EXHIBIT 10.1
1999 AMENDED AND RESTATED LOAN AGREEMENT
By and between
SYPRIS SOLUTIONS, INC.
as the Borrower
and
▇▇▇▇ TECHNOLOGIES, INC.,
TUBE TURNS TECHNOLOGIES, INC.,
GROUP TECHNOLOGIES CORPORATION,
METRUM-DATATAPE, INC.,
as Guarantors
and
BANK ONE, KENTUCKY, NA
as Agent Bank
and
BANK ONE, KENTUCKY, NA
LASALLE BANK NATIONAL ASSOCIATION
BANK OF AMERICA, N.A.
SUNTRUST BANK, NASHVILLE, N.A.
as Banks
dated as of October 27, 1999
1
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND CROSS REFERENCE
SECTION 2 REVOLVING CREDIT FACILITY
2.1 Revolving Loan Commitments, Revolving Credit Loans
2.2 Interest on the Revolving Credit Loans
2.3 Fees
2.4 Prepayments and Payments; Reductions in Revolving Loan Commitments
2.5 Use of Proceeds
2.6 Swing Line Credit Subfacility
2.7 Letters of Credit
SECTION 3 SPECIAL PROVISIONS GOVERNING LIBOR LOANS
3.1 Determination of LIBOR
3.2 Inability to Determine LIBOR
3.3 Illegality or Impracticability of LIBOR Loans
3.4 Compensation For Breakage or Non-Commencement of Interest Periods
3.5 Booking of LIBOR Loans
3.6 Assumptions Concerning Funding of LIBOR Loans
3.7 LIBOR Loans After Event of Default
SECTION 4 CLOSING CONDITIONS
4.1 Initial Closing Conditions
4.2 Conditions to All Revolving Credit Loans, Letters of Credit and Swing
Line Loans
SECTION 5 REPRESENTATIONS AND WARRANTIES
5.1 Organization, Standing, etc, of the Borrower and the Guarantors
5.2 Qualification
5.3 Use of Proceeds
5.4 Intellectual Property
5.5 Disclosure; Solvency
5.6 Tax Returns and Payments
5.7 Funded Debt; Financial Information
5.8 Title to Properties; Liens; Leases
5.9 Litigation, etc.
5.10 Authorization; Compliance With Other Instruments, etc.
5.11 Enforceability
5.12 Governmental Consent
5.13 Environmental Matters
5.14 Year 2000 Representations
SECTION 6 AFFIRMATIVE COVENANTS
6.1 Corporate Existence and Good Standing
6.2 Money Obligations, Payment of Taxes, ERISA, etc.
6.3 Financial Statements and Reports
6.4 Financial Records; Inspection
6.5 Maintenance of Properties, etc.
6.6 Permits, Certificates, Leases, Licenses
6.7 Notice
6.8 Payment of Obligations
6.9 Environmental Matters
6.10 Insurance
6.11 Environmental Compliance
6.12 Material Change in Management
6.13 Year 2000 Compliance
2
SECTION 7 NEGATIVE COVENANTS
7.1 Mergers, Acquisitions and Other Extraordinary Events
7.2 Indebtedness, Guaranties, etc.
7.3 Use of Assets
7.4 Mortgages, Liens, Encumbrances, Security Interests, Assignments,
etc.
7.5 Nature of Businesses
7.6 Fixed Charge Coverage Ratio
7.7 Ratio of Adjusted Funded Debt to EBITDA
7.8 Minimum Net Worth
7.9 Interest Rate Agreements
SECTION 8 EVENTS OF DEFAULT; ACCELERATION
8.1 Events of Default
SECTION 9 REMEDIES UPON DEFAULT, ETC.
9.1 Defaults
9.2 Offset
9.3 Rights Cumulative
9.4 Payment of Costs and Expenses
SECTION 10 THE AGENT BANK
10.1 Appointment
10.2 Delegation of Duties
10.3 Nature of Duties; Independent Credit Investigation
10.4 Actions in Discretion of the Agent Bank; Instructions from the Banks
10.5 Reimbursement and Indemnification of the Agent Bank and the Banks by
the Borrower
10.6 Exculpatory Provisions
10.7 Reimbursement and Indemnification of the Agent Bank by the Banks
10.8 Reliance by the Agent Bank
10.9 Notice of Default
10.10 The Banks in Their Individual Capacities
10.11 Holders of Revolving Credit Notes
10.12 Equalization of the Banks
10.13 Successor Agent Bank
10.14 Calculations
10.15 Withholding Tax
10.16 Beneficiaries
SECTION 11 ASSIGNMENTS AND PARTICIPATIONS
SECTION 12 INDEMNITY
SECTION 13 INCREASED COSTS; TAXES; CAPITAL ADEQUACY
13.1 Compensation for Increased Costs and Taxes
13.2 Withholding of Taxes
13.3 Capital Adequacy Adjustment
13.3 Banks' Obligation to Mitigate
SECTION 14 NOTICES
3
SECTION 15 MISCELLANEOUS
15.1 Ratable Sharing
15.2 Waiver
15.3 Survival of Representations and Warranties
15.4 Invalidity
15.5 Assignment
15.6 Governing Law
15.7 Section Headings
15.8 Entire Agreement
15.9 Time of the Essence
15.10 Modifications
15.11 Submission to Jurisdiction, Etc.
4
1999 AMENDED AND RESTATED LOAN AGREEMENT
----------------------------------------
THIS 1999 AMENDED AND RESTATED LOAN AGREEMENT (this "Loan Agreement"), is
made and entered into as of the 27th day of October, 1999, by and among (i) BANK
ONE, KENTUCKY, NA, a national banking association with an office and place of
business in Louisville, Kentucky ("the Agent Bank") (Bank One, Kentucky, NA may
also be referred to as a "Bank"); (ii) the BANKS identified on Schedule 1.1
------------
hereto (each a "Bank" and collectively, the "Banks"); (iii) SYPRIS SOLUTIONS,
INC., a Delaware corporation with its principal office and place of business and
registered office in Louisville, Jefferson County, Kentucky (the "Borrower") and
(iv) the GUARANTORS identified on Schedule 1.2 hereto (each a "Guarantor" and
------------
collectively, the "Guarantors").
P R E L I M I N A R Y S T A T E M E N T:
- - - - - - - - - - - - - - - - - - - -
A. Certain of the Guarantors and their Affiliate entered into a Loan
Agreement dated as of March 21, 1997 with the Agent Bank (the "Original Loan
Agreement"), whereby the Agent Bank has extended in favor of the Guarantors a
revolving line of credit in the amount of $20,000,000, a term loan in the amount
of $10,000,000 and a swing line of credit subfacility in the amount of
$5,000,000.
B. The predecessors to the Borrower and certain of the Guarantors entered
into a 1997A Amended and Restated Loan Agreement dated as of November 1, 1997
with the Agent Bank (the "1997A Loan Agreement"), whereby the Agent Bank
increased the revolving line of credit to $30,000,000 and the term loan to
$15,000,000 and provided the swing line of credit subfacility in the amount of
$5,000,000. The 1997A Loan Agreement was subsequently amended by, among other
amendments, the 1998B Amendment to Loan Documents. The Original Loan Agreement,
as amended and restated by the 1997A Loan Agreement, as amended, is referred to
as the "Existing Loan Agreement."
C. The Borrower and the Guarantors wish to amend and restate the Existing
Loan Agreement to (i) provide for a revolving line of credit in the amount of
$100,000,000, (ii) a swing line subfacility of $5,000,000, (iii) a letter of
credit subfacility of $15,000,000, (iv) guaranties by the Guarantors, (v) the
deletion of certain securitization requirements, (vi) changes in financial and
other covenants and (vii) certain other changes, on the terms set forth herein.
D. The Banks are agreeable to the foregoing changes, on the terms set
forth herein.
E. The Borrower and the Guarantors will benefit from the extension of the
Revolving Credit Facility, the Letter of Credit Subfacility and the Swing Line
Credit Subfacility because such extensions of credit will enable the Borrower to
have available and to draw from time to time credit and will further enable the
Borrower to make such credit available to the Guarantors.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the mutuality, receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS AND CROSS REFERENCE
-------------------------------
Certain terms used in this Loan Agreement are defined in this Section 1;
other terms are defined elsewhere in this Loan Agreement.
1.1 "Adjusted Funded Debt" means Funded Debt less all book cash balances.
1.2 "Advance" means with respect to the Borrower, each and every advance
of proceeds under the Revolving Credit Facility, the Letter of Credit
Subfacility, or the Swing Line Credit Subfacility, directly or indirectly, to
the Borrower, regardless of whether such advance is accounted for under GAAP as
an extension of credit, a contribution of capital or otherwise.
1.3 "Affiliate" means, as applied to any Person, (i) any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person, (ii) any other Person that, directly or indirectly, owns or
5
controls, whether beneficially or as a trustee, guardian or other fiduciary, 10%
or more of the stock having ordinary voting power in the election of directors
of such Person, or (iii) each of such Person's directors and officers appointed
by the board of directors of such Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
1.4 "Agent Bank" has the meaning assigned to that term in the
introduction to this Loan Agreement.
1.5 "And/or" means one or the other or both, or any one or more or all,
of the things or persons or parties in connection with which the conjunction is
used.
1.6 "Applicable LIBOR Margin" means the applicable per annum percentage
set forth in the table appearing in Section 2.2A hereof, with respect to LIBOR
Loans.
1.7 "Applicable Letter of Credit Percentage" means the applicable per
annum percentage set forth in the table appearing in Section 2.7F of the Loan
Agreement.
1.8 "Applicable Commitment Fee Percentage" means the applicable per annum
percentage set forth in the table appearing in Section 2.3A hereof, with respect
to the calculation of Revolving Credit Facility Commitment Fees.
1.9 "Application and Agreement for Letter of Credit" means the document
substantially in the form of Exhibit C annexed hereto, with appropriate
---------
insertions and deletions, with respect to the proposed issuance or amendment of
a Letter of Credit.
1.10 "Authorized Officer" means the President, the Financial Officer and
any other officer of the Borrower, who, by the Certificate of Incorporation,
Bylaws or Resolutions of the Board of Directors of the Borrower, is authorized
to execute and deliver this Loan Agreement and the other Loan Documents on
behalf of the Borrower.
1.11 "Banks" has the meaning assigned to that term in the introduction to
this Loan Agreement.
1.12 "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy" as now and hereafter in effect, or any successor statute.
1.13 "Bank One 1-Day Funds Transfer Pricing Rate" means an interest rate
established daily by the Agent Bank, based on its cost of funds, and used in
connection with Swing Line Loans.
1.14 "Base Rate" means at any time the variable interest rate per annum
that is the higher of (i) the Agent Bank's Reference Rate as announced publicly
and changing from time to time when such Reference Rate changes or (ii) the
Federal Funds Effective Rate plus 1/2%.
1.15 "Base Rate Loan" means Loans bearing interest at rates determined
with reference to the Base Rate, as the same may change from time to time, as
provided in Section 2.2A with respect to Revolving Credit Loans that are Base
Rate Loans.
1.16 "Borrower" means Sypris Solutions, Inc.
1.17 "Borrower's Loan Accounts" means the accounts respectively on the
books of the Banks in which will be recorded Loans made by the Banks to the
Borrower, payments made on such Loans and other appropriate debits and credits
as provided by this Loan Agreement.
1.18 "Business Combination" means any acquisition or merger, whether
accounted for under GAAP as a purchase or pooling of interests and regardless of
whether the value of the consideration paid or received is comprised of cash,
assets, common stock, preferred stock, partnership interests, limited liability
company or limited liability partnership interests.
6
1.19 "Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the Commonwealth of Kentucky or is a
day on which banking institutions located in the Commonwealth of Kentucky are
authorized or required by law or other governmental action to close.
1.20 "Change in Control" means the acquisition by any Person or "group"
(as defined in Section 13 (d) (3) of the Securities Exchange Act of 1934, as
amended) of more than 50% of the Voting Stock of the Borrower by a Person or
"group" other than the shareholders (or their Affiliates) of the Borrower in
existence as of the Closing Date, including any such acquisition by merger or
consolidation.
1.21 "Closing Date" means October 27, 1999.
1.22 "Companies" means the Borrower and the Guarantors.
1.23 "Compliance Certificate" means a certificate substantially in the
form of Exhibit G annexed hereto delivered by the Borrower to the Agent Bank
---------
pursuant to Section 6.3C hereof.
1.24 "Contingent Obligations" means, with respect to the Borrower or any
Guarantor, any direct or indirect liability, contingent or otherwise (excluding
all transactions which, on a Combined basis under GAAP, should be eliminated) of
the Borrower or Guarantor, (i) with respect to any indebtedness, lease,
dividend, letter of credit or other obligation of another if the primary purpose
or intent thereof by the Borrower or Guarantor is to provide assurance to the
obligee of such obligation of another that such obligation of another will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holder of such obligation will be protected (in whole or in
part) against loss in respect thereof, or (ii) under any letter of credit issued
for the account of the Borrower or Guarantor or for which the Borrower or
Guarantor is otherwise liable for reimbursement thereof, or (iii) under interest
rate swap agreements, interest rate collar agreements or other similar
arrangements providing interest rate protection. Contingent Obligations shall
include, without limitation, (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by the Borrower or
Guarantor of the obligation of another, and (b) any liability of the Borrower or
Guarantor for the obligations of another through any agreement (contingent or
otherwise) (1) to purchase, repurchase, or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), (2) to maintain the solvency of any balance sheet
item, level of income or financial condition of another, or (3) to make take-or-
pay or similar payments if required regardless of non-performance by any other
party or parties to an agreement, in the case of any agreement described under
subclauses (1), (2) or (3) of this sentence if the primary purpose or intent
thereof is as described in clause (i) of the preceding sentence. The amount of
any Contingent Obligation, as at any time of determination, shall be equal to
the amount of the obligation so guaranteed or otherwise supported at such time
of determination which amount shall be deemed to be the amount of such
obligation guaranteed, as reasonably estimated by the Borrower or Guarantor, if
such amount cannot be specifically determined at the time of determination.
1.25 "Covered Tax" means any Tax that is not an Excluded Tax.
1.26 "Current Maturities of Long Term Debt" means the current principal
maturities of all indebtedness for borrowed money (including but not limited to
amortization of capitalized lease obligations) having an original term of one
year or more.
1.27 "Date of Determination" means, for purposes of determining the
applicable Pricing Level on any Pricing Level Calculation Date, the last day of
the most recently ended fiscal quarter.
1.28 "Default Rate" means, for any Loan, the Base Rate plus two percent
(2.00%).
1.29 "Designated Interest Rate Agreement" has the meaning set forth in
Section 7.9 hereof.
1.30 "Dollars" or "$" means lawful currency of the United States of
America.
1.31 "EBIT" means, as of the end of any Fiscal Quarter, the sum of the
amounts for such period of the Borrower's (i) Net Income, (ii) Interest Expense,
and (iii) provisions for taxes based on income for the previous four Fiscal
Quarters, determined on a consolidated basis in accordance with GAAP.
7
1.32 "EBITDA" means, as of the end of any Fiscal Quarter, the sum of the
Borrower's (i) Net Income, (ii) Interest Expense, (iii) provisions for taxes
based on income, (iv) depreciation, and (v) amortization for the previous four
Fiscal Quarters, determined on a consolidated basis in accordance with GAAP. The
calculation of EBITDA shall include adjustments necessary to reflect the pro
forma results of acquisitions and dispositions. Any pro forma adjustments
required to be made hereby shall include adjustments to reflect consolidation
savings (without limitation as to other appropriate pro forma adjustments in
accordance with generally accepted financial practice) giving effect to all
acquisitions and dispositions made during the period with respect to which such
adjustment is being made as if such acquisitions and dispositions were made on
the first day of such period. The calculation of EBITDA shall exclude the
following: (i) gains or losses on dispositions of noncurrent assets, (ii) losses
on writedowns of noncurrent assets or lease obligation, and (iii) the cumulative
effect of changes in accounting principles.
1.33 "Environmental Complaint" means any complaint, order, directive,
claim, citation or notice by any governmental authority or any other Person
described in Section 5.13E hereof.
1.34 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
1.35 "Events of Default" means the occurrence or happening of any of the
matters set forth in Section 8 hereof.
1.36 "Excluded Tax" means any of the following taxes, levies, imposts,
duties, deductions, withholdings or charges, and all liabilities with respect
thereto: (i) Taxes imposed on the net income of any Bank or a Tax Transferee
(including without limitation branch profits taxes, minimum taxes and taxes
computed under alternative methods, at least one of which is based on net
income) (collectively referred to as "net income taxes") by (A) the United
States of America, (B) the jurisdiction under the laws of which such Bank or Tax
Transferee is organized or any political subdivision thereof, or (C) the
jurisdiction of such Bank's or Tax Transferee's applicable lending office or any
political subdivision thereof, or (D) any jurisdiction in which such Bank or Tax
Transferee is doing business, (ii) any Taxes to the extent that they are in
effect and would apply to a payment to any Bank as of the Closing Date, or as of
the date such Person becomes a Bank, in the case of any assignee pursuant to
Section 11 hereof, (iii) any Taxes that are in effect and would apply to a
payment to a Tax Transferee as of the date of acquisition of any portion of the
Revolving Credit Loans by such Tax Transferee or the date of the change of
lending office of such Tax Transferee, as the case may be (provided however that
-----------------
a Person shall not be considered a Tax Transferee for purposes of this clause
(iii) as a result of a change of its lending office or the taking of any other
steps pursuant to Section 13.4 hereof), (iv) any Taxes to the extent of any
credit or other Tax benefit available to any Bank or Tax Transferee, as
applicable, as a result thereof, or (v) any Taxes that would not have been
imposed but for the failure by any Bank or Tax Transferee, as applicable, to
provide and keep current any certification or other documentation required to
qualify for an exemption from or reduced rate of any Tax.
1.37 "Federal Funds Effective Rate" for any day means the rate per annum
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
--------
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
1.38 "Financial Officer" means the chief financial officer or controller
of the Borrower.
1.39 "Fiscal Quarter" means a fiscal quarter of the Borrower. The Fiscal
Quarters of the Borrower will be reported on or about the last day of each
March, June, September and December of each calendar year.
1.40 "Fiscal Year" means a fiscal year of the Borrower. The Borrower's
Fiscal Year ends on the last day of December of each calendar year.
8
1.41 "Fixed Charge Coverage Ratio" means, as of any Date of Determination
thereof, the ratio of (i) the sum of the Borrower's EBIT plus Operating Lease
Rentals to (ii) the sum of the Borrower's Interest Expense, plus Operating Lease
Rentals.
1.42 "Funded Debt" means, with respect to the Borrower on a consolidated
basis, (i) all indebtedness for borrowed money, including, without limitation,
all Revolving Credit Loans, all Swing Line Loans, all reimbursement obligations
in respect of all letters of credit, including the Letters of Credit, (ii)
mandatorily redeemable preferred stock of the Borrower and Guarantors (except
any mandatorily redeemable preferred stock owned by Borrower or the Guarantor),
(iii) that portion of obligations with respect to capital leases which is
properly classified as a liability on a balance sheet in conformity with GAAP ,
(iv) that portion of obligations with respect to Synthetic Leases which is not
classified as a liability on a balance sheet in conformity with GAAP, (v) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (vi) any obligation owed for all or
any part of the deferred purchase price of property or services which purchase
price is (y) due more than six months from the date of the incurring of the
obligation in respect thereof, or (z) evidenced by a note or similar written
instrument, but excluding trade payables incurred in the ordinary course of
business, (vii) all indebtedness secured by any lien on any property or asset
owned by the Borrower or the Guarantors regardless of whether the indebtedness
secured thereby shall have been assumed by the Borrower or is non-recourse to
the credit of the Borrower or the Guarantors but only to the extent of the fair
market value of any such property or assets, and (viii) all other Contingent
Obligations of the Borrower and the Guarantors not otherwise included in clauses
(i) through (vii) of this Section.
1.43 "Funding Date" means the date of the funding of a Revolving Credit
Loan.
1.44 "GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, as applied in accordance with Sections 1.106 and 6.3
hereof.
1.45 "Guarantor" means any Person identified on Schedule 1.2 hereto and
------------
any new Subsidiaries of the Borrower hereafter acquired or created, with the
consent of the Banks, pursuant to the provisions of Section 7.1 hereof.
1.46 "Guaranty Agreements" means the Guaranty Agreements between the Agent
Bank and each of the Guarantors, where each Guarantor has jointly and severally
guaranteed the Borrower's payment of the Loans.
1.47 "Hazardous Discharge" means any event described in Section 5.13D
hereof.
1.48 "Hazardous Materials" means any and all substances, chemicals or
wastes (including, without limitation, asbestos, polychlorinated biphenyls
("PCBs") and petroleum) that are designated or defined (either by inclusion in a
list of materials or by reference to exhibited characteristics) as hazardous,
toxic or dangerous, or as a pollutant or contaminant in any of the Relevant
Environmental Laws.
1.49 "Interest Expense" means, for the period in question, total interest
expense (including that attributable to capital leases in conformity with GAAP)
of the Borrower with respect to all outstanding Funded Debt of the Borrower,
including, without limitation, all capitalized interest, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs and benefits under interest rate
agreements, whether payable in cash or accrued (including amortization of
discount), net of any interest income all as determined on a consolidated basis
in accordance with GAAP.
1.50 "Interest Payment Date" means, (i) with respect to each Base Rate
Loan, the last day of each calendar quarter during which such Base Rate Loan is
outstanding in whole or in part, (ii) with respect to each LIBOR Loan, the
ninetieth (90th) day of the Interest Period applicable to such LIBOR Loan,
and/or the last day of the Interest Period applicable to such LIBOR Loan,
whichever is earlier , (iii) with respect to each Swing Line Loan, the last day
of each calendar quarter during which such Swing Line Loan is outstanding in
whole or in part, and (iv) with respect to all Revolving Credit Loans and Swing
Line Loans, the date of maturity thereof.
1.51 "Interest Period" means any interest period applicable to a LIBOR
Loan, as determined pursuant to Section 2.2B hereof with respect to the
Revolving Credit Loans that are LIBOR Loans.
9
1.52 "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement.
1.53 "Interest Rate Determination Date" means each date for calculating
the LIBOR for purposes of determining the interest rate in respect of an
Interest Period. The Interest Rate Determination Date shall be the date which
is two (2) Business Days prior to the related Interest Period for a LIBOR Loan.
1.54 "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
1.55 "Letters of Credit" means all standby letters of credit or similar
instruments issued by the Agent Bank for the account of the Borrower pursuant to
Section 2.7 of the Loan Agreement for the purpose of securing the performance,
payment, deposit or surety obligations of the Borrower or a Subsidiary of the
Borrower.
1.56 "Letter of Credit Subfacility" means the commitment of the Agent
Bank, to issue Letters of Credit for the account of the Borrower or a Subsidiary
of the Borrower up to an aggregate amount at any one time outstanding of Fifteen
Million Dollars ($15,000,000). The Letter of Credit Subfacility is a sublimit
of the Revolving Credit Facility.
1.57 "Letter of Credit Fee" has the meaning assigned to that term in
Section 2.7F(i) hereof.
1.58 "Letter of Credit Fronting Fee" has the meaning assigned to that term
in Section 2.7F(v) hereof.
1.59 "Letter of Credit Usage" means, as at any date, the sum of (i) the
maximum aggregate amount which is or at any time thereafter may become available
for drawing under all Letters of Credit then outstanding, plus (ii) the
aggregate amount of all drawings under all Letters of Credit honored by the
Agent Bank and not theretofore reimbursed by the Borrower to the Agent Bank,
whether by virtue of the Banks making a Revolving Credit Loan to the Borrower to
enable the Borrower to reimburse the Agent Bank for such drawing or otherwise.
1.60 "LIBOR Loan" means any advance or any part of the principal of any
Revolving Credit Loan for which the Borrower has properly selected an Interest
Period and which is to bear interest at LIBOR plus the Applicable LIBOR Margin.
1.61 "LIBOR" means, for a particular LIBOR Loan for a particular Interest
Period, the annual rate of interest determined by the Agent Bank in accordance
with its usual procedures (which determination shall be conclusive absent
manifest error) (rounded, if necessary, to the nearest 1/16 of 1%) to be the
"offered" Eurodollar rate as of 11:00 a.m. London time two Business Days
preceding the first day of the Interest Period for such LIBOR Loan for deposits
in immediately available funds in United States dollars for delivery on the
first day of such Interest Period for an amount substantially equal to the
principal amount of that LIBOR Loan and for a period approximately equal to such
Interest Period, as shown on the TeleRate Service or as published by a
comparable interest rate reporting service selected by the Agent Bank.
1.62 "Loan" means a Revolving Credit Loan or a Swing Line Loan.
1.63 "Loan Agreement" means this Loan Agreement as further amended,
supplemented or otherwise modified from time to time.
1.64 "Loan Documents" means this Loan Agreement, the Revolving Credit
Notes, each Application and Agreement for Letter of Credit, the Negative Pledge
Agreement, the Guaranty Agreements, any Interest Rate Agreement and all other
agreements, documents and instruments now or hereafter evidencing and/or
pertaining to this Loan Agreement and/or the other Obligations, and as may be
further amended, supplemented or otherwise modified from time to time.
1.65 "Negative Pledge Agreement" means the Negative Pledge Agreement by
and among the Borrower, the Guarantors and the Agent Bank.
1.66 "Net Worth" means the Borrower's retained earnings, capital stock,
additional paid in capital minus the sum of treasury stock subscribed for and
unissued determined on a consolidated basis in accordance with
10
GAAP. The calculation of Net Worth excludes any amounts with respect to
accumulated other comprehensive income or similar non-cash adjustments to
shareholder's equity.
1.67 "Net Income" means, for the period in question, the consolidated net
income (or loss) of the Borrower for such period taken as a single accounting
period, determined on a consolidated basis in accordance with GAAP and excluding
any extraordinary items.
1.68 "Notice of Conversion/Continuation" means the Notice in the form of
Exhibit D annexed hereto with respect to the conversion and/or continuation of
---------
the interest rate(s) applicable to the Revolving Credit Loans, as set forth in
Section 2.2B hereof.
1.69 "Obligations" means, collectively, (i) the entire unpaid principal
balance of and all interest now accrued or hereafter to accrue on the Revolving
Credit Notes, (ii) the entire unpaid principal balance of and all interest now
accrued or hereafter to accrue on the Swing Line Credit Subfacility, (iii) the
obligation of the Borrower to reimburse the Agent Bank for all drafts honored by
the Agent Bank under Letters of Credit together with accrued interest thereon,
(iv) the performance of all of the covenants, agreements and obligations of the
Borrower hereunder and under the other Loan Documents, and (v) all other
liabilities, obligations, covenants and duties owing by the Borrower to any Bank
arising under or pursuant to this Loan Agreement or the other Loan Documents of
any kind or nature, present or future, and whether or not evidenced by any note,
guaranty or other instrument. The term "Obligations" includes, without
limitation, all interest, charges, expenses, reasonable attorneys' fees and any
other sums chargeable to the Borrower under this Loan Agreement and/or any other
Loan Document.
1.70 "Operating Lease Rentals" means the periodic expense for the portion
of obligations with respect to non-capital leases determined on a consolidated
basis in accordance with GAAP.
1.71 "Permitted Acquisition" means an acquisition proposed to be made by
the Borrower or any Guarantor that has been consented to by the Banks, pursuant
to Section 7.1 hereof.
1.72 "Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
other entity or group, institution, party or government, whether federal, state,
county, city, municipal or other, or any agency or division thereof.
1.73 "Potential Default" means the occurrence of any act or event which,
with the giving of notice and/or the passage of time, or both, would become an
Event of Default.
1.74 "Pricing Level" means, for any Pricing Period, Pricing Level I,
Pricing Level II, Pricing Level III, Pricing Level IV, or Pricing Level V, as
may be in effect for such Pricing Period; provided that, the Default Rate shall
--------
be in effect upon the occurrence and during the continuation of any Event of
Default.
1.75 "Pricing Level I" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as at the relevant Date of Determination, the
ratio of the Borrower's Adjusted Funded Debt as measured on such Date of
Determination, to the Borrower's EBITDA as measured on such Date of
Determination, is equal to or greater than 0 to 1.00 but is less than or equal
to 1.24 to 1.00.
1.76 "Pricing Level II" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as at the relevant Date of Determination, the
ratio of the Borrower's Adjusted Funded Debt as measured on such Date of
Determination, to the Borrower's EBITDA as measured on such Date of
Determination, is equal to or greater than 1.25 to 1.00 but is less than or
equal to 1.74 to 1.00.
1.77 "Pricing Level III" means the Pricing Level that will be in effect
for the applicable Pricing Period if, as at the relevant Date of Determination,
the ratio of the Borrower's Adjusted Funded Debt as measured on such Date of
Determination, to the Borrower's EBITDA as measured on such Date of
Determination, is equal to or greater than 1.75 to 1.00 but is less than or
equal to 2.24 to 1.00.
1.78 "Pricing Level IV" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as of the relevant Date of Determination, the
ratio of the Borrower's Adjusted Funded Debt as measured on such Date of
Determination, to the Borrower's EBITDA as measured on such Date of
Determination, is equal to or greater than 2.25 to 1.00 but is less than or
equal to 2.50 to 1.00.
11
1.79 "Pricing Level V" means the Pricing Level that will be in effect for
the applicable Pricing Period if, as of the relevant Date of Determination, the
ratio of the Borrower's Adjusted Funded Debt as measured on such Date of
Determination, to the Borrower's EBITDA as measured on such Date of
Determination, is equal to or greater than 2.51 to 1.00 but is less than or
equal to 3.00 to 1.0.
1.80 "Pricing Level Calculation Date" means the date of the delivery to
the Banks of a Compliance Certificate in the form of Exhibit G hereto
---------
demonstrating the appropriate Pricing Level, which delivery can occur on any
date from the prior Date of Determination to the due date of the Borrower's
financial statements for the particular quarter or year then ended as required
by Section 6.3A hereof.
1.81 "Pricing Period" means, with respect to any Date of Determination,
the period commencing on the day immediately after such Date of Determination
and ending on the next Date of Determination.
1.82 "Real Property" means the real property and improvements thereon
owned by any of the Borrower or the Guarantors.
1.83 "Relevant Environment Laws" means any and all federal, state and
local laws, codes, ordinances, rules, regulations, reported and publicly
available orders, reported judicial determinations, and reported and publicly
available decisions of an executive body or any governmental and quasi-
governmental entity, whether in the past, the present or the future, pertaining
to health, safety or the environment in effect in any and all jurisdictions in
which the Borrower is or at any time may be doing business, or where the Real
Property is located. The Relevant Environmental Laws shall include, but shall
not be limited to, the following: (i) the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sections 9601, et seq.; the Superfund
-- ---
Amendments and Reauthorization Act, Public Law 99-949, 100 Stat. 1613; the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; the
-- ---
National Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking
Water Act, 42 U.S.C. Sections 300F, et seq.; the Toxic Substances Control Act,
-- ---
15 U.S.C. Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251,
et seq.; the Clean Air Act, 42 U.S.C. Section 7401, et seq.; and the regulations
-- --- -- ---
promulgated in connection therewith; (ii) EPA regulations pertaining to asbestos
(including 29 C.F.R. Sections 1910.1001 and 1926.58); and any state and local
laws and regulations pertaining to Hazardous Materials and/or asbestos.
1.84 "Request for Revolving Credit Loan" means the Request in the form of
Exhibit E annexed hereto with respect to a proposed Revolving Credit Loan to be
---------
delivered by the Borrower to the Agent Bank pursuant to Section ▇.▇▇ hereof.
1.85 "Request for Swing Line Loan" means the Request in the form of
Exhibit F annexed hereto with respect to a proposed Swing Line Loan to be
----------
delivered by the Borrower to the Agent Bank pursuant to Section 2.6A hereof.
1.86 "Revolving Credit Facility" means the revolving line of credit
established by the Banks in favor of the Borrower in the principal amount of One
Hundred Million Dollars ($100,000,000) pursuant to which the Borrower may obtain
Revolving Credit Loans from the Banks and/or Letters of Credit from the Agent
Bank during the term of the Revolving Credit Facility upon the terms and
conditions set forth in this Loan Agreement. The Revolving Credit Facility
includes as a sublimit the Letter of Credit Subfacility and the Swing Line
Credit Subfacility. All references to the "aggregate principal balance of the
Revolving Credit Loans outstanding" or similar phrases in this Loan Agreement or
in the Revolving Credit Notes shall mean, as of the date of determination
thereof, the sum of (i) the entire aggregate outstanding principal balance of
all Revolving Credit Loans made by the Banks pursuant to this Loan Agreement,
(ii) the then existing Letter of Credit Usage and (iii) the then existing Swing
Line Usage.
1.87 "Revolving Credit Facility Commitment Fees" has the meaning set forth
in Section 2.3A hereof.
1.88 "Revolving Credit Facility Pro Rata Shares" means, with respect to
each Revolving Loan Commitment of each Bank, the percentage set forth opposite
that Bank's name on Schedule 2.1 annexed hereto; provided that Schedule 2.1
------------ ------------
shall be amended and each Bank's Revolving Credit Facility Pro Rata Share shall
be adjusted from time to time to give effect to the addition or removal of any
Bank as provided herein or by assignment, sales or purchases, pursuant to
Section 11 hereof.
12
1.89 "Revolving Credit Loans" means advances of principal of the Revolving
Credit Facility made pursuant to Section 2 hereof by the Banks to the Borrower
from time to time pursuant to, and subject to the terms and conditions set forth
in, this Loan Agreement to support the working capital needs of the Borrower and
for the other purposes described in Section 2.5A hereof.
1.90 "Revolving Credit Notes" means (i) that certain Amended and Restated
Revolving Credit Promissory Note made by the Borrower, payable to the order of
Bank One, Kentucky, NA, and in the face principal amount of Thirty-Five Million
Dollars ($35,000,000) the form of which is annexed to this Loan Agreement as
Exhibit A-1, as the same may hereafter be amended, modified, renewed, replaced
-----------
and/or restated from time to time; (ii) that certain Amended and Restated
Revolving Credit Promissory Note made by the Borrower, payable to the order of
LaSalle Bank National Association, and in the face principal amount of Twenty-
Five Million Dollars ($25,000,000), the form of which is annexed to this Loan
Agreement as Exhibit A-2, as the same may hereafter be amended, modified,
-----------
renewed, replaced and/or restated from time to time; (iii) that certain Amended
and Restated Revolving Credit Promissory Note made by the Borrower, payable to
the order of Bank of America, N.A. and in the face principal amount of Twenty-
Five Million Dollars ($25,000,000), the form of which is annexed to this Loan
Agreement as Exhibit A-3, as the same may hereafter be amended, modified,
-----------
renewed, replaced and/or restated from time to time; (iv) that certain Amended
and Restated Revolving Credit Promissory Note made by the Borrower, payable to
the order of SunTrust Bank, Nashville, N.A., and in the face principal amount of
Fifteen Million Dollars ($15,000,000), the form of which is annexed to this Loan
Agreement as Exhibit A-4, as the same may hereafter be amended, modified,
-----------
renewed, replaced and/or restated from time to time and (v) each future
Revolving Credit Promissory Note, if any, made by the Borrower pursuant to the
Revolving Credit Facility.
1.91 "Revolving Loan Commitments" means each Bank's commitment to maintain
or make Revolving Credit Loans and Swing Line Loans and/or to issue Letters of
Credit as set forth in Section 2.1 hereof.
1.92 "Revolving Loan Commitment Termination Date" means the Revolving Loan
Commitment Termination Date then in effect, which shall be the earliest of (i)
January 2, 2005, (ii) the date as of which the Obligations shall have become
immediately due and payable pursuant to Section 8 of the Loan Agreement and
(iii) the date on which all of the Obligations are paid in full (including,
without limitation, the repayment, expiration, termination or cash
collateralization of Letters of Credit pursuant to this Loan Agreement) and the
Revolving Loan Commitments are reduced to zero.
1.93 "Synthetic Lease" means any lease (i) that is treated as an operating
lease for accounting purposes, with the result that the obligations with respect
to such lease are not classified as a liability on a balance sheet, in
conformity with GAAP, and (ii) that is treated as a conditional sale for Federal
income tax purposes, with the result that the lessee of such lease is entitled
to take depreciation on the leased property and to characterize rental payments
as payments of principal and interest for Federal income tax purposes.
1.94 "Subsidiary" means (i) any corporation of which more than 50% of the
outstanding voting stock is at the time owned by the Borrower or by one or more
of its Subsidiaries, and (ii) any Person controlled by the Borrower or by one or
more of its Subsidiaries, whether by virtue of voting interest, other beneficial
interest or by voting agreement, contract, proxy or otherwise.
1.95 "Swing Line Commitment Period" means the period from the Closing Date
through the Swing Line Commitment Termination Date.
1.96 "Swing Line Credit Subfacility" means the sums advanced or to be
advanced by the Agent Bank as described in Section 2.6 hereof.
1.97 "Swing Line Loan" means advances of principal of the Swing Line
Credit Subfacility made by the Agent Bank to the Borrower from time to time
pursuant to, and subject to the terms and conditions set forth in, this Loan
Agreement for the other purposes described in Section 2.6 hereof.
1.98 "Swing Line Commitment Termination Date" means the same date as the
Revolving Loan Commitment Termination Date.
1.99 "Swing Line Usage" means, as at any date of determination thereof,
the sum of the maximum aggregate principal amount of all outstanding Swing Line
Loans, which amount shall never exceed Five Million Dollars ($5,000,000).
13
1.100 "Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, governmental fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net income"
--------
of a Person shall be construed as a reference to a tax imposed by the
jurisdiction in which that Person's principal office (and/or, in the case of any
Bank, its lending office) is located on all or part of the net income, profits
or gains of that Person (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise).
1.101 "Tax Transferee" means any Person who acquires any interest in the
Revolving Credit Loans (whether or not by operation of law) or the office to
which any Bank has transferred its Revolving Credit Loans for purposes of
determining where such Bank's Revolving Credit Loans are made, accounted for or
booked.
1.102 "Total Utilization of Revolving Loan Commitments" means, as at any
Date of Determination thereof, the sum of (i) the aggregate principal amount of
all outstanding Revolving Credit Loans, (ii) the Letter of Credit Usage and
(iii) the Swing Line Usage.
1.103 "Uniform Commercial Code" means the Uniform Commercial Code in
effect in the Commonwealth of Kentucky, currently codified as KRS 355.101 et
--
seq.
---
1.104 "Voting Stock" means the shares of capital stock or other securities
of the Borrower entitled to vote generally in the election of the directors of
the Borrower.
1.105 Accounting Terms and Financial Information.
------------------------------------------
A. Accounting Terms. For purposes of this Loan Agreement, all
----------------
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP and all financial statements and certificates
and reports as to financial matters required to be delivered to the Agent Bank
hereunder shall (unless otherwise disclosed to the Agent Bank in writing at the
time of delivery thereof in the manner described in paragraph B of this Section)
be prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent with GAAP as applied in the preparation of the latest financial
statements furnished to the Agent Bank hereunder.
B. Accounting Variances. The Borrower, for itself and the
--------------------
Guarantors, shall deliver to the Agent Bank at the same time as the delivery of
any annual or quarterly financial statement under Section 6.3 hereof, (i) a
description in reasonable detail of any variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements (which variation materially
affects the presentation of the financial position or results of operations of
the Borrower in accordance with GAAP) and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
1.106 Other Definitional Provisions. Any reference in this Loan Agreement
-----------------------------
(i) to a Section, an Annex, a Schedule or an Exhibit is a reference to a section
hereof, an annex hereto, a schedule hereto or an exhibit hereto, respectively;
and (ii) to a subsection or a clause is, unless otherwise stated, a reference to
a subsection or a clause of the Section or subsection in which the reference
appears. In this Loan Agreement the singular includes the plural and the plural
the singular; "hereof," "herein," "hereto," "hereunder" and the like mean and
refer to this Loan Agreement as a whole and not merely to the specific section,
paragraph or clause in which the respective word appears; words importing any
gender include the other genders; references to statutes are to be construed as
including all statutory provisions consolidating, amending or replacing the
statute referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible visible form; the
words "including", "includes" and "include" shall be deemed to be followed by
the words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments, supplements,
assignments and other modifications thereto, but only to the extent such
modifications are not prohibited by the terms of this Loan Agreement, and
references to Persons include their respective permitted successors and assigns
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons.
14
SECTION 2
REVOLVING CREDIT FACILITY
-------------------------
Subject to the terms and conditions of this Loan Agreement, the Banks
hereby establish the Revolving Credit Facility in favor of the Borrower in the
principal amount of One Hundred Million Dollars ($100,000,000). Pursuant to the
Revolving Credit Facility, the Borrower may obtain Revolving Credit Loans and/or
Letters of Credit pursuant to, and subject to the terms and conditions set forth
in, this Loan Agreement for the purposes set forth in Sections 2.5A and 2.7
hereof. The Revolving Credit Facility is subject to the following terms and
conditions:
2.1 Revolving Loan Commitments, Revolving Credit Loans.
--------------------------------------------------
A. Revolving Loan Commitments. Each Bank severally agrees, subject
--------------------------
to the terms and conditions set forth herein and the limitations set forth below
with respect to the maximum amount of Revolving Credit Loans permitted to be
outstanding from time to time, to lend to the Borrower from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Revolving Credit Facility
Pro Rata Share of the aggregate Revolving Loan Commitments. The amount of each
Bank's Revolving Loan Commitment is set forth opposite its name on Schedule 2.1
------------
annexed to this Loan Agreement and the aggregate amount of the Revolving Loan
Commitments is One Hundred Million Dollars ($100,000,000); provided, the amount
--------
of the Revolving Loan Commitments shall be reduced from time to time by the
amount of any voluntary reductions that are allowed to be made pursuant to
Section 2.4D hereof (it being understood that all references to the Revolving
Loan Commitments of the Banks set forth in this Loan Agreement shall mean the
initial Revolving Loan Commitments of the Banks set forth on Schedule 2.1
------------
annexed to this Loan Agreement, as reduced by any voluntary reductions of the
Revolving Loan Commitments effected by the Borrower pursuant to Section 2.4D of
the Loan Agreement). Each Bank's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving Credit Loans shall
be paid in full no later than that date. Amounts borrowed under this Section
▇.▇▇ may be repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date, subject to the provisions of Section 2.4C hereof.
Anything contained in this Loan Agreement to the contrary notwithstanding,
the Revolving Credit Loans and the Revolving Loan Commitments shall be subject
to the following limitations:
(i) The Letter of Credit Subfacility is a sublimit under the
Revolving Credit Facility. The amount otherwise available for borrowing under
the Revolving Loan Commitments as of the time of determination thereof (other
than to reimburse the Agent Bank for the amount of any drawings under any
Letters of Credit honored by the Agent Bank and not theretofore reimbursed by
the Borrower) shall be reduced by an amount equal to the Letter of Credit Usage
as of such time of determination;
(ii) The Swing Line Credit Subfacility is a sublimit under the
Revolving Credit Facility. The amount otherwise available for borrowing under
the Revolving Loan Commitments as of the time of determination thereof shall be
reduced by an amount equal to the Swing Line Usage; and
(iii) The Total Utilization of Revolving Loan Commitments shall
not exceed the then-applicable aggregate Revolving Loan Commitments.
B. Term of Revolving Loan Commitments. The Revolving Loan
----------------------------------
Commitments shall become effective immediately as of the Closing Date, and as of
the Closing Date, the Borrower may obtain Revolving Credit Loans subject to the
terms and conditions contained herein. The Revolving Loan Commitments shall
continue in effect until the Revolving Loan Commitment Termination Date, unless
sooner terminated (i) by the Banks upon the occurrence and during the
continuation of an Event of Default, or (ii) by the Borrower upon a voluntary
reduction in all of the Revolving Loan Commitments, pursuant to Section 2.4D
hereof. The Revolving Loan Commitment Termination Date may only be extended by
the unanimous written consent of all of the Banks in their sole and absolute
discretion. If any Bank elects not to extend the Revolving Loan Commitment
Termination Date, such Bank shall notify the Borrower and the other Banks
thereof. In the event any Bank elects not to extend the Revolving Loan
Commitment Termination Date, the Revolving Loan Commitments shall terminate, and
the entire unpaid principal balance of and all accrued and unpaid interest on
the Revolving Credit Loans, the Swing Line Loans and the Letters of Credit shall
be respectively due and payable in full to the Banks on the Revolving Loan
Commitment Termination Date, subject at all times to the Banks' absolute right
to terminate the Revolving Loan Commitments upon the occurrence and during the
continuation of an Event of Default. Upon termination of the
15
Revolving Loan Commitments by the Banks upon the occurrence and during the
continuation of an Event of Default, the entire unpaid principal balance of and
all accrued and unpaid interest on the Revolving Credit Loans, the Swing Line
Loans and the Letters of Credit shall be respectively due and payable in full to
the Banks. The termination of the Revolving Loan Commitments, for whatever
reason, shall not in any way release or relieve the Borrower from its
obligations incurred hereunder or in connection herewith or under the Revolving
Credit Notes, the Applications and Agreements For Letters of Credit or the other
Loan Documents and the provisions hereof and of the Revolving Credit Notes, the
Applications and Agreements For Letters of Credit and the other Loan Documents
shall continue in full force and effect until the Revolving Credit Notes, the
Applications and Agreements For Letters of Credit and all other Obligations have
been respectively paid in full to the Banks. In the event the Borrower
terminates the Revolving Loan Commitments, pursuant to Section 2.4C hereof, the
Borrower shall be obligated to pay the Revolving Credit Notes, the Applications
and Agreements For Letters of Credit and all other Obligations in full to the
Banks, respectively.
C. Borrowing Mechanics For Revolving Credit Loans Made to the
----------------------------------------------------------
Borrower. Revolving Credit Loans (excluding Swing Line Loans under the Swing
--------
Line Credit Subfacility discussed in Section 2.6 hereof) made to the Borrower on
any Funding Date shall be in an aggregate minimum amount of (i) One Hundred
Thousand Dollars ($100,000) and integral multiples of Ten Thousand Dollars
($10,000) in excess of that amount in the case of Base Rate Loans, and (ii) Two
Hundred Fifty Thousand Dollars ($250,000) and integral multiples of Fifty
Thousand Dollars ($50,000) in excess of that amount in the case of LIBOR Loans.
Whenever the Borrower desires that the Banks make a Revolving Credit Loan to the
Borrower, the Borrower shall deliver to the Agent Bank a Request For Revolving
Credit Loan no later than 12:00 noon (Louisville, Kentucky time) at least three
(3) Business Days in advance of the proposed Funding Date in the case of a LIBOR
Loan and on the proposed Funding Date in the case of a Base Rate Loan. The
Request For Revolving Credit Loan shall be in the form of Exhibit E annexed
---------
hereto and shall specify (i) the proposed Funding Date, (ii) the amount of the
Revolving Credit Loan, (iii) whether the Revolving Credit Loan shall be a Base
Rate Loan or a LIBOR Loan, (iv) in the case of any Revolving Credit Loan
requested to be made as a LIBOR Loan, the initial Interest Period applicable
thereto, and (v) that the amount of the proposed Revolving Credit Loan will not
cause the Total Utilization of Revolving Loan Commitments to exceed the
aggregate Revolving Loan Commitments. Revolving Credit Loans made to the
Borrower may be continued as or converted into Base Rate Loans or LIBOR Loans in
the manner provided in Section 2.2D hereof. In lieu of delivering the above
described Request For Revolving Credit Loan, the Borrower may give the Agent
Bank telephonic notice by the required time of the requested Revolving Credit
Loan under this Section ▇.▇▇; provided that such notice shall be promptly
confirmed in writing by delivery of a Request For Revolving Credit Loan to the
Agent Bank on or before the applicable Funding Date.
No Bank shall incur any liability to the Borrower in acting upon any
telephonic notice referred to above which the Agent Bank believes in good faith
to have been given by a duly Authorized Officer or other Person authorized to
borrow on behalf of the Borrower or for otherwise acting in good faith under
this Section ▇.▇▇ and, upon funding of any Revolving Credit Loan by the Banks in
accordance with this Loan Agreement pursuant to any telephonic notice, the
Borrower shall have effected such Revolving Credit Loan hereunder.
Except as provided in Sections 3.2, 3.3 and 3.7 hereof, a Request For
Revolving Credit Loan for a LIBOR Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and the Borrower shall be bound to obtain the LIBOR Loan in accordance
therewith.
D. Disbursement of Revolving Credit Loans to the Borrower. All
------------------------------------------------------
Revolving Credit Loans made to the Borrower under this Loan Agreement shall be
made by the Banks simultaneously and proportionately in accordance with their
respective Revolving Credit Facility Pro Rata Shares, it being understood that
no Bank shall be responsible for any default by any other Bank in funding its
Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan requested
hereunder by the Borrower, nor shall the Revolving Loan Commitment of any Bank
be increased or decreased as a result of the default by another Bank in funding
its Revolving Credit Facility Pro Rata Share of a Revolving Credit Loan
requested hereunder by the Borrower. Each Bank shall make its Revolving Credit
Facility Pro Rata Share of each Revolving Credit Loan to be made to the Borrower
available to the Agent Bank, in same day funds, at the office of the Agent Bank
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ not later than 1:00
P.M. (Louisville, Kentucky time) on the Funding Date. Except with respect to
the reimbursement to the Agent Bank for a drawing under a Letter of Credit
issued by the Agent Bank as provided in Section 2.7 hereof, upon satisfaction or
waiver of the conditions precedent specified in Section 4.1 in the case of the
initial Revolving Credit Loan on the initial Funding Date and Section 4.2 in the
case of a Revolving Credit Loan on any subsequent Funding Date, the Agent Bank
shall make the proceeds of each Revolving Credit Loan requested by the Borrower
available to the Borrower on the Funding Date by causing an amount of same day
funds equal to the
16
proceeds of the Banks' respective Revolving Credit Facility Pro Rata Shares of
such Revolving Credit Loan received by the Agent Bank at its office located at
the address set forth in the preceding sentence to be credited to the Borrower's
Loan Account maintained at such office of the Agent Bank or wired to an account
designated by the Borrower. All Revolving Credit Loans shall be respectively
paid in full to the Banks on the Revolving Loan Commitment Termination Date.
Nothing in this Section 2.1D shall be deemed to relieve any Bank from its
obligation to fulfill its Revolving Loan Commitment hereunder or to prejudice
any rights that the Borrower may have against any Bank as a result of any
default by such Bank hereunder.
E. Records. Each Bank shall record the Revolving Credit Loans made
-------
to the Borrower from time to time and each repayment or prepayment in respect of
the principal amount of such Revolving Credit Loans in the Bank's electronic
records. Any such recordation in accordance with the terms of this Loan
Agreement shall be conclusive and binding on the Borrower absent manifest error;
provided, the failure to make any such recordation, or any error in such
--------
recordation, shall not affect the Borrower's obligation to repay all Revolving
Credit Loans to the Banks in accordance with this Loan Agreement and the
Revolving Credit Notes.
F. Borrower's Loan Accounts.
------------------------
(i) Each Bank shall enter all Revolving Credit Loans made to the
Borrower as debits in the Borrower's Loan Account maintained with such Bank.
Each Bank shall also record in the Borrower's Loan Account maintained with such
Bank in accordance with customary accounting practice all other charges,
expenses and other items properly chargeable to the Borrower; all payments made
by the Borrower on account of the Revolving Credit Loans made by such Bank; and
other appropriate debits and credits. The debit balance of the Borrower's Loan
Account maintained with such Bank shall reflect the unpaid principal balance of
the Revolving Credit Loans from time to time maintained with such Bank. At
least once each month the Agent Bank shall render a statement of account for the
Borrower's Loan Account maintained with the Agent Bank and the other Banks,
which statement shall be considered correct and accepted by the Borrower and
conclusively binding upon the Borrower in the absence of manifest error unless
the Borrower notifies the Agent Bank to the contrary within thirty (30) days
from the receipt of said statement by the Borrower.
(ii) Any and all principal, interest, charges and expenses,
attorneys' fees and taxes now or hereafter due and owing under the Revolving
Credit Notes and any of the other Loan Documents may be charged to any deposit
account of the Borrower with a Bank or to the Borrower's Loan Account maintained
with such Bank.
2.2 Interest on the Revolving Credit Loans.
--------------------------------------
A. Rates of Interest. Subject to the provisions of Section 2.2E,
-----------------
Section 3 and Section 13 hereof, each Revolving Credit Loan shall bear interest
on the unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at the (i) Base Rate or (ii) the LIBOR
plus the Applicable LIBOR Margin, as the case may be. The applicable interest
rate mode with respect to Revolving Credit Loans shall be selected by the
Borrower initially at the time a Request For Revolving Credit Loan is delivered
to the Agent Bank pursuant to Section 2.1C hereof. The interest rate with
respect to any Revolving Credit Loan may be changed by the Borrower from time to
time pursuant to Section 2.2D hereof. If on any day a Revolving Credit Loan is
outstanding with respect to which notice has not been delivered to the Agent
Bank or the Banks in accordance with the terms of this Loan Agreement specifying
the applicable interest rate, then, for that day, that Revolving Credit Loan
shall bear interest at the Base Rate.
Subject to the provisions of Section 2.2E, Section 3 and Section 13 hereof,
Revolving Credit Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, at a rate equal to the Base Rate.
(ii) if a LIBOR Loan, at a rate per annum equal to the sum of the
LIBOR plus the Applicable LIBOR Margin; provided that, on each Date of
-------------
Determination, commencing with the first Date of Determination to occur after
the Closing Date, the Applicable LIBOR Margin in effect for the Pricing Period
commencing on such Date of Determination and continuing for the term of the
Pricing Period that begins on such
17
Date of Determination shall be the Applicable LIBOR Margin corresponding to the
Pricing Level in effect for such Pricing Period, as follows:
-----------------------------------------------------------------------------------------------------------------------------
Adjusted Funded Applicable
Pricing Level Debt to EBITDA LIBOR Margin
------------- -------------- ------------
-----------------------------------------------------------------------------------------------------------------------------
Pricing Level I more than or equal to 0.00, but less than or equal to 1.24 1.00%
-----------------------------------------------------------------------------------------------------------------------------
Pricing Level II more than or equal to 1.25, but less than or equal to 1.74 1.25
-----------------------------------------------------------------------------------------------------------------------------
Pricing Level III more than or equal to 1.75, but less than or equal to 2.24 1.50
-----------------------------------------------------------------------------------------------------------------------------
Pricing Level IV more than or equal to 2.25, but less than or equal to 2.50 1.75
-----------------------------------------------------------------------------------------------------------------------------
Pricing Level V more than or equal to 2.51, but less than or equal to 3.00 2.00
-----------------------------------------------------------------------------------------------------------------------------
Notwithstanding anything in the foregoing to the contrary, if any
Compliance Certificate (the form of which is included as Exhibit G) delivered by
---------
the Borrower demonstrating the appropriate Pricing Level shall prove to be
incorrect (as determined by reference to a subsequent Compliance Certificate),
then such Compliance Certificate shall no longer be in effect. In such event,
the Agent Bank shall calculate the difference between the amount of interest
actually paid by the Borrower on LIBOR Loans on the basis of such incorrect
Compliance Certificate and the amount of interest which would have been due on
such LIBOR Loans had such incorrect Compliance Certificate not been delivered,
and shall forward to the Borrower a statement setting forth the amount of the
difference and the method of calculation of such amount (which calculation, in
the absence of demonstrable error, shall be deemed correct) and the Borrower
shall pay such amount to the Agent Bank for the benefit of the Banks within
three (3) Business Days of such notice.
B. Interest Periods for LIBOR Loans. In connection with each LIBOR
--------------------------------
Loan, the Borrower may, pursuant to the applicable Request For Revolving Credit
Loan, select the Interest Period to be applicable to such LIBOR Loan, which
Interest Period shall be at the Borrower's option either a one, two, three or
six month period. The following provisions are applicable to Interest Periods
generally:
(i) the initial Interest Period for any LIBOR Loan shall
commence on the Funding Date of such LIBOR Loan, in the case of a Revolving
Credit Loan initially made as a LIBOR Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Revolving Credit
Loan converted to a LIBOR Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a LIBOR Loan continued as such pursuant to Notice of
Conversion/Continuation, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that, if any Interest Period would otherwise expire on a
-------------
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iv) any Interest Period of a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) of this Section 2.2B, end on the last
Business Day of a calendar month;
(v) in the event the Borrower fails to specify an Interest
Period with respect to a LIBOR Loan in the applicable Request For Revolving
Credit Loan or Notice of Conversion/Continuation, the Borrower shall be deemed
to have selected an Interest Period of one month; and
(vi) no Interest Period shall extend beyond the Revolving Loan
Commitment Termination Date.
C. Interest Payments. Subject to the provisions of Section 2.2E
-----------------
hereof, interest shall be payable on the Revolving Credit Loans as follows:
18
(i) interest on each Base Rate Loan shall be payable in arrears
on and to the last day of each calendar quarter, and at maturity (including
final maturity); and
(ii) interest on each LIBOR Loan shall be payable in arrears on
and to the ninetieth (90th) day during each Interest Period applicable to that
LIBOR Loan, the last day of each Interest Period applicable to that LIBOR Loan,
and upon any prepayment or repayment of that LIBOR Loan (to the extent accrued
on the amount being prepaid or repaid) and at maturity (including final
maturity).
D. Conversion or Continuation of Interest Rate Modes. Subject to
-------------------------------------------------
the provisions of Section 2.4 hereof, the Borrower shall have the option (i) at
any time to convert all or any part of outstanding Revolving Credit Loans
bearing interest as Base Rate Loans to Revolving Credit Loans bearing interest
as LIBOR Loans; and (ii) upon the expiration of any Interest Period applicable
to a Revolving Credit Loan bearing interest as a LIBOR Loan, (a) to continue all
or any portion of such Loan as a LIBOR Loan, with the succeeding Interest Period
of such continued LIBOR Loan to commence on the most recent Interest Payment
Date thereof or (b) to convert all or any part of such Loan to a Base Rate Loan.
The Borrower shall deliver a Notice of Conversion/Continuation to the Agent Bank
no later than 12:00 noon (Louisville, Kentucky time) at least three (3) Business
Days in advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount of the Revolving Credit
Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a conversion to, or continuation
of, a LIBOR Loan, the requested Interest Period, and (v) in the case of a
conversion to, or a continuation of, a LIBOR Loan or a Base Rate Loan, that no
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, the Borrower may give the
Agent Bank telephonic notice by the required time of any proposed
conversion/continuation under this Section 2.2D; provided that such notice shall
be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent Bank on or before the proposed
conversion/continuation date.
The Banks shall not incur any liability to the Borrower in acting upon any
telephonic notice referred to above that the Agent Bank believes in good faith
to have been given by a duly Authorized Officer or other Person authorized to
act on behalf of the Borrower or for otherwise acting in good faith under this
Section 2.2D, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Revolving Credit Loans in
accordance with this Loan Agreement pursuant to any such telephonic notice, the
Borrower shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in Sections 3.2, 3.3 and 3.7 hereof, a Notice
of Conversion/Continuation for conversion to, or continuation of, a LIBOR Loan
(or telephonic notice in lieu thereof) shall be irrevocable on and after the
related Interest Rate Determination Date and the Borrower shall be bound to
effect a conversion or continuation in accordance therewith.
E. Post-Maturity Interest. Any principal payments on the Revolving
----------------------
Credit Loans not paid when due and, to the extent permitted by applicable law,
any interest payments on the Revolving Credit Loans or any fees or other amounts
owed by the Borrower hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate equal to the Default Rate. Payment or acceptance of the increased
rates of interest provided for in this Section 2.2E is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of the Banks.
F. Computation of Interest. Interest on Revolving Credit Loans
-----------------------
shall be computed on the basis of a 360-day year, and the actual number of days
elapsed in the period during which it accrues. In computing interest on any
Revolving Credit Loan, the date of the making of such Revolving Credit Loan or
the first day of an Interest Period applicable to such Revolving Credit Loan, as
the case may be, shall be included, and the date of payment of such Revolving
Credit Loan or the expiration date of an Interest Period applicable to such
Revolving Credit Loan or, with respect to a Revolving Credit Loan being
converted to a LIBOR Loan or a Base Rate Loan, the date of conversion of such
Revolving Credit Loan to such LIBOR Loan or a Base Rate Loan shall be excluded;
provided that if a Revolving Credit Loan is repaid on the same day on which it
is made, one day's interest shall be paid on that Revolving Credit Loan.
G. Limitation on LIBOR Loan Tranches. At no time shall the number
---------------------------------
of Revolving Credit Loans bearing interest as LIBOR Loans outstanding at any
time outstanding exceed twelve (12) in the aggregate.
19
2.3 Fees.
----
A. Commitment Fees.
---------------
(i) The Borrower agrees to pay to the Agent Bank, for the
benefit of the Banks in proportion to their respective Revolving Credit Facility
Pro Rata Shares, commitment fees (the "Revolving Credit Facility Commitment
Fees") for the period from and including the Closing Date to and excluding the
Revolving Loan Commitment Termination Date, equal to the average of the daily
excess of the Revolving Loan Commitments (as they may be reduced pursuant to
Sections 2.4C hereof) over the aggregate outstanding principal amount of
Revolving Credit Loans, Swing Line Loans and the Letter of Credit Usage
multiplied by the Applicable Commitment Fee Percentage set forth below; provided
--------
that, on each Date of Determination, commencing with the first Date of
----
Determination to occur after the Closing Date, the Applicable Commitment Fee
Percentage in effect for the Pricing Period commencing on such Date of
Determination and continuing for the term of the Pricing Period that begins on
such Date of Determination shall be the Applicable Commitment Fee Percentage
corresponding to the Pricing Level in effect for such Pricing Period, as
follows:
Adjusted Funded Applicable Commitment Fee
Pricing Level Debt to EBITDA Percentage
------------- -------------- ----------
------------------------------------------------------------------------------------------------------------------------------
Pricing Level I more than or equal to 0.00, but less than or equal to 1.24 0.20%
------------------------------------------------------------------------------------------------------------------------------
Pricing Level II more than or equal to 1.25, but less than or equal to 1.74 0.20
------------------------------------------------------------------------------------------------------------------------------
Pricing Level III more than or equal to 1.75, but less than or equal to 2.24 0.25
------------------------------------------------------------------------------------------------------------------------------
Pricing Level IV more than or equal to 2.25, but less than or equal to 2.50 0.25
------------------------------------------------------------------------------------------------------------------------------
Pricing Level V more than or equal to 2.51, but less than or equal to 3.00 0.25
------------------------------------------------------------------------------------------------------------------------------
The Revolving Credit Facility Commitment Fees shall be calculated on the basis
of a 360-day year and the actual number of days elapsed and shall be payable
quarterly in arrears on the last day of each Fiscal Quarter, commencing on the
first such date to occur after the Closing Date, and on the Revolving Loan
Commitment Termination Date. The Borrower shall have no liability to any Bank
for any Revolving Credit Facility Commitment Fees paid to the Agent Bank which
the Agent Bank does not properly remit to such Bank, and such Bank's sole remedy
in respect thereof shall be against the Agent Bank.
(ii) Notwithstanding anything in the foregoing to the contrary,
if any Compliance Certificate (the form of which is attached hereto as
Exhibit G) delivered by the Borrower demonstrating the appropriate Pricing Level
---------
shall prove to be incorrect (as determined by reference to a subsequent
Compliance Certificate), such Compliance Certificate shall no longer be in
effect, and the Agent Bank shall notify the Borrower of such incorrectness and
shall calculate the difference between the amount of the Revolving Credit
Facility Commitment Fees actually paid by the Borrower on the basis of such
incorrect Compliance Certificate and the amount of Revolving Credit Facility
Commitment Fees which would have been due had such incorrect Compliance
Certificate not been delivered. The Agent Bank shall notify the Borrower of the
amount of such difference, if any, in a statement setting forth the method of
calculation of such amount (which calculation, in the absence of demonstrable
error, shall be deemed correct) and the Borrower shall pay such amount to the
Agent Bank for the benefit of the Banks within three (3) Business Days of such
notice.
B. Upfront Fees. The Borrower shall pay to the Agent Bank for the
------------
benefit of the Banks in proportion to their respective Revolving Credit Facility
Pro Rata Shares on the Closing Date, an upfront fee equal to 25/100 of one
percent (0.25%) of the Revolving Loan Commitments. The Borrower shall have no
liability for any Upfront Fees paid to Agent Bank which the Agent Bank does not
properly remit to such Bank, and such Bank's sole remedy in respect thereof
shall be against the Agent Bank.
C. Other Fees and Expenses. The Borrower agrees to pay to the Agent
-----------------------
Bank such fees for serving as the Agent Bank hereunder in the amounts and at the
times agreed to in writing between the Borrower and the Agent Bank, as well as
any other fees agreed to in writing between the Borrower and the Agent Bank.
The Borrower also agrees to pay to the Agent Bank on the Closing Date the
reasonable fees and expenses of the Agent
20
Bank's counsel in negotiating, drafting and closing this Loan Agreement, the
Loan Documents and related documents.
2.4 Prepayments and Payments; Reductions in Revolving Loan Commitments.
------------------------------------------------------------------
A. Voluntary Prepayments. The Borrower may, upon not less than one
---------------------
(1) Business Day prior written or telephonic notice confirmed in writing to the
Agent Bank, at any time and from time to time, prepay any Revolving Credit Loans
(other than Swing Line Loans, which are discussed in Section 2.6 hereof) in
whole or in part in an aggregate minimum amount of One Hundred Thousand Dollars
($100,000) and integral multiples of Twenty Five Thousand Dollars ($25,000) in
excess of that amount; provided however that in the event that the Borrower
prepays a LIBOR Loan pursuant to this Section 2.4A on a date that is other than
the expiration date of the Interest Period applicable thereto, the Borrower
shall compensate the Banks in accordance with the provisions of Section 3.4
hereof. If the Borrower has given notice of prepayment as aforesaid, the
principal amount of the Revolving Credit Loans specified in such notice shall
become due and payable on the prepayment date specified therein. All prepayments
of principal of the Revolving Credit Loans shall be accompanied by the payment
of accrued interest on the principal amount being prepaid and shall be applied
to the payment of interest before application to principal. All prepayments of
the Revolving Credit Loans shall be applied first to Base Rate Loans to the full
extent thereof and then shall be applied to LIBOR Loans, in each case in a
manner which minimizes the amount of any payments required to be made by the
Borrower pursuant to Section 3.4 hereof.
B. General Provisions Regarding Payments.
-------------------------------------
(i) Manner and Time of Payment. All payments of principal,
--------------------------
interest and fees hereunder and under the Revolving Credit Notes by the Borrower
shall be made without defense, setoff and counterclaim and in same day funds and
delivered to the Agent Bank not later than 12:00 noon (Louisville, Kentucky
time) on the date due at its office located in Louisville, Kentucky; funds
received by the Agent Bank after that time shall be deemed to have been paid by
the Borrower on the next succeeding Business Day. The payments to be made by the
Borrower with respect to the Revolving Credit Notes for the benefit of the Banks
shall be aggregated into a single payment made by the Borrower to the Agent Bank
for the benefit of the Banks. The Agent Bank shall be responsible for remitting
to each Bank its portion of such payment based upon its Revolving Credit
Facility Pro Rata Share of such payment.
(ii) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder or under the Revolving Credit Notes shall be stated to be due on a day
that is not a Business Day, such payment shall be made on the next succeeding
Business Day (unless no further Business Day occurs in such month, in which case
payment shall be made on the next preceding Business Day) and such extension or
reduction of time shall be included in the computation of the payment of
interest hereunder or under the Revolving Credit Notes or of the Revolving
Credit Facility Commitment Fees, as the case may be.
C. Voluntary Reduction of Revolving Loan Commitments. The Borrower
-------------------------------------------------
shall have the right, at any time and from time to time, to terminate in whole
or permanently reduce in part, without premium or penalty, the Revolving Loan
Commitments. The Borrower shall give not less than five (5) Business Days' prior
written notice to the Agent Bank designating the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial reduction of
the Revolving Loan Commitments. Such termination or partial reduction of the
Revolving Loan Commitments shall be effective on the date specified in the
Borrower's notice and shall reduce the Revolving Loan Commitment of each Bank in
proportion to its Revolving Credit Facility Pro Rata Share. Any such partial
reduction of the Revolving Loan Commitments shall be in a minimum amount of One
Million Dollars ($1,000,000) and integral multiples of One Hundred Thousand
Dollars ($100,000) in excess of that amount.
2.5 Use of Proceeds.
---------------
A. Revolving Credit Loans. The proceeds of the Revolving Credit
----------------------
Loans shall be used by the Borrower to finance Permitted Acquisitions, to
finance working capital requirements and to finance general corporate purposes
of the Borrower.
B. Margin Regulations. No portion of the proceeds of any Revolving
------------------
Credit Loans under this Loan Agreement shall be used by the Borrower in any
manner which might cause the making of the Revolving Credit Loans or the
application of the proceeds thereof to violate Regulation G, Regulation U,
Regulation T, or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to
21
violate the Securities and Exchange Act of 1934, in each case as in effect on
the date or dates of the making of any such Revolving Credit Loan and such use
of the proceeds thereof. If requested by the Banks, the Borrower shall execute
and deliver to the Banks a completed Federal Reserve Form U-1.
2.6 Swing Line Credit Subfacility. Subject to the terms and conditions of
-----------------------------
this Loan Agreement, the Agent Bank hereby agrees to make Swing Line Loans to
the Borrower under the Swing Line Credit Subfacility.
A. Swing Line Credit Subfacility. From the date hereof throughout
-----------------------------
the Swing Line Commitment Period, and subject to the terms, conditions and other
provisions of this Agreement, the Agent Bank agrees to make Swing Line Loans to
the Borrower from time to time in a total amount not exceeding Five Million
Dollars ($5,000,000) in amounts of One Thousand Dollars ($1,000) and integral
multiples of One Thousand Dollars ($1,000) in excess thereof. The Swing Line
Credit Subfacility is established for the administrative convenience of the
Borrower, the Agent Bank and the Banks. During the Swing Line Commitment Period
the Borrower may borrow and repay advances under the Swing Line Credit
Subfacility in whole or in part, and reborrow all in accordance with the terms,
conditions and other provisions of this Agreement. The making of each Swing Line
Loan shall be subject to the further provisions of this Section 2.6, and shall
be subject to all of the conditions of lending stated in Section 4.2 being
fulfilled at the time of each Swing Line Loan, and provided further that each
Swing Line Loan shall be on the terms and subject to the conditions hereinafter
stated.
(i) Interest. Swing Line Loans shall bear interest (calculated
--------
on the basis that an entire year's interest is earned in 365 or 366 days as the
case may be) from the date of each such Swing Line Loan until repaid at an
annual rate equal to the Bank One 1-Day Funds Transfer Pricing Rate. After
maturity, whether by acceleration or scheduled maturity, until paid in full, or
when and so long as there shall exist any uncured Event of Default, Swing Line
Loans shall bear interest at the applicable Default Rate. Interest shall be due
and payable to the Agent Bank at the end of each calendar quarter following
receipt of a statement from the Agent Bank and on the Swing Line Commitment
Termination Date.
(ii) Principal. The Borrower shall pay all principal of all then
---------
outstanding Swing Line Loans in excess of $500,000 before the end of each fiscal
month. To the extent that the Borrower fails to repay such amount by such date,
the Agent Bank shall convert the outstanding principal balance of such Swing
Line Loans in excess of $500,000 to a Revolving Credit Loan, to be payable on
the dates and in the manner set forth in Article II hereof and to bear interest
as a Base Rate Loan or, at the Borrower's option, as a LIBOR Loan, any LIBOR
loan shall be in the minimum amount of Two Hundred Fifty Thousand Dollars
($250,000) and integral multiples of Fifty Thousand Dollars ($50,000) in excess
thereof. The Borrower shall pay the Agent Bank the outstanding principal balance
of all Swing Line Loans on the Swing Line Commitment Termination Date.
(iii) Conditions for Swing Line Loans. So long as no Event of
-------------------------------
Default shall have occurred and be continuing, during the Swing Line Commitment
Period, the Borrower may borrow, repay and reborrow under the Swing Line Credit
Subfacility on any Business Day, subject to the terms, conditions and other
provisions of this Agreement. The making of Swing Line Loans will be conditioned
upon receipt by the Agent Bank from the Borrower, of a Request for Swing Line
Loan by 12:00 noon Louisville, Kentucky, time on the Business Day of the
requested Swing Line Loan. Notwithstanding the foregoing, the Agent Bank may, in
its sole discretion, accept an oral or written request made on behalf of the
Borrower by an Authorized Officer by telephone, telex, facsimile or some other
form of written electronic communication, in which case the Agent Bank shall be
entitled to rely on any such oral or written request received by the Agent Bank
in good faith from anyone reasonably believed by the Agent Bank to be an
Authorized Officer. The Borrower shall promptly confirm any such communication
by delivery of a Request for Swing Line Loan upon request of the Agent Bank.
Disbursements of, and payments of principal, with respect to Swing Line Loans
may be evidenced by notations of the Agent Bank in its electronic data
processing equipment. The aggregate amount of all disbursements of Swing Line
Loans made and shown on the Agent Bank's electronic data processing equipment,
over all of the payments of principal made by the Borrower and recorded on the
Agent Bank's electronic data processing equipment shall be prima facie evidence
----- -----
of the outstanding principal balance due under the Swing Line Credit
Subfacility.
22
(v) General Provisions Regarding Payments.
-------------------------------------
(a) Manner and Time of Payment. All payments of principal,
--------------------------
interest and fees hereunder and under the Swing Line Credit Subfacility by the
Borrower shall be made without defense, setoff and counterclaim and in same day
funds and delivered to the Agent Bank not later than 12:00 noon (Louisville,
Kentucky time) on the due date therefor at its office located in Louisville,
Kentucky; funds received by the Agent Bank after that time shall be deemed to
have been paid by the Borrower on the next succeeding Business Day.
(b) Payments on Business Days. Whenever any payment to be
-------------------------
made hereunder or under the Swing Line Credit Subfacility shall be stated to be
due on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day (unless no further Business Day occurs in such month, in
which case payment shall be made on the next preceding Business Day) and such
extension or reduction of time shall be included in the computation of the
payment of interest hereunder or under the Swing Line Credit Subfacility.
(vi) Voluntary Reduction of Swing Line Loan Commitment. The
-------------------------------------------------
Borrower shall have the right, at any time and from time to time, to terminate
in whole or permanently reduce in part, without premium or penalty, the Swing
Line Loan Commitment. The Borrower shall give not less than five (5) Business
Days' prior written notice to the Agent Bank designating the date (which shall
be a Business Day) of such termination or reduction and the amount of any
partial reduction of the Swing Line Loan Commitment. Such termination or partial
reduction of the Swing Line Loan Commitment shall be effective on the date
specified in the Borrower's notice. Any such partial reduction of the Swing Line
Loan Commitment shall be in a minimum amount of One Hundred Thousand Dollars
($100,000).
(vii) Other Banks. Swing Line Loans will be made by the Agent
-----------
Bank in its individual capacity. Upon a request to reduce the principal amount
outstanding in Swing Line Loans from the Agent Bank, the Banks shall make
advances based on their Revolving Credit Facility Pro Rata Shares in amounts
sufficient to effect the requested reduction in Swing Line Loans. Any such
advances will be made pursuant to the terms and conditions set forth in this
Loan Agreement.
(viii) Limitation. The Borrower may not request that the Agent
----------
Bank make any Swing Line Loan if, after making such Swing Line Loan, (x) the
total aggregate principal amount of outstanding Swing Line Loans would exceed
Five Million Dollars ($5,000,000), or (y) the Total Utilization of Revolving
Loan Commitments would exceed the Revolving Loan Commitments, as the amount
available under such Revolving Loan Commitments may be reduced from time to time
pursuant to Sections 2.4C.
B. Use of Proceeds.
---------------
(i) Swing Line Loans. The principal of the Swing Line Loans
----------------
shall be used by Borrower for any lawful corporate purposes.
(ii) Margin Regulations. No portion of the principal of the Swing
------------------
Line Loans shall be used by the Borrower in any manner which might cause the
making of the Swing Line Loan or the application of the proceeds thereof to
violate Regulation G, Regulation U, Regulation T, or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Securities and Exchange Act of 1934, in each case as in effect
on the date or dates of each Swing Line Loan. If requested by the Agent Bank,
the Borrower shall execute and deliver to the Agent Bank a completed Federal
Reserve Form U-1.
2.7 Letters of Credit.
-----------------
A. Letters of Credit. Subject to the terms and conditions of this Loan
-----------------
Agreement and in reliance upon the representations and warranties of the
Borrower set forth herein, the Borrower may request, in accordance with the
provisions of this Section 2.7A, that on and after the Closing Date, the Agent
Bank issue Letters of Credit for the account of the Borrower denominated in
Dollars. Issuances of Letters of Credit shall be subject to the following
limitations:
(i) The Borrower may not request that the Agent Bank issue any Letter
of Credit if, after giving effect to such issuance, (x) the total Letter of
Credit Usage would exceed Fifteen Million Dollars ($15,000,000), or (y) the
Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan
23
Commitments, as the amount available under such Revolving Loan Commitments may
be reduced from time to time pursuant to Sections 2.4C.
(ii) In no event shall the Agent Bank issue, reissue, amend
or permit the extension of: (y) any Letter of Credit having an expiration date
later than the Revolving Loan Commitment Termination Date in effect at the time
of issuance, reissuance, amendment or extension (automatic or otherwise)
thereof; or (z) subject to the foregoing clause (y), any Letter of Credit having
an expiration date more than one year after its date of issuance; provided that
subject to the foregoing clause (y), this clause (z) shall not prevent the Agent
Bank from agreeing that a Letter of Credit will automatically be extended
annually for one or more periods each not to exceed one year if the Agent Bank
does not cancel such extension, subject to the Banks extending the Revolving
Loan Commitment Termination Date.
It shall be a condition precedent to the issuance of any Letter of Credit
in accordance with the provisions of this Section 2.7 that each condition set
forth in Sections 4.1 and 4.2A and 4.2B of this Loan Agreement shall have been
satisfied.
Immediately upon the issuance of each Letter of Credit, each Bank shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Agent Bank
a participation in such Letter of Credit and drawings thereunder in an amount
equal to such Bank's Revolving Credit Facility Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
Each Letter of Credit shall provide that it shall be subject to the Uniform
Customs and Practice of Documentary Credits (1993 Revision), International
Chamber of Commerce Brochure No. 500, or any successor thereto. Each Letter of
Credit may provide that the Agent Bank may (but shall not be required to) pay
the beneficiary thereof upon the occurrence of an Event of Default and the
acceleration of the maturity of the Revolving Credit Loans or, if payment is not
then due to the beneficiary, provide for the deposit of funds in an account to
secure payment to the beneficiary and that any funds so deposited shall be paid
to the beneficiary of the Letter of Credit if conditions to such payment are
satisfied or returned to the Agent Bank for distribution to the Banks (or, if
all Obligations shall have been indefeasibly paid in full, to the Borrower) if
no payment to the beneficiary has been made and thirty (30) days after the final
date available for drawings under the Letter of Credit has passed. Each payment
or deposit of funds by the Agent Bank as provided in this paragraph shall be
treated for all purposes of this Loan Agreement as a drawing duly honored by the
Agent Bank under the related Letter of Credit.
B. Notice of Issuance. Whenever the Borrower desires the issuance
------------------
of a Letter of Credit, the Borrower shall deliver to the Agent Bank an
Application and Agreement for Letter of Credit in the form of Exhibit C annexed
---------
hereto no later than 12:00 noon (Louisville, Kentucky time) at least ten (10)
Business Days, or in each case such shorter period as may be agreed to by the
Agent Bank in any particular instance, in advance of the proposed date of
issuance. The Application and Agreement for Letter of Credit shall specify (i)
the proposed date of issuance (which shall be a Business Day under the laws of
the Commonwealth of Kentucky), (ii) the face amount of the Letter of Credit,
(iii) the expiration date of the Letter of Credit, (iv) the name and address of
the beneficiary of the Letter of Credit, and (v) a summary of the purpose and
contemplated terms of the Letter of Credit. Prior to the date of issuance of any
Letter of Credit, the Borrower shall specify a precise description of the
documents and the proposed text of any certificate to be presented by the
beneficiary under such Letter of Credit which, if presented by the beneficiary
prior to the expiration date of the Letter of Credit, would require the Agent
Bank to make payment under the Letter of Credit; provided that the Agent Bank,
--------
in its sole reasonable judgment, may require changes in any such documents and
certificates; provided further that no Letter of Credit shall require payment
----------------
against a conforming draft to be made thereunder on the same Business Day (under
the laws of the Commonwealth of Kentucky) that such draft is presented if such
presentation is made after 12:00 noon (Louisville, Kentucky time) on such
Business Day. In determining whether to pay under any Letter of Credit, the
Agent Bank shall be responsible only to determine that the documents and
certificates required to be delivered under that Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit; provided, further, nothing contained in this Section 2.7B
-----------------
shall be deemed to prejudice the right of the Borrower to recover from the Agent
Bank in respect of any amounts paid by the Agent Bank under any Letter of Credit
in the event that it is determined by a court of competent jurisdiction that the
payment with respect to such Letter of Credit by the Agent Bank constituted
gross negligence or willful misconduct on the part of the Agent Bank.
C. Delivery of Copies of Letters of Credit and Letter of Credit
------------------------------------------------------------
Amendments. The Agent Bank shall, promptly after the issuance of each Letter of
----------
Credit, or any amendment or cancellation thereto, furnish to the Banks a copy of
such Letter of Credit or of such amendment or cancellation, as the case may be,
together with,
24
in the case of the issuance of any Letter of Credit, the amount of its risk
participation therein, which shall be such Bank's Revolving Credit Facility Pro
Rata Share of the stated amount of such Letter of Credit.
D. Payment of Amounts Drawn Under Letters of Credit. In the event of
------------------------------------------------
any drawing under any Letter of Credit by the beneficiary thereof, the Agent
Bank shall promptly notify the Borrower and the Banks of such drawing, and the
Borrower shall reimburse the Agent Bank on the date on which such drawing is
honored in an amount in same day funds equal to the amount of such drawing. The
Borrower shall have the right to obtain a Revolving Credit Loan (subject to the
limitations set forth in Section ▇.▇▇ hereof and in the absence of any Event of
Default hereunder) in an amount sufficient to repay in full any such drawing
honored by the Agent Bank under a Letter of Credit.
E. Payment by Banks with Respect to Letters of Credit. In the event
--------------------------------------------------
that the Borrower shall fail to reimburse the Agent Bank as provided in Section
2.7D hereof in an amount equal to the amount of any drawing honored by the Agent
Bank under a Letter of Credit issued by the Agent Bank, the Agent Bank shall
promptly notify each of the other Banks of the unreimbursed amount of such
drawing and of each Bank's participation therein, which participation shall be
equal to such Bank's Revolving Credit Facility Pro Rata Share of the
unreimbursed amount of such drawing. Each Bank shall make available to the Agent
Bank an amount equal to its participation in same day funds, at the offices of
the Agent Bank located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ not
later than 1:00 P.M. (Louisville, Kentucky time) on the Business Day (under the
laws of Commonwealth of Kentucky) after the date notified by the Agent Bank, and
each such amount so made available by each Bank will be deemed a Revolving
Credit Loan made by such Bank to the Borrower under this Loan Agreement as of
the date such amount is so made available to the Agent Bank. In the event that
any Bank fails to make available to the Agent Bank the amount of such Bank's
participation in such Letter of Credit as provided in this Section 2.7E, the
Agent Bank shall be entitled to recover such amount on demand from such Bank
together with interest at the customary rate set by the Agent Bank for the
correction of errors among banks for three (3) Business Days and thereafter at
the Federal Funds Effective Rate. Nothing in this Section 2.7 shall be deemed to
prejudice the right of any Bank to recover from the Agent Bank any amounts made
available by such Bank to the Agent Bank pursuant to this Section 2.7E in the
event that it is determined by a court of competent jurisdiction that the
payment made by the Agent Bank with respect to a Letter of Credit in respect of
which reimbursement was made by such Bank constituted gross negligence or
willful misconduct on the part of the Agent Bank. The Agent Bank shall
distribute to each other Bank, to the extent that it has paid all amounts
payable by it under this Section 2.7E with respect to any Letter of Credit
issued by the Agent Bank, such Bank's Revolving Credit Facility Pro Rata Share
of all payments received by the Agent Bank from the Borrower in reimbursement of
drawings honored by the Agent Bank under such Letter of Credit, as the case may
be, when such payments are received. Notwithstanding anything to the contrary
herein, each Bank shall have a direct right to reimbursement of such amounts
from the Borrower, subject to the procedures for reimbursing such Bank set forth
in this Section 2.7.
F. Compensation. The Borrower agrees to pay, without duplication,
------------
the following amounts to the Agent Bank with respect to each such Letter of
Credit issued by the Agent Bank for the account of the Borrower:
(i) with respect to each Letter of Credit, a letter of credit fee
(the "Letter of Credit Fee") payable to the Agent Bank for the account of the
Banks (and to be shared by the Banks pro rata in accordance with their
respective Revolving Credit Facility Pro Rata Shares) equal to the Applicable
Letter of Credit Percentage multiplied by the maximum amount available from time
to time to be drawn under such Letter of Credit; provided that, on each Date of
-------------
Determination, commencing with the first Date of Determination to occur after
the Closing Date, the applicable Letter of Credit Percentage in effect for the
Pricing Period commencing on such Date of Determination and continuing for the
term of the Pricing Period that begins on such Date of Determination shall be
the Applicable Letter of Credit Percentage corresponding to the Pricing Level in
effect for such Pricing Period, as follows:
25
Applicable
Adjusted Funded Letter of Credit
Pricing Level Debt to EBITDA Percentage
------------- -------------- ----------
-----------------------------------------------------------------------------------------------------------------
Pricing Level I more than or equal to 0.00, but less than or equal to 1.24 1.00%
-----------------------------------------------------------------------------------------------------------------
Pricing Level II more than or equal to 1.25, but less than or equal to 1.74 1.25
-----------------------------------------------------------------------------------------------------------------
Pricing Level III more than or equal to 1.75, but less than or equal to 2.24 1.50
-----------------------------------------------------------------------------------------------------------------
Pricing Level IV more than or equal to 2.25, but less than or equal to 2.50 1.75
-----------------------------------------------------------------------------------------------------------------
Pricing Level V more than or equal to 2.51, but less than or equal to 3.00 2.00
-----------------------------------------------------------------------------------------------------------------
The Letter of Credit Fee, as based on the Applicable Letter of Credit
Percentage, shall be payable quarterly in advance beginning on the date of
issuance of such Letter of Credit and quarterly in advance beginning on the
date, if such should occur, of each renewal or extension of such Letter of
Credit;
(ii) with respect to drawings made under any Letter of Credit,
interest, payable in immediately available funds to the Agent Bank on demand, on
the amount paid by the Agent Bank in respect of each such drawing from the date
of the drawing through the date such amount is reimbursed by the Borrower at a
variable rate equal to the Base Rate;
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder, documentary and processing
charges payable to the Agent Bank in accordance with the Agent Bank's standard
schedule for such charges in effect at the time of such issuance, amendment,
transfer or drawing, as the case may be;
(iv) promptly upon receipt by the Agent Bank of the amount described
in subdivisions (ii) and (iii) of this Section 2.7F, the Agent Bank shall
distribute to each Bank its Revolving Credit Facility Pro Rata Share of such
amount; and
(v) with respect to each Letter of Credit, a letter of credit
fronting fee (the "Letter of Credit Fronting Fee") payable to the Agent Bank for
its own account, in the amount of one eighth of one percent (0.125%) per annum
multiplied by the aggregate face amount of Letters of Credit outstanding during
a Fiscal Quarter, plus other customary charges, if any, payable quarterly in
advance.
G. Obligations Absolute; Indemnification, Nature of the Agent Bank's
-----------------------------------------------------------------
Duties. Subject to the right of the Borrower and the Banks to seek damages in
------
the event that a court of competent jurisdiction determines that the Agent Bank
acted in bad faith and/or committed gross negligence or willful misconduct in
honoring any draft presented under any Letter of Credit issued by the Agent
Bank, the obligation of the Borrower to reimburse the Agent Bank for drawings
made under such Letter of Credit and the obligation of the Banks under Section
2.7E hereof to reimburse the Agent Bank in accordance with their Revolving
Credit Facility Pro Rata Shares for drawings made under such Letter of Credit
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Loan Agreement under all circumstances including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of such Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary or any transferee
of such Letter of Credit (or any Persons for whom any such transferee may be
acting), the Agent Bank, any Bank or any other Person, whether in connection
with this Loan Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between the Borrower and the
beneficiary for which such Letter of Credit was procured); or
(iii) any draft, demand, certificate or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or
(iv) payment by the Agent Bank under such Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit; or
26
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that an Event of Default or a Potential Event of
Default under this Loan Agreement shall have occurred and be continuing.
In addition to amounts payable as elsewhere provided in this Section 2, the
Borrower hereby agrees to protect, indemnify, pay and save the Agent Bank
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees),
which the Agent Bank may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of the Letters of Credit, other than as a result
of bad faith, gross negligence or willful misconduct of the Agent Bank as
determined by a court of competent jurisdiction, or (ii) the failure of the
Agent Bank to honor a drawing under any Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority.
As between the Borrower and the Agent Bank, the Borrower assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit issued by the
Agent Bank for the account of the Borrower by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
the Agent Bank shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of the Letters of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) for failure of the beneficiary of any such
Letter of Credit to comply fully with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any such Letter of Credit
or of the proceeds thereof; (vii) for the misapplication by the beneficiary of
any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes beyond the control
of the Agent Bank, including, without limitation, any act or omission, whether
rightful or wrongful, of any present or future government agency or authority.
None of the above shall affect, impair, or prevent the vesting of any of the
Agent Bank's rights or powers hereunder; provided however, that the Agent Bank
----------------
shall be responsible for any payment the Agent Bank makes under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit in the event such
payment constitutes bad faith, gross negligence or willful misconduct of the
Agent Bank as determined by a court of competent jurisdiction.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Agent Bank
under or in connection with the Letters of Credit issued by it or the related
certificates, if taken or omitted in good faith and without bad faith, gross
negligence or willful misconduct, shall not put the Agent Bank under any
resulting liability to the Borrower or the Banks.
Notwithstanding anything to the contrary contained in this Section 2.7, the
Borrower shall have no obligation to indemnify the Agent Bank in respect of any
liability incurred by the Agent Bank arising out of the bad faith, gross
negligence or willful misconduct of the Agent Bank, as determined by a court of
competent jurisdiction, or out of the wrongful dishonor by the Agent Bank of
proper demand for payment made under the Letters of Credit issued by it.
H. Computation of Interest. Interest payable pursuant to this
-----------------------
Section 2.7 shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which it accrues.
I. Amendments. The Borrower may request that the Agent Bank enter
----------
into one or more amendments of any Letter of Credit issued by the Agent Bank for
the account of the Borrower by delivering to the Agent Bank an Application and
Agreement For Letter of Credit specifying (i) the proposed date of the
amendment, and (ii) the requested amendment. The Agent Bank shall be entitled to
enter into amendments with respect to the Letters of Credit issued by it;
provided however that any such amendment extending the expiry date, changing the
----------------
Letter of Credit Fee, or increasing the stated amount of any Letter of Credit
shall only be permitted if the Agent
27
Bank would be permitted to issue a new Letter of Credit having such an expiry
date, different Letter of Credit Fee, or stated amount under this Section 2.7 on
the date of the amendment.
J. Additional Payments. If by reason of (i) any change in applicable
-------------------
law, regulation, rule, decree or regulatory requirement or any change in the
interpretation or application by any judicial or regulatory authority of any
law, regulation, rule, decree or regulatory requirement or (ii) compliance by
the Agent Bank with any direction, request or requirement (whether or not having
the force of law) of any governmental or monetary authority including, without
limitation, Regulation D:
(a) any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letter of Credit issued by the
Agent Bank; or
(b) there shall be imposed on the Agent Bank any other condition
regarding this Section 2.7 or any Letter of Credit;
and the result of the foregoing is to directly or indirectly increase the cost
to the Agent Bank of issuing, making or maintaining any Letter of Credit, or to
reduce the amount receivable in respect thereof by the Agent Bank (other than an
increase in cost or reduction in amounts receivable as a consequence of any Tax,
which shall be governed by the provisions of Section 3 hereof), then and in any
such case the Agent Bank may, at any time within a reasonable period after the
additional cost is incurred or the amount received is reduced, notify the
Borrower, and the Borrower shall pay on demand such amounts as the Agent Bank
may specify to be necessary to compensate the Agent Bank for such additional
cost or reduced receipt, together with interest on such amount from ten (10)
days after the date of such demand until payment in full thereof at a rate equal
at all times to the Base Rate. The determination by the Agent Bank of any amount
due pursuant to this Section 2.7J as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on the Borrower.
SECTION 3
SPECIAL PROVISIONS GOVERNING LIBOR LOANS
----------------------------------------
Notwithstanding any other provision of this Loan Agreement to the contrary,
the following provisions shall govern with respect to LIBOR Loans as to the
matters covered:
3.1 Determination of LIBOR. As soon as practicable after 12:00 noon
----------------------
Louisville, Kentucky time on each Interest Rate Determination Date applicable to
the particular LIBOR Loan, the Agent Bank shall furnish to the Borrower a quote
of the LIBOR to apply to the particular LIBOR Loan. The Agent Bank will in
addition confirm to the Borrower in writing the actual LIBOR prior to the
funding of the particular LIBOR Loan, and the determination of each LIBOR by the
Agent Bank, provided that the Agent Bank shall have determined the LIBOR in good
faith, shall be final, conclusive and binding upon both the Borrower and the
Banks in the absence of manifest or demonstrable error and shall apply to the
particular LIBOR Loan for the applicable Interest Period.
3.2 Inability to Determine LIBOR. In the event that the Agent Bank shall
----------------------------
have determined in good faith (which determination shall be final and conclusive
and binding upon the Borrower), on any Interest Rate Determination Date or
Funding Date with respect to any LIBOR Loans, that by reason of circumstances
occurring after the date of this Loan Agreement affecting the London interbank
market, adequate and fair means do not exist for ascertaining the interest rate
applicable to such LIBOR Loans on the basis provided for in the definition of
LIBOR, the Agent Bank shall on such date give notice (by telecopy or by
telephone confirmed in writing) to the Borrower and the Banks of such
determination, whereupon (i) no Revolving Credit Loans may be made as, or
converted to, LIBOR Loans until such time as the Agent Bank notifies the
Borrower and the Banks that the circumstances giving rise to such notice no
longer exist; and (ii) any Request for Revolving Credit Loan or Notice of
Conversion/Continuation given by the Borrower with respect to the Revolving
Credit Loans in respect of which such determination was made shall be deemed to
be rescinded by the Borrower, and any Request for Revolving Credit Loan or
Notice of Conversion/Continuation given by the Borrower with respect to the
Revolving Credit Loans in respect of which such determination was made shall be
deemed to be a request to make Base Rate Loans.
3.3 Illegality or Impracticability of LIBOR Loans. In the event that on
---------------------------------------------
any date any Bank shall have determined in good faith (which determination shall
be final and conclusive and binding upon the parties hereto but
28
shall be made only after consultation with the Borrower) that the making,
maintaining or continuation of its LIBOR Loans (i) has become unlawful as a
result of compliance by such Bank in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Bank material hardship, as
a result of contingencies occurring after the date of this Loan Agreement which
materially and adversely affect the London interbank market or the position of
such Bank in that market, then such Bank shall on that day give notice (by
telecopy or by telephone confirmed in writing) to the Borrower and the other
Banks of such determination. Thereafter, (a) the obligation of the Banks to make
Revolving Credit Loans as, or to convert Revolving Credit Loans to, LIBOR Loans
shall be suspended until such notice shall be withdrawn by the particular Bank,
(b) to the extent such determination by the particular Bank relates to a LIBOR
Loan then being requested by the Borrower pursuant to a Request for Revolving
Credit Loan or Notice of Conversion/Continuation, the Banks shall make such
LIBOR Loan as (or convert such LIBOR Loan to, as the case may be) a Base Rate
Loan, and (c) the Banks' obligation to maintain their outstanding LIBOR Loans,
as the case may be (the "Affected Loans"), shall be terminated at the earlier to
occur of the expiration of the Interest Periods then in effect with respect to
the Affected Loans or when required by law, and the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
3.4 Compensation For Breakage or Non-Commencement of Interest Periods.
-----------------------------------------------------------------
The Borrower shall compensate the Banks, upon written request by the Banks
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by the Banks to lenders of funds borrowed by them to make or carry
the LIBOR Loans and any reasonable loss, expense or liability sustained by the
Banks in connection with the liquidation or re-employment of such funds) which
the Banks may sustain: (i) if for any reason (other than a default by the Banks
or the conversion of the Borrower's Request for Revolving Credit Loan or Notice
of Conversion/Continuation with respect to Revolving Credit Loans from a request
to make LIBOR Loans into a request to make Base Rate Loans pursuant to Sections
3.2 and 3.3 hereof) a borrowing of any LIBOR Loan does not occur on a date
specified therefor in a Request for Revolving Credit Loan or Notice of
Conversion/Continuation with respect to Revolving Credit Loans or a telephonic
request for borrowing, or a conversion to or continuation of any LIBOR Loan does
not occur on a date specified therefor in a Request for Revolving Credit Loan or
Notice of Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment or conversion of any of the LIBOR Loans
occurs on a date that is not the last day of the Interest Period applicable to
that LIBOR Loan, (iii) if any prepayment of any of the LIBOR Loans is not made
on any date specified in a notice of prepayment given by the Borrower, or (iv)
as a consequence of any other default by the Borrower to repay the LIBOR Loans
when required by the terms of this Loan Agreement. The Banks shall deliver to
the Borrower a certificate setting forth the calculation of the compensation
claimed to be due to the Banks within thirty (30) days after the occurrence of
the event giving rise to such claim for compensation, which calculations shall
be binding upon the Borrower in the absence of manifest or demonstrable error.
3.5 Booking of LIBOR Loans. Each Bank may make, carry or transfer its
----------------------
Revolving Credit Facility Pro Rata Share of LIBOR Loans at, to, or for the
account of any of its branch offices or the office of an Affiliate of such Bank;
provided however that if any transfer of a Bank's Revolving Credit Pro Rata
Share of LIBOR Loans from the office where such Bank's Revolving Credit Facility
Pro Rata Share of LIBOR Loans originated shall increase the cost to the Borrower
of such LIBOR Loans, such transfer may occur only if required (i) by the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (ii) to comply with any guideline or request from
any central bank or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally (whether or
not such guideline or request shall have the force of law).
3.6 Assumptions Concerning Funding of LIBOR Loans. The calculation of all
---------------------------------------------
amounts payable to the Banks under this Section 3 and under Section 13.1 hereof
shall be made as though each Bank had actually funded each LIBOR Loan through
the purchase of a deposit bearing interest at the rate obtained pursuant to the
definition of LIBOR in an amount equal to such Bank's Revolving Credit Facility
Pro Rata Share of the amount of such LIBOR Loan and having a maturity comparable
to the relevant Interest Period and through the transfer of such deposit from an
offshore office of such Bank to a domestic office of such Bank in the United
States of America; provided however that each Bank may fund its Revolving Credit
Facility Pro Rata Share of the LIBOR Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 3 and under Section 13.1 hereof.
3.7 LIBOR Loans After Event of Default. After the occurrence and during
----------------------------------
the continuation of an Event of Default, (i) the Borrower may not elect to have
Revolving Credit Loans made or maintained as, or
29
converted to, LIBOR Loans after the expiration of any Interest Period then in
effect for such Loans, (ii) any Request for Revolving Credit Loan or Notice of
Conversion/Continuation given by the Borrower with respect to a requested
borrowing or conversion/continuation, as applicable, that has not yet occurred
shall be deemed to be rescinded by the Borrower, and (iii) all LIBOR Loans shall
thereupon bear interest at the Default Rate until the Event of Default is cured
or the Revolving Credit Loans are paid in full to the Banks and the Revolving
Loan Commitments have expired or have been terminated by the Borrower or the
Banks.
SECTION 4
CLOSING CONDITIONS
------------------
The establishment of the Revolving Credit Facility by the Banks in favor of
the Borrower, the obtaining of Revolving Credit Loans, Swing Line Loans and/or
Letters of Credit by the Borrower thereunder are subject to the satisfaction of
all of the following conditions:
4.1 Initial Closing Conditions. The obligation of the Banks to make the
--------------------------
initial Revolving Credit Loans and the Swing Line Loans to the Borrower is
subject to the condition that, in addition to the satisfaction of the conditions
precedent specified in Section 4.2 hereof and, with respect to the Swing Line
Loans, the conditions precedent specified in Section 2.6A(iii) hereof, as of the
Closing Date, the Banks shall have received the following from the Borrower,
dated the Closing Date or such other date as shall be acceptable to the Banks:
A. Loan Agreement. This Loan Agreement, duly executed and delivered
--------------
by the Borrower and the Guarantors.
B. Revolving Credit Notes. The Revolving Credit Notes, duly executed
----------------------
and delivered by the Borrower.
C. Negative Pledge Agreement. The Negative Pledge Agreement, duly
-------------------------
executed and delivered by the Borrower and the Guarantors.
D. Guaranty Agreements. The Guaranty Agreements, duly executed and
-------------------
delivered by each of the Guarantors, guarantying the Borrower's payment of the
Loans.
E. Opinion of Counsel. A written opinion of counsel on behalf of the
------------------
Borrower and the Guarantors, in form and substance satisfactory to the Banks.
F. Certificate of Secretary of the Borrower. A Certificate of the
----------------------------------------
Secretary or Assistant Secretary of the Borrower (i) certifying as to the
authenticity, completeness and accuracy of, and attaching copies of, (a) the
Certificate of Incorporation and By-Laws of the Borrower, and (b) Resolutions of
the Board of Directors of the Borrower authorizing the Borrower's execution,
delivery and performance of the Loan Documents to which the Borrower is a party,
and (ii) certifying the names and true signatures of the officers of the
Borrower authorized to execute and deliver the Loan Documents to which the
Borrower is party, on behalf of the Borrower.
G. Certificate of Secretary of Each Guarantor. A Certificate of the
------------------------------------------
Secretary or Assistant Secretary of each Guarantor (i) certifying as to the
authenticity, completeness and accuracy of, and attaching copies of, (a) the
Certificate or Articles of Incorporation and By-Laws of the Guarantor, and (b)
Resolutions of the Board of Directors of the Guarantor authorizing the
execution, delivery and performance of the Loan Documents to which the Guarantor
is a party by the Guarantor, and (ii) certifying the names and true signatures
of the officers of the Guarantor authorized to execute and deliver the Loan
Documents to which the Guarantor is a party on behalf of such Guarantor.
H. Compliance Certificate. A Compliance Certificate in the form of
----------------------
Exhibit G hereto, completed by the Borrower, and executed by an Authorized
---------
Officer of the Borrower, certifying as to the accuracy of the representations
and warranties of the Borrower and the Guarantors set forth in this Loan
Agreement as of September 26, 1999.
I. Other Documents. Such other documents as the Banks may reasonably
---------------
request.
30
Immediately following the Closing, the Borrower may deliver to the Agent
Bank such UCC-3 releases and mortgage satisfactions as the Borrower deems
reasonably necessary to terminate UCC-1s and mortgages previously delivered to
the Agent Bank by the Borrower and/or the Guarantors, and the Agent Bank shall
expeditiously execute such UCC-3 releases and mortgage satisfactions and return
them to the Borrower for recordation.
4.2 Conditions to All Revolving Credit Loans, Letters of Credit and Swing
---------------------------------------------------------------------
Line Loans. The obligation of the Banks to make each Revolving Credit Loan on
----------
each Funding Date and to issue, through the Agent Bank, each Letter of Credit,
and the obligation of the Agent Bank to make each Swing Line Loan pursuant to
the Swing Line Credit Subfacility, is in each case subject to the following
additional conditions precedent:
A. Request for Revolving Credit Loan. The Agent Bank shall have
---------------------------------
received with respect to each Revolving Credit Loan, in accordance with the
provisions of Section ▇.▇▇ of this Loan Agreement, an originally executed
Request For Revolving Credit Loan, in the form of Exhibit E hereto, in each case
---------
signed by an Authorized Officer of the Borrower, as agent for the Borrower.
B. Letters of Credit. The Agent Bank shall have received with
-----------------
respect to each Letter of Credit, in accordance with the provisions of Section
2.7B of this Loan Agreement, an originally executed Application and Agreement
For Letter of Credit relating to such Letter of Credit, in each case signed by
an Authorized Officer of the Borrower, as agent for the Borrower.
C. Request for Swing Line Loan. The Agent Bank shall have received
---------------------------
with respect to each Swing Line Loan, in accordance with the provisions of
Section 2.6A(iii) of this Loan Agreement, an originally executed Request For
Swing Line Loan, in each case signed by an Authorized Officer of the Borrower,
as agent for the Borrower.
D. General Conditions. As of the Funding Date of any Revolving
------------------
Credit Loan, the date of issuance or extension of the stated expiration date of
any Letter of Credit, or the date of any Swing Line Loan:
(i) The representations and warranties contained herein shall
be true and correct in all material respects on and as of that date to the same
extent as though made on and as of that date;
(ii) No event shall have occurred and be continuing or would
result from the funding of the Revolving Credit Loan contemplated by such
Request For Revolving Credit Loan, the issuance or extension of the stated
expiration date of such Letter of Credit contemplated by such Application and
Agreement For Letter of Credit, or the funding of the Swing Line Loan
contemplated by such Request for Swing Line Loan which would constitute an Event
of Default;
(iii) The Borrower and Guarantors shall have performed in all
material respects all agreements and satisfied all conditions which this Loan
Agreement and the other Loan Documents provide shall be performed by them on or
before such date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Banks from making
that Revolving Credit Loan or issuing, through the Agent Bank, that Letter of
Credit or the Agent Bank from making such Swing Line Loan;
(v) There shall not be pending or, to the knowledge of the
Borrower threatened, any action, suit, proceeding or arbitration or, to the
knowledge of the Borrower, any governmental investigation pending or threatened,
against or affecting the Borrower or any Guarantors or any property of the
Borrower or any Guarantors seeking damages in excess of $5,000,000, which is not
fully covered by insurance other than any applicable deductible and which has
not been disclosed by the Borrower pursuant to Section 5.9 hereof or which prior
to (a) the making of the last preceding Revolving Credit Loan (or, in the case
of the initial Revolving Credit Loan made hereunder, prior to the execution of
this Loan Agreement), (b) the issuing of the most recent Letter of Credit (or in
the case of the initial Letter of Credit issued hereunder, prior to the
execution of this Loan Agreement) or the most recent extension of the stated
maturity date of any Letter of Credit, or (c) the making of the last Swing Line
Loan (or in the case of the initial Swing Line Loan hereunder, prior to the
execution of this Loan Agreement) if determined adversely, would have a material
adverse effect. Further, there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, which, in either event, in the opinion of the Banks,
could reasonably be expected to have a material adverse effect on the financial
condition of the Borrower and the Guarantors taken as a whole. No injunction or
other restraining order
31
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of this Loan Agreement or the making of the Revolving Credit Loans,
the issuing or extension of the respective stated expiration dates of the
Letters of Credit, and/or the making of the Swing Line Loans hereunder; and
(vi) As of the Funding Date of any Revolving Credit Loan, the
date of issuance or extension of the stated expiration date of any Letter of
Credit, or the date of any Swing Line Loan, the Agent Bank shall have received
such other documentation as it may reasonably request.
SECTION 5
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower and the Guarantors represent and warrant to the Banks as
follows, which representations and warranties shall be deemed to be continuing
representations and warranties until the Revolving Credit Notes and the other
obligations have been respectively paid in full to the Banks, and which
representations and warranties shall survive the execution and delivery of this
Loan Agreement:
5.1 Organization, Standing, etc, of the Borrower and the Guarantors. The
---------------------------------------------------------------
Borrower is a corporation duly organized and validly existing under the laws of
the State of Delaware. ▇▇▇▇ Technologies, Inc. is a corporation duly organized
and validly existing under the laws of the State of Florida. Tube Turns
Technologies, Inc. is a corporation duly organized and validly existing under
the laws of the Commonwealth of Kentucky. Group Technologies Corporation is a
corporation duly organized and validly existing under the laws of the State of
Florida. Metrum-DATATAPE, Inc. is a corporation duly organized and validly
existing under the laws of the State of Delaware. The Borrower and each of the
Guarantors has all requisite power and authority to own and operate its
properties, to carry on its businesses as now conducted and proposed to be
conducted, and to execute and deliver this Loan Agreement and the other Loan
Documents to which it is a party and to carry out the terms hereof and thereof.
The Borrower has delivered to the Agent Bank a true and complete copy of its
Certificate of Incorporation and By-Laws as in effect on the date hereof.
5.2 Qualification. Schedule 5.2 hereto sets forth a list of the Borrower
------------- ------------
and the Guarantors and the locations in which they are qualified to do business.
Neither the Borrower nor any Guarantor is presently required to be qualified to
transact business as a foreign corporation in any jurisdiction other than the
states identified in Schedule 5.2 hereto, and except where failure to so qualify
------------
would not have a material adverse effect upon the business or operations of the
Borrower or the Guarantors.
5.3 Use of Proceeds. The uses of the proceeds of the Revolving Credit
---------------
Loans and the Swing Line Loans and the uses of the Letters of Credit by the
Borrower and the Guarantors are and will continue to be legal and proper
corporate uses duly authorized by the Board of Directors of each of the Borrower
and the Guarantors, and such uses are consistent with all applicable laws and
statutes as in effect as of the date hereof.
5.4 Intellectual Property. To the best of the Borrower's knowledge, the
---------------------
Borrower and the Guarantors own or possess adequate assets, licenses, patents,
patent applications, copyrights, trademarks, trademark applications, trade
names, franchises, consents, authorizations and service marks and rights with
respect to the foregoing necessary for the conduct of their businesses as
presently conducted and as proposed to be conducted, without any known conflict
with the rights of others.
5.5 Disclosure; Solvency. Neither this Loan Agreement nor any other
--------------------
document furnished to the Banks by or on behalf of the Borrower and the
Guarantors in connection with the Revolving Credit Facility and/or the Swing
Line Loans and/or the other Obligations taken as a whole contains any statement
of any material fact which is untrue or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading.
There is no fact known to the Borrower and the Guarantors which materially
adversely affects or in the future will (so far as the Borrower and the
Guarantors can now foresee) materially adversely affect the business,
operations, affairs or condition of the Borrower and the Guarantors or any of
their properties which has not been set forth in this Loan Agreement or in the
other documents furnished to the Banks by or on behalf of the Borrower and the
Guarantors in connection with the Revolving Credit Facility, the Swing Line
Loans and the other Obligations. The Borrower, on a consolidated basis in
accordance with GAAP, is currently solvent; and neither the issuance and
delivery of the Revolving Credit Notes and the Guaranty Agreements to the Banks,
nor the obtaining of the Letters
32
of Credit, nor the performance of the transactions contemplated hereunder or
thereunder, will render the Borrower, on a consolidated basis in accordance with
GAAP, insolvent, inadequately capitalized to undertake the transactions
contemplated hereunder or to undertake the businesses in which they are
presently engaged or about to engage or render the Borrower, on a consolidated
basis, unable to pay its debts as they become due; neither the Borrower nor any
Guarantor is contemplating either the filing of a petition by them or the
commencement of a case by them under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of their property;
and the Borrower has no knowledge of any Person contemplating the filing of any
such petition or commencement of any such case against the Borrower or the
Guarantors.
5.6 Tax Returns and Payments. To the best of the Borrower's knowledge
------------------------
after due inquiry, the Borrower and the Guarantors have filed all tax returns
required by law to be filed by them and have paid all taxes, assessments and
other governmental charges levied upon their properties, assets, income and
franchises, other than those not yet delinquent and those, not substantial in
aggregate amount, being or about to be contested as provided in Section 5.6
hereof. The charges, accruals and reserves on the books of the Borrower, on a
consolidated basis, in respect of its taxes are adequate in the opinion of the
Borrower. The Borrower and the Guarantors know of no material unpaid assessment
for additional taxes or of any basis therefor.
5.7 Funded Debt; Financial Information. As of the date of this Loan
----------------------------------
Agreement, and without regard to the transactions contemplated hereunder, there
is no outstanding Funded Debt of the Borrower and the Guarantors in respect of
borrowed money, capital leases or the deferred purchase price of property,
existing guaranties issued by the Borrower and the Guarantors, in each case in
an amount in excess of $100,000, or existing liens and security interests
encumbering the assets of the Borrower and the Guarantors other than as
disclosed in the most recent annual and quarterly financial statements of the
Borrower delivered to the Banks or on Schedule 5.7 attached hereto and made a
------------
part hereof. The financial information contained in such financial statements is
true and complete in all material respects. There has been no material adverse
change in the financial condition of the Borrower and the Guarantors since the
date of such financial statements.
5.8 Title to Properties; Liens; Leases. The Borrower and the Guarantor
----------------------------------
have good and marketable title to all of their properties and assets and none of
such properties or assets is subject to any mortgage, pledge, or security
interest, or any material lien, charge or encumbrance other than as described in
Section 7.4 hereof and other than statutory landlord liens. The Borrower and the
Guarantors enjoy quiet possession under all leases to which they are party as
lessee, and all of such leases are to the best knowledge of the Borrower and the
Guarantors, after due inquiry, validly existing and in full force and effect,
and, to the best knowledge of the Borrower and the Guarantors, after due
inquiry, neither the lessor nor the Borrower or the Guarantors as lessee is in
default under any of such leases.
5.9 Litigation, etc. Except as previously disclosed to the Agent Bank,
---------------
there is no action, proceeding or investigation pending or, to the best
knowledge of the Borrower and the Guarantors, threatened (or any basis therefor
known to the Borrower and the Guarantors) (i) which questions the validity of
this Loan Agreement, the Revolving Credit Notes, the Guaranty Agreements, the
Negative Pledge Agreement or the other Loan Documents or any action taken or to
be taken pursuant hereto or thereto, (ii) which is not fully covered by
insurance other than any applicable deductible, or (iii) which might result,
either in any case or in the aggregate, in any material adverse change in the
businesses, operations, affairs or condition of the Borrower and the Guarantors
or in any of their material properties or assets or in any material liability on
the part of the Borrower and the Guarantors. The Borrower has provided the Agent
Bank with a list of all pending actions, proceedings and investigations
involving (y) claims against the Borrower and the Guarantors seeking damages in
excess of $5,000,000 in any individual case or in excess of $25,000,000 in the
aggregate which is not fully covered by insurance other than any applicable
deductible, and (z) claims of the Borrower and the Guarantors for payment,
reimbursement or under contracts in excess of $5,000,000 or in excess of
$25,000,000 in the aggregate.
5.10 Authorization; Compliance With Other Instruments, etc. The
-----------------------------------------------------
execution, delivery and performance of this Loan Agreement, the Revolving Credit
Notes, the Guaranty Agreements and the other Loan Documents to which the
Borrower or the Guarantors are a party have been duly authorized by all
necessary corporate action on the part of the Borrower and the Guarantors, will
not result in any violation of or be in conflict with or constitute a default
under any term of the Articles of Incorporation or Certificate of Incorporation,
as applicable, or By-Laws of the Borrower and the Guarantors or of any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to the Borrower and the Guarantors, or result in the
creation of any mortgage, lien, charge or encumbrance upon any of the properties
or assets of the Borrower and the Guarantors pursuant to any such term, except
as provided in the Loan Documents. The Borrower and the Guarantors are not in
violation of any
33
term of their Articles of Incorporation or Certificate of Incorporation, as
applicable, or By-Laws, or of any material term of any agreement or instrument
to which they are party, or, to the Borrower's best knowledge, of any judgment,
decree, order, statute, rule or governmental regulation applicable to the
Borrower and the Guarantors. Without limiting the generality of the foregoing,
to the best knowledge of the Borrower and the Guarantors, the Borrower and the
Guarantors are in compliance in all material respects with all federal and state
laws and all rules, regulations and administrative orders of all state and local
commissions or authorities which are applicable to the Borrower and the
Guarantors or to the operation of their businesses.
5.11 Enforceability. This Loan Agreement, the Revolving Credit Notes, the
--------------
Guaranty Agreements, and the other Loan Documents to which the Borrower and the
Guarantors are party constitute legal, valid and binding obligations of the
Borrower and the Guarantors, enforceable against the Borrower and the Guarantors
in accordance with their respective terms, except to the extent the
enforceability hereof and thereof may be limited by applicable laws affecting
creditors, rights generally and by equitable principles.
5.12 Governmental Consent. To the best knowledge of the Borrower and the
--------------------
Guarantors, the Borrower and the Guarantors are not required to obtain any
order, consent, approval or authorization of, and are not required to make any
declaration or filing with, any governmental authority in connection with the
execution and delivery of this Loan Agreement, the Revolving Credit Notes, the
Guaranty Agreements, and the other Loan Documents to which the Borrower and the
Guarantors are party.
5.13 Environmental Matters. Except as disclosed in the Existing Studies
---------------------
(as defined in the 1997A Loan Agreement) delivered to the Agent Bank:
A. The Borrower and the Guarantors have duly complied in all
material respects with, and their businesses, operations, assets, equipment,
leaseholds and facilities, including, without limitation, the Real Property, are
in material compliance with, the provisions of all federal, state and local
environmental, health and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder, including, without limitation, all the
Relevant Environmental Laws and all other laws and regulations with respect to
reporting releases of Hazardous Materials and the registration and maintenance
of underground storage tanks.
B. The Borrower and the Guarantors have been issued, and will
maintain, all required federal, state and local permits, licenses, certificates
and approvals relating to (i) air emissions; (ii) discharges to surface water or
ground water; (iii) noise emissions; (iv) solid or liquid waste disposal; (v)
the use, generation, storage, transportation or disposal of Hazardous Materials;
and (vi) other environmental, health or safety matters.
C. The Borrower has not received notice of violations of any
federal, state or local environmental, health or safety laws, codes or
ordinances, or any rules or regulations promulgated thereunder, including,
without limitation, any of the Relevant Environmental Laws, which relate to the
use, ownership or occupancy of any of the Real Property and the Borrower and the
Guarantors are not in violation in any material respect of any covenants,
conditions, easements, rights of way or restrictions affecting any of the Real
Property or any rights appurtenant thereto.
D. Except in accordance with a valid governmental permit, license,
certificate or approval, to the Borrower's knowledge there has been no emission,
spill, release, discharge or threatened release into or upon (i) the air; (ii)
the soils or any improvements located thereon; (iii) the surface water or ground
water; or (iv) the sewer, septic system or waste treatment, storage or disposal
system servicing any of the Real Property, of any Hazardous Material at, upon,
under, in or from any of the Real Property (any of which is hereafter referred
to as a "Hazardous Discharge").
E. There has been no complaint, order, directive, claim, citation or
notice by any governmental authority or any other Person concerning any
violation of Relevant Environmental Laws with respect to (i) air emissions; (ii)
spills, releases or discharges to soils or any improvements located thereon,
surface water, ground water or the sewer, septic system or waste treatment,
storage or disposal systems servicing the Real Property; (iii) noise emissions;
(iv) solid or liquid waste disposal; (v) the use, generation, storage,
transportation or disposal of Hazardous Materials; or (vi) other environmental,
health or safety matters, affecting any of the Borrower and the Guarantors, any
of the Real Property, any improvements located thereon or the business conducted
thereon (any of which is hereafter referred to as an "Environmental Complaint").
34
F. Hazardous Materials disposed of, treated or stored on or off-site
of any Real Property owned, leased or operated at any time by the Borrower or
the Guarantors has been disposed of, treated and stored in compliance in all
material respects with all applicable laws, codes and ordinances and all rules
and regulations promulgated thereunder, including, without limitation, all
Relevant Environmental Laws.
G. Except as set forth in the Existing Studies and for supplies that
are to be used or sold in the ordinary course of the respective businesses of
the Borrower and the Guarantors and in full compliance with all applicable laws,
codes and ordinances, to our knowledge all of the Real Property are free of all
(i) Hazardous Materials; (ii) underground storage tanks; and (iii) underground
pipelines. Except for materials used in the ordinary course of business, neither
the Borrower nor any Guarantor has stored, treated or disposed of any Hazardous
Materials on, in or under any of the Real Property, or any part thereof, nor
permitted the Real Property, or any part thereof, to be used for the storage,
treatment or disposal of Hazardous Materials. Except for the material used in
the ordinary course of business, to the Borrower's knowledge there has been no
storage, treatment, disposal or release of Hazardous Materials on, in or under
the Real Property at any time by any Person.
H. Except in accordance with a valid required governmental permit,
license, certificate or approval, neither the Borrower nor any Guarantor has
transported or accepted for transport any Hazardous Materials.
I. To their knowledge, the Borrower and the Guarantors have provided
the Agent Bank with true, accurate and complete information pertaining to the
environmental history of all of the Real Property. The Borrower and the
Guarantors shall furnish promptly to the Agent Bank true, accurate and complete
copies of all sampling and test results obtained from all environmental and/or
health samples and tests taken at and around any of the Real Property.
J. The Borrower and the Guarantors are not aware of any claims or
litigation, and none of them have received any communication from any Person
(including, without limitation, any governmental authority), concerning the
presence of Hazardous Materials or concerning any violation or alleged violation
of the Relevant Environmental Laws. The Borrower agrees promptly to notify the
Agent Bank of any such claims and to furnish the Agent Bank of any such claims
and to furnish the Agent Bank with a copy of any such communications received
after the date hereof.
5.14 Year 2000 Representations.
--------------------------
A. All devices, systems, machinery, information technology, computer
software and hardware, and other date sensitive technology (jointly and
severally the "Systems") owned and necessary for the Borrower and the Guarantors
to carry on their businesses as presently conducted and as contemplated to be
conducted in the future are Year 2000 Compliant or will be Year 2000 Compliant
within a period of time calculated to result in no material disruption of any of
the Borrower's or the Guarantors' business operations taken as a whole. For
purposes of these provisions, "Year 2000 Compliant" means that such Systems are
designed to be used prior to, during and after the Gregorian calendar year 2000
A.D. and will operate during each such time period without material error
relating to date data, specifically including any error relating to, or the
product of, date data which represents or references different centuries or more
than one century.
B. The Borrower and the Guarantors have: (i) undertaken a detailed
inventory, review, and assessment of all areas within their businesses and
operations that could be adversely affected by the failure of the Borrower or
the Guarantors to be Year 2000 Compliant on a timely basis; (ii) developed a
detailed plan and time line for becoming Year 2000 Compliant on a timely basis;
and (iii) to date, implemented that plan in accordance with that timetable in
all material respects.
C. The Borrower and the Guarantors have made written inquiry of each
of its key suppliers, vendors, and customers, and has obtained in writing
confirmations from all such persons, as to whether such persons have initiated
programs to become Year 2000 Compliant and on the basis of such confirmations,
the Borrower and the Guarantors reasonably believe that all such persons will be
or become so compliant. For purposes hereof, "key suppliers, vendors, and
customers" refers to those suppliers, vendors, and customers of the Borrower and
the Guarantors whose business failure would, with reasonable probability, result
in a material adverse change in the business, properties, condition (financial
or otherwise), or prospects of the Borrower or the Guarantors, taken as a whole.
For purposes of this paragraph, Agent Bank and each Bank, as a lender of funds
under the terms of the Credit Facility, confirms to the Borrower and the
Guarantors that Agent Bank has initiated its own corporate-wide Year 2000
program with respect to its lending activities.
35
SECTION 6
AFFIRMATIVE COVENANTS
---------------------
The Borrower and the Guarantors hereby covenant and agree that until the
Revolving Credit Notes and the other Obligations have been respectively paid in
full to the Banks, and the Swing Line Credit Subfacility and the Letter of
Credit Subfacility have been terminated, the Borrower and the Guarantors will
perform and observe all of the following provisions:
6.1 Corporate Existence and Good Standing. Each of the Borrower and the
-------------------------------------
Guarantors shall preserve its corporate existence in good standing and shall be
and remain qualified to do business and in good standing in all states and
countries in which it is required to be so qualified and where the failure to be
so qualified would have a material adverse effect upon the business of such
entity.
6.2 Money Obligations, Payment of Taxes, ERISA, etc.
-----------------------------------------------
A. Governmental Obligations. The Borrower and the Guarantors will
------------------------
pay promptly as they become due and payable all taxes, assessments and other
governmental charges levied upon them or their income or upon any of their
properties or assets or in respect of their franchises, businesses, income or
profits, or upon any part thereof, as well as all lawful claims of any kind
(including claims for labor, materials and supplies) which, if unpaid, might by
law become a lien or a charge upon their property before any of the same become
delinquent; provided that no such tax, assessment or charge need be paid if
being contested in good faith and by appropriate proceedings promptly initiated
and diligently conducted by the Borrower and the Guarantors and if such reserve
or other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor. The Borrower and the Guarantors will satisfy or cause to be
satisfied the minimum annual funding standard within the meaning of ERISA for
any employee benefit plan established or maintained by the Borrower and the
Guarantors which is subject to ERISA, and the Borrower and the Guarantors will
not permit any tax or penalty to be incurred by it as a result of any failure to
satisfy any such minimum funding requirement or as a result of any violation of
the provisions of Section 4975 of the Code, or of any regulation issued
thereunder.
B. Other Obligations. The Borrower and the Guarantors will pay in
-----------------
full all their other debts, obligations and liabilities allowed hereunder before
the same become delinquent, unless the same are being contested in good faith by
the Borrower and the Guarantors, the Borrower and the Guarantors have
established adequate reserves for the payment of the same in accordance with
GAAP, and the contesting thereof does not involve the risk of forfeiture or loss
of any of the assets of the Borrower or the Guarantors.
6.3 Financial Statements and Reports. The Borrower will furnish to the
--------------------------------
Agent Bank the information required below at the times set forth below:
A. Quarterly Statements. The Borrower, for itself and for the
--------------------
Guarantors, shall furnish to the Agent Bank, as soon as available, and in any
event within forty-five (45) days after the end of each Fiscal Quarter of the
Borrower, a copy of the Borrower's Form 10-Q.
B. Annual Statements. The Borrower, for itself and for the
-----------------
Guarantors, shall furnish to the Agent Bank, as soon as available, and in any
event within ninety (90) days after the end of the Fiscal Year of the Borrower,
a copy of the Borrower's Form 10-K accompanied with the auditor's management
letter in addition to any other financial statements and reports that the Banks
may, in their sole discretion, reasonably request from time to time.
C. Compliance Certificate. Together with the delivery to the Agent
----------------------
Bank of the financial statements referred to in subparts (A) and (B) above, the
Borrower, for itself and the Guarantors, shall deliver to the Agent Bank a
Compliance Certificate in substantially the form of Exhibit G hereto with all
---------
blanks completed and (x) stating that the Authorized Officer of the Borrower,
for itself and the Guarantors, signing the Compliance Certificate has reviewed
the relevant terms of this Loan Agreement, the Revolving Credit Notes, the
Negative Pledge Agreement and the other Loan Documents to which the Borrower and
the Guarantors are party, and such Authorized Officer has no actual knowledge
(after making such inquiry as is consistent with the scope of his or her duties)
of any event or condition which constitutes an Event of Default hereunder, or,
if any such condition or event existed or
36
exists, specifying the nature and period of existence thereof and what action
the Borrower has taken or is taking or proposes to take with respect thereto,
and (y) demonstrating in reasonable detail compliance at the end of such
accounting period with Sections 7.6 through 7.8 of this Loan Agreement to the
extent applicable to such period.
D. Events of Default. Forthwith upon any Authorized Officer of the
-----------------
Borrower obtaining knowledge of, or receiving notice of any claim of or action
taken with respect to, any condition or event which constitutes a Potential
Default or an Event of Default hereunder, the Borrower, for itself and the
Guarantors, shall furnish to the Agent Bank a certificate specifying the nature
and period of existence thereof and what action the Borrower has taken or is
taking or proposes to take with respect thereto.
E. Reports from CPAs. Promptly upon receipt thereof, the Borrower,
-----------------
for itself and the Guarantors, shall furnish to the Agent Bank copies of any
reports (including management letters, if any) submitted to the Borrower and the
Guarantors by independent certified public accountants in connection with the
examination of the financial statements of the Borrower and the Guarantors made
by such accountants.
F. Other Information. With reasonable promptness, the Borrower
-----------------
shall furnish to the Agent Bank such other information and data with respect to
the Borrower and the Guarantors as from time to time may be reasonably requested
by the Banks.
The Banks shall keep confidential all of the financial statements and other
information, unless otherwise publicly available furnished to the Banks pursuant
to this Loan Agreement, except that each Bank shall have the right to furnish
copies of such financial statements and other information furnished to such Bank
to financial institutions which purchase interests in the Revolving Credit
Facility pursuant to Section 11 hereof and governmental agencies having
jurisdiction over such Bank and which request copies of such financial
statements and/or other information. Such Bank will promptly inform the Borrower
each time such Bank is obligated or required to deliver any such financial
statements and other information to any such governmental agency having
jurisdiction over such Bank.
6.4 Financial Records; Inspection.
-----------------------------
A. System of Accounting. The Borrower and the Guarantors will
--------------------
maintain a standard, modern system of accounting established and administered in
accordance with GAAP consistently applied, in which full, true and correct
entries shall be made of all dealings and transactions in relation to the
Borrower's and the Guarantors' businesses and affairs, and will set aside on
their books all such proper reserves as shall be required by GAAP.
B. Access to Books and Records. The Borrower and the Guarantors
---------------------------
will permit any authorized representative designated by any Bank to inspect any
of the properties of the Borrower and the Guarantors, including their books of
account (and to make copies thereof and to take extracts therefrom), and to
discuss their affairs, finances and accounts with their officers and with their
independent accountants, all at such reasonable times and as often as may be
reasonably requested. Discussions with independent accountants shall be
requested in writing. Such inspection shall be for the information and benefit
of the Banks and, unless otherwise publicly available, any information obtained
thereby or otherwise pursuant thereto shall not be divulged to others except in
connection with the enforcement of the rights of the Banks upon the occurrence
of an Event of Default hereunder or to financial institutions which purchase
interests in the Revolving Credit Facility pursuant to Section 11 hereof and
except as may be required by law or by any governmental agency having
jurisdiction over any Bank. Each Bank will promptly inform the Borrower each
time such Bank is obligated or required to deliver any such information to any
governmental agency having jurisdiction over such Bank.
6.5 Maintenance of Properties, etc. The Borrower and the Guarantors will,
------------------------------
insofar as they are not prevented by causes beyond their control, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all properties used or useful in the businesses of the
Borrower and the Guarantors. The Borrower and the Guarantors will maintain or
cause to be maintained, with financially sound and reputable insurers, insurance
with respect to their properties and businesses against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or a similar business and similarly situated, in such types
and amounts as are customarily carried under similar circumstances by such other
corporations. The Banks have no basis to conclude that the current insurance of
the Borrower and the Guarantors, including their current worker's compensation
insurance, is deficient in any material respect.
37
6.6 Permits, Certificates, Leases, Licenses. The Borrower and the
---------------------------------------
Guarantors will obtain, maintain and comply at all times, in all material
respects, with all permits, certificates, licenses, approvals, authorizations,
leases and other instruments necessary or appropriate for the conduct of their
businesses as presently conducted or as contemplated to be conducted in the
future.
6.7 Notice. The Borrower will notify the Agent Bank in writing, within no
------
more than ten (10) calendar days (and without the benefit of any grace period
afforded in any provision of this Loan Agreement or the other Loan Documents)
after any Authorized Officer of the Borrower learns of any of the following: (i)
the existence or occurrence of any Event of Default under this Loan Agreement,
(ii) that any representation or warranty made herein or in any other Loan
Document shall, for any reason, not be or shall cease in any material respect to
be true and complete and not misleading, (iii) the institution of, or adverse
determination in, any material arbitration proceeding, including, without
limitation, an audit or examination by the Internal Revenue Service, involving
the Borrower and the Guarantors and describing the nature and result thereof,
and what steps are being taken by the Borrower and the Guarantors with respect
thereto, or (iv) the institution of, or adverse determination in, any litigation
involving a claim against the Borrower and the Guarantors in excess of the sum
of Five Million Dollars ($5,000,000) not covered by applicable insurance,
describing the nature and result thereof, and what steps are being taken by the
Borrower and the Guarantors with respect thereto.
6.8 Payment of Obligations. The Borrower will pay the Revolving Credit
----------------------
Notes and the other Obligations timely in accordance with their respective terms
in legal tender of the United States of America. All payments on the Revolving
Credit Notes and the other Obligations shall be made to the Banks, respectively,
in "good and collected funds," at the principal office of the Agent Bank not
later than 12:00 noon (Louisville, Kentucky time) on the date due; funds
received by the Agent Bank after that hour shall be deemed to have been received
on the next following Business Day.
6.9 Environmental Matters. The Borrower and the Guarantors hereby warrant
---------------------
that, to the best of their knowledge, the Borrower's assets are now, and so long
as the Revolving Credit Facility, the Swing Line Loans and the Letters of Credit
continue in effect, will remain materially free of contamination by hazardous,
dangerous, contaminating, noxious or unsafe materials except as such materials
are stored, handled, used and disposed of in the ordinary course and in
compliance with the Relevant Environmental Laws. Subject to the right of the
Borrower and the Guarantors to contest any alleged violation of any
environmental law, regulation and requirement in good faith and with due
diligence, and provided that no such contesting will result in the loss or
forfeiture of any assets of the Borrower and the Guarantors or otherwise have a
material adverse effect on the financial condition of the Borrower and the
Guarantors taken as a whole, the Borrower and the Guarantors further covenant to
comply in all material respects with all applicable environmental laws,
regulations and requirements, and the Borrower and the Guarantors covenant and
agree to remedy any violation of any environmental law, regulation and
requirement, promptly upon the Borrower's learning of such violation. The
Borrower and the Guarantors further hereby agree to indemnify and hold the Banks
harmless from any expense, loss, claim, suit or fee arising out of any such
contamination or noncompliance or the Borrower's breach of the provisions of
this Section 6.9.
6.10 Insurance. The Borrower and the Guarantors shall maintain insurance
---------
as follows:
A. Liability Insurance. The Borrower and the Guarantors at their
-------------------
own cost and expense, shall procure, maintain and carry in full force and effect
general liability, public liability, workers' compensation liability and
property damage insurance with respect to the actions and operations of the
Borrower and the Guarantors to such extent, in such amounts and with such
deductibles as are carried by prudent businesses similarly situated. Without
limiting the foregoing, such insurance shall insure against any liability for
loss, injury, damage or claims caused by or arising out of or in connection with
the operation of the Borrower's and the Guarantors' respective businesses
including injury to or death of any of the Borrower's and the Guarantors'
employees, agents or any other persons and damage to or destruction of public or
private property.
B. Physical Damage Insurance. The Borrower and the Guarantors at
-------------------------
their own cost and expense, shall insure all of their insurable properties to
such extent, against such hazards (excluding, without limitation, environmental
hazards), in the amount of coverage and with such deductibles as are carried by
prudent businesses similarly situated, but in any event in amounts of coverage
not less than the insurable value of the property insured.
38
C. General Insurance Requirements.
------------------------------
(i) All insurance which the Borrower and the Guarantors are
required to maintain shall be satisfactory to the Agent Bank in form, amount and
insurer. Such insurance shall provide that any loss thereunder shall be payable
notwithstanding any action, inaction, breach of warranty or condition, breach of
declarations, misrepresentation or negligence of the Borrower and the
Guarantors.
(ii) If the Borrower and the Guarantors fail to acquire any
policy of insurance required to be maintained pursuant to this Section, or fail
to renew or replace any such policy at least ten (10) days prior to the
expiration thereof, or fail to keep any such policy in full force and effect,
the Agent Bank shall have the option (but not the obligation) to pay the
premiums on any such policy of insurance or to take out new insurance in amount,
type, coverage and terms satisfactory to the Agent Bank, after first notifying
the Borrower of the Agent Bank's intent to pay it. Any amounts paid therefor by
the Agent Bank shall be immediately due and payable to the Agent Bank by the
Borrower upon demand. No exercise by the Agent Bank of such option shall in any
way affect the provisions of this Agreement, including the provision that
failure by the Borrower and the Guarantors to maintain the prescribed insurance
shall constitute an Event of Default.
6.11 Environmental Compliance.
------------------------
A. The Borrower shall notify the Agent Bank promptly and in
reasonable detail in the event that the Borrower becomes aware of the presence
of Hazardous Materials (other than as used in ordinary course of business) or a
violation of the Relevant Environmental Laws resulting from or in connection,
directly or indirectly, with the business or operations of the Borrower or the
Guarantors.
B. The Borrower shall ensure that its business and operations and
those of the Guarantors comply and continue to comply in all material respects
with the Relevant Environmental Laws.
C. Should the Borrower or the Guarantors conduct any business or
operations in such a way as to subject any of the Borrower or the Guarantors or
the Agent Bank to a claim or violation of the Relevant Environmental Laws
(unless contested in good faith), the Borrower or the Guarantors shall prudently
and appropriately remedy and fully cure any conditions arising therefrom, at
their own cost and expense.
D. At their sole cost and expense, the Borrower and the Guarantors
shall:
(i) Pay or cause to be paid immediately when due the cost of
compliance with the Relevant Environmental Laws; and
(ii) Keep the Borrower's business, assets and operations and
those of the Guarantors free of any lien imposed pursuant to the Relevant
Environmental Laws.
E. The Agent Bank shall not be liable for, and the Borrower and the
Guarantors shall immediately pay to the Agent Bank when incurred and shall
indemnify, defend and hold the Agent Bank harmless from and against, all loss,
cost, liability, damage and expense (including, without limitation, reasonable
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims) that the Agent Bank may suffer or incur as mortgagee (as holder of or
assignee in possession or as successor in interest to the Borrower and the
Guarantors as owner of a lease, by virtue of exercising the Agent Bank's right
pursuant to a security interest thereof) as a result of or in connection in any
way with any of the Relevant Environmental Laws (including, without limitation,
the assertion that any lien existing pursuant to the Relevant Environmental Laws
takes priority over the lien or security interest of the Agent Bank's), or any
environmental assessment or study from time to time reasonably undertaken or
requested by Agent Bank or breach of any covenant or undertaking by the Borrower
and the Guarantors concerning Relevant Environmental Laws.
F. There shall not occur any unpermitted Hazardous Discharge or
material Environmental Complaint.
6.12 Material Change in Management. The Borrower shall notify the Agent
-----------------------------
Bank of any material change in its management from that existing on the date of
this Agreement.
39
6.13 Year 2000 Compliance. For the period through June 30, 2000, the
--------------------
Borrower and Guarantors will:
A. Furnish such additional information, statements and other reports
with respect to Borrower's and Guarantors' activities, course of action and
progress towards becoming Year 2000 Compliant as Agent Bank may request from
time to time.
B. In the event of any change in circumstances that causes or will
likely cause any of Borrower's or any Guarantor's representations and warranties
with respect to its being or becoming Year 2000 Compliant to no longer be true
in any material respect (hereinafter, referred to as a "Change in
Circumstances"), promptly, and in any event within ten (10) days of receipt of
information regarding a Change in Circumstances, provide Agent Bank with written
notice (the "Notice") that describes in reasonable detail the Change in
Circumstances and how such Change in Circumstances caused or will likely cause
its representations and warranties with respect to being or becoming Year 2000
Compliant to no longer be true in any material respect. Borrower shall, within
ten (10) days of a request, also provide Agent Bank with any additional
information Agent Bank requests of Borrower in connection with the Notice and/or
a Change in Circumstances.
C. Give any representative of Agent Bank access during all business
hours to, and permit such representative to examine, copy or make excerpts from,
any and all books, records and documents in the possession of Borrower or
Guarantors and relating to their affairs, and to inspect any of the properties
and Systems of Borrower and Guarantors, and to project test the Systems to
determine if they are Year 2000 Compliant in an integrated environment, all at
the sole cost and expense of Agent Bank.
SECTION 7
NEGATIVE COVENANTS
------------------
The Borrower and the Guarantors hereby covenant and agree that until the
Revolving Credit Notes, and the other Obligations have been respectively paid in
full to the Banks, and the Swing Line Credit Subfacility and Letter of Credit
Subfacility have been terminated, the Borrower and the Guarantors will perform
and observe all of the following provisions:
7.1 Mergers, Acquisitions and Other Extraordinary Events. Without the
----------------------------------------------------
prior written consent of the Agent Bank which shall not be unreasonably withheld
or delayed, the Borrower and the Guarantors shall not:
A. Be a party to any consolidation, reorganization (including
without limitation those types referred to in ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Internal Revenue Code of 1986, as amended), recapitalization, "stock-swap" or
merger; or
B. Sell or otherwise transfer any material part (10% or more) of
their assets; or
C. Allow a Change in Control to occur with respect to the Borrower;
or
D. Liquidate or dissolve or take any action with a view toward
liquidation or dissolution; or
E. Purchase all or a substantial part of the capital stock or assets
of any corporation or other business enterprise if (i) such purchase involves
consideration, including assumption of Funded Debt, in excess of Ten Million
Dollars ($10,000,000) for any single transaction or (ii) such purchase, when
combined with other such transactions occurring in the same Fiscal Year,
involves consideration, including assumption of liabilities, in excess of Twenty
Million Dollars ($20,000,000) in the aggregate.
An acquisition that can be accomplished without violating Section 7.1E or that
has been consented to in writing by the Majority Banks as defined in Section
15.10 pursuant to this Section 7.1 shall be known as a "Permitted Acquisition."
40
7.2 Indebtedness, Guaranties, etc. The Borrower and the Guarantors will
-----------------------------
not, without the prior written consent of the Agent Bank, directly or
indirectly, create, incur, assume, guarantee, agree to purchase or repurchase or
provide funds in respect of, or otherwise become liable with respect to any
Funded Debt other than:
A. The Revolving Credit Facility;
B. The Swing Line Credit Subfacility;
C. The Letter of Credit Subfacility;
D. Funded Debt, other than under Sections 7.2A., 7.2B., and 7.2C.,
that is unsecured debt is an aggregate amount not exceeding five million dollars
($5,000,000);
E. Funded Debt, other than under Sections 7.2A., 7.2B., and 7.2C.,
that is secured by a purchase money lien on tangible or intangible personal
property, which lien is permitted under Section 7.4 hereof.
F. Any guaranty by the Borrower or a Guarantor of Funded Debt
incurred by the Borrower or the Guarantor that is allowable under and included
within Sections 7.2D., and 7.2E.; and
G. Inter-Borrower Notes.
7.3 Use of Assets. The Borrower and the Guarantors will not use, or cause
-------------
or permit the use of, any of their assets in any manner prohibited by law,
governmental regulations or applicable insurance policies.
7.4 Mortgages, Liens, Encumbrances, Security Interests, Assignments, etc.
--------------------------------------------------------------------
The Borrower and the Guarantors will not, without the prior written consent of
the Agent Bank, directly or indirectly create, incur, assume or permit to
continue in existence any mortgage, lien, charge or encumbrance on, or security
interest in, or pledge or deposit of, or conditional sale or other title
retention agreement (including any lease which would constitute Funded Debt), or
assignment of, with respect to, any property or asset now owned or hereafter
acquired by the Borrower and the Guarantors; provided, however, that the
restrictions in this Section 7.4 shall not prohibit:
A. Liens on assets as of the Closing Date and which have been
disclosed to Agent Bank in Schedule 7.4 hereto or secure a debt in an amount
------------
less than $100,000;
B. Liens on assets acquired by the Borrower or any Guarantor in a
Permitted Acquisition (as defined in Section 7.1 hereof);
C. Liens on assets that are owned by the Borrower or any Guarantor,
other than under 7.4A, 7.4B, and 7.4D., so long as the aggregate value of such
assets does not exceed 20% of the Borrower's Net Worth at the time such liens
are granted;
D. Liens on assets that are acquired or constructed by Borrower or
any Guarantor, other than under 7.4A., 7.4B., and 7.4C., under a capital leasing
or purchase money borrowing arrangement, so long as the aggregate value of such
assets does not exceed 20% of the Borrower's Net Worth at the time such liens
are granted;
E. Liens for taxes, assessments or governmental charges not yet due
and payable or the payment of which is not at the time required for the reasons
set forth by the proviso to the first sentence of Section 6.2A; and
F. Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance and
other types of social security or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, performance and
return of money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) for sums not yet due or being contested in
good faith and by appropriate proceedings promptly initiated and diligently
conducted, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor.
7.5 Nature of Businesses. The Borrower and the Guarantors will not,
--------------------
without the prior written consent of the Agent Bank in every specified instance,
engage in any businesses other than the businesses conducted as of the Closing
Date and all businesses incidental thereto.
41
7.6 Fixed Charge Coverage Ratio. The Borrower shall not permit the Fixed
---------------------------
Charge Coverage Ratio for any period of four consecutive Fiscal Quarters, to
fall below 2.25 to 1.0 as of the end of each Fiscal Quarter.
7.7 Ratio of Adjusted Funded Debt to EBITDA. The Borrower shall not
----------------------------------------
permit the ratio of Adjusted Funded Debt to EBITDA for any period of four
consecutive Fiscal Quarters, to exceed 3.00 to 1.00, calculated as of the end of
each Fiscal Quarter.
7.8 Minimum Net Worth. The Borrower shall not permit its Net Worth for
-----------------
any period of four consecutive Fiscal Quarters, calculated as of the end of each
Fiscal Quarter during the term of this Agreement, to be less than the sum of (i)
85% of the minimum Net Worth amount on the consolidated financial statements of
the Borrower as of September 26, 1999, plus (ii) 50% of Net Income earned in
each Fiscal Quarter ended subsequent to the Closing Date, plus (iii) 100% of
equity raised or contributed. For purposes of calculating Net Worth under this
Section 7.8, any net losses hereafter incurred by the Borrower as of the end of
a Fiscal Quarter will be treated as $0 earnings for purposes of calculating the
Minimum Net Worth requirement.
7.9 Interest Rate Agreements. The Borrower and the Guarantors will not
------------------------
enter into any Interest Rate Agreement unless (i) such Interest Rate Agreement
is intended to fix or establish a maximum interest rate in respect of
Indebtedness with a notional amount not in excess of the Revolving Loan
Commitments and is embodied in a standard ISDA form of agreement which is
acceptable to the Banks with respect to any intercreditor issues, (ii) the
Borrower and the Guarantors promptly provide a true and complete copy of such
Interest Rate Agreement to the Agent Bank, on behalf of itself and the Banks. At
or following the effective date of any such Interest Rate Agreement, the Agent
Bank may, upon written notification to the Borrower and the Guarantors and the
Banks and such counterparty, designate (which designations shall be made only
upon the instructions or with the consent of the Majority Banks) the credit
exposure of such counterparty under such Interest Rate Agreement as an
obligation entitled to share, pari passu with the Obligations, in respect to the
benefits provided by the collateral under the Loan Documents, in accordance with
the applicable provisions of the Loan Documents, and if the Agent Bank so
designates such credit exposure, the applicable Interest Rate Agreement of such
counterparty shall be considered a "Designated Interest Rate Agreement."
SECTION 8
EVENTS OF DEFAULT; ACCELERATION
-------------------------------
8.1 Events of Default. The following events shall constitute Events of
-----------------
Default under this Loan Agreement:
A. The failure by the Borrower to pay any principal of any Revolving
Credit Note when the same becomes due and payable or the failure of the Borrower
to pay any interest thereon within five (5) days of the date when the same
becomes due and payable; or
B. The failure by the Borrower to reimburse the Agent Bank upon
demand for any draft honored by the Agent Bank under any Letter of Credit now or
hereafter issued by the Agent Bank for the account of the Borrower; or
C. The failure by the Borrower or a Guarantor to perform or observe
any of the provisions of Sections 7.1, 7.6, 7.7 or 7.8; or
D. The failure by the Borrower or a Guarantor to perform or observe
any of the provisions of Sections 6.10, 7.2, 7.3, 7.4, 7.5 or 7.9 hereof, and
such default continues for twenty (20) days after a Financial Officer or the
chief executive officer of the Borrower has knowledge of such failure or for
twenty (20) days after written notice of such failure shall have been delivered
to Borrower by any Bank; or
E. The Borrower or a Guarantor shall default in the performance of
or compliance with any covenant, obligation or provision contained in this Loan
Agreement (other than those referred to above in this Section 8.1A., and any
such default shall not have been remedied within thirty (30) days after written
notice of such default shall have been delivered to the Borrower; or
42
F. If any material representation or warranty made in writing by or
on behalf of the Borrower or a Guarantor herein or pursuant hereto or otherwise
in connection with the Revolving Credit Facility, the Swing Line Credit
Subfacility and/or the Letter of Credit Subfacility shall have been materially
false or misleading or incorrect when made and the Authorized Officer on behalf
of the Borrower knew or should have known of the falsity, misleading nature of
or incorrectness of such representation or warranty when it was made; or
G. The failure of the Borrower or a Guarantor to pay any of its
Funded Debt (other than Funded Debt with respect to the Revolving Credit
Facility) which in the aggregate exceeds Ten Million Dollars ($10,000,000), when
due or within any grace period afforded the Borrower or a Guarantor for paying
the same, or the acceleration of the maturity of any such Funded Debt by the
holder thereof, other than any such Funded Debt with respect to which the
Borrower or a Guarantor is contesting in good faith the validity, amount and/or
the Borrower or a Guarantor's liability therefor and for which adequate reserves
have been established on the books of the Borrower or a Guarantor in accordance
with GAAP; or
H. If any of the Borrower or a Guarantor shall (i) file a petition
for an order of relief under the federal bankruptcy laws (as in effect on the
date of this Agreement or as they may be amended from time to time); (ii) admit
its inability to pay its debts generally as they become due; (iii) become
insolvent in that its total assets are in the aggregate worth less than all of
its liabilities or it is unable to pay its debts generally as they become due;
(iv) make a general assignment for the benefit of creditors; (v) file a
petition, or admit (by answer, default or otherwise) the material allegations of
any petition filed against it, in bankruptcy under the federal bankruptcy laws
(as in effect on the date of this Agreement or as they may be amended from time
to time), or under any other law for the relief of debtors, or for the
discharge, arrangement or compromise of its debts; or (vi) consent to the
appointment of a receiver, conservator, trustee or liquidator of all or part of
its assets; or
I. If a petition shall have been filed against the Borrower or a
Guarantor in proceedings under the federal bankruptcy laws (as in effect on the
date of this Agreement, or as they may be amended from time to time), or under
any other laws for the relief of debtors, or for the discharge, arrangement or
compromise of its debts, or an order shall be entered by any court of competent
jurisdiction appointing a receiver, conservator, trustee or liquidator of all or
part of the assets of the Borrower or a Guarantor, and such petition or order is
not dismissed or stayed within sixty (60) consecutive days after entry thereof;
or
J. If a final uninsured judgment or judgments shall be rendered
against any of the Borrower or a Guarantor in an aggregate amount exceeding Five
Million Dollars ($5,000,000) and (i) if, prior to the availability of any
execution thereon, such judgment(s) shall not have been discharged or execution
thereof shall not have been stayed pending appeal, or if, after the expiration
of any such stay, such judgment(s) shall not have been discharged, or (ii) the
Borrower shall not have established adequate reserves on its books in respect of
such final uninsurable judgment or judgments; or
K. In the event the Borrower experiences a Change in Control without
the prior written consent of the Banks; or
L. The occurrence of any event of default or default under any of
the Loan Documents; or
M. The occurrence of any event of default or default under any note,
loan agreement, security agreement, mortgage or instrument (other than the Loan
Documents) evidencing or securing indebtedness of the Borrower which in the
aggregate exceeds Ten Million Dollars ($10,000,000).
Upon the occurrence of any Event of Default described in clauses H or I of this
Section 8 with respect to the Borrower, the unpaid principal balance of each of
the Revolving Credit Notes, and the other Obligations, together with all accrued
interest thereon, shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by the Borrower. Upon the occurrence of any
other Event of Default referred to in this Section 8, the Agent Bank, on behalf
of the Banks, subject to the provisions of Section 10.4 hereof, may at any time
at its option, by written notice to the Borrower, declare the unpaid principal
balance of and all accrued and unpaid interest on each of the Revolving Credit
Notes and the other Obligations to be immediately due and payable in full to the
Banks, as applicable, without presentment, demand, protest or other requirements
of any kind, all of which are hereby waived by the Borrower.
43
SECTION 9
REMEDIES UPON DEFAULT, ETC.
--------------------------
9.1 Defaults. Upon the occurrence and during the continuation of any
--------
Event of Default, the Banks may proceed to protect and enforce their rights by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained herein or in the Revolving
Credit Notes or for an injunction against a violation of any of the terms hereof
or thereof, or in aid of the exercise of any right, power or remedy granted
hereby or thereby or by law or pursuant to the other Loan Documents.
9.2 Offset. If any Event of Default shall occur and be continuing and
------
regardless of whether or not the Banks have accelerated the maturity date of the
Revolving Credit Notes, and/or the other Obligations, each Bank shall have the
right then, or at any time thereafter, to set off against any and all deposit
balances and other sums and Funded Debt and other property then held or owned by
such Bank to or for the credit or account of the Borrower, all without notice to
or demand upon the Borrower or any other Person, all such notices and demands
being hereby expressly waived by the Borrower.
9.3 Rights Cumulative. All of the rights and remedies of the Banks upon
-----------------
the occurrence of an Event of Default hereunder shall be cumulative to the
greatest extent permitted by law, and shall be in addition to all those rights
and remedies afforded the Banks at law or in equity.
9.4 Payment of Costs and Expenses. All of the reasonable costs,
-----------------------------
expenses, damages and liabilities, including, without limitation, all reasonable
attorneys' fees, incurred by and imposed upon any Bank with respect to, in
connection with the enforcement of this Loan Agreement or any other Loan
Document or collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under this Loan Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and in
any workout or restructuring or in connection with the protection, preservation,
exercise or enforcement of any of the terms hereof or of any rights hereunder or
under any other Loan Document or in connection with any foreclosure, collection
or bankruptcy proceedings, in connection with or as a result of any action taken
or omitted to be taken pursuant to this Loan Agreement, the Revolving Credit
Notes, or the other Loan Documents shall be paid by, and shall be the sole
responsibility of, the Borrower.
SECTION 10
THE AGENT BANK
--------------
10.1 Appointment. Each Bank hereby irrevocably designates, appoints and
-----------
authorizes the Agent Bank to act as the agent bank under this Loan Agreement and
to execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any
Revolving Credit Note by the acceptance of such Revolving Credit Note shall be
deemed irrevocably to authorize, the Agent Bank to take such action on behalf of
such Bank and such holder under the provisions of this Loan Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Agent Bank by the terms hereof,
together with such powers as are reasonably incidental thereto. The Agent Bank
agrees to act as the agent bank to the extent provided in this Loan Agreement.
10.2 Delegation of Duties. The Agent Bank may perform any of its duties
--------------------
hereunder by or through agents or employees (provided such delegation is
--------
exercised with reasonable care and does not constitute a relinquishment of its
duties as Agent Bank) and, subject to Sections 10.5, 10.6 and 10.7 hereof, shall
be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained, provided reasonable care is
--------
used in the selection of the foregoing experts.
10.3 Nature of Duties; Independent Credit Investigation. The Agent Bank
--------------------------------------------------
shall have no duties or responsibilities except those expressly set forth in
this Loan Agreement and the other Loan Documents and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Loan Agreement or shall otherwise exist. The duties of the Agent Bank
shall be mechanical and administrative in nature and shall include the duty to
provide to each Bank an executed original of such Bank's Revolving Credit Note
and an executed
44
original of this Loan Agreement and a copy of the other Loan Documents; the
Agent Bank shall not have by reason of this Loan Agreement a fiduciary or trust
relationship in respect of any Bank; and nothing in this Loan Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent Bank any obligations in respect of this Loan Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the Agent
Bank has not made any representations or warranties to it and that no act which
the Agent Bank hereafter takes, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Agent Bank to any Bank; (ii) that it has made and will continue to make, without
reliance upon the Agent Bank, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of the
Borrower in connection with this Loan Agreement and the making and continuance
of the Loans hereunder; and (iii) except as expressly provided herein, that the
Agent Bank shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information with
respect thereto, whether coming into its possession before the making of any
Loan or at any time or times thereafter.
10.4 Actions in Discretion of the Agent Bank; Instructions from the Banks.
--------------------------------------------------------------------
The Agent Bank agrees, upon the written request of the Majority Banks, to take
or refrain from taking any action of the type specified as being within the
Agent Bank's rights, powers or discretion herein; provided that the Agent Bank
--------
shall not be required to take any action which exposes the Agent Bank to legal
liability or which is contrary to this Loan Agreement or any other Loan Document
or applicable law. In the absence of a request by the Majority Banks, the Agent
Bank shall have authority, in its sole discretion, to take or not to take any
such action, unless this Loan Agreement specifically requires the consent of the
Majority Banks. Any action taken or failure to act pursuant to such instructions
or discretion shall be binding on the Banks, subject to the provisions of
Section 10.6 hereof. Subject to the provisions of Section 10.6 hereof, no Bank
shall have any right of action whatsoever against the Agent Bank as a result of
the Agent Bank acting or refraining from acting hereunder in accordance with the
instructions of the Banks or, in the absence of such instructions, in the
absolute discretion of the Agent Bank.
The consent of the Majority Banks is specifically required before the Agent
Bank declares the unpaid principal balance and all accrued and unpaid interest
on the Revolving Credit Notes to be immediately due and payable upon the
occurrence of an Event of Default described in Section 8.1 hereof, other than in
sections H or I thereof. The Banks shall have 48 hours, from the Agent Bank's
giving of telephonic or written notice of a request for such consent, to notify
the Agent Bank as to whether such consent is granted or withheld, and any Bank
that fails to so notify the Agent Bank within such 48 hour period shall be
deemed to have consented to the action proposed by the Agent Bank.
10.5 Reimbursement and Indemnification of the Agent Bank and the Banks by
--------------------------------------------------------------------
the Borrower. The Borrower unconditionally agrees to pay or reimburse the Agent
------------
Bank and hold the Agent Bank harmless against liability for the payment of all
reasonable and necessary out-of-pocket costs, expenses and disbursements for
which reimbursement is customarily obtained, including reasonable fees and
expenses of counsel and consultants incurred by the Agent Bank (i) in connection
with the preparation, negotiation, printing, execution, administration,
interpretation and performance of this Loan Agreement and the other Loan
Documents and (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof. The Borrower unconditionally agrees to pay or
reimburse the Agent Bank and each Bank against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent Bank and/or any Bank, in its capacity as such,
in any way relating to or arising out of this Loan Agreement or any other Loan
Document or any action taken or omitted by the Agent Bank and/or any Bank
hereunder or thereunder; provided that the Borrower shall not be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the bad faith, gross negligence or willful misconduct of the Agent Bank or any
Bank, or (b) if the Borrower was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense, or (c) if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which consent shall not be unreasonably withheld.
10.6 Exculpatory Provisions. Neither the Agent Bank nor any of its
----------------------
directors, officers, employees, agents or affiliates shall (i) be liable to any
Bank for any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any other Loan Documents, unless
caused by its or their own gross negligence or willful misconduct, (ii) be
responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or the due execution of this Loan
Agreement or any other Loan Document or for any recital, representation,
warranty, document, certificate, report or statement herein or made or furnished
under or in connection with this Loan Agreement or any other Loan Document, or
(iii) be under any obligation to any of the Banks to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions
45
hereof or thereof on the part of the Borrower, or the financial condition of the
Borrower, or the existence or possible existence of any Event of Default or
Potential Default under the Loan Documents. Neither the Agent Bank nor any Bank
nor any of their respective directors, officers, employees, agents, attorneys or
affiliates shall be liable to the Borrower or any other Person for consequential
damages resulting from any breach of contract, tort or other wrong in connection
with the negotiation, documentation or administration of the Loan Documents or
the collection of the Obligations.
10.7 Reimbursement and Indemnification of the Agent Bank by the Banks.
----------------------------------------------------------------
Each Bank agrees to reimburse and indemnify the Agent Bank (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) in proportion to its Revolving Credit Facility Pro Rata Share from and
against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent
Bank, in its capacity as such, in any way relating to or arising out of this
Loan Agreement or any other Loan Document or any action taken or omitted by the
Agent Bank hereunder or thereunder, provided that no such reimbursement shall be
--------
required with respect to expenses incurred by the Agent Bank during the time
period through the Closing Date and no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements (i) if the same relates to or arises out
of the Agent Bank's gross negligence or willful misconduct, or (ii) if such Bank
was not given notice of the subject claim and the opportunity to participate in
the defense thereof, at its expense, or (iii) if the same results from a
compromise and settlement agreement entered into without the consent of the
Bank, which consent shall not be unreasonably withheld.
10.8 Reliance by the Agent Bank. The Agent Bank shall be entitled to rely
--------------------------
upon any writing, telegram, telex or teletype message, facsimile, resolution,
notice, consent, certificate, letter, cablegram, statement, order or other
document or conversation by telephone or otherwise believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon the advice and opinions of counsel and other professional
advisers selected by the Agent Bank. The Agent Bank shall be fully justified in
failing or refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Banks in accordance with their respective
Revolving Credit Facility Pro Rata Shares against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
10.9 Notice of Default. The Agent Bank shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the loan officer of the Agent Bank, responsible for the Revolving
Credit Facility has actual knowledge of such Potential Default or Event of
Default or the Agent Bank has received written notice from a Bank or the
Borrower referring to this Loan Agreement, specifically describing such
Potential Default or Event of Default.
10.10 The Banks in Their Individual Capacities. With respect to its
----------------------------------------
Revolving Loan Commitment, the Agent Bank shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it were not the
Agent Bank, and the term "Banks" shall, unless the context otherwise indicates,
include the Agent Bank in its individual capacity. Each Bank and its Affiliates
may, without liability to account, except as prohibited herein, make loans to,
accept deposits from, discount drafts for, act as trustee under indentures of,
and generally engage in any kind of banking or trust business with, the Borrower
and its Affiliates, in the case of the Agent Bank, as though it were not acting
as Agent Bank hereunder and in the case of each Bank, as though such Bank were
not a Bank hereunder.
10.11 Holders of Revolving Credit Notes. The Agent Bank may deem and
---------------------------------
treat any payee of any Revolving Credit Note as the owner thereof for all
purposes hereof unless and until written notice of the assignment or transfer
thereof shall have been filed with the Agent Bank. Any request, authority or
consent of any Person who at the time of making such request or giving such
authority or consent is the holder of any Revolving Credit Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Revolving Credit Note or Term Note or of any Revolving Credit Note issued in
exchange therefor.
10.12 Equalization of the Banks. The Banks and the holders of any
-------------------------
participations in any Revolving Credit Notes agree among themselves that, with
respect to all amounts received by any Bank or any such holder for application
to any Revolving Credit Note or under any such participation, whether received
by voluntary payment, by the exercise of the right of setoff or banker's lien,
by counterclaim or by any other non-pro rata source, equitable adjustment will
be made in the manner stated in the following sentence so that, in effect, all
such excess amounts will be shared ratably among the Banks and such holders in
proportion to their interests in payments under the Revolving Credit Notes. The
Banks or any such holder receiving any such amount shall purchase for cash from
46
each of the other Banks an interest in such Bank's Revolving Credit Loans in
such amount as shall result in a ratable participation by the Banks and each
holder in the aggregate unpaid amount under the Revolving Credit Notes, provided
--------
that if all or any portion of such excess amount is thereafter recovered from
the Bank or the holder making such purchase, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by law (including court order) to be
paid by the Bank or the holder making such purchase.
10.13 Successor Agent Bank. The Agent Bank, with the consent of the
--------------------
Borrower which shall not be unreasonably withheld, may resign as Agent Bank upon
not less than thirty (30) days prior written notice given to the Borrower and
the other Bank(s). If the Agent Bank shall resign under this Loan Agreement,
then either (i) the Banks shall appoint a successor Agent Bank, subject to the
consent to such successor Agent Bank by the Borrower, such consent not to be
unreasonably withheld, or (ii) if a successor Agent Bank shall not be so
appointed and approved within the thirty (30) day period following the Agent
Bank's notice to the Banks of its resignation, then the Agent Bank shall
appoint, with the consent of the Borrower, such consent not to be unreasonably
withheld, a successor Agent Bank who shall serve as Agent Bank until such time
as the Banks appoint, and the Borrower consents, which consent shall not be
unreasonably withheld, to the appointment of a successor Agent Bank. Upon its
appointment pursuant to either clause (i) or (ii) above, such successor Agent
Bank shall succeed to the rights, powers and duties of the Agent Bank and the
term "Agent Bank" shall mean such successor Agent Bank, effective upon its
appointment, and the former Agent Bank's rights, powers and duties as Agent Bank
shall be terminated without any other or further act or deed on the part of such
former Agent Bank or any of the other parties to this Loan Agreement. After the
resignation of any Agent Bank hereunder, the provisions of this Section 10 shall
not by reason of such resignation be deemed to release the Agent Bank from
liability for any actions taken or not taken by it while it was the Agent Bank
under this Loan Agreement.
10.14 Calculations. In the event an error in computing any amount payable
------------
to any Bank is made, the Agent Bank, the Borrower and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
10.15 Withholding Tax. A. If any Bank is a "foreign corporation,
---------------
partnership or trust" within the meaning of the Internal Revenue Code and such
Bank claims exemption from, or a reduction of, U.S. withholding tax under
Sections 1441 or 1442 of the Internal Revenue Code, such Bank agrees with and in
favor of the Agent Bank, to deliver to the Agent Bank:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly completed and
executed copies of IRS Form 1001 before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively connected
with a United States trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any interest is due in
the first taxable year of such Bank and in each succeeding taxable year of such
Bank during which interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Internal
Revenue Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent Bank of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
B. If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Borrower to such Bank, such Bank agrees to notify the Agent
Bank of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Borrower to such Bank. To the extent of such percentage
amount, the Agent Bank will treat such Bank's IRS Form 1001 as no longer valid.
C. If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent Bank sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the
47
Borrower to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Section 1341 and 1442
of the Internal Revenue Code.
D. If any Bank is entitled to a reduction in the applicable withholding
tax, the Agent Bank may withhold from any interest payment to such Bank an
amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by
subsection A of this Section are not delivered to the Agent Bank, then the Agent
Bank may withhold from any interest payment to such Bank not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax imposed by Sections 1441 and 1442 of the Internal Revenue Code, without
reduction.
E. If the IRS or any other Governmental Authority of the United States
or other jurisdiction asserts a claim that the Agent Bank did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent Bank of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Bank shall indemnify the Agent Bank fully for all amounts
paid, directly or indirectly, by the Agent Bank as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent Bank under this Section 10, together with all
costs and expenses (including attorney costs). The obligation of the Banks under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of the Agent Bank.
10.16 Beneficiaries. Except as set forth in Sections 10.5 and 10.13
-------------
hereof, the provisions of this Section 10 are solely for the benefit of the
Agent Bank and the Banks, and the Borrower shall not have any right to rely on
or enforce any of the provisions hereof. In performing its functions and duties
under this Loan Agreement, the Agent Bank shall act solely as agent of the Banks
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for the Borrower or any other
Person.
SECTION 11
ASSIGNMENTS AND PARTICIPATIONS
------------------------------
A. Assignments to Eligible Assignees. Each Bank shall have the right
---------------------------------
at any time, with the prior consent of the Borrower and the Agent Bank, which
shall not be unreasonably withheld, to sell, assign, transfer or negotiate all
or any part of its Revolving Loan Commitment and Revolving Credit Loans in a
minimum amount of Five Million Dollars ($5,000,000) to one or more commercial
banks, insurance companies, savings and loan associations, savings banks or
other financial institutions, pension funds or mutual funds or other accredited
investors ("Eligible Assignees"). In the case of any sale, assignment, transfer
or negotiation of all or part of the Revolving Loan Commitment or Revolving
Credit Loans authorized under this Section 11, the assignee, transferee or
recipient shall have, to the extent of such sale, assignment, transfer or
negotiation, the same rights, benefits and obligations as it would if it were a
Bank hereunder, including, without limitation (x) the right to approve or
disapprove actions which, in accordance with the terms hereof, require the
approval of the Banks, and (y) the obligation to fund Revolving Credit Loans
pursuant to Section 2 hereof. The Bank assigning a portion or all of its
Revolving Loan Commitment and Revolving Credit Loans pursuant to this Section
11, or the bank purchasing the interest of the Assigning Bank, shall pay a fee
to the Agent Bank in the amount of Three Thousand Dollars ($3,000).
B. Participations. Notwithstanding Section 11A hereof, each Bank may
--------------
grant participations in all or any part of its Revolving Loan Commitment and
Revolving Credit Loans to one or more Eligible Assignees; provided that (i) any
--------
such disposition shall not, without the consent of the Borrower, require the
Borrower to file a registration statement with the Securities and Exchange
Commission or apply to qualify the Revolving Credit Loans or the Revolving
Credit Notes under the blue sky law of any state; and (ii) the holder of any
such participation, other than an Affiliate of such Bank, shall not be entitled
to require the Banks to take or omit to take any action hereunder except action
directly extending the final maturity of any portion of the principal amount of
or interest on a Revolving Credit Loan allocated to such participation or a
reduction of the principal amount of or the rate of interest payable on the
Revolving Credit Loans allocated to such participation.
C. Assignments to Affiliates. Notwithstanding the foregoing
-------------------------
provisions of this Section 11, each Bank may at any time sell, assign, transfer,
or negotiate all or any part of its Revolving Loan Commitment and Revolving
Credit Loans to any Affiliate of such Bank; provided that an Affiliate to whom
--------
such disposition has been made shall not be considered a "Bank" for purposes of
this Loan Agreement other than for purposes of Section 9.2
48
hereof; provided further that the Borrower shall not incur any additional
----------------
expenses solely as a result of such sale, assignment, transfer or negotiation.
D. No Release of Obligations. No Bank shall, as between the Borrower
-------------------------
and such Bank, be relieved of any of its obligations hereunder as a result of
any granting of participations in all or any part of its Revolving Loan
Commitment or Revolving Credit Loans. Each Bank shall, as between the Borrower
and such Bank, be relieved of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of all or any part of its Revolving Loan
Commitment and Revolving Credit Loans made in accordance with Section 11.A
hereof.
SECTION 12
INDEMNITY
---------
The Borrower shall indemnify and hold harmless each Bank and its
successors, assigns, agents and employees from and against any and all claims,
actions, suits, proceedings, costs, expenses, damages, fines, penalties and
liabilities, including, without limitation, reasonable attorneys' fees and
costs, arising out of, connected with or resulting from the operation of the
business of the Borrower.
SECTION 13
INCREASED COSTS; TAXES; CAPITAL ADEQUACY
----------------------------------------
13.1 Compensation for Increased Costs and Taxes. In the event that the
------------------------------------------
Banks shall determine in good faith (which determination shall, absent manifest
or demonstrable error, be final and conclusive and binding upon both the
Borrower and the Banks) that any law, treaty or governmental rule, regulation or
order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the Closing
Date, or compliance by the Banks with any guideline, request or directive issued
or made after the date hereof by any central bank or other governmental or
quasi-governmental authority, and which has the force of law and first becomes
effective after the Closing Date in all cases of general applicability to the
banking industry:
(i) subjects any Bank (or its applicable lending office) to any
additional Covered Tax with respect to this Loan Agreement or any of the
Revolving Credit Loans or the Swing Line Loans or any of its other obligations
hereunder, or changes the basis of taxation of payments to such Bank (or its
applicable lending office) of principal, interest, fees or any other amount
payable hereunder (but not changes in Excluded Taxes);
(ii) imposes, modifies or holds applicable any additional reserve
(including without limitation any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in or for
the account of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any Bank (or its applicable lending office)
(other than any such reserve or other requirements with respect to LIBOR Loans
that are reflected in the definition of LIBOR); or
(iii) imposes any other condition on or affecting any Bank (or its
applicable lending office) or its obligations hereunder or the London interbank
market, other than with respect to Taxes;
and the result of any of the foregoing is to increase the cost to any Bank of
agreeing to make, making or maintaining Revolving Credit Loans and Swing Line
Loans hereunder or to reduce any amount received or receivable by any Bank (or
its applicable lending office) with respect thereto, then, in any such case, the
Borrower shall promptly pay to such Bank, upon demand, such additional amount or
amounts (in the form of an increased rate of, or a different method of
calculating, interest as such Bank in its reasonable discretion shall determine)
as may be necessary to compensate such Bank on an after-tax basis for any such
increased cost or reduction in amounts received or receivable hereunder;
provided that any increased cost arising as a result of any of the foregoing
--------
other than in respect of Taxes shall apply only to LIBOR Loans to the extent the
same bear interest by reference to the LIBOR. The Bank seeking reimbursement for
such amounts from the Borrower shall deliver to the Borrower a written statement
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Bank under
49
this Section 13.1, which statement shall be conclusive and binding upon both
parties hereto absent manifest or demonstrable error.
13.2 Withholding of Taxes.
--------------------
A. Payments to Be Free and Clear. All sums payable by the Borrower
-----------------------------
under this Loan Agreement and the other Loan Documents to or for the benefit of
any Bank or any Person who acquires any interest in the Revolving Credit Loans
pursuant to the provisions hereof shall be paid free and clear of and (except to
the extent required by law) without any deduction or withholding on account of
any Covered Tax imposed, levied, collected, withheld or assessed by or within
the United States of America or any political subdivision in or of the United
States of America or any other jurisdiction from or to which a payment is made
by or on behalf of the Borrower or by any federation or organization of which
the United States of America or any such jurisdiction is a member at the time of
payment.
B. Grossing-up of Payments. If the Borrower or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any Covered
Tax from any sum paid or payable by the Borrower to any Bank under any of the
Loan Documents:
(i) The Borrower shall notify such Bank of any such
requirement or any change in any such requirement as soon as the Borrower
becomes aware of it;
(ii) The Borrower shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the liability to pay
is imposed on the Borrower) for their own account or (if that liability is
imposed on such Bank) on behalf of and in the name of such Bank;
(iii) The sum payable by the Borrower in respect of which the
relevant deduction, withholding or payment is required shall be increased to the
extent necessary to ensure that, after the making of that deduction, withholding
or payment, such Bank receives on the due date and retains (free from any
liability in respect of any such deduction, withholding or payment) a net sum
equal to what it would have received and so retained had no such deduction,
withholding or payment in respect of Covered Taxes been required or made; and
(iv) Within thirty (30) days after paying any sum from which
it is required by law to make any deduction or withholding, and within thirty
(30) days after the due date of payment of any Tax which it is required to pay
by clause (ii) above, the Borrower shall deliver to such Bank evidence
satisfactory to such Bank of such deduction, withholding or payment and of the
remit thereof to the relevant taxing or other authority; provided that no such
--------
additional amount shall be required to be paid to any Bank under clause (iii)
above except to the extent that any change after the date hereof in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Loan Agreement in respect of
payments to such Bank.
C. Tax Refund. If the Borrower determines in good faith that a
----------
reasonable basis exists for contesting a Covered Tax, the relevant Bank or Tax
Transferee, as applicable, shall cooperate with the Borrower in challenging such
Tax at the Borrower's expense if requested by the Borrower (it being understood
and agreed that no Bank shall have any obligation to contest, or any
responsibility for contesting, any Tax). If any Tax Transferee or any Bank, as
applicable, receives a refund (whether by way of a direct payment or by offset
of any Covered Tax for which a payment has been made pursuant to this Section
13) the amount of such refund (together with any interest received thereon)
shall be paid to the Borrower to the extent payment has been made in full
pursuant to this Section 13.
13.3 Capital Adequacy Adjustment. If any Bank shall have determined in
---------------------------
good faith that the adoption, effectiveness, phase-in or applicability of any
law, rule or regulation (or any provision thereof) regarding capital adequacy,
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy of any such governmental authority, central bank or comparable
agency in all cases of general applicability to the banking industry, and which
has the force of law and first becomes effective after the Closing Date, has or
will have the effect of reducing the rate of return on the capital of such Bank
or any corporation controlling such Bank as a consequence of, or with reference
to, such Bank's Revolving Credit Loans or other obligations hereunder to a level
below that which such Bank or such controlling corporation would have achieved
but for such adoption,
50
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Bank or such controlling corporation with
regard to capital adequacy), then from time to time, within ten (10) Business
Days after demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such controlling
corporation on an after-tax basis for such reduction as and when incurred. Each
Bank, upon determining in good faith that any additional amounts will be payable
pursuant to this Section 13.3, will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
under this Section 13.3.
13.4 Banks' Obligation to Mitigate. Each Bank agrees that, as promptly as
-----------------------------
practicable after the officer of such Bank responsible for administering the
Revolving Credit Loans under this Loan Agreement becomes aware of the occurrence
of an event or the existence of a condition that would entitle such Bank to
receive payments under Section 13 hereof, it will, to the extent not
inconsistent with its internal policies, use reasonable efforts (i) to make,
fund or maintain its Revolving Credit Loans through another lending office of
such Bank, or (ii) take such other reasonable measures, if as a result thereof,
the additional amounts which would otherwise be required to be paid to such Bank
pursuant to Section 13 hereof would be materially reduced and if, as determined
by such Bank in its sole discretion, the making, funding or maintaining of such
Revolving Credit Loans through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Revolving Credit Loans or the interests of such Bank;
provided that such Bank will not be obligated to utilize such other lending
--------
office pursuant to this Section 13.3 unless the Borrower agrees to pay all
expenses incurred by such Bank in utilizing such other lending office. A
certificate as to the amount of any such expenses payable by the Borrower
pursuant to this Section 13.4 (setting forth in reasonable detail the basis for
requesting such amount) submitted by any Bank to the Borrower shall be
conclusive absent manifest or demonstrable error.
SECTION 14
NOTICES
-------
All notices required or permitted to be given hereunder shall be given in
writing and shall be personally delivered or sent by facsimile transmission or
by registered or certified United States mail, return receipt requested, postage
prepaid, addressed as follows (or to such other address as to which any party
hereto shall have given the other parties written notice):
If to the Borrower: Sypris Solutions, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to Guarantors: c/o Sypris Solutions, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the BANK ONE, KENTUCKY, NA
Agent Bank: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Banks: To the Banks at the respective
address of each Bank
Set forth in Schedule 1.1 hereof
------------
All notices hereunder shall be deemed given upon the earlier of (i)
actual delivery in person or by facsimile transmission, or (ii) two (2) Business
Days after having been deposited in the United States mails, in accordance with
the foregoing. Except where the Borrower is expressly required by the provisions
of this Loan Agreement to give notice to all of the Banks, it shall be
sufficient whenever the Guarantors or the Borrower are required to give notice
hereunder for the Guarantors or the Borrower to give such notice solely to the
Agent Bank.
51
SECTION 15
MISCELLANEOUS
-------------
15.1 Ratable Sharing. Each Bank agrees with the other Bank that (i) with
---------------
respect to all amounts received by it which are applicable to the payment of
principal of or interest on the Revolving Credit Loans and the Revolving Credit
Facility Commitment Fees, including, without limitation, all amounts received by
such Bank pursuant to the exercise of the right of setoff pursuant to Section
9.2 hereof, equitable adjustment will be made so that, in effect, all such
amounts will be shared among the Banks proportionately in accordance with their
respective Revolving Credit Facility Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, and (ii) if any of them shall exercise any right of counterclaim,
set-off, banker's lien or similar right with respect to amounts owed by the
Borrower hereunder, that Bank shall apportion the amount recovered as a result
of the exercise of such right pro rata in accordance with (a) all amounts
outstanding at such time owed by the Borrower to it hereunder with respect to
the Revolving Credit Loans, and (b) all amounts otherwise owed by the Borrower
to it, and (iii) if any of them shall thereby through the exercise of any right
of counterclaim, set-off, banker's lien or otherwise, or as adequate protection
of a deposit treated as cash collateral under the Bankruptcy Code, receive
payment or reduction of a proportion of the aggregate amount of principal and
interest due with respect to the Revolving Credit Loans made by that Bank or any
participation therein, or any other amount payable hereunder (collectively, the
"Aggregate Amount Due" to such Bank), which is greater than the proportion
received by any other Bank in respect of the Aggregate Amount Due to such other
Bank, then the Bank receiving such proportionately greater payment shall (y)
notify each other Bank and the Agent Bank of such receipt and (z) purchase
participations (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in the Aggregate Amounts Due to the other Banks so that
all recoveries of Aggregate Amounts Due shall be shared by the Banks in
proportion to their respective Revolving Credit Facility Pro Rata Shares;
provided that if all or part of such proportionately greater payment received by
--------
such purchasing Bank is thereafter recovered from such Bank, those purchases
shall be rescinded and the purchase prices paid for such participations shall be
returned to that Bank to the extent of such recovery, but without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
participant in respect of any Revolving Credit Loan may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by the Borrower to that participant as fully as if that participant
were a Bank in the amount of such participation held by that participant.
15.2 Waiver. No course of dealing in respect of, nor any omission or
------
delay in the exercise of, any right, power, remedy or privilege by the Banks
shall operate as a wavier thereof, nor shall any right, power, remedy or
privilege of the Banks be exclusive of any other right, power, remedy or
privilege referred to herein or in any related document or now or hereafter
available at law, in equity, in bankruptcy, by statute or otherwise. Each such
right, power, remedy or privilege may be exercised by the Banks, either
independently or concurrently with others, and as often and in such order as the
Banks may deem expedient. No waiver or consent granted by the Banks in respect
of this Loan Agreement or the other Loan Documents shall be binding upon the
Banks unless specifically granted in writing by a duly authorized officer of the
Agent Bank, which writing shall be strictly construed.
15.3 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties and covenants of the Borrower and each Bank contained herein or made
pursuant hereto shall survive the execution and delivery of this Loan Agreement
and shall continue throughout the term hereof. Further, the indemnities set
forth in Section 12 hereof shall survive the payment of the Revolving Credit
Notes and the other Obligations to the Banks, as applicable.
15.4 Invalidity. If any part of this Loan Agreement shall be adjudged
----------
invalid or unenforceable, whether in general or in any particular circumstance,
then such partial invalidity or enforceability shall not cause the remainder of
this Loan Agreement to be or to become invalid or unenforceable, and if a
provision hereof is held invalid or unenforceable in one or more of its
applications, the parties hereto agree that said provision shall remain in
effect in all valid applications that are severable from the invalid or
unenforceable application or applications.
15.5 Assignment. This Loan Agreement may not be assigned by the Borrower
----------
without the prior written consent of the Banks. This Loan Agreement may be
assigned by the Banks as provided in Section 11 hereof. All rights of the Banks
hereunder shall inure to the benefit of their respective successors and assigns,
and all obligations, covenants and agreements of the Borrower shall bind its
permitted successors and assigns, if any.
52
15.6 Governing Law. This Loan Agreement and the rights and obligations of
-------------
the parties hereunder shall, in all respects, be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky.
15.7 Section Headings. The section headings of this Loan Agreement are
----------------
inserted herein solely for convenience of reference and shall not affect the
construction or interpretation of the provisions hereof.
15.8 Entire Agreement. This Loan Agreement and the other Loan Documents
----------------
constitute the entire agreement between the Borrower and the Banks with respect
to the subject matter hereof.
15.9 Time of the Essence. Time shall be of the essence in the payment and
-------------------
performance of all of the Borrower's obligations under this Loan Agreement, the
Revolving Credit Note and the other Loan Documents to which the Borrower are
party.
15.10 Modifications. This Loan Agreement may be modified only in writing
-------------
executed by the Borrower and the Banks. Neither this Loan Agreement nor the
other Loan Documents nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by Banks holding at least fifty one percent (51%) of the
aggregate of the Revolving Credit Facility Pro Rata Shares (the "Majority
Banks"); provided, however, that no such change, waiver, discharge or
-------- -------
termination, shall, without the consent of each Bank, (i) extend the Revolving
Loan Commitment Termination Date or the final maturity of the Revolving Credit
Note of such Bank, or change the rate or extend the time of payment of interest,
principal or fees, or reduce the principal amount thereof, or increase the
aggregate amount of the Revolving Loan Commitments above the maximum amount
provided for in Section 2.1 hereof, or increase any Bank's commitment to
disburse its Revolving Loan Pro Rata Share of Revolving Credit Loans requested
by the Borrower as set forth in Section 2.1 hereof, or (ii) amend, modify or
waive any provisions of this Section 15.10 (Modifications), Section 2 (Revolving
Credit Facility), Section 2.6 (Swing Line Credit Subfacility), Section 2.7
(Letter of Credit Subfacility), Section 8 (Events of Default; Acceleration),
Section 9 (Remedies Upon Default, Etc.), Section 10 (The Agent Bank), Section
15.1 (Ratable Sharing), or (iii) amend, modify or waive any provision requiring
consent of all Banks, or (iv) reduce the percentages specified in this Section
15.10 or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement.
15.11 Submission to Jurisdiction, Etc. The Borrower hereby irrevocably
-------------------------------
agrees that any legal action, suit or proceeding against the Borrower with
respect to the obligations and liabilities of the Borrower hereunder or any
other matter under or arising out of or in connection with this Loan Agreement,
the Revolving Credit Notes, or any other Loan Document or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding may
be brought in the United States District Court of the Western District of
Kentucky at Louisville, Kentucky or in the Jefferson County, Kentucky Circuit
Court, as the Banks may elect, and, by execution and delivery of this Loan
Agreement, the Borrower hereby irrevocably accepts and submits to the non-
exclusive jurisdiction of each of the aforesaid courts in personam generally and
-- --------
unconditionally with respect to any such action, suit or proceeding involving
the Borrower and in respect of the Borrower's property. The Borrower further
agrees that final judgment against the Borrower in any action, suit or
proceeding referred to herein shall be conclusive after all appeals have been
exhausted or waived by the Borrower, and may thereafter be enforced in any other
jurisdiction, within or outside the United States of America, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of the Borrower's obligations and liabilities. The
Borrower further irrevocably consents and agrees to the service of any and all
legal process, summons, notices and documents out of any of the aforesaid courts
in any such action, suit or proceeding by mailing copies thereof by serving
copies thereof upon any statutory agent for service of process of the Borrower.
The Borrower agrees that service upon the Borrower as provided for herein shall
constitute valid and effective personal service upon the Borrower and that the
failure of any statutory agent to give any notice of such service to the
Borrower shall not impair or affect in any way the validity of such service or
any judgment rendered in any action or proceeding based thereon. Nothing herein
shall, or shall be construed so as to, limit the right of the Banks to bring
actions, suits or proceedings with respect to the obligations and liabilities of
the Borrower under, or any other matter arising out of or in connection with,
this Loan Agreement, the Revolving Credit Notes, the Negative Pledge Agreement
and/or the other Loan Documents, or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding, in the courts of
whatever jurisdiction in which property of the Borrower may be found or as
otherwise shall to the Banks seem appropriate, or to affect the right to service
of process in any jurisdiction in any manner permitted by law. In addition, the
Borrower hereby irrevocably and unconditionally waives any objection which the
Borrower may now or hereafter have to the laying of venue of any of the
aforesaid actions, suits or proceedings arising out of or in connection with
this Loan Agreement, the Revolving Credit Notes, the Negative Pledge Agreement
and/or the other Loan Documents brought in the Circuit Court of Jefferson
County,
53
Kentucky or in the United States District Court for the Western District of
Kentucky at Louisville, Kentucky, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in either such court has been brought in an
inconvenient forum.
IN WITNESS WHEREOF, the Agent Bank, each Bank, the Borrower and each Guarantor
has caused this Loan Agreement to be duly executed as of the day and year first
above written.
BANK ONE, KENTUCKY, NA, as Agent Bank ("the
Agent Bank")
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
BANK ONE, KENTUCKY, NA
as a Bank
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
BANK OF AMERICA, N.A.
as a Bank
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
LASALLE BANK NATIONAL ASSOCIATION
as a Bank
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
SUNTRUST BANK, NASHVILLE, N.A.
as a Bank
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
54
SYPRIS SOLUTIONS, INC. (the "Borrower")
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
▇▇▇▇ TECHNOLOGIES, Inc.
("▇▇▇▇")(as a "Guarantor" and solely with
respect to Sections 6 and 7 of the Loan
Agreement)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Treasurer
TUBE TURNS TECHNOLOGIES, INC.
("TT")(as a "Guarantor" and solely with
respect to Sections 6 and 7 of the Loan
Agreement)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Treasurer
GROUP TECHNOLOGIES
CORPORATION
("Group")(as a "Guarantor" and solely with
respect to Sections 6 and 7 of the Loan
Agreement)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Treasurer
METRUM-DATATAPE, INC.
("MD")(as a "Guarantor" and solely with
respect to Sections 6 and 7 of the Loan
Agreement)
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Treasurer
55
