LOAN AGREEMENT
among
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
as Agent ("Agent");
and
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
and
THE OTHER "LENDERS"
as "Lenders"
and
TRAK INTERNATIONAL, INC.
and
LULL LIFT CORPORATION
collectively and individually as "Borrower"
DATED AS OF AUGUST 16, 1996
LOAN AGREEMENT
This is an agreement (this "Agreement") among Trak International,
Inc., a Delaware corporation ("Trak") and Lull Lift Corporation, a
Delaware corporation ("Lull"; Lull and Trak are referred to herein both
collectively and individually as "Borrower"), The Boatmen's National Bank
of St. Louis, as agent for itself and the other Lenders (in its individual
capacity, "Boatmen's"; and as agent, the "Agent"), and the Lenders.
AGREEMENT
In consideration of the mutual agreements herein and other
sufficient consideration, the receipt of which is hereby acknowledged,
Borrower, Agent, and each of the Lenders agree as follows:
1. EFFECTIVE DATE. This Agreement shall become effective on August
16, 1996 (the "Effective Date").
2. DEFINITIONS AND RULES OF CONSTRUCTION.
2.1. LISTED DEFINITIONS. Capitalized terms defined in the Glossary
and Index of Defined Terms attached hereto as Exhibit shall have such defined
meanings wherever used in this Agreement and the other Loan Documents.
2.2. OTHER DEFINITIONS. If a capitalized term used in this Agreement
is not defined in the Glossary and Index of Defined Terms, it shall have such
meaning as defined elsewhere herein, or if not defined elsewhere herein, the
meaning defined in the UCC.
2.3. REFERENCES TO COVERED PERSON. The term "Covered Person" means
each Borrower, each Guarantor (including Holdings), and if any of the
foregoing has or acquires any Subsidiaries, each of such Subsidiaries. The
words "a Covered Person", "any Covered Person", "each Covered Person" and
"every Covered Person" refer to each Borrower, each Guarantor (including
Holdings), and their respective Subsidiaries, separately.
2.4. REFERENCES TO REQUIRED LENDERS. The term "Required Lenders"
means any one or more Lenders whose shares of the Lenders' Exposure at the
relevant time aggregate at least 66 2/3%.
2.5. ACCOUNTING TERMS; CONSOLIDATED BASIS. Unless the context
otherwise requires, accounting terms herein that are not defined herein
shall be calculated under GAAP. All financial measurements herein respecting
"Borrower" shall be made and calculated for Holdings and all of its
Subsidiaries, including each Borrower, unless otherwise expressly provided
otherwise herein, on a consolidated basis in accordance with GAAP.
2.6. "SATISFACTORY"; "SATISFACTION". Wherever herein a document,
matter, or condition is required to be satisfactory or completed to the
satisfaction of either the Agent, the Required Lenders, a Lender, all the
Lenders, or the Letter of Credit Issuer, unless expressly stated otherwise
such document must be satisfactory to Agent, the Required Lenders, such
Lender, the Lenders, or such Letter of Credit Issuer (as applicable) in both
form and substance, and unless expressly stated otherwise they shall have
the absolute discretion to determine whether the document or matter is
satisfactory or whether the condition has been satisfied.
2.7. COMPUTATION OF TIME PERIODS. In the computation of periods of
time from a specified date to a later specified date, the word "from" shall
mean "from and including" and the words "to" and "until" shall each mean "to
but excluding." Periods of days referred to in this Agreement shall be
counted in
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calendar days unless Business Days are expressly prescribed, and references
in this Agreement to months and years shall be to calendar months and
calendar years unless otherwise specified.
2.8. GENERAL. Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice versa;
(ii) references to any Person include such Person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by
this Agreement; (iii) references to one gender include all genders; (iv)
"including" is not limiting; (v) "or" has the inclusive meaning represented
by the phrase "and/or"; (vi) the words "hereof", "herein", "hereby",
"hereunder" and similar terms in this Agreement refer to this Agreement as a
whole, including its Exhibits, and not to any particular provision of this
Agreement; (vii) the word SECTION or SECTION and PAGE or PAGE refer to a
section or page, respectively, and the word "Exhibit" refers to an Exhibit
to this Agreement unless it expressly refers to something else; (viii)
reference to any agreement (including this Agreement), document or
instrument means such agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms hereof; and (ix) general and specific
references to any Law means such Law as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time. Section
captions and the Table of Contents are for convenience only and shall not
affect the interpretation or construction of this Agreement or the other
Loan Documents.
3. LENDERS' COMMITMENTS. Subject to the terms and conditions hereof,
and in reliance upon the representations and warranties of Borrower herein,
Lenders make the following commitments to Borrower:
3.1. REVOLVING COMMITMENTS.
3.1.1. REVOLVING ADVANCES. Subject to the limitations in Section
and elsewhere herein, each of the Lenders commits to make available for
advances to Borrower (each a "Revolving Advance") from time to time
during the period commencing on the Effective Date and ending at the
close of business on August 16, 2002 (the "Revolver Maturity Date") such
Lender's prorata share of the Aggregate Revolving Commitment as listed
on Exhibit hereto, which such obligation shall be several upon each
Lender and not joint and several. The "Aggregate Revolving Commitment"
on any date shall be $25,000,000, or such lesser or greater Dollar
amount to which it may have been changed as provided herein. Each
Lender's "Revolving Commitment" is its prorata share of the Aggregate
Revolving Commitment as listed on Exhibit hereto. The obligation of
Borrower to repay each Lender's Revolving Loan shall be evidenced by a
promissory note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Revolving Commitment (as
amended, modified, restated, or replaced from time to time, individually
a "Revolving Note" and collectively the "Revolving Notes") reasonably
satisfactory to such Lender. Subject to the limitations in Section and
elsewhere herein, amounts applied to reduce the Aggregate Revolving Loan
may be reborrowed as Revolving Advances. Upon the occurrence of an Event
of Default and at any time thereafter so long as any Unwaived Event of
Default exists, the Aggregate Revolving Commitment may be canceled as
provided in Section.
3.1.2. LIMITATION ON REVOLVING ADVANCES. No Revolving Advance
will be made which would result in the Aggregate Revolving Loan
exceeding the Maximum Available Amount and no Revolving Advance will be
made on or after the Revolver Maturity Date. Lenders may, however, in
their absolute discretion make such Revolving Advances, but shall not be
deemed by doing so to have increased the Maximum Available Amount and
shall not be obligated to make any such Revolving Advances thereafter.
The "Maximum Available Amount" on any date for any Revolving Advance
shall be a Dollar amount equal to (i) the lesser of the Aggregate
Revolving Commitment or the Borrowing Base on such date, MINUS (ii) the
sum of (a) 100% of the Lenders' Letter of Credit Exposure (except to the
extent that such Revolving Advance will be used immediately to reimburse
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the Letter of Credit Issuer for unreimbursed draws on a Letter of Credit)
and (b) the Swingline Loan.
3.1.3. BORROWING BASE. The "Borrowing Base" on any date for
any Revolving Advance or any Swingline Advance shall be the sum of:
3.1.3.1. eighty-five percent (85%) of the total
outstanding principal balance of Eligible Accounts as of the
close of business on such date, or as certified in the Borrowing
Base Certificate most recently furnished to Agent as required in
Section , whichever is less; PLUS
3.1.3.2. seventy percent (70%) of
(i) the value of all Eligible Inventory which
constitutes Finished Goods as of the close of
business on such date, or as certified in the
Borrowing Base Certificate most recently furnished
to Agent as required in Section , whichever is
less;
MINUS
(ii) the total of all customer advances and
deposits related to such Eligible Inventory, as
such amount would be shown in Borrower's Financial
Statements; PLUS
3.1.3.3. fifty percent (50%) of
(i) the value of all Eligible Inventory other than
that which constitutes Finished Goods as of the
close of business on such date, or as certified in
the Borrowing Base Certificate most recently
furnished to Agent as required in Section ,
whichever is less;
MINUS
(ii) the total of all customer advances and
deposits related to such Eligible Inventory, as
such amount would be shown in Borrower's Financial
Statements.
All Inventory shall be valued at the lower of cost or market on a
irst-in-first-out basis. The defined term "Finished Goods" shall have
its meaning and shall be determined under GAAP.
3.2. SWINGLINE COMMITMENT.
3.2.1. SWINGLINE ADVANCES. In order to reduce the frequency of
the transfer of funds from Lenders to Agent for making Revolving
Advances, but subject to the limitations in Section and elsewhere
herein, Boatmen's may in its absolute discretion make advances (each a
"Swingline Advance") to Borrower from time to time during the period
commencing on the Effective Date and ending at the close of business on
the Revolver Maturity Date (the "Swingline Commitment"). (The from time
to time outstanding principal balance of all Swingline Advances from
Boatmen's is referred to herein as the "Swingline Loan".) The obligation
of Borrower to repay the Swingline Loan shall be evidenced by a
promissory note payable to the order of Boatmen's in a maximum principal
amount equal to $3,000,000 (the "Swingline Note") reasonably
satisfactory to Boatmen's. Subject to the limitations in Section and
elsewhere herein, amounts applied
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to reduce the Swingline Loan may be reborrowed as Swingline Advances. Boatmen's
may terminate the Swingline Commitment at any time in its absolute discretion.
3.2.2. LIMITATIONS ON SWINGLINE ADVANCES. Boatmen's shall not be
obligated to make any particular Swingline Advance, the making of any
particular Swingline Advance at any particular time being absolutely
discretionary. In any event, no Swingline Advance will be made on or
after the Revolver Maturity Date, and no Swingline Advance will be made
which would result in the Swingline Loan exceeding the Maximum Swingline
Amount. Boatmen's may, however, in its absolute discretion make such
Swingline Advances, but shall not be deemed by doing so to have
increased the Maximum Swingline Amount and shall not be obligated to
make any such Swingline Advance thereafter. The "Maximum Swingline
Amount" on any date for any Swingline Advance shall be a Dollar amount
equal to the lesser of (i) $3,000,000, or (ii) any excess of the Maximum
Available Amount (determined prior to the making of such Swingline
Advance) over the Aggregate Revolving Loan as of such date.
3.3. TERM 1 COMMITMENT. Each Lender commits to make a term loan to
Borrower (its "Term 1 Commitment") in the amount of its prorata share of
$54,000,000 (the "Aggregate Term 1 Commitment") as listed on Exhibit hereto in a
single advance by each Lender (the aggregate of all such advances being referred
to herein as the "Term 1 Advance"), which obligation shall be several upon each
Lender and not joint and several. No Term 1 Advance will be made which would
result in the Aggregate Term 1 Loan exceeding the Aggregate Term 1 Commitment.
The obligation of Borrower to repay each Lender's prorata share of the Aggregate
Term 1 Loan shall be evidenced by a promissory note payable to the order of such
Lender in a principal amount equal to such Lender's prorata share of the
Aggregate Term 1 Commitment (as amended, modified, restated or replaced from
time to time, individually a "Term 1 Note" and collectively the "Term 1 Notes")
reasonably satisfactory to such Lender. Amounts applied to reduce the Aggregate
Term 1 Loan may not be reborrowed.
3.4. TERM 2 COMMITMENT. Each Lender commits to make a term loan to
Borrower (its "Term 2 Commitment") in the amount of its prorata share of
$6,000,000 (the "Aggregate Term 2 Commitment") as listed on Exhibit hereto in a
single advance by each Lender (the aggregate of all such advances being referred
to herein as the "Term 2 Advance"), which such obligation shall be several upon
each Lender and not joint and several. No Term 2 Advance will be made which
would result in the Aggregate Term 2 Loan exceeding the Aggregate Term 2
Commitment. The obligation of Borrower to repay each Lender's prorata share of
the Aggregate Term 2 Loan shall be evidenced by a promissory note payable to the
order of such Lender in a principal amount equal to such Lender's prorata share
of the Aggregate Term 2 Commitment (as amended, modified, restated or replaced
from time to time, individually a "Term 2 Note" and collectively the "Term 2
Notes") reasonably satisfactory to such Lender. Amounts applied to reduce the
Aggregate Term 2 Loan may not be reborrowed.
3.5. LETTER OF CREDIT COMMITMENT. Letter of Credit Issuer commits to
issue Standby Letters of Credit and Commercial Letters of Credit for the account
of Borrower from time to time during the period commencing on the Effective Date
and ending on the Revolver Maturity Date, but only in connection with
transactions satisfactory to Agent and only if the Letter of Credit Exposure
will not as a result of such issuance exceed the lesser of (a) $2,000,000 and
(b) any excess of the Maximum Available Amount (determined prior to issuing such
Letter of Credit) over the Aggregate Revolving Loan (the "Letter of Credit
Commitment"). Unless the Letter of Credit Issuer agrees otherwise, which
agreement will not be unreasonably withheld, the expiration date of any Letter
of Credit will not be more than one year after its issuance date and in no event
will be later than the Revolver Maturity Date. Immediately upon the issuance by
the Letter of Credit Issuer of a Letter of Credit in accordance with the terms
and conditions of this Agreement, the Letter of Credit Issuer shall be deemed to
have sold and transferred to each other Lender,
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and each such other Lender shall be deemed to have purchased and received from
the Letter of Credit Issuer, a prorata undivided interest and participation in
such Letter of Credit, the reimbursement obligation of Borrower with respect
thereto, and any guaranty thereof or collateral therefor. Such other Lender's
prorata undivided interest shall be the same as such other Lender's prorata
share of the Aggregate Revolving Commitment.
4. INTEREST.
4.1. RATES.
4.1.1. INTEREST ON REVOLVING ADVANCES. Each Revolving Advance
shall bear interest at a rate per annum that is either the Revolver
Adjusted LIBO Rate or the Revolver Adjusted CBR, as designated by
Borrower as provided herein. Each Revolving LIBOR Advance shall bear
interest at the Revolver Adjusted LIBO Rate throughout the Interest
Period for such Revolving LIBOR Advance.
4.1.1.1. DEFINITION OF THE REVOLVER ADJUSTED LIBO RATE.
The "Revolver Adjusted LIBO Rate" shall mean the LIBO Rate plus
(a) 2.75% per annum if the Interest Rate Ratio is greater than or
equal to 2.50, or (b) 2.25% per annum if the Interest Rate Ratio
is less than 2.50. The applicable percentage set forth in (a) and
(b) in the preceding sentence is hereinafter referred to as the
"Revolver LIBO Spread".
4.1.1.2. DEFINITION OF THE REVOLVER ADJUSTED CBR. The
"Revolver Adjusted CBR" shall mean CBR plus (a) 1.50% per annum
if the Interest Rate Ratio is greater than or equal to 2.50, or
(b) 1.00% per annum if the Interest Rate Ratio is less than 2.50.
The applicable percentage set forth in (a) and (b) in the
preceding sentence is hereinafter referred to as the "Revolver
CBR Spread".
4.1.2. INTEREST ON TERM 1 AND TERM 2 ADVANCES. Each Term 1
Advance and each Term 2 Advance shall bear interest at a rate per annum
that is either the Term Loan Adjusted LIBO Rate or the Term Loan
Adjusted CBR, as designated by Borrower as provided herein. Each Term 1
Loan LIBOR Advance and each Term 2 Loan LIBOR Advance shall bear
interest at the Term Loan Adjusted LIBO Rate throughout the Interest
Period for such Term 1 Loan LIBOR Advance or Term 2 Loan LIBOR Advance,
as the case may be.
4.1.2.1. DEFINITION OF THE TERM LOAN ADJUSTED LIBO RATE.
The "Term Loan Adjusted LIBO Rate" shall mean the LIBO Rate plus
(a) 3.00% per annum if the Interest Rate Ratio is greater than or
equal to 2.50, or (b) 2.50% per annum if the Interest Rate Ratio
is less than 2.50. The applicable percentage set forth in (a) and
(b) in the preceding sentence is hereinafter referred to as the
"Term Loan LIBO Spread".
4.1.2.2. DEFINITION OF THE TERM LOAN ADJUSTED CBR. The
"Term Loan Adjusted CBR" shall mean CBR plus (a) 1.75% per annum
if the Interest Rate Ratio is greater than or equal to 2.50, or
(b) 1.25% per annum if the Interest Rate Ratio is less than 2.50.
The applicable percentage set forth in (a) and (b) in the
preceding sentence is hereinafter referred to as the "Term Loan
CBR Spread".
4.1.3. INTEREST ON SWINGLINE ADVANCES. Each Swingline Advance
shall bear interest at a rate per annum equal to the Revolver Adjusted
CBR.
4.1.4. INTEREST ON UNREIMBURSED LETTER OF CREDIT DRAWS. Each
unreimbursed draw on a Letter of Credit shall bear interest at a rate
per annum equal to the Revolver Adjusted CBR.
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4.1.5. CALCULATING INTEREST SPREADS.
4.1.5.1. The Interest Rate Ratio and, in connection
therewith, the Revolver LIBO Spread, the Term Loan LIBO Spread,
the Revolver CBR Spread, and the Term Loan CBR Spread shall first
be determined by Agent on the Effective Date and thereafter
within ten Business Days after Agent receives Borrower's
Financial Statements for the last month of a Fiscal Quarter as
required under Section .
4.1.5.2. Whenever a Revolver CBR Spread and a Term Loan
CBR Spread are determined hereunder, each such CBR Spread shall
become effective immediately upon such determination for all
existing CBR Advances and shall apply to all CBR Advances made
thereafter until changed pursuant to the terms of Section (or any
of the subsections thereunder).
4.1.5.3. Whenever a Revolver LIBO Spread and a Term Loan
LIBO Spread are determined hereunder, each such LIBO Spread shall
apply to all LIBOR Advances made thereafter until changed
pursuant to the terms of Section (or any of the subsections
thereunder), but shall not be effective as to any existing LIBOR
Advance until and unless such existing LIBOR Advance is renewed
as a LIBOR Advance (it being understood that the Revolver LIBO
Spread or Term Loan LIBO Spread in effect when such LIBOR Advance
was made shall continue to apply to such LIBOR Advance until it
is renewed as a LIBOR Advance or converted to a CBR Advance).
4.1.5.4. As used in Section , the capitalized term
"Interest Rate Ratio" shall mean a ratio calculated by dividing
(a) Consolidated Total Funded Debt by (b) (i) Adjusted Operating
Cash Flow LESS (ii) Adjusted Capital
Expenditures.
4.1.5.5. As used in the calculation of the Interest
Rate Ratio:
(a) the capitalized term "Consolidated" shall
have the meaning given it in Section ;
(b) the capitalized term "Total Funded Debt"
shall the meaning given it in Section ;
(c) the capitalized term "Adjusted Capital
Expenditures" shall mean (i) the amount of Consolidated
Capital Expenditures (as defined in Section ) for the
twelve month period ending on the last day of any Fiscal
Quarter for which the Interest Rate Ratio is calculated
(in each case, an "Interest Rate Ratio Calculation Date"),
PLUS (ii) the aggregate amount of all Capital Expenditures
made by any Target Company during the period commencing
twelve months immediately prior to the Interest Rate Ratio
Calculation Date and ending on the date any Consented
Acquisition applicable to such Target Company is
consummated, provided, however, that if said Consented
Acquisition is consummated more that twelve months prior
to the Interest Rate Ratio Calculation Date, this
subsection (ii) shall not be applicable; and
(d) the capitalized term "Adjusted Operating Cash
Flow" shall mean (i) the amount of Consolidated Operating
Cash Flow (as defined in Section ) for the twelve month
period ending of the last day of an Interest Rate Ratio
Calculation Date, PLUS (ii) the aggregate amount of any
Target Company's
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Operating Cash Flow during the period commencing twelve months immediately prior
to the Interest Rate Ratio Calculation Date and ending on the date any Consented
Acquisition applicable to such Target Company is consummated, provided, however,
that if said Consented Acquisition is consummated more that twelve months prior
to the Interest Rate Ratio Calculation Date, this subsection (ii) shall not be
applicable.
4.1.5.6. If Borrower does not deliver its Financial
Statements for any month to Agent within the period required by
Section , until such time as such Financial Statements are
delivered to Agent (a) the highest possible Revolver LIBO Spread
shall become applicable as of the last day of the Fiscal Quarter
for all Revolving LIBOR Advances, (b) the highest possible
Revolver CBR Spread shall become applicable as of the last day of
such Fiscal Quarter for all Revolving CBR Advances, (c) the
highest possible Term Loan LIBO Spread shall become applicable as
of the last day of such Fiscal Quarter for all Term 1 Loan LIBOR
Advances and Term 2 Loan LIBOR Advances, and (d) the highest
possible Term Loan CBR Spread shall become applicable as of the
last day of such Fiscal Quarter for all Term 1 Loan CBR Advances
and Term 2 Loan CBR Advances.
4.2. INTEREST PERIODS FOR LIBOR ADVANCES. For each Advance that Borrower
designates to be a LIBOR Advance, Borrower shall select an interest period (each
an "Interest Period") to be applicable to such LIBOR Advance. The Interest
Period for a LIBOR Advance shall be either a one-, two-, three-, or six-month
period; provided, however, that:
(i) every such Interest Period for a LIBOR Advance shall commence on the
date of the LIBOR Advance;
(ii) if any Interest Period would otherwise expire on a day of a
calendar month which is not a Business Day, then such Interest Period
shall expire on the next succeeding Business Day in that calendar month;
provided, however, that if the next succeeding Business Day would be in
the following calendar month, it shall expire on the first preceding
Business Day;
(iii) any Interest Period 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 end on the last Business Day of a calendar month; and
(iv) no Interest Period for a Revolving LIBOR Advance shall extend
beyond the Revolver Maturity Date, and no Interest Period for a Term 1
Loan LIBOR Advance or a Term 2 Loan LIBOR Advance shall extend beyond
the Term Maturity Date.
4.3. CONVERSION OF ADVANCES. Borrower may at any time (a) convert all or
any portion of a Revolving Advance of one bearing interest type into a Revolving
Advance of another type, (b) convert all or any portion of a Term 1 Advance into
a Term 1 Advance bearing interest of another type, (c) convert all or any
portion of the Term 2 Advance into a Term 2 Advance bearing interest of another
type, or (d) at the end of any Interest Period for a LIBOR Advance, continue
such LIBOR Advance for an additional Interest Period; provided, however, that a
LIBOR Advance may only be so converted or continued on the last day of its
Interest Period; and provided, further, that the Swingline Loan may not be
converted into a LIBOR Advance. To cause a conversion or continuation, Borrower
shall give Agent, prior to 11:00 a.m. (St. Louis, Missouri time), three (3)
Business Days prior to the date the conversion or continuation is to be
effective (the "Conversion Date"), a written request in the form attached hereto
as Exhibit (a "Notice of Conversion/Continuation"), which such Notice of
Conversion/Continuation may be mailed, personally delivered or telecopied as
provided in Section (i) identifying the Advance to be converted or continued,
(ii) specifying whether a conversion or continuation is requested, (iii) in the
case of a conversion,
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specifying whether the Advance is to become a Revolving LIBOR Advance, a Term 1
Loan LIBOR Advance, a Term 2 Loan LIBOR Advance, a Revolving CBR Advance, a Term
1 Loan CBR Advance, or a Term 2 Loan CBR Advance, and (iv) in the case of
conversion to or continuation of a LIBOR Advance, specifying the Interest Period
therefor. If a Notice of Conversion/Continuation is not received by Agent by
11:00 a.m. (St. Louis, Missouri time) on the last day of the Interest Period for
a LIBOR Advance, then Borrower shall be deemed to have timely given a Notice of
Conversion/Continuation to Agent requesting to convert such LIBOR Advance to a
Term 1 Loan CBR Advance if such LIBOR Advance is a Term 1 Loan LIBOR Advance, or
to a Term 2 Loan CBR Advance if such LIBOR Advance is a Term 2 Loan LIBOR
Advance, or to a Revolving CBR Advance if such LIBOR Advance is a Revolving
LIBOR Advance.
4.4. TIME OF ACCRUAL. Subject to Section interest shall accrue on all
principal amounts outstanding from and including the date when first outstanding
to but excluding the date when no longer outstanding. Amounts shall be deemed
outstanding until payments are applied thereto as provided in Section or
otherwise in accordance with the Loan Documents.
4.5. COMPUTATION. Interest shall be computed for the actual days elapsed
over a year deemed to consist of 360 days. Interest rates that are based on the
CBR shall change simultaneously with any change in the CBR and such rates shall
be effective for the entire day on which such CBR change becomes effective.
4.6. RATE AFTER MATURITY. Notwithstanding any terms or provisions in
this Agreement or any of the other Loan Documents to the contrary, Borrower
shall pay interest on each Loan after its Maturity, and (at the option of
Lenders) upon all of the Loans, Advances and the other Loan Obligations so long
as any Unwaived Event of Default exists, at a rate per annum of 2% in excess of
the rate which would otherwise apply hereunder to each such Loans, Advances or
other Loan Obligation as of the date of such Maturity or as of the first day any
such Unwaived Event of Default exists, as the case may be.
4.7. TAXES.
4.7.1. NET PAYMENTS. If any Tax is required to be withheld or
deducted from, or is otherwise payable by Borrower in connection with,
any payment due to Agent or any Lender under the Loan Documents,
Borrower (i) shall, if required, withhold or deduct the amount of such
Tax from such payment and, in any case, pay such Tax to the appropriate
taxing authority in accordance with applicable Law and (ii) shall pay to
Agent or such Lender, as applicable, (a) such additional amounts as may
be necessary so that the net amount received by Agent or such Lender
with respect to such payment, after withholding or deducting all Taxes
required to be withheld or deducted, is equal to the full amount payable
under the Loan Documents and (b) an amount equal to all Taxes payable by
Agent or such Lender as a result of payments made by Borrower (whether
to a taxing authority or to Agent or such Lender) pursuant to this
Section. If any Tax is withheld or deducted from, or is otherwise
payable by Borrower in connection with, any payment due to Agent or any
Lender under the Loan Documents, Borrower shall, within 30 days after
the date of such payment, furnish to Agent or such Lender, as
applicable, the original or a certified copy of a receipt for such Tax
from the applicable taxing authority. If any payment due to Agent or any
Lender under the Loan Documents is or is expected to be made without
withholding or deducting therefrom, or otherwise paying in connection
therewith, any Tax payable to any taxing authority under circumstances
that would lead Agent or such Lender to reasonably believe such
withholding or deduction is required, Borrower shall, within 30 days
after any request from Agent or such Lender, as applicable, furnish to
Agent or such Lender a certificate from such taxing authority, or an
opinion of counsel acceptable to Agent or such Lender, in either case
stating that no Tax payable to such taxing authority was or is, as the
case may be, required to be withheld or deducted from, or otherwise paid
by Borrower in connection with, such payment. For purposes
8
of this Section only, the term "Tax" shall not be deemed to include any tax
based upon net income, such as but not limited to the tax on net income imposed
under the Internal Revenue Code of 1986, as amended, and similar state income
taxes.
4.7.2. EXEMPTION FORMS. Each Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code)
agrees to deliver to Borrower and Agent on or prior to the Effective
Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section , on the date of such
assignment or transfer to such Lender, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments to
be made under this Agreement and under any Note, or (ii) if the Lender
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code
(a "Non-bank Lender") and cannot deliver either Internal Revenue Service
Form 1001 or 4224, (x) a certificate substantially in the form of
Exhibit (each an "Exemption Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect,
it will deliver to Borrower and Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or
Form W-8 and an Exemption Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify Borrower and
Agent of its inability to deliver any such Form or Certificate.
4.7.3. EXCLUSIONS FROM GROSS-UP OBLIGATIONS. Notwithstanding
anything to the contrary contained in Section , but subject to the
immediately succeeding sentence, (i) Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or
similar Taxes imposed by the United States (or any political subdivision
or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such
Lender has not provided to Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding
and (ii) Borrower shall not be obligated pursuant to Section hereof to
gross-up payments to be made to a Lender in respect of income or similar
Taxes imposed by the United States if (A) such Lender has not provided
to Borrower the Internal Revenue Service Forms required to be provided
to Borrower pursuant to Section or (B) in the case of a payment, other
than interest, to a Non-bank Lender, to the extent that such forms do
not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section , Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth
in Section (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a
result of any changes after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
income or similar Taxes.
4.8. COMPENSATION FOR INCREASE IN LIBOR ADVANCE COSTS. If after the
Execution Date there is any change in any Law or in any rule, order, or
guideline of any Governmental Authority (whether or not
9
having the force of law and whether or not failure to comply therewith would be
unlawful, and including but not limited to any imposition or increase of reserve
requirements) and as a result thereof or as a result of compliance therewith by
a Lender or its parent holding company:0
(i) such Lender is subject to any tax, duty or other charge with
respect to its LIBOR Advances or its obligation to make Advances
that are LIBOR Advances, or the basis of taxation of payments to
such Lender of the principal of or interest on its LIBOR
Advances, or its obligation to make the same, change (except for
changes in the rate of tax on the overall net income of such
Lender imposed by the United States or other jurisdiction in
which such Lender's principal executive office is located); or
(ii) any reserve (including, without limitation, any imposed by the
FRB), special deposit, compulsory loan, assessment, or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, such Lender is imposed or deemed
applicable or any other condition affecting its LIBOR Advances or
its obligation to make them is imposed on such Lender or the
London Interbank Market;
and as a result thereof there is any increase in the cost to such Lender of
agreeing to make or making an Advance that is a LIBOR Advance or maintaining its
LIBOR Advances (except to the extent already included in the determination of
the applicable LIBO Rate), or there is a reduction in the amount received or
receivable by such Lender, then Borrower shall from time to time, upon written
notice from and demand by such Lender (with a copy of such notice and demand to
Agent), pay to such Lender, within five Business Days after the date specified
in such notice and demand, additional amounts sufficient to compensate such
Lender in the amount of such increased cost. If such Lender claims compensation
under this Section, such Lender shall furnish a certificate to Borrower that
states the additional amount or amounts to be paid to it hereunder and the basis
therefor. Borrower shall have the burden of proving that any such certificate is
not correct.
4.9. LIBOR ADVANCE FUNDING LOSSES. Borrower shall pay to a Lender upon
demand an amount sufficient to compensate such Lender for all loss and expense
suffered by such Lender, including but not limited to loss of profit and the
cost of acquiring funds to make or carry one or more LIBOR Advances, (i) if for
any reason (other than a default by such Lender or pursuant to Section hereof)
an Advance does not occur on the date specified therefor in a Advance Request
(whether or not withdrawn), (ii) if any prepayment or repayment of a LIBOR
Advance or conversion of a LIBOR Advance to a CBR Advance, whether or not
required hereby, occurs on a date which is not the last day of the Interest
Period therefor, or (iii) if for any reason Borrower fails to repay a LIBOR
Advance when required by the terms of this Agreement. The minimum that Borrower
shall be obligated to pay to such Lender in any such event shall be an amount
equal to (x) the greater of zero or
{[A x (B-C) x D]} OVER 360
wherein
"A" is the Affected Principal Amount;
"B" is the decimal equivalent of the LIBO Rate that is (or would be in
the case of Borrower's failure to borrow after giving an Advance
Request) payable by Borrower on such Advance;
"C" is the decimal equivalent of the LIBO Rate that would apply to a
hypothetical LIBOR Advance whose Advance Date were on the last Business
Day on or before the first day of the Remaining Interest Period and
whose amount and whose Interest Period were approximately equal, as
10
determined by such Lender, to the Affected Principal Amount and the Remaining
Interest Period; and
"D" is the number of days from and including the first day of the
Remaining Interest Period to but excluding the last day of the Remaining
Interest Period;
plus (y) any other out-of-pocket loss or expense (including any internal
processing charge customarily charged by such Lender) suffered by such Lender in
liquidating deposits prior to maturity in amounts which correspond to the
Affected Principal Amount.
For purposes of this Section:
"Affected Principal Amount" means, as applicable, (i) the principal
amount of a LIBOR Advance that Borrower fails to take after having given
an Advance Request; (ii) the entire principal amount of a LIBOR Advance
that Borrower fails to repay when required by the terms of this
Agreement; or (iii) the amount of any prepayment or repayment on a LIBOR
Advance that occurs, or the entire principal amount of a LIBOR Advance
that converts to a CBR Advance, whether or not required hereby, on a
date which is not the last day of the Interest Period therefor.
"Remaining Interest Period" means, as applicable, (i) the entire
Interest Period that would have been applicable to a LIBOR Advance that
Borrower fails to take after having given an Advance Request; (ii) a
period equal in duration to the Interest Period of a LIBOR Advance that
Borrower fails to repay when required by the terms of this Agreement; or
(iii) if a prepayment or repayment on a LIBOR Advance occurs, or a LIBOR
Advance converts to a CBR Advance, whether or not required hereby, prior
to the last day of the Interest Period therefor, the period from and
including the date thereof to but excluding the last day of such
Interest Period.
If a Lender claims compensation under this Section, such Lender shall
furnish a certificate to Borrower that states the additional amount or amounts
to be paid to it hereunder and the basis therefor. Borrower shall have the
burden of proving that any such certificate is not correct. Any compensation
payable by Borrower to a Lender under this Section shall be payable without
regard to whether such Lender has funded its LIBOR Advances through the purchase
of deposits in an amount or of a maturity corresponding to the deposits used as
a reference in determining the LIBO Rate.
4.10. CAPITAL ADEQUACY REIMBURSEMENT. If after the Execution Date there
is any change of Law, or in any rule, order, or guideline of any Governmental
Authority (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), regarding the capital that financial
institutions in a class that includes a Lender are required to maintain, and
which has the effect of reducing the rate of return on, or increasing the cost
of maintaining, such Lender's capital as a consequence of its obligations
hereunder, then such Lender may from time to time demand, and Borrower shall pay
to such Lender within fifteen days after each demand, such additional amount as
will compensate such Lender for such reduction or increase. If a Lender claims
compensation under this Section, such Lender shall furnish a certificate to
Borrower that states the additional amount to be paid to it hereunder and
includes a description of the method used by such Lender in calculating such
amount. Borrower shall have the burden of proving that the amount of any such
additional compensation calculated by a Lender is not correct.
4.11. USURY. Notwithstanding any provisions to the contrary in Section
or elsewhere in any of the Loan Documents, Borrower shall not be obligated to
pay interest at a rate which exceeds the maximum rate permitted by Law. If, but
for this Section , Borrower would be deemed obligated to pay interest at a rate
which exceeds the maximum rate permitted by Law, or if any of the Loan
Obligations is paid or becomes payable before its originally scheduled Maturity
and as a result Borrower has paid or would be obligated to pay interest at such
an excessive rate, then (i) Borrower shall not be obligated to pay
11
interest to the extent it exceeds the interest that would be payable at the
maximum rate permitted by Law; (ii) if the outstanding Loan Obligations have not
been accelerated as provided in Section , any such excess interest that has been
paid by Borrower shall be refunded; (iii) if the outstanding Loan Obligations
have been accelerated as provided in Section , any such excess that has been
paid by Borrower shall be applied to the Loan Obligations as provided in Section
; and (iv) the effective rate of interest shall be deemed automatically reduced
to the maximum rate permitted by Law; provided that if thereafter the rate of
interest on any Loan hereunder is less than the maximum rate permitted by Law
such rate of interest shall automatically be increased to the maximum rate
permitted by Law until Lenders recapture the aggregate amount of all interest
payments they would have otherwise been entitled to hereunder and under the
Notes but for the terms of this Section.
5. FEES.
5.1. COMMITMENT FEE TO LENDERS. Borrower shall pay to Agent for the
ratable account of Lenders a "Commitment Fee" calculated by applying the daily
equivalent of the Commitment Fee Rate to the Unused Aggregate Revolving
Commitment on each day during the preceding calendar quarter (based on a 360 day
year). The "Commitment Fee Rate" shall be one half of one percent (.50%). The
"Unused Aggregate Revolving Commitment" on any day shall be an amount equal to
(i) the Aggregate Revolving Commitment MINUS (ii) the sum of the amounts of (a)
the Aggregate Revolving Loan plus (b) the Letter of Credit Exposure and (c) the
Swingline Loan. The Commitment Fee shall be payable quarterly in arrears
commencing on the first day of the first full calendar quarter beginning after
the Effective Date and continuing on the first day of each calendar quarter
thereafter and on the Revolver Maturity Date.
5.2. LETTER OF CREDIT FEES TO AGENT FOR RATABLE BENEFIT OF LENDERS.
Borrower shall pay to Agent for the ratable account of Lenders a non-refundable
"Letter of Credit Fee" for each Letter of Credit issued that shall be calculated
by multiplying the Revolver LIBO Spread then in effect by the undrawn amount of
such Letter of Credit. The Letter of Credit Fee for each Letter of Credit shall
be payable in fourths and in advance on the date such Letter of Credit is issued
and on the first day of every calendar quarter ended after issuance of such
Letter of Credit and on the date of termination or expiration of such Letter of
Credit. The Letter of Credit Fee shall accrue based on the undrawn face amount
of each Letter of Credit outstanding during each day of the relevant quarterly
period (based on a 360 day year). Any portion of a Letter of Credit Fee received
by Agent but not accrued for any such quarterly period as a result of a decrease
in the undrawn face amount of the applicable Letter of Credit or the termination
of the applicable Letter of Credit whereby the Letter of Credit Issuer no longer
has any obligations thereunder shall be reimbursed by Agent to Borrower on the
next payment date so long as there exists no Unwaived Event of Default. Agent
shall notify each Lender of the amount of any such Letter of Credit Fee
reimbursed by Agent pursuant to the previous sentence and each Lender shall
promptly thereafter remit to Agent such Lender's pro-rata portion of the amount
of such reimbursed Letter of Credit Fee. Agent shall retain for its benefit, as
issuer, its customary fees charged to its customers for issuing letters of
credit.
6. PAYMENTS.
6.1. SCHEDULED PAYMENTS ON REVOLVING LOANS AND THE SWINGLINE LOAN.
6.1.1. INTEREST. Borrower shall pay interest accrued on all
Revolving CBR Advances and on all Swingline Advances monthly in arrears
beginning on the first day of the first full calendar month following
the Effective Date and continuing on the first day of each calendar
month thereafter, and on the Revolver Maturity Date. Borrower shall pay
interest accrued on all Revolving LIBOR Advances with Interest Periods
of three months or less on the last day of the Interest Period
applicable to any such Revolving LIBOR Advance and on the Revolver
Maturity Date. Borrower shall pay interest accrued on all Revolving
LIBOR Advances with Interest Periods in excess of three
12
months quarterly in arrears beginning on the first day of the first
full calendar quarter following the Effective Date and continuing on
the first day of each calendar quarter thereafter, on the last day of
the Interest Period applicable to any such Revolving LIBOR Advance,
and on the Revolver Maturity Date.
6.1.2. PRINCIPAL.
6.1.2.1. DAILY PAYMENTS. Borrower shall maintain one or
more lockboxes with Agent under its standard lockbox agreements
or other institutions acceptable to Agent (the "Lockboxes").
Agent will establish on its books an account in the name of
Borrower designated as the "Cash Collateral Account". Borrower
shall direct all Account Debtors to remit payments on their
Accounts to one or another of the Lockboxes. All proceeds of
Collateral and all funds Borrower receives directly (other than
Revolving Advances and Swingline Advances) shall be deposited in
the Cash Collateral Account. Collected funds in the Cash
Collateral Account on each Business Day, to the extent they do
not exceed the Swingline Loan on such Business Day, shall be
remitted by Agent to Boatmen's and applied by Boatmen's to reduce
the Swingline Loan. The collected funds remaining in the Cash
Collateral Account on the next to last Business Day of every
calendar week after such remittance and application to reduce the
Swingline Loan, to the extent they do not exceed the Aggregate
Revolving CBR Loan on the Settlement Date, shall be remitted by
Agent to Lenders weekly on the last Business Day of each such
calendar week (the "Settlement Date") in accordance with their
prorata shares of the Aggregate Revolving Commitment and applied
by Lenders to reduce the Aggregate Revolving CBR Loan. Any
collected funds still remaining in the Cash Collateral Account
after such remittances and application to reduce the Swingline
Loan and Aggregate Revolving CBR Loan shall be applied at
Lender's discretion to (i) the outstanding principal balance of
any Revolving LIBOR Advances when their respective Interest
Periods expire, or (ii) the outstanding principal balance of any
subsequent Revolving CBR Advances.
6.1.2.2. PAYMENT ON REVOLVER MATURITY DATE. Borrower
shall pay the entire amount of the Aggregate Revolving Loan and
the Swingline Loan on the Revolver Maturity Date.
6.2. SCHEDULED PAYMENTS ON THE TERM LOANS.
6.2.1. INTEREST. Borrower shall pay interest accrued on all Term
1 Loan CBR Advances and Term 2 Loan CBR Advances monthly in arrears,
beginning on the first day of the first full calendar month following
the Effective Date, and continuing on the first day of each calendar
month thereafter, and on August 16, 2002 (the "Term Maturity Date").
Borrower shall pay interest accrued on all Term 1 Loan LIBOR Advances
and Term 2 Loan LIBOR Advances with Interest Periods of three months or
less on the last day of the Interest Period applicable to any such Term
1 Loan LIBOR Advance or Term 2 Loan LIBOR Advance, as the case may be,
and on the Term Maturity Date. Borrower shall pay interest accrued on
all Term 1 Loan LIBOR Advances and Term 2 Loan LIBOR Advances with
Interest Periods in excess of three months quarterly in arrears
beginning on the first day of the first full calendar quarter following
the Effective Date and continuing on the first day of each calendar
quarter thereafter, on the last day of the Interest Period applicable to
any such Term 1 Loan LIBOR Advance or Term 2 Loan LIBOR Advance, as the
case may be, and on the Term Maturity Date.
6.2.2. TERM 1 LOAN PRINCIPAL. Borrower shall repay the Aggregate
Term 1 Loan as set forth in Exhibit.
13
6.2.3. TERM 2 LOAN PRINCIPAL. Borrower shall repay the Aggregate
Term 2 Loan as set forth in Exhibit .
6.3. PREPAYMENTS; REDUCTION OF REVOLVING COMMITMENT.
6.3.1. VOLUNTARY PREPAYMENTS. In addition to daily payments
contemplated in Section above, Borrower may wholly prepay the Aggregate
Term 1 Loan, the Aggregate Term 2 Loan, the Aggregate Revolving Loan, or
the Swingline Loan at any time and may make partial prepayments thereon
from time to time, without penalty or premium, but only if (i) Borrower
gives Agent written notice (which shall be mailed, personally delivered
or telecopied as provided in Section ) of Borrower's intention to make
such prepayments at least one Business Day prior to tendering the
prepayments, (ii) the total amount of the prepayments is a whole
multiple of $100,000 and no less than $500,000, and (iii) Borrower pays
any accrued interest on the amount prepaid at the time of such
prepayment. Each such prepayment will be applied by Agent, in accordance
with each Lender's respective prorata shares of the applicable
Commitment, to reduce the Aggregate Revolving Loan and, in the case of
the Aggregate Term 1 Loan and the Aggregate Term 2 Loan, to reduce the
repayment installments in the inverse order of their due dates. The
foregoing notwithstanding, Borrower shall not be entitled to voluntarily
prepay the Aggregate Term 1 Loan, the Aggregate Term 2 Loan, or the
Aggregate Revolving Loan, if the effect of such voluntary prepayment or
reduction would be to prepay principal or interest under the relevant
Loan which is attributable to a LIBOR Advance, unless Borrower also
reimburses Lenders pursuant to the terms of Section . Without limiting
the terms of the previous sentence, Borrower shall not be entitled to
partially prepay any LIBOR Advance if the remaining balance outstanding
of such LIBOR Advance after such prepayment is less than $400,000.
6.3.2. VOLUNTARY REDUCTION OF AGGREGATE REVOLVING COMMITMENT.
Borrower may reduce the Aggregate Revolving Commitment in whole
multiples of $1,000,000 at any time and from time to time, but only if
(i) Borrower gives Agent written notice of Borrower's intention to make
such reduction at least one Business Day prior to the effective date of
the reduction, and (ii) Borrower makes on the effective date of the
reduction any payment on the Aggregate Revolving Loan required under
Section as a consequence of the reduction. Any such reduction of the
Aggregate Revolving Commitment shall be permanent. The foregoing
notwithstanding, Borrower shall not be entitled to voluntarily reduce
the Aggregate Revolving Commitment, if the effect of such voluntary
reduction would be to prepay principal or interest under the relevant
Commitment which is attributable to a LIBOR Advance, unless Borrower
also reimburses Lenders pursuant to the terms of Section .
6.3.3. MANDATORY PREPAYMENTS WHEN OVER-ADVANCES EXIST. If at any
time the sum of the Aggregate Revolving Loan and the Swingline Loan
exceeds the Maximum Available Amount (an "Overadvance"), whether as a
result of optional Revolving Advances by Lenders as contemplated by
Section or otherwise, Borrower shall on demand by Agent make a
prepayment in the amount of the excess. Each such prepayment shall be
applied first by Boatmen's to reduce the Swingline Loan until it is
reduced to zero, then by the Lenders in accordance with their respective
prorata shares of the Revolving Commitment to reduce the Revolving
Loans, including Revolving LIBOR Advances, until they are reduced to
zero.
14
6.3.4. OTHER MANDATORY PREPAYMENTS.
6.3.4.1. PROCEEDS FROM SALES OF ASSETS. If Borrower sells
any of its assets in a single transaction or related series of
transactions that are not in the ordinary course of business,
Borrower shall make a prepayment to Agent, for the ratable
benefit of the Lenders, to be applied in the manner required
under Section , in the amount of the gross proceeds therefrom
less reasonable selling expenses and the increment in federal,
state and local income taxes, if any, payable as a consequence of
any taxable gain from such sale. The foregoing shall not apply to
(i) the net proceeds from such sale or sales that are less than
$75,000 during any Fiscal Year during the term hereof, or (ii)
the net proceeds of any such sale of a capital asset if (a) such
net proceeds are expended by Borrower within 90 days of
completion of the sale for replacement of such asset by another
asset of comparable type and utility (Lenders agree that the
amount of such net proceeds expended will not be included for the
purposes of calculating Capital Expenditures in Section ), (b)
such replacement asset is made subject to Lenders' first priority
Security Interest and is free and clear of all other Security
Interests, and (c) Borrower delivers to Agent written evidence of
the use of the proceeds for such purchase, or (iii) the net
proceeds of any such sale of assets described in Section 11.5 of
the Asset Purchase Agreement which is a part of the Acquisition
Documents.
6.3.4.2. PROCEEDS FROM SALE OF SECURITIES. If after the
Execution Date Borrower or any other Covered Person issues any
equity or debt securities, or warrants or options therefor,
Borrower shall make a prepayment to Agent, for the ratable
benefit of the Lenders, to be applied in the manner required
under Section , promptly after such sale in an amount equal to
the gross proceeds therefrom less reasonable brokers' and
underwriters' fees and commissions and other reasonable issuing
expenses.
6.3.4.3. APPLICATION OF INSURANCE/CONDEMNATION PROCEEDS.
Agent for the ratable benefit of the Lenders is hereby authorized
to participate with the Borrower in any proceeding for the
condemnation or other taking of any Covered Person's property and
each Covered Person from time to time will deliver to Agent all
instruments reasonably requested by Agent to permit such
participation. If an Unwaived Event of Default exists, Agent is
hereby authorized to collect, for the ratable benefit of the
Lenders, all Insurance/Condemnation Proceeds directly and, after
deducting the expenses, if any, incurred by Agent in collection
or handling thereof, apply such Insurance/Condemnation Proceeds
as a prepayment to be applied in the manner required under
Section . If no Unwaived Event of Default exists, Agent will
permit such Covered Person to use such Insurance/Condemnation
Proceeds or any part thereof to replace, repair, restore or
rebuild the property giving rise to such Insurance/Condemnation
Proceeds in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before
the condemnation, taking, loss, damage or destruction, and if
such Covered Person elects so to proceed, it shall commence the
work of replacement, repair, restoration or rebuilding as soon as
practicable and proceed diligently with it until completion. In
such event, Agent shall hold such Insurance/Condemnation Proceeds
and disburse the same for such repair work. Plans and
specifications for any such repair or restoration (if the amount
involved is in excess of $250,000) shall be reasonably
satisfactory to Agent and the Required Lenders and shall be
submitted to Agent prior to commencement of the work and shall be
subject to the reasonable approval of Agent and the Required
Lenders. Expenditures by Borrower for such rebuilding, repairing
or
15
replacement in excess of the amount of the Insurance/Condemnation
Proceeds shall be deemed Capital Expenditures subject to the
limits in Section . In the event that any Insurance/Condemnation
Proceeds remain after application as described above, they shall
be applied to make a prepayment to Agent, for the ratable benefit
of Lenders, in the manner required under Section .
6.3.4.4. EXCESS CASH FLOW.
6.3.4.4.1. Borrower shall pay (and/or cause the
applicable Covered Person to pay) to Agent, for the
ratable benefit of the Lenders, an amount equal to 100% of
each Covered Person's Excess Cash Flow for Borrower's
Fiscal Year ending September 30, 1997 and Borrower's
Fiscal Year ending September 30, 1998, in each case
payable in three equal installments with the first
installment due within 90 days after the end of each such
Fiscal Year, the second installment due within 120 days
after the end of each such Fiscal Year, and the last
installment due within 150 days after the end of each such
Fiscal Year.
6.3.4.4.2. Within 90 days after the end of
Borrower's Fiscal Year ending September 30, 1999 and
within 90 days after the end of each of Borrower's Fiscal
Years thereafter, Borrower shall pay (and/or cause the
applicable Covered Person to pay) to Agent, for the
ratable benefit of the Lenders, an amount equal to 75% of
each Covered Person's Excess Cash Flow for each such
Fiscal Year.
6.3.4.4.3. "Excess Cash Flow" means, for any period
of calculation, (A) Consolidated Operating Cash Flow MINUS
(B) the sum of (i) Consolidated Fixed Charges PLUS (ii)
the amount of any voluntary prepayments of the Aggregate
Term 1 Loan and the Aggregate Term 2 Loan during any
period of calculation.
6.3.4.5. APPLICATION OF MANDATORY PAYMENTS. Each
prepayment required under Section , other than prepayments made
under Section , shall be applied (i) first, to reduce the
Aggregate Term 1 Loan and the repayment installments thereon due
under Section . in the inverse order of their due dates, (ii)
second, to reduce the Aggregate Term 2 Loan and the repayment
installments thereon due under Section . in the inverse order of
their due dates, and (iii) third, to the remaining outstanding
Loan Obligations. All prepayments required under Section , shall
be applied:
(i) first, to reduce the Aggregate Term 1 Loan such that
each of the remaining quarterly principal installments on
the Aggregate Term 1 Loan is reduced (but not below zero)
by an amount calculated by dividing (a) the amount of any
such prepayment by (b) the number of quarterly payments
remaining under the Aggregate Term 1 Loan as of the date
that such prepayment is received by Agent for the ratable
benefit of the Lenders;
(ii) second, to reduce the Aggregate Term 2 Loan such that
each of the remaining quarterly principal installments on
the Aggregate Term 2 Loan is reduced (but not below zero)
by an amount calculated by dividing (a) the amount of any
such prepayment by (b) the number of quarterly payments
remaining under the Aggregate Term 2 Loan as of the date
that such prepayment is received by Agent for the ratable
benefit of the Lenders; and
16
(iii) third, to reduce the Aggregate Revolving Loan and
any other remaining Loan Obligations.
6.4. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.
6.4.1. PAYMENT REQUIREMENT. Except as provided in Section with
respect to payments from collected funds in the Cash Collateral Account
and unless expressly provided to the contrary elsewhere herein, Borrower
shall make each payment on the Loan Obligations to Agent for the ratable
account of the Lenders as required under the Loan Documents at the
Lending Office. All such payments shall be made in Dollars on the date
when due, without deduction, set-off or counterclaim. All such payments
will be distributed by Agent to Lenders as provided in Section for
application to the Loan Obligations as provided herein.
6.4.2. APPLICATION OF PAYMENTS AND PROCEEDS. Except as provided
below, all payments received by Agent or a Lender in immediately
available funds at or before 1:00 p.m. (St. Louis, Missouri time) on a
Business Day will be applied to the relevant Loan Obligation on the same
day. Such payments received on a day that is not a Business Day or after
1:00 p.m. (St. Louis, Missouri time) on a Business Day will be applied
to the relevant Loan Obligation on the next Business Day. Except as
expressly provided otherwise herein or in any other Loan Document, (i)
Lenders may apply, and reverse and reapply, payments and proceeds of the
Collateral to the Loan Obligations in such order and manner as Lenders
determine in their absolute discretion, and (ii) Borrower hereby
irrevocably waives the right to direct the application of payments and
proceeds of the Collateral.
6.4.3. INTEREST CALCULATION. Notwithstanding anything contained
herein to the contrary, for purposes of interest calculation on the Loan
Obligations, (i) a payment by check, draft or other instrument received
at or before 1:00 p.m. (St. Louis, Missouri time) on a Business Day
shall be deemed to have been applied to the relevant Loan Obligation on
the second following Business Day, (ii) a payment by check, draft or
other instrument received on a day that is not a Business Day or after
1:00 p.m. (St. Louis, Missouri time) on a Business Day shall be deemed
to have been applied to the relevant Loan Obligation on the third
following Business Day, (iii) a payment in cash or by wire transfer
received at or before 1:00 p.m. (St. Louis, Missouri time) on a Business
Day shall be deemed to have been applied to the relevant Loan Obligation
on the Business Day when it is received, and (iv) a payment in cash or
by wire transfer received on a day that is not a Business Day or after
1:00 p.m. (St. Louis, Missouri time) on a Business Day shall be deemed
to have been applied to the relevant Loan Obligation on the next
Business Day.
6.4.4. PREPAYMENTS OF THE TERM LOAN 1 LIBOR ADVANCES. All
prepayments required under Section and all scheduled principal payments
required under Section to be applied against the Aggregate Term 1 Loan
shall first be applied against the outstanding principal, if any, of the
Aggregate Term 1 CBR Loan. Anything herein to the contrary
notwithstanding, until the Term Maturity Date, each and every prepayment
of the outstanding principal on the Aggregate Term 1 Loan required under
Section and each and every scheduled payment of the outstanding
principal on the Aggregate Term 1 Loan required under Section , which
would have the effect of reducing the outstanding principal balance of
the Aggregate Term 1 Loan below the outstanding principal balance of the
Aggregate Term 1 LIBOR Loan, shall not be applied against the Aggregate
Term 1 LIBOR Loan at such time, but shall be deposited into a separate
blocked interest bearing account at Agent in the name of Borrower.
Borrower hereby assigns to Agent, for the ratable benefit of Lenders,
such account along with all funds held in such account, all proceeds of
such account, and all interest earned thereon, to further secure the
Loan Obligations and at the time such deposit is made shall execute and
deliver to Agent any other written assignments and related
17
financing statements reasonably requested by Agent to evidence the Lenders'
first priority Security Interest in said account, funds, proceeds, and interest.
Agent shall apply the amount remaining in such blocked account to the
outstanding principal balance of each Term Loan 1 LIBOR Advance as and when its
respective Interest Period expires.
6.4.5. PREPAYMENTS OF THE TERM LOAN 2 LIBOR ADVANCES. All
prepayments required under Section and all scheduled principal payments
required under Section to be applied against the Aggregate Term 2 Loan
shall first be applied against the outstanding principal, if any, of the
Aggregate Term 2 CBR Loan. Anything herein to the contrary
notwithstanding, until the Term Maturity Date, each and every prepayment
of the outstanding principal on the Aggregate Term 2 Loan required under
Section and each and every scheduled payment of the outstanding
principal on the Aggregate Term 2 Loan required under Section , which
would have the effect of reducing the outstanding principal balance of
the Aggregate Term 2 Loan below the outstanding principal balance of the
Aggregate Term 2 LIBOR Loan, shall not be applied against the Aggregate
Term 2 LIBOR Loan at such time, but shall be deposited into a separate
blocked interest bearing account at Agent in the name of Borrower.
Borrower hereby assigns to Agent, for the ratable benefit of Lenders,
such account along with all funds held in such account, all proceeds of
such account, and all interest earned thereon, to further secure the
Loan Obligations and at the time such deposit is made shall execute and
deliver to Agent any other written assignments and related financing
statements reasonably requested by Agent to evidence the Lenders' first
priority Security Interest in said account, funds, proceeds, and
interest. Agent shall apply the remaining amount in such blocked account
to the outstanding principal balance of each Term Loan 2 LIBOR Advance
as and when its respective Interest Period expires.
6.5. RETURNED INSTRUMENTS. If a payment is made by check, draft or other
instrument and the check, draft or other instrument is returned unpaid, the
application of the payment to the Loan Obligations will be reversed and will be
treated as never having been made.
6.6. COMPELLED RETURN OF PAYMENTS OR PROCEEDS. If a Lender is for any
reason compelled to surrender any payment or any proceeds of the Collateral
because such payment or the application of such proceeds is for any reason
invalidated, declared fraudulent, set aside, or determined to be void or
voidable as a preference, an impermissible setoff, or a diversion of trust
funds, then this Agreement and the Loan Obligations to which such payment or
proceeds was applied or intended to be applied shall be revived as if such
application was never made for all purposes, including, without limitation, the
calculation of interest; and Borrower shall be liable to pay to such Lender, and
shall indemnify such Lender for and hold such Lender harmless from any loss with
respect to, the amount of such payment or proceeds surrendered. This Section
shall be effective notwithstanding any contrary action such Lender may take in
reliance upon its receipt of any such payment or proceeds. Any such contrary
action so taken by such Lender shall be without prejudice to such Lender's
rights under this Agreement and shall be deemed to have been conditioned upon
the application of such payment or proceeds having become final and irrevocable.
The provisions of this Section shall survive termination of the Commitments, the
expiration of the Letter of Credits and the payment and satisfaction of all of
the Loan Obligations.
6.7. DUE DATES NOT ON BUSINESS DAYS. If any payment required hereunder
becomes due on a date that is not a Business Day, then such due date shall
be deemed automatically extended to the next Business Day.
7. BORROWINGS.
7.1. INITIAL INTER-LENDER ADVANCES. To the extent that on the
Effective Date the Revolving Loan owing to a Lender exceeds such Lender's
prorata share of the Aggregate Revolving Commitment, or the
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Term 1 Loan owing to a Lender exceeds the Aggregate Term 1 Commitment, or the
Term 2 Loan owing to a Lender exceeds the Aggregate Term 2 Commitment, each of
the other Lenders shall remit to such Lender by 3:00 p.m. (St. Louis, Missouri
time) on the Effective Date, in accordance with such Lender's remittance
instructions, its share of each such excess calculated in accordance with its
prorata share of the Aggregate Revolving Commitment, the Aggregate Term 1
Commitment, and the Aggregate Term 2 Commitment, as applicable, rounded to the
nearest ▇▇▇▇▇, in immediately available funds consisting solely of Dollars. Each
such remittance by a Lender shall be deemed to be a Revolving Advance, Term 1
Advance, or Term 2 Advance hereunder, as applicable, by such Lender, and shall
reduce the Revolving Advance, the Term 1 Advance, or Term 2 Advance, as
applicable, of the Lender to whom such remittance is made.
7.2. ADVANCES TO BORROWER. Borrower may request Revolving Advances by
submitting an Advance Request to Agent. Agent may treat every request for a CBR
Advance as a request for a Swingline Advance from Borrower to the extent the
requested amount does not exceed the Maximum Swingline Amount and as a request
for a Revolving Advance in the amount of the excess. Every Advance Request shall
be irrevocable. An Advance Request received by Agent on a day that is not a
Business Day or that is received by Agent after 11:00 a.m. (St. Louis, Missouri
time) on a Business Day shall be treated as having been received by Agent at
11:00 a.m. (St. Louis, Missouri time) on the next Business Day.
7.3. REVOLVING ADVANCES TO REPAY THE SWINGLINE LOAN.
7.3.1. Boatmen's shall, (i) (A) on any Advance Date for an
Advance other than a Swingline Advance, (B) on any date when a
prepayment of the Aggregate Revolving CBR Loan is made as permitted or
required under Section and Section , and (C) on each Settlement Date,
and (ii) Boatmen's may, on any other date in Boatmen's absolute
discretion, in each case, give notice to Lenders of the amount of the
Swingline Loan after application of all payments to be applied thereto
as provided elsewhere herein. Such notice shall be given no later than
12:00 noon (St. Louis, Missouri time) and may include a demand that the
Swingline Loan be fully paid. If Boatmen's demands that the Swingline
Loan be fully paid, then prior to 3:00 p.m. (St. Louis, Missouri time)
on such date, each Lender (other than Boatmen's) shall make a Revolving
CBR Advance (a "Mandatory Advance") to Boatmen's for the account of
Borrower and the proceeds thereof shall be applied by Boatmen's to
reduce the Swingline Loan. Such Revolving CBR Advances shall be made by
Lenders (other than Boatmen's) in accordance with their prorata shares
of the Aggregate Revolving Commitment and shall be made notwithstanding
that (i) the amount of the aggregate Mandatory Advances may not be in
the minimum amount for Advances otherwise required hereunder, (ii) any
conditions to Advances in Section may not be then satisfied, (iii) there
is an Existing Default, (iv) the amount of such Mandatory Advances would
result in the Aggregate Revolving Loan exceeding the Maximum Available
Amount, or (v) such Mandatory Advances may be made after the Revolver
Maturity Date; provided, however, that in no event shall any Lender be
required to make any Mandatory Advance that would result in the
Revolving Loan of such Lender exceeding such Lender's Revolving
Commitment. After application of the proceeds of Mandatory Advances to
reduce the Swingline Loan, Boatmen's Revolving Loan shall be deemed
increased by the remaining amount of the Swingline Loan and the
Swingline Loan simultaneously reduced to zero.
7.3.2. If for any reason, including the commencement of a
proceeding in bankruptcy with respect to any Borrower, Mandatory
Advances cannot be made on the date otherwise required above, then each
Lender shall be deemed automatically to have purchased from Boatmen's as
of such date a prorata undivided interest and participation in the
Swingline Loan so as to cause such Lender to share in the Swingline Loan
in accordance with its prorata share of the Aggregate Revolving
Commitment. Each Lender shall remit its prorata share of the Swingline
Loan to
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Boatmen's promptly on demand. All interest payable with respect to such Lender's
prorata share of the Swingline Loan shall be for the account of Boatmen's to the
date such remittance is made, and shall be for the account of and remitted by
Boatmen's to such Lender as a participant from and after such date. Further,
until such remittance is made, such Lender shall pay to Boatmen's, on demand,
interest on such Lender's prorata share of the Swingline Loan at the Federal
Funds Rate.
7.4. LENDERS' RIGHT TO MAKE OTHER REVOLVING ADVANCES. With the prior
approval of Required Lenders in each instance, Lenders shall have the right
themselves to make prorata Revolving Advances at any time and from time to time
to cause timely payment of any of the Loan Obligations. Agent will give notice
to Borrower after any such Revolving Advance is made.
7.5. LETTERS OF CREDIT. Borrower may request the issuance of a Letter of
Credit by submitting a Letter of Credit Request to the Agent and Letter of
Credit Issuer and executing the reimbursement agreement required under Section
no less than five Business Days prior to the requested issue date for such
Letter of Credit (provided that if Agent is also the Letter of Credit Issuer, a
Letter of Credit Request need only be submitted to Agent).
7.6. AGENT'S NOTICE TO LENDERS; FUNDS DEPOSIT.
7.6.1. ADVANCES. Not later than 12:00 noon (St. Louis time) on
the date when an Advance is requested to be made (each an "Advance
Date"), which may only be on a Business Day, Agent shall promptly notify
each Lender of the amount of the Advance to be made on that Business
Day. Each Lender shall make available by 3:00 p.m. (St. Louis, Missouri
time) on the Advance Date its prorata share of such Advance (except a
Swingline Advance, which shall be funded solely by Boatmen's as provided
herein), rounded to the nearest ▇▇▇▇▇, in immediately available funds
consisting solely of Dollars, to Agent in accordance with such
remittance instructions as may be given by Agent to Lenders from time to
time.
7.6.2. FUNDING DRAWS ON LETTERS OF CREDIT. In the event that a
draw is made on a Letter of Credit and Borrower does not reimburse the
amount of such draw in full to the Letter of Credit Issuer on demand,
the Letter of Credit Issuer shall promptly notify Agent of such failure.
Upon Agent's receipt of such notice from the Letter of Credit Issuer,
Agent shall promptly notify each Lender thereof and shall have the right
to cause a Revolving Advance to be made, regardless of whether such
Revolving Advance would result in the Aggregate Revolving Loan exceeding
the Maximum Available Amount, by notifying each Lender of the draw, the
amount of the Revolving Advance required to fund such draw, and the
amount of each such Lender's ratable share of such Revolving Advance
(which notice shall be deemed to be an Advance Request). Unless
otherwise agreed by Lenders, the Advance Date and time for such
Revolving Advance shall not be later than 1:00 p.m. (St. Louis, Missouri
time) on the first Business Day following Agent's delivery of notice to
the Lenders. By no later than such Advance Date and time, each Lender
shall unconditionally make available its prorata share of the Revolving
Advance, in immediately available funds consisting solely of Dollars, to
Agent in accordance with such remittance instructions as may be given by
Agent to each Lender from time to time and upon Agent receiving all such
funds it shall promptly pay over such amount to the Letter of Credit
Issuer for application to outstanding draws. Each Revolving Advance made
by Lenders pursuant to this Section shall be deemed to be a Revolving
CBR Advance.
7.7. ADVANCES RATABLE. All Advances shall be made by Lenders as
provided herein in accordance with their prorata shares of the respective
Commitments, as applicable. Except as otherwise expressly provided herein,
a Lender shall not be obligated to make Revolving Advances in excess of its
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Revolving Commitment, Term 1 Advances in excess of its ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ 2
Advances in excess of its Term 2 Commitment, or advance more than its prorata
share of any Advance.
7.8. AGENT'S AVAILABILITY ASSUMPTION. Unless Agent has been given
written notice by a Lender prior to an Advance Date that such Lender does not
intend to make available to Agent such Lender's prorata portion of the Advance
which it will be obligated to make on the Advance Date, Agent may assume that
each Lender has made the required amount available to Agent on the Advance Date
and Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to Agent by such Lender on the Advance Date, Agent shall be entitled to recover
such corresponding amount on demand from such Lender. If such Lender does not
pay such corresponding amount immediately upon Agent's demand therefor, then
Agent shall promptly notify Borrower and the other Lenders and Borrower shall
immediately pay such corresponding amount to Agent. Agent shall also be entitled
to recover, either from such defaulting Lender or Borrower, interest on such
corresponding amount for each day from, but not including, the date such
corresponding amount was made available by Agent to Borrower to, and including,
the date such corresponding amount is recovered by Agent, at a rate per annum
equal to (i) if paid by such Lender, the cost to Agent of funding such amount at
the Federal Funds Rate, or (ii) if paid by Borrower, the applicable rate for
Revolving Advances determined from the Advance Request to which such amount
relates. Each Lender shall be obligated only to fund its prorata share of an
Advance subject to the terms and conditions hereof, regardless of the failure of
another Lender to fund its prorata share thereof.
7.9. DISBURSEMENT. Provided that all conditions precedent herein to a
requested Advance have been satisfied, Agent (Boatmen's, in the case of a
Swingline Advances) will make the amount of such requested Advance available to
Borrower on the applicable Advance Date in immediately available funds in
Dollars at the Lending Office. Such funds will be deposited in an account of
Borrower's at the Lending Office unless Borrower gives Agent specific
disbursement instructions otherwise.
7.10. AMOUNT, NUMBER, AND PURPOSE RESTRICTIONS ON ADVANCES. No Advance
will be made unless it is a whole multiple of $100,000 and not less than
$400,000, in the case of a LIBOR Advance, or a whole multiple of $10,000 and not
less than $50,000, in the case of a CBR Advance. On any one day, no more than
one Revolving Advance will be made from each Lender pursuant to an Advance
Request; and no more than one Swingline Advance will be made from Boatmen's
pursuant to an Advance Request. Advances will only be made for the purposes
permitted in Section .
7.11. RESTRICTION ON NUMBER OF LIBOR ADVANCES. No more than ten (10)
LIBOR Advances with different Interest Periods may be outstanding at any one
time.
7.12. EACH ADVANCE REQUEST AND LETTER OF CREDIT REQUEST A CERTIFICATION.
Each Advance Request and each Letter of Credit Request by a Borrowing Officer
shall constitute a certification by Borrower that (i) there is no Existing
Default, (ii) all representations and warranties of Borrower in this Agreement
are then true, with such exceptions as have been disclosed to Agent in writing
by Borrower which are reasonably satisfactory to Agent, and will be true on the
Advance Date or date such Letter of Credit is to be issued, as applicable, as if
then made, with such exceptions as have been disclosed to Agent in writing by
Borrower which are reasonably acceptable to Agent, except that with respect to
the representations and warranties made regarding financial data, such
representations and warranties shall be deemed made with respect to the most
recent Financial Statements and other financial data delivered by Borrower to
Agent, and (iii) all conditions precedent hereunder to the making of the
requested Advance or issuance of the requested Letter of Credit have been
satisfied.
7.13. REQUIREMENTS FOR EVERY ADVANCE REQUEST. Only a written request
in the form attached hereto as Exhibit (which may be mailed, personally
delivered or telecopied as provided in Section
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20.1) from a Borrowing Officer to Agent that specifies the amount of the
Revolving Advance to be made, the Advance Date, whether it is to be a Revolving
LIBOR Advance or a Revolving CBR Advance, and the Interest Period to be
applicable to the Advance if it is a Revolving LIBOR Advance, shall be treated
as an "Advance Request".
7.14. REQUIREMENTS FOR EVERY LETTER OF CREDIT REQUEST. Only a written
request (which may be mailed, personally delivered or telecopied as provided in
Section ) from a Borrowing Officer to Agent and the Letter of Credit Issuer (if
a different Lender than Agent) that specifies the amount, requested issue date
(which shall be a Business Day and in no event later than 180 days before the
Revolver Maturity Date) and beneficiary of the requested Letter of Credit and
other information necessary for its issuance shall be treated as a "Letter of
Credit Request".
7.15. EXONERATION OF AGENT, LENDERS, AND LETTER OF CREDIT ISSUER.
Neither Agent nor any Lender or Letter of Credit Issuer shall incur any
liability to Borrower for treating a request that meets the express requirements
of Section or Section as an Advance Request or Letter of Credit Request, as
applicable, if Agent believes in good faith that the Person making the request
is a Borrowing Officer. Neither Agent nor any Lender or Letter of Credit Issuer
shall incur any liability to Borrower for failing to treat any such request as
an Advance Request or Letter of Credit Request, as applicable, if Agent, Lender,
or Letter of Credit Issuer, as the case may be, believes in good faith that the
Person making the request is not a Borrowing Officer.
7.16. SUSPENSION OF OBLIGATION TO MAKE LIBOR ADVANCES. If (i) on any
date for determining the LIBO Rate for any Interest Period, by reason of any
changes arising after the Execution Date affecting the London Interbank Market,
or any Lender's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition herein of LIBO Rate, or (ii) the making of any Advance which is to be
a LIBOR Advance or the continuance of any LIBOR Advance by a Lender has become
unlawful by compliance by such Lender in good faith with any Law or any
pronouncement of a Governmental Authority (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful), then such
Lender shall promptly give notice to Borrower of such determination. Until such
Lender notifies Borrower that the circumstances giving rise to the suspension
described herein no longer exist, (a) the obligation of such Lender to make
Advances which are LIBOR Advances shall be suspended, (b) each outstanding LIBOR
Advance from such Lender shall be automatically converted into a CBR Advance on
the earlier of the last day of the Interest Period for such LIBOR Advance or the
last date permitted by applicable law, and (c) all Revolving Advances from such
Lender shall be CBR Advances. Notwithstanding anything to the contrary contained
herein, if a LIBOR Advance is converted to a CBR Advance pursuant to this
Section , the per annum interest rate applicable thereto from and after the
effective date of such conversion shall be the Revolver Adjusted CBR if a
Revolving CBR Advance or the Term Loan Adjusted CBR if a Term 1 Loan CBR Advance
or a Term 2 Loan CBR Advance (as calculated in accordance with Section ).
8. SECURITY. As security for payment and performance of the Loan
Obligations, Borrower shall on the Execution Date execute and deliver, or cause
to be executed and delivered, to Agent the following documents, each being
satisfactory to Lenders:
8.1. SECURITY AGREEMENTS. Security agreements from Borrower and every
other Covered Person (including, without limitation, Holdings) granting to
Agent, for the ratable benefit of Lenders, a Security Interest under the UCC, in
the case of Borrower and each Covered Person, in all of the Goods, Equipment,
Accounts, Inventory, Instruments, Documents, Chattel Paper, General Intangibles,
Fixtures, and other personal property (of any type or nature, tangible or
intangible) of Borrower and the other Covered Persons, whether now owned or
hereafter acquired, wherever located, and all proceeds thereof, subject only to
Permitted Security Interests affecting such property.
22
8.2. MORTGAGES. Mortgages and deeds of trust granting to Agent for the
ratable benefit of Lenders Security Interests in the real property described in
Attachment 1 to the Disclosure Schedule, and all income, rent and proceeds
thereof, subject only to Permitted Encumbrances affecting such real property and
existing on the Execution Date and Permitted Security Interests (each such
mortgage and deed of trust that Borrower or any other Covered Person executes
and delivers to Agent, for the ratable benefit of Lenders, either on or after
the Execution Date, a "Mortgage"). If Borrower or any other Covered Person
acquires or leases any real property after the Execution Date, Borrower shall
notify Agent thereof and shall deliver to Agent for the ratable benefit of
Lenders a deed of trust or mortgage, or leasehold deed of trust or mortgage, as
appropriate, on each parcel of such real property promptly upon request by Agent
(each such mortgage and deed of trust executed and delivered by Borrower or any
other Covered Person, as the case may be, to Agent, for the ratable benefit of
Lenders, shall be included in the definition of "Mortgage").
8.3. INTELLECTUAL PROPERTY ASSIGNMENTS. One or more assignments
assigning to Agent for the ratable benefit of Lenders a Security Interest in all
the Intellectual Property of Borrower and the other Covered Persons described in
Attachment 2 to the Disclosure Schedule.
8.4. STOCK PLEDGE AGREEMENTS. Stock Pledge Agreements granting to Agent
for the ratable benefit of Lenders a Security Interest in all of the capital
stock and other equity securities of Borrower and every Subsidiary of Borrower,
if any, and all dividends and other proceeds thereof. If Borrower or any
Subsidiary of any Covered Person issues any such capital stock or other equity
securities, Borrower, or Subsidiary, shall notify Agent thereof and shall
deliver to Agent a stock pledge agreement granting to Agent for the ratable
benefit of the Lenders a Security Interest in such capital stock or other equity
securities.
8.5. ACCOUNT ASSIGNMENT. The Account Assignment.
8.6. RIGHTS ASSIGNMENT. The Rights Assignment.
8.7. GUARANTIES. The Guaranty duly executed by Holdings.
Agent may, either before or after an Event of Default, but only with the consent
or at the direction of the Lenders, granted or withheld in their absolute
discretion, exchange, waive or release the Security Interests in any of the
Collateral or permit Borrower to substitute any real or personal property for
any of the Collateral without affecting the Loan Obligations or Agent's right to
take any other action with respect to any other Collateral; provided, however,
that Agent may, in its sole discretion and without the consent of any other
Lender, do, or permit Borrower to do, any of the foregoing with respect to the
Collateral or other real or personal property with a value of up to $100,000 in
the aggregate for each calendar year during the term hereof.
9. POWER OF ATTORNEY. Borrower hereby authorizes Agent and irrevocably appoints
Agent (acting by any of its officers) as such Borrower's agent and
attorney-in-fact (which appointment is coupled with an interest and is therefore
irrevocable) to do any of the following until all of the Loan Obligations are
fully paid and satisfied and the Commitments are terminated:
9.1. At any time while there is an Unwaived Event of Default, (i) demand
payment of any Account; (ii) enforce payment of any Account by legal proceedings
or otherwise; (iii) exercise all of Borrower's rights and remedies in
proceedings brought to collect any Account; (iv) sell or assign any Account upon
such terms, for such amount and at such time or times as Agent deems advisable;
(v) settle, adjust, compromise, extend or renew any Account; (vi) discharge and
release any Account; (vii) prepare, file and sign such Borrower's name on any
proof of claim in bankruptcy or other similar documents against an Account
Debtor; (viii) notify the postal authorities of any change of the address for
delivery of such
23
Borrower's mail to any address designed by Agent, and open and process all mail
addressed to such Borrower; (ix) endorse such Borrower's name on any
verification of Accounts and notices thereof to Account Debtors; (x) make one or
more Revolving Advances to pay the costs and expenses of any of the foregoing;
and (xi) do anything that Agent deems necessary in its reasonable discretion to
assure that the Loan Obligations are fully paid.
9.2. At any time, (i) take control in any manner of any item of payment
or proceeds of any Account; (ii) have access to any lockbox or postal box into
which such Borrower's mail is deposited; (iii) endorse such Borrower's name upon
any items of payment and deposit the same in the Cash Collateral Account and
apply the proceeds thereof to the Loan Obligations as provided herein; (iv)
endorse such Borrower's name upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to any Account or other item
of the Collateral; and (v) execute in such Borrower's name and on such
Borrower's behalf any financing statement or amendments thereto deemed necessary
or appropriate by Agent to assure the perfection or continued perfection of
Agent's Security Interests in the Collateral for the ratable benefit of Lenders.
The foregoing power of attorney and authorization shall be deemed automatically
revoked upon the payment in full of all of the Loan Obligations and the
termination of the Commitments.
10. CONDITIONS OF LENDING.
10.1. CONDITIONS TO INITIAL ADVANCE. As conditions precedent
to Lenders' obligations to make the initial Advances:
10.1.1. LISTED DOCUMENTS AND OTHER ITEMS. Agent shall have
received on or before the Effective Date all of the documents and other
items listed or described in Exhibit hereto, with each being (as
applicable) duly executed and (also as applicable) sealed, attested,
acknowledged, certified, or authenticated.
10.1.2. NET WORTH. Borrower's Net Worth (before considering
any Harbour Subordinated Indebtedness or Boatmen's Subordinated
Indebtedness) shall not be less than $11,000,000.
10.1.3. PRO FORMAS; FINANCIAL CONDITION. Lenders shall have
determined to their satisfaction that the pro forma financial statements
dated as of August 15, 1996 which were previously delivered to Lenders
and which reflect Borrower's expectations as to the financial
performance of Borrower, after giving effect to the Acquisition, and the
funding of the Loans, the Minnesota Mutual Subordinated Indebtedness,
the Harbour Subordinated Indebtedness, the Boatmen's Subordinated
Indebtedness, and the initial Advance through September 30, 2001 (the
"Initial Financial Statements") (i) fairly and accurately reflect, on a
pro forma basis, the business and financial condition of Borrower in all
material respects, its cash flows, and the results of its operations for
such prior periods as of the date of such statement, (ii) for the
periods that will end after the Effective Date, fairly and accurately
forecast the business and financial condition of Borrower, its cash
flows, and the results of its operations for such periods, as of the
date of such projections, and (iii) demonstrate to the Lenders's
reasonable satisfaction that the Borrower and its Subsidiaries can repay
their Obligations as they become due, and can comply with each and every
covenant contained herein and in the other Loan Documents.
10.1.4. LULL'S AND TRAK'S FINANCIAL STATEMENTS. Lenders
shall have received audit reports prepared by McGladdery & ▇▇▇▇▇▇ with
respect to Lull's 1994 and 1995 fiscal years and audit reports prepared
by Price Waterhouse LLP with respect to Holdings' 1994 and 1995 fiscal
24
year (collectively, the "Audit") and the unaudited financial statements
of both Lull and Trak for each month after their respective 1995 fiscal
year ends through and including May, 1996, which shall be reasonably
satisfactory to Lenders (along with the Audit, hereinafter collectively
referred to as the "Historical Financial Statements").
10.1.5. DEFAULT. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such Advance
being requested or made or the application of the proceeds thereof,
after giving effect to the funding of such Advance, the Term 1 Advance,
the Term 2 Advance, and the consummation of the Acquisition.
10.1.6. PERFECTION OF SECURITY INTERESTS. Every Security
Interest required to be granted by Borrower to Agent under Section
shall have been perfected and shall be a first priority Security
Interest subject to the Permitted Security Interests and, in the case
of real property, Permitted Encumbrances.
10.1.7. REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in the Loan Documents shall be true and
correct.
10.1.8. STRUCTURE. The definitive ownership, organizational,
and asset structure of Borrower and its Subsidiaries, if any, shall
be satisfactory to Agent and the Lenders.
10.1.9. MATERIAL ADVERSE CHANGE. Since September 30, 1995 there
shall not have been any change which would have a Material Adverse
Effect on Trak or Holdings and since December 31, 1995 there shall not
have been any change which would have a Material Adverse Effect on Lull.
10.1.10. PENDING MATERIAL PROCEEDINGS. There shall be no pending
Material Proceedings.
10.1.11. PAYMENT OF FEES. Borrower shall have paid and
reimbursed to Agent and Lenders all fees, costs and expenses that are
payable or reimbursable to Agent and Lenders hereunder on or before the
Effective Date.
10.1.12. LEGAL OPINIONS. Agent shall have received opinion(s)
of Borrower's counsel, Seller's counsel, and of local counsel in the
States of Minnesota and Wisconsin deemed necessary by the Lenders,
dated the Effective Date, addressed to Agent and satisfactory to
Agent.
10.1.13. AVAILABILITY. The excess of the Maximum Available
Amount over the Aggregate Revolving Loan after taking into account the
initial Advances requested by Borrower against the Aggregate Revolving
Loan on the Effective Date shall be at least $7,000,000.
10.1.14. ACQUISITION. All conditions precedent to the
Acquisition shall have been met or waived, to the satisfaction of the
Lenders, and the Acquisition shall have been consummated. The
Acquisition Documents shall be in a form and substance acceptable to
Lenders, and all representations and warranties contained therein
shall be in form and substance satisfactory to Lenders.
10.1.15. MINNESOTA MUTUAL SUBORDINATED DEBT. Minnesota Mutual
shall have loaned in cash $5,000,000 to Trak pursuant to the Minnesota
Mutual Subordinated Documents which shall have payment terms acceptable
to the Lenders and shall provide that, among other things, the
repayment of the Minnesota Mutual Subordinated Indebtedness shall be at
all times
25
subordinated to the rights of the Agent and the Lenders to the
satisfaction of the Lenders pursuant to the Minnesota Mutual
Subordination Documents.
10.1.16. HARBOUR SUBORDINATED DEBT. Harbour Group Investments
III, L.P. shall have loaned in cash $2,000,000 to Trak pursuant to the
Harbour Subordinated Documents which shall provide that, among other
things, the repayment of the Harbour Subordinated Indebtedness shall
be at all times subordinated to the rights of the Agent and the Lenders
to the satisfaction of the Lenders pursuant to the Harbour Subordination
Agreement.
10.1.17. BOATMEN'S SUBORDINATED DEBT. Boatmen's shall have
loaned in cash $14,000,000 to Holdings pursuant to the Boatmen's
Subordinated Documents which shall provide that, among other things, the
repayment of the Boatmen's Subordinated Indebtedness shall be at all
times subordinated to the rights of the Agent and the Lenders to the
satisfaction of the Lenders pursuant to the Boatmen's Subordination
Agreement.
10.1.18. GUARANTIES. Agent shall have received from the
Guarantor its Guaranty.
10.1.19. GOVERNMENTAL APPROVALS; PERMITS. Agent shall have
received evidence satisfactory to it that all necessary approvals and
consents, including, without limitation, any such approvals or consents
with regards to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, have been obtained, and that Borrower
and each Covered Person has all Material Licenses necessary to operate
its business.
10.1.20. CLOSING COSTS. Agent shall have received a Borrower's
best estimate of all closing costs and fees related to the consummation
of the Acquisition in detail reasonably satisfactory to Agent.
10.1.21. OTHER ITEMS. Agent shall have received such other
consents, approvals , opinions , certificates or documents as it
reasonably deems necessary.
10.2. CONDITIONS TO ALL SUBSEQUENT ADVANCES. The obligation of Lenders
to make any Advance subsequent to the initial Advances shall be subject to the
prior or concurrent fulfillment of each of the following additional
conditions precedent:
10.2.1. GENERAL CONDITIONS. All of the conditions to the
initial Advances in Section shall have been satisfied.
10.2.2. REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in the Loan Documents, with such exceptions as
have been disclosed to Agent in writing by Borrower as addenda to the
Disclosure Schedule and reasonably agreed to by Agent, shall be true and
correct as of the time of such Advance and with the same force and
effect as if made at such time, except that with respect to the
representations and warranties made regarding financial data, such
representations and warranties shall be deemed made with respect to the
most recent Financial Statements and other financial data delivered by
Borrower to Agent.
10.2.3. DEFAULT. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such Revolving
Advance being requested or made or the application of the proceeds
thereof.
11. CONDITIONS TO ISSUANCE OF LETTER OF CREDIT. As conditions precedent
to the issuance of any Letter of Credit:
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11.1. REIMBURSEMENT AGREEMENT. Borrower shall have executed and
delivered to the Letter of Credit Issuer a reimbursement agreement satisfactory
to the Letter of Credit Issuer under which Borrower undertakes to reimburse to
the Letter of Credit Issuer on demand the amount of each draw on such Letter of
Credit, together with interest from the date of the draw at the rate provided in
Section .
11.2. NO PROHIBITIONS. No order, judgment or decree of any Governmental
Authority shall exist which purports by its terms to enjoin or restrain the
Letter of Credit Issuer or any other Lender from issuing such Letter of Credit,
and no Law or request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the Letter of Credit Issuer or
any other Lender shall exist which prohibits, or requests that the Letter of
Credit Issuer or any other Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular, or imposes upon the
Letter of Credit Issuer or any other Lender with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the Letter
of Credit Issuer or any other Lender is not otherwise compensable by Borrower
hereunder).
11.3. REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in the Loan Documents shall be true and correct, with such exceptions
as have been disclosed to Agent in writing by Borrower as addenda to the
Disclosure Schedule which are reasonably agreed to by the Agent, as of the time
of issuance, except that with respect to the representations and warranties made
regarding financial data, such representations and warranties shall be deemed
made with respect to the most recent Financial Statements and other financial
data delivered by Borrower to Agent.
11.4. NO DEFAULT. There shall be no Existing Default and no Default
or Event of Default will occur as a result of such Letter of Credit being
requested or issued.
11.5. OTHER CONDITIONS. All of the conditions to the initial Advances
in Section shall have been satisfied.
12. REPRESENTATIONS AND WARRANTIES. Except as otherwise described on the
disclosure schedule that is attached hereto as Exhibit (the "Disclosure
Schedule"), Borrower represents and warrants to Lenders as follows:
12.1. ORGANIZATION AND EXISTENCE. Each Covered Person is duly organized
and existing in good standing under the laws of the state or country, as the
case may be, of its organization, is duly qualified to do business and is in
good standing in every state or country, as the case may be, where the nature or
extent of its business or properties require it to be qualified to do business,
except where the failure to so qualify will not have a Material Adverse Effect
on any Covered Person. Each Covered Person has the power and authority to own
its properties and carry on its business as now being conducted.
12.2. AUTHORIZATION. Each Covered Person is duly authorized to execute
and perform every Loan Document to which such Covered Person is a party, and
Borrower is duly authorized to borrow hereunder, and this Agreement and the
other Loan Documents have been duly authorized by all requisite corporate or
limited liability company action of each Covered Person a party thereto. No
consent, approval or authorization of, or declaration or filing with, any
Governmental Authority, and no consent of any other Person, is required in
connection with Borrower's execution, delivery or performance of this Agreement
and the other Loan Documents to which it is a party or any other Covered
Person's execution, delivery and performance of any of the Loan Documents to
which it is a party, except in each case for those already duly obtained.
12.3. DUE EXECUTION. Every Loan Document to which a Covered Person
is a party has been executed on behalf of such Covered Person by a Person duly
authorized to do so.
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12.4. ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to which
a Covered Person is a party constitutes the legal, valid and binding obligation
of such Covered Person, enforceable against such Covered Person in accordance
with its terms, except to the extent that the enforceability thereof against
such Covered Person may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by equitable
principles of general application.
12.5. BURDENSOME OBLIGATIONS. No Covered Person is a party to or bound
by any Contract or is subject to any provision in the Charter Documents of such
Covered Person which would, if performed by such Covered Person, result in a
Default or Event of Default either immediately or upon the elapsing of time.
12.6. LEGAL RESTRAINTS. The execution of any Loan Document by a Covered
Person will not violate or constitute a default under the Charter Documents of
such Covered Person, any Material Agreement of such Covered Person, or any
Material Law, and will not, except as expressly contemplated or permitted in
this Agreement or any other Loan Document, result in any Security Interest being
imposed on any of such Covered Person's property. The performance by any Covered
Person of its obligations under any Loan Document to which it is a party will
not violate or constitute a default under the Charter Documents of such Covered
Person, any Material Agreement of such Covered Person, or any Material Law, and
will not, except as expressly contemplated or permitted in this Agreement or any
other Loan Document, result in any Security Interest being imposed on any of
such Covered Person's property.
12.7. LABOR CONTRACTS AND DISPUTES. There is no collective bargaining
agreement or other labor contract covering employees of a Covered Person. No
union or other labor organization is seeking to organize, or to be recognized
as, a collective bargaining unit of employees of a Covered Person. There is no
pending or, to Borrower's knowledge, threatened, strike, work stoppage, material
unfair labor practice claim or other material labor dispute against or affecting
any Covered Person or its employees.
12.8. NO MATERIAL PROCEEDINGS. There are no Material Proceedings
pending or, to the best knowledge of Borrower, threatened.
12.9. MATERIAL LICENSES. All Material Licenses have been obtained or
exist for each Covered Person.
12.10 COMPLIANCE WITH MATERIAL LAWS. Each Covered Person is in
compliance with all Material Laws. Without limiting the generality of the
foregoing:
12.10.1. GENERAL COMPLIANCE WITH ENVIRONMENTAL AND EMPLOYMENT
LAWS. The operations and employee compensation practices of every
Covered Person comply in all material respects with all applicable
Environmental Laws and Employment Laws. To Borrower's knowledge, there
are no underground storage tanks under or upon any real property now or
heretofore owned, leased, used or operated by any Covered Person.
12.10.2. PROCEEDINGS. None of the operations of any Covered
Person are the subject of any judicial or administrative complaint,
order or proceeding alleging the violation of any applicable
Environmental Laws or Employment Laws.
12.10.3. INVESTIGATIONS REGARDING HAZARDOUS MATERIALS. None of
the operations of any Covered Person are the subject of investigation by
any Governmental Authority regarding the improper transportation,
storage, disposal, generation or release into the environment of any
Hazardous Material, the results of which may have a Material Adverse
Effect on such Covered Person, or reduce materially the value of the
Collateral.
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12.10.4. NOTICES AND REPORTS REGARDING HAZARDOUS MATERIALS.
No notice or report under any Environmental Law indicating a past or
present spill or release into the environment of any Hazardous
Material has been filed, or is required to be filed, by any Covered
Person.
12.10.5. HAZARDOUS MATERIALS ON REAL PROPERTY. No Covered
Person, nor to Borrower's knowledge, any other Person, has at any time
transported, stored, disposed of, generated or released any Hazardous
Material on the surface, below the surface, or within the boundaries
of any real property owned or operated by such Covered Person or any
improvements thereon, except for transportation or storage in the
ordinary course of such Covered Person's business and in compliance
with all applicable Laws. Borrower has no knowledge of any Hazardous
Material on the surface, below the surface, or within the boundaries
of any real property owned or operated by such Covered Person or any
improvements thereon. No property of such Covered Person is subject to
a Security Interest in favor of any Governmental Authority for any
liability under any Environmental Law or damages arising from or costs
incurred by such Governmental Authority in response to a spill or
release of Hazardous Material into the environment.
12.10.6. ENVIRONMENTAL PROPERTY TRANSFER ACTS. No environmental
property transfer acts are applicable to the transactions contemplated
by this Agreement or any Acquisition Documents and Borrower has provided
all notices and obtained all necessary environmental permit transfers
and consents, if any, required in order to consummate the transactions
contemplated by this Agreement or the Acquisition Documents, to perfect
Agent's Security Interests for the benefit of the Lenders and to operate
Borrower's and every other Covered Person's business as presently or
proposed to be operated.
12.11. OTHER NAMES. During the 6 year period immediately preceding the
Effective Date, no Covered Person has used any name other than the full name
which identifies such Covered Person in this Agreement. The only trade name or
style under which a Covered Person sells Inventory or creates Accounts, or to
which instruments in payment of Accounts are made payable, is the name which
identifies such Covered Person in this Agreement.
12.12. PRIOR TRANSACTIONS. Since August 16, 1995, except with respect to
the Acquisition, no Covered Person has been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business
(other than as expressly permitted pursuant to the provisions hereof).
12.13. MEMBERS; CAPITALIZATION. Borrower and its Subsidiaries authorized
capital stock and issued and outstanding capital stock is as described in
Section of the Disclosure Schedule, and all issued and outstanding shares of
Borrower and each such Subsidiary are validly issued and outstanding, fully
paid, and non-assessable.
12.14. SOLVENCY. Borrower and each of its Subsidiaries is Solvent.
12.15. FINANCIAL STATEMENTS. The Initial Financial Statements are
complete and correct in all material respects, have been prepared in accordance
with GAAP, and fairly reflect or project in good faith, as the case may be, the
financial condition, results of operations and cash flows of the Persons covered
thereby, as of the dates and for the periods stated therein.
12.16. NO CHANGE IN CONDITION. Since September 30, 1995 there shall
not have been any change which would have a Material Adverse Effect on Trak or
Holdings, since December 31, 1995 there shall not
29
have been any change which would have a Material Adverse Effect on Lull, and
since the Execution Date there has been no change which would have a Material
Adverse Effect on any other Covered Person.
12.17. NO DEFAULTS. No Covered Person has breached or violated or
has defaulted under any Material Agreement, or has defaulted with respect to any
Material Obligation of such Covered Person. There exists no Existing Default.
12.18. INVESTMENTS. No Covered Person has any Investments in other
Persons except Permitted Investments.
12.19. INDEBTEDNESS. No Covered Person has any Indebtedness except
Permitted Indebtedness.
12.20. INDIRECT OBLIGATIONS. No Covered Person has any Indirect
Obligations except Permitted Indirect Obligations.
12.21. ENCUMBRANCES. The Real Property Collateral is not subject to
any Encumbrances except Permitted Encumbrances.
12.22. OPERATING LEASES. No Covered Person has an interest as
lessee under any Operating Leases other than leases of non-material items of
office equipment and leases permitted by Section .
12.23. CAPITAL LEASES. No Covered Person has an interest as a lessee
under any Capital Leases other than Capital Leases that are Permitted
Indebtedness.
12.24. TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has
filed or caused to be filed all tax reports and returns required to be filed by
it with any Governmental Authority, except where extensions have been properly
obtained. Each Covered Person has paid or made adequate provision for payment of
all Taxes of such Covered Person, except Taxes which are being diligently
contested in good faith by appropriate proceedings and as to which such Covered
Person has established adequate reserves in conformity with GAAP. No Security
Interests for any such Taxes has been filed and no claims are being asserted
with respect to any such Taxes which, if adversely determined, would have a
Material Adverse Effect on such Covered Person. There are no material unresolved
issues concerning any liability of a Covered Person for any Taxes which, if
adversely determined, would have a Material Adverse Effect on such Covered
Person.
12.25. PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by
each Covered Person or an ERISA Affiliate qualify under Section 401 of the Code
and are in compliance with the provisions of ERISA. Except with respect to
events or occurrences which would not have a Material Adverse Effect on any
Covered Person:
12.25.1. PROHIBITED TRANSACTIONS. None of such Pension Benefit
Plans has participated in, engaged in or been a party to any
non-exempt prohibited transaction as defined in ERISA or the Code, and
no officer, director or employee of a Covered Person or of an ERISA
Affiliate has committed a breach of any of the responsibilities or
obligations imposed upon fiduciaries by Title I of ERISA.
12.25.2. CLAIMS. There are no claims, pending or to Borrower's
knowledge threatened, involving any such Pension Benefit Plan by a
current or former employee (or beneficiary thereof) of such Covered
Person or ERISA Affiliate, other than claims for benefits made in the
ordinary course of business, nor is there any reasonable basis to
anticipate any such claims
30
involving any such Pension Benefit Plan which would likely be successfully
maintained against such Covered Person or ERISA Affiliate.
12.25.3. REPORTING AND DISCLOSURE REQUIREMENTS. There are
no violations of any reporting or disclosure requirements with respect
to any such Pension Benefit Plan and none of such Pension Benefit
Plans has violated any applicable Law, including ERISA and the Code.
12.25.4. ACCUMULATED FUNDING DEFICIENCY. No such Pension
Benefit Plan has (i) incurred an accumulated funding deficiency
(within the meaning of Section 412(a) of the Code), whether or not
waived; (ii) been a Pension Benefit Plan with respect to which a
Reportable Event (to the extent that the reporting of such events to
the PBGC within thirty days of the occurrence has not been waived) has
occurred and is continuing; or (iii) been a Pension Benefit Plan with
respect to which there exist conditions or events which have occurred
that present a significant risk of termination of such Pension Benefit
Plan by the PBGC.
12.25.5. MULTI-EMPLOYER PLAN. All Multi-employer Plans to which
any Covered Person contributes or is obligated to contribute are
listed in Section of the Disclosure Schedule. No Covered Person or
ERISA Affiliate has received notice that any such Multi-employer Plan
is in reorganization or has been terminated within the meaning of
Title IV of ERISA, and no such Multi-employer Plan is reasonably
expected to be in reorganization or to be terminated within the
meaning of Title IV of ERISA.
12.26. WELFARE BENEFIT PLANS. No Covered Person or ERISA Affiliate
maintains a Welfare Benefit Plan that has a liability which, if enforced or
collected, would have a Material Adverse Effect on any Covered Person. Each
Covered Person and ERISA Affiliate has complied in all material respects with
the applicable requirements of Section 4980B of the Code pertaining to
continuation coverage as mandated by COBRA.
12.27. RETIREE BENEFITS. No Covered Person or ERISA Affiliate has an
obligation to provide any Person with any medical, life insurance, or similar
benefit following such Person's retirement or termination of employment (or to
such Person's beneficiary subsequent to such Person's death) other than (i) such
benefits provided to Persons at such Person's sole expense and (ii) obligations
under COBRA.
12.28. DISTRIBUTIONS. No Distribution as defined in Section has been
declared, paid or made upon or in respect of any capital stock, other
securities, or membership interest of any Covered Person on and after the
Execution Date, except as expressly permitted hereby.
12.29. REAL PROPERTY. Section to the Disclosure Schedule contains a
correct and complete list of (i) the street addresses and a general description
of all real property owned by Borrower, its Subsidiaries, or any of the
Guarantors, and (ii) a list of all leases and subleases of real property by
Borrower, its Subsidiaries, or any of the Guarantors, with Borrower, any of
Borrower's Subsidiaries, or any of the Guarantors identified for each as the
lessee, sublessee, lessor, or sublessor, as the case may be, together with the
street addresses and a general description of the real property involved and the
names of the other parties to such leases and subleases. Other than any such
lease or sublease which has expired pursuant to its terms, each of such leases
and subleases is valid and enforceable in accordance with its terms and is in
full force and effect, and no default under any such lease or sublease exists
with respect to Borrower, Borrower's Subsidiaries, or any of the Guarantors, as
the case may be, or, to Borrower's knowledge, any other party thereto which
could have a Material Adverse Effect on any Covered Person. Attachment 1 to the
Disclosure Schedule contains the legal descriptions from the most recent
evidences of title to all the real property in which Agent will have a Security
Interest under a Mortgage as provided in Section 8.2.
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12.30. STATE OF COLLATERAL AND OTHER PROPERTY. After giving effect to
the Acquisition, each Covered Person has good and marketable or merchantable
title to all real and personal property purported to be owned by it or reflected
in the Initial Financial Statements, except for personal property sold in the
ordinary course of business after the date of the Initial Financial Statements
or otherwise disposed of as expressly permitted hereby. There are no Security
Interests on any of the property purported to be owned by any Covered Person,
including the Collateral, except existing Permitted Security Interests. With the
exception of certain non-material items of tangible personal property, each
tangible item of Personal Property Collateral purported to be owned by a Covered
Person is in good working order, normal wear and tear excepted. Without limiting
the generality of the foregoing:
12.30.1. ACCOUNTS. With respect to each Account scheduled, listed
or referred to in reports submitted by Borrower to Agent pursuant to the
Loan Documents, except as disclosed therein: (i) the Account arose from
a bona fide transaction completed in accordance with the terms of any
documents pertaining to such transaction; (ii) the Account is not
evidenced by a judgment and there is no material dispute respecting it;
(iii) the amount of the Account as shown on Borrower's books and records
and all invoices and statements which may be delivered to Agent with
respect thereto are actually and absolutely owing to Borrower and are
not in any way contingent; (iv) there are no set-offs, counterclaims or
disputes existing or asserted with respect to the Account and Borrower
has not made any agreement with any Account Debtor for any deduction
therefrom except a discount or allowance allowed by Borrower in the
ordinary course of its business for prompt payment; (v) there are no
facts, events or occurrences which in any way impair the validity or
enforcement of the Account or tend to reduce the amount payable
thereunder as shown on Borrower's books and records and all invoices and
statements delivered to Agent with respect thereto; (vi) the Account is
assignable; (vii) the Account arose in the ordinary course of Borrower's
business; (viii) to the Borrower's knowledge, the Account Debtor with
respect to the Account has the capacity to contract; (ix) the services
furnished and/or goods sold giving rise to the Account are not subject
to any Security Interest except the first priority, perfected Security
Interest granted to Agent for the ratable benefit of Lenders and except
the Permitted Security Interests; (x) to the Borrower's knowledge, there
are no proceedings or actions which are threatened or pending against
the Account Debtor with respect to the Account; and (xi) no payments
have been or shall be made on the Account except payments promptly
delivered to Agent or to other financial institutions approved by Agent
pursuant to this Agreement.
12.30.2. INVENTORY. With respect to Inventory scheduled, listed
or referred to in any certificate, schedule, list or report given by
Borrower, except as disclosed therein: (i) such Inventory (except for
Inventory in transit and Inventory not subject to the negative covenant
set forth in the last sentence of Section ) is located at one or another
of the premises listed in Section of the Disclosure Schedule; (ii)
Borrower has good and merchantable title to such Inventory subject to no
Security Interest whatsoever except for the first priority, perfected
Security Interest granted to Agent for the ratable benefit of Lenders
and except for Permitted Security Interests; (iii) such Inventory is of
good and merchantable quality, free from any material defects; (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties; and (v) the
completion of manufacture and sale or other disposition of such
Inventory by Agent or Lenders following an Event of Default shall not
require the consent of any Person and shall not constitute a breach or
default under any contract or agreement to which Borrower is a party or
to which the Inventory is subject.
12.30.3. EQUIPMENT. With respect to the Borrower's equipment
or any Guarantor's or any Subsidiary of Borrower's equipment: (i)
Borrower or said Guarantor or Subsidiary, as the case may be, has good
and marketable title thereto; (ii) none of such equipment is subject to
any Security Interests except for the first priority Security Interest
granted to Agent for the ratable
32
benefit of Lenders pursuant hereto and except for Permitted Security
Interests; and (iii) all such equipment is in good operating condition
and repair, ordinary wear and tear alone excepted, and is suitable for
the uses to which customarily put in the conduct of Borrower's, said
Guarantor's or said Subsidiary's business, as the case may be.
12.30.4. INTELLECTUAL PROPERTY. (i) Section of the Disclosure
Schedule contains a complete and correct list of the Intellectual
Property of Borrower, each of Borrower's Subsidiaries, and each
Guarantor, (ii) Borrower and each said Subsidiary and each Guarantor,
as the case may be, owns all right, title and interest in, under and
to such Intellectual Property owned by it, subject to no licenses or
any interest therein or other agreements relating thereto; (iii) no
Intellectual Property or grant of license by or to Borrower, said
Subsidiary or Guarantor is subject to any pending or, to Borrower's
knowledge, threatened challenge; (iv) to Borrower's knowledge, neither
Borrower nor any said Subsidiary or Guarantor has committed any
patent, trademark, trade name, service ▇▇▇▇ or copyright infringement,
and the present conduct of Borrower's and each said Subsidiary's and
Guarantor's business does not infringe any patents, trademarks, trade
name rights, service marks, copyrights, publication rights, trade
secrets or other proprietary rights of any Person; and (v) there are
no claims or demands of any Person pertaining to, or any proceedings
which are pending or, to Borrower's knowledge, threatened, which
challenge the rights of Borrower or any said Subsidiary or Guarantor
in respect of any proprietary or confidential information or trade
secrets used in the conduct of their respective businesses.
12.30.5. DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. All documents,
instruments and chattel paper describing, evidencing or constituting
Collateral, and all signatures and endorsements thereon, are complete,
valid, and genuine, and all goods evidenced by such documents,
instruments and chattel paper are owned by Borrower or one or more of
Borrower's Subsidiaries, or one or more of the Guarantors, free and
clear of all Security Interests other than Permitted Security
Interests.
12.31. CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL. As of the
Execution Date,
12.31.1. the only chief executive office and the principal
places of business of Borrower, Borrower's Subsidiaries, and the
Guarantor are located at the places listed and so identified in
section of the Disclosure Schedule.;
12.31.2. the books and records of Borrower, Borrower's
Subsidiaries, and each Guarantor and all of the Borrower's, each of
Borrower's Subsidiaries, and each Guarantor's chattel paper and all
records of Accounts, are located only at the places listed and so
identified in section of the Disclosure Schedule; and
12.31.3. all of the Collateral (except for any Covered Person's
Inventory which is in transit, Inventory not subject to the negative
covenant set forth in the last sentence of Section and Borrower's Real
Property Collateral) is located only at the places listed and so
identified in section of the Disclosure Schedule.
12.32. NEGATIVE PLEDGES. No Covered Person is a party to or bound by
any Contract which prohibits the creation or existence of any Security Interest
upon or assignment or conveyance of any of the Collateral, except for the Loan
Documents.
12.33. Security Documents.
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12.33.1. SECURITY AGREEMENTS. Each Security Agreement is
effective to grant to Agent for the ratable benefit of the Lenders an
enforceable Security Interest in all rights, title and interest of
Borrower, Borrower's Subsidiary referenced therein, or Guarantor
referenced therein, as the case may be, in the Personal Property
Collateral described therein. Upon appropriate filing (as to all
Personal Property Collateral in which a Security Interest may be
perfected under the applicable state's UCC by filing a financing
statement) or Agent's taking possession (as to items of the Personal
Property Collateral of which a secured party must take possession in
order to perfect a Security Interest under the applicable state's UCC),
Agent will have a fully perfected first priority Security Interest in
such Personal Property Collateral described in each Security Agreement,
subject only to Permitted Security Interests affecting such Personal
Property Collateral.
12.33.2. MORTGAGES. The Mortgages are effective to grant to Agent
for the ratable benefit of the Lenders a legal, valid and enforceable
mortgage lien on the Real Property Collateral. Upon proper recording and
payment of recording fees and taxes, if any, Agent will have for the
ratable benefit of Lenders a fully perfected first priority lien on the
Real Property Collateral subject only to Permitted Security Interests
affecting the Real Property Collateral.
12.33.3. INTELLECTUAL PROPERTY ASSIGNMENTS. Each Intellectual
Property Assignment is effective to assign to Agent for the ratable
benefit of the Lenders all rights, title and interest of Borrower,
Borrower's Subsidiary referenced therein, or Guarantor referenced
therein, as the case may be, in and to the Intellectual Property
referenced therein, subject only to Permitted Security Interests
affecting the Intellectual Property.
12.33.4. ACCOUNT ASSIGNMENT. The Account Assignment is effective
to grant to Agent for the ratable benefit of the Lenders an enforceable
Security Interest in all rights, title and interest of Borrower in the
Cash Collateral Account.
12.33.5. RIGHTS ASSIGNMENT. The Rights Assignment is effective
to grant to Agent for the ratable benefit of the Lenders an enforceable
Security Interest in all rights, title and interest of Borrower under
the Acquisition Documents.
12.33.6. STOCK PLEDGE AGREEMENT. Each Stock Pledge Agreement is
effective to grant to Agent for the ratable benefit of the Lenders a
Security Interest in all rights, title and interest of Borrower,
Borrower's Subsidiary referenced therein, or Guarantor referenced
therein, as the case may be, in and to the stock and other securities
and proceeds thereof described therein.
12.34. S CORPORATION. There is no election in effect under Section
1362(a) of the Code for Borrower to be treated as an S Corporation as defined in
Section 1361(a) of the Code.
12.35. SUBSIDIARIES. Borrower has no Subsidiaries other than those
listed in section of the Disclosure Schedule. Harbour Group Investments III,
L.P. is the principal shareholder of Holdings.
12.36. BANK ACCOUNTS AND LOCKBOXES. Neither Borrower nor any of
Borrower's Subsidiaries has a lockbox other than the lockboxes allowed or
required hereunder. All bank accounts maintained by Borrower and each of
Borrower's Subsidiaries with any bank or other financial institution are
described in section of the Disclosure Schedule.
12.37. MARGIN STOCK. Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U), and no part of the proceeds of any Advance will be
used to
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purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation U or
Regulation G. None of the transactions contemplated by any Acquisition Documents
will violate Regulations G, T, U or X of the FRB.
12.38. SECURITIES MATTERS. No proceeds of any Advance will be used
to acquire any security in any transaction which is subject to Sections 13 and
14 of the Securities Exchange Act of 1934, as amended.
12.39. INVESTMENT COMPANY ACT, ETC. Borrower is not an investment
company registered or required to be registered under the Investment Company Act
of 1940, as amended, or a company controlled (within the meaning of such
Investment Company Act) by such an investment company or an affiliated person
of, or promoter or principal underwriter for, an investment company, as such
terms are defined in the Investment Company Act of 1940, as amended. Borrower is
not subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act or any other Law limiting or
regulating its ability to incur Indebtedness for money borrowed.
12.40. NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the Loan
Documents, the Acquisition Documents, any of the Financial Statements nor any
statement, list, certificate or other information furnished or to be furnished
by Borrower to Agent or Lenders in connection with the Loan Documents or any of
the transactions contemplated thereby contains any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements therein not misleading. Borrower has disclosed to Agent and Lenders
everything regarding the business, operations, property, financial condition, or
business prospects of itself and every Covered Person that is likely to have a
Material Adverse Effect on Borrower or any Covered Person.
12.41. FILINGS. All registration statements, reports, proxy statements
and other documents, if any, required to be filed by Borrower with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, have been filed,
and such filings are complete and accurate and contain no untrue statements of
material fact or omit to state any material facts required to be stated therein
or necessary in order to make the statements therein not misleading.
12.42. BROKER'S FEES. No broker or finder is entitled to compensation
for services rendered with respect to the transactions contemplated by this
Agreement and the other Loan Documents.
12.43. ELIGIBILITY OF COLLATERAL. Each Account or item of Inventory
which Borrower, expressly or by implication, requests Agent to classify as an
Eligible Account or as Eligible Inventory, respectively, will, as of the time
when such request is made, conform in all respects to the requirements of such
classification set forth in the respective definitions of "Eligible Accounts"
and "Eligible Inventory" herein.
12.44. CLOSING OF THE ACQUISITION. The Acquisition Documents are in form
and substance adequate to effect the Acquisition and the Acquisition has been
validly consummated under the Laws of the States of Minnesota and Wisconsin, and
all required Acquisition Documents have been effected and are valid in
accordance with the Laws of the States of Minnesota and Wisconsin, as the case
may be. To the knowledge of Borrower after due inquiry, all of the
representations and warranties of Seller contained in the Acquisition Documents
or any instrument furnished in connection therewith or in reference thereto are
true and correct.
13. SURVIVAL OF REPRESENTATIONS. All representations and warranties in
Section , and all representations and warranties in any certificate delivered by
Borrower pursuant hereto, shall survive
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execution of each of the Loan Documents and the making of every Advance, and may
be relied upon by Agent and Lenders as being true and correct as of the date
when made or deemed made or reaffirmed until all of the Loan Obligations are
fully and irrevocably paid as contemplated in Section .
14. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, so long
as any of the Commitments remains in effect or any of the Loan Obligations are
owing to Lenders by Borrower or any Letter of Credits are outstanding, Borrower
shall do, or cause to be done, the following:
14.1. USE OF PROCEEDS. Subject to the terms and conditions hereof, the
proceeds of the Aggregate Term 1 Loan and the Aggregate Term 2 Loan shall be
used only to finance the Acquisition (including reasonable and necessary
expenses incurred in connection therewith), to repay the existing Indebtedness
of (i) Seller as set forth on Schedule 14.1 and for general corporate purposes,
and (ii) Trak as set forth on Schedule 14.1 and for general corporate purposes.
Subject to the terms and conditions hereof, (i) up to $3,500,000 of the
Aggregate Revolving Loan may be used to finance the Acquisition (including
reasonable and necessary expenses incurred in connection therewith) after the
application of the proceeds of the Aggregate Term 1 Loan and the Aggregate Term
2 Loan, and (ii) the balance may be used to provide working capital, including
payment of Borrower's reimbursement obligations with respect to draws on Letters
of Credit, and for general corporate purposes.
14.2. GOOD STANDING. Each Covered Person shall maintain its existence in
good standing and shall maintain in good standing its right to transact business
in those states or countries, as the case may be, in which it is now or
hereafter doing business, except where the failure to so qualify will not have a
Material Adverse Effect on any Covered Person. Each Covered Person shall obtain
and maintain all Material Licenses for such Covered Person.
14.3. MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
maintain in good condition and working order (normal wear and tear excepted),
and repair and replace as required, all buildings, equipment, machinery,
fixtures and other real and personal property whose useful economic life has not
elapsed and which is necessary for the ordinary conduct of the business of such
Covered Person. Each Covered Person shall maintain in full force and effect and
free of defaults all of its leases of buildings, equipment, machinery, fixtures
and other real and personal property whose useful economic life has not elapsed
and which is necessary for the ordinary conduct of the business of such Covered
Person. No Covered Person shall permit any of its equipment or other property to
become a fixture to real property or an accession to other personal property
unless Agent has a valid, perfected and first priority Security Interest for the
ratable benefit of Lenders in such real or personal property. No Covered Person
will, without Agent's prior written consent, alter or remove any identifying
symbol or number on its equipment.
14.4. INVENTORY. Borrower shall keep its Inventory in good and
merchantable condition at its own expense and shall hold such Inventory for sale
or lease, or to be furnished in connection with the rendition of services, in
the ordinary course of Borrower's business, on terms which do not include
▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval, consignment
or similar repurchase or return terms. All such Inventory produced by Borrower
(or their predecessors) shall be produced in accordance with the Federal Fair
Labor Standards Act of 1938 and all rules, regulations, and orders thereunder.
14.5. INSURANCE. Each Covered Person shall at all times keep insured or
cause to be kept insured, in insurance companies having a rating of at least "A"
by Best's Rating Service, all property owned by it of a character usually
insured by others carrying on businesses similar to that of such Covered Person
in such manner and to such extent and covering such risks as such properties are
usually insured. Each Covered Person shall at all times carry insurance, in
insurance companies having a rating of at least "A" by Best's Rating Service,
against liability on account of damage to persons or property (including product
liability insurance and insurance required under all applicable workers'
compensation laws) and covering
36
all other liabilities common to such Covered Person's business, in such manner
and to such extent as such coverage is usually carried by others conducting
businesses similar to that of such Covered Person. Such insurance must include
liability, casualty, business interruption, and environmental insurance. All
policies of liability insurance maintained hereunder shall name Agent as an
additional insured for the ratable benefit of Lenders; all fire and casualty
policies of insurance maintained hereunder shall reflect Lenders' interests
therein as mortgagees under a standard New York or Union mortgagee clause. Agent
is authorized, but not obligated, as the attorney-in-fact for Borrower or any
other Covered Person maintaining such insurance and for the ratable benefit of
Lenders, (i) prior to the occurrence of an Event of Default, with Borrower's or
such other Covered Person's consent (which consent shall not be unreasonably
withheld), and upon the occurrence of an Event of Default and at any time
thereafter so long as any Unwaived Event of Default exists, without Borrower's
or such other Covered Person's consent, to adjust and compromise proceeds
payable under such policies of insurance, (ii) to collect, receive and give
receipts for such proceeds in the name of Borrower or such other Covered Person,
and (iii) to endorse Borrower's or such other Covered Person's name upon any
instrument in payment thereof. Such power granted to Agent shall be deemed
coupled with an interest and shall be irrevocable. All policies of insurance
maintained hereunder shall contain a clause providing that such policies may not
be canceled, reduced in coverage or otherwise modified without 30 days prior
written notice to Agent. Borrower shall upon request of Agent at any time
furnish to Agent updated evidence of insurance (in the form required as a
condition to Agent's lending hereunder) for such insurance.
14.6. PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person shall
promptly pay and discharge or cause to be paid and discharged, as and when due,
any and all income taxes, federal or otherwise, lawfully assessed and imposed
upon it, and any and all lawful taxes, rates, levies, claims and assessments
whatsoever upon its properties and every part thereof, or upon the income or
profits therefrom and all claims of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials, supplies,
storage or other items or services which if unpaid might be or become a Security
Interest or charge upon any of its property; provided, however, that a Covered
Person may diligently contest in good faith by appropriate proceedings the
validity of any of the foregoing, provided such Covered Person has established
adequate reserves therefor in conformity with GAAP on the books of such Covered
Person.
14.7. COMPLIANCE WITH LAWS. Each Covered Person shall comply with
all Material Laws. Without limiting the generality of the foregoing:
14.7.1.ENVIRONMENTAL LAWS. Each Covered Person shall comply and
shall use commercially reasonable efforts to ensure compliance by all
tenants, subtenants and other occupants, if any, with all Environmental
Laws.
14.7.2.MATERIAL LICENSES. Each Covered Person shall possess all
Material Licenses which are required in connection with the conduct of
its business.
14.7.3.PENSION BENEFIT PLANS. Each Covered Person and each ERISA
Affiliate shall at all times make prompt payments or contributions to
meet the minimum funding standards as defined in Section 412 of the Code
with respect to any Pension Benefit Plan maintained by such Covered
Person or ERISA Affiliate, and shall comply with all reporting and
disclosure requirements and all provisions of the Code and ERISA
applicable to any Pension Benefit Plan maintained by such Covered Person
or ERISA Affiliate.
14.7.4.EMPLOYMENT LAWS. Each Covered Person shall comply with all
requirements of all Employment Laws applicable to such Covered Person.
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14.8. DISCOVERY AND CLEAN-UP OF HAZARDOUS MATERIAL.
▇▇.▇.▇.▇▇ GENERAL. Upon any Covered Person receiving notice of
any violation of Environmental Laws or any similar notice described in
Section , or upon any Covered Person otherwise discovering Hazardous
Material on any property owned or leased by such Covered Person which is
in violation of, or which would result in liability under, any
Environmental Law, Borrower shall: (i) promptly take such acts as may be
necessary to prevent danger or harm to the property or any person
therein as a result of such Hazardous Material; (ii) at the request of
Agent, and at Borrower's sole cost and expense, obtain and deliver to
Agent promptly, but in no event later than 90 days after such request, a
then currently dated environmental assessment of the property certified
to Agent and any future holder of the Loan Obligations, a proposed plan
for responding to any environmental problems described in such
assessment, and an estimate of the costs thereof; and (iii) take all
necessary steps to initiate and expeditiously complete all removal,
remedial, response, corrective and other action to eliminate any such
environmental problems, and keep Agent informed of such actions and the
results thereof.
14.8.2.ASBESTOS CLEAN-UP. In the event that any property of any
Covered Person is discovered to contain Asbestos Material, Borrower
shall develop and implement, as soon as reasonably possible, an
Operations and Maintenance Program (as contemplated by EPA guidance
document entitled "Managing Asbestos in Place; A Building Owner's Guide
to Operations and Maintenance Programs for Asbestos-Containing
Materials") for managing in place the Asbestos Material, and deliver a
true, correct and complete copy of such Operations and Maintenance
Program to Agent. In the event that the asbestos survey done in
connection with developing the Operations and Maintenance Program
reveals Asbestos Material which, due to its condition, location or
planned building renovation, is recommended to be encapsulated or
removed, Borrower shall promptly cause the same to be encapsulated or
removed and disposed of offsite, in either case by a licensed and
experienced asbestos contractor, all in accordance with applicable
state, federal and local Laws. Upon completion of any such encapsulation
or removal, Borrower shall deliver to Agent a certificate in such form
as is then customarily available signed by the consultant overseeing the
activity certifying to Agent that the work has been completed in
compliance with all applicable Laws regarding notification,
encapsulation, removal and disposal and that no airborne fibers beyond
permissible exposure limits remain on site. All costs of such
inspection, testing and remedial actions shall be paid by Borrower.
14.9. TERMINATION OF PENSION BENEFIT PLAN. No Covered Person or ERISA
Affiliate shall terminate or amend any Pension Benefit Plan maintained by such
Covered Person or ERISA Affiliate if such termination or amendment would result
in any liability to such Covered Person or ERISA Affiliate under ERISA or any
increase in current liability for the plan year for which such Covered Person or
ERISA Affiliate is required to provide security to such Pension Benefit Plan
under the Code.
14.10. NOTICE TO AGENT OF MATERIAL EVENTS. Borrower shall, promptly upon
any Borrowing Officer of Borrower obtaining knowledge or notice thereof, give
notice to Agent of (i) any breach of any of the covenants in Section , , or , or
any breach of any representation or warranty in Section ; (ii) any Default or
Event of Default promptly, but in any event within five (5) Business Days of
obtaining knowledge or notice of such Default or Event of Default; (iii) the
commencement of any Material Proceeding; and (iv) any loss of or damage to any
assets of a Covered Person or the commencement of any proceeding for the
condemnation or other taking of any of the assets of a Covered Person, if
Insurance/Condemnation Proceeds are likely to be payable as a consequence of
such loss, damage or proceeding, or if such loss, damage or proceeding has or
could have a Material Adverse Effect on such Covered Person. In addition,
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14.10.1. Borrower shall furnish to Agent from time to time all
information which Agent requests with respect to the status of any
Material Proceeding.
14.10.2. Borrower shall furnish to Agent from time to time all
information which Agent requests with respect to any Pension Benefit
Plan established by a Covered Person or ERISA Affiliate.
14.10.3. Borrower shall deliver notice to Agent of the
establishment by a Covered Person or an ERISA Affiliate of any Pension
Benefit Plan.
14.10.4. Borrower shall as soon as possible and in any event
within five (5) Business Days after receipt thereof by Borrower or any
Covered Person notify Agent of its receipt of, and deliver to Agent a
copy of, any (i) notice that any violation of any Environmental Law or
Employment Law may have been committed or is about to be committed by
any Covered Person, (ii) notice that any administrative or judicial
complaint or order has been filed or is about to be filed against any
Covered Person alleging violations of any Environmental Law or
Employment Law or requiring such Covered Person to take any action in
connection with the release of any Hazardous Material into the
environment, (iii) notice from a Governmental Authority or private party
alleging that a Covered Person may be liable or responsible for costs
associated with a response to or cleanup of a release of Hazardous
Material into the environment or any damages caused thereby, (iv) notice
that a Covered Person is subject to federal, state or local
investigation regarding the improper transportation, storage, disposal,
generation or release into the environment of any Hazardous Material, or
(v) notice that any properties or assets of a Covered Person are subject
to a Security Interest in favor of any Governmental Authority for any
liability under any Environmental Law or damages arising from or costs
incurred by such Governmental Authority in response to a release of
Hazardous Material into the environment.
14.10.5. Borrower shall deliver to Agent notice of the following
events as soon as possible and in any event within five (5) Business
Days after Borrower has knowledge thereof: (i) the failure of any
Covered Person or ERISA Affiliate to make any required installment or
any other required payment to any Pension Benefit Plan in sufficient
amount to comply with ERISA and the Code on or before the due date for
such installment or payment; (ii) the occurrence of any Reportable
Event, or a prohibited transaction or accumulated funding deficiency (as
those terms are defined in ERISA), with respect to any Pension Benefit
Plan maintained or contributed to by a Covered Person or ERISA
Affiliate; (iii) receipt by a Covered Person or ERISA Affiliate of any
notice from a Multi-employer Plan regarding the imposition of withdrawal
liability; and (iv) receipt by a Covered Person or ERISA Affiliate of
any notice of the institution, or a Covered Person's expectancy of the
institution, of any proceeding or receipt by such Covered Person or
ERISA Affiliate of any notice of the taking, or such Covered Person's
expectancy of the taking, of any other action which may result in the
termination of any Pension Benefit Plan maintained or contributed to by
such Covered Person or ERISA Affiliate, or the withdrawal or partial
withdrawal by a Covered Person or ERISA Affiliate from any Pension
Benefit Plan, and the filing or receipt by a Covered Person or ERISA
Affiliate of any such notice and filing or receipt of all subsequent
reports or notices under ERISA with or from the IRS, the PBGC, or the
DOL relating to the same; and, in addition to such notice, deliver to
Agent a certificate of a Borrowing Officer of Borrower, setting forth
details as to such events and the action that the affected Covered
Person or ERISA Affiliate proposes to take with respect thereto. For
purposes of this Section, Borrower and any ERISA Affiliate shall be
deemed to know all facts known by the administrator of any Plan of which
Borrower or any ERISA Affiliate is the plan sponsor.
39
14.10.6. Borrower shall promptly deliver to Agent notice of, but
in any event within five (5) Business Days of becoming aware of, any
default or event of default, or the occurrence of any event which would
with the passage of time, giving of notice or otherwise, constitute a
default or event of default with respect to any of the Permitted
Indebtedness.
14.10.7. Borrower shall promptly deliver notice to Agent of the
assertion by the holder of any capital stock of a Covered Person, any
membership or partnership interest of a Covered Person, or any
Indebtedness of a Covered Person that a default exists with respect
thereto or that such Covered Person is not in compliance with the terms
thereof, or of the threat or commencement by such holder of any
enforcement action because of such asserted default or noncompliance.
14.10.8. Borrower shall, promptly after becoming aware thereof,
deliver notice to Agent of any pending or threatened strike, work
stoppage, material unfair labor practice claim or other material labor
dispute affecting a Covered Person.
14.10.9. Borrower shall promptly deliver notice to Agent of any
change in the name, state of incorporation, or form of organization of
any Covered Person, or fictitious names under which a Covered Person
will sell Inventory or create Accounts, or to which instruments in
payment of Accounts may be made payable, at least 30 days prior to such
change.
14.10.10. Borrower shall, promptly, but in any event within five
(5) Business Days after becoming aware thereof, deliver notice to Agent
of any event that has or could have a Material Adverse Effect with
respect to any Covered Person.
14.10.11. Borrower shall, promptly after becoming aware thereof,
deliver notice to Agent of an actual, alleged, or potential violation of
any Material Law applicable to a Covered Person or the property of a
Covered Person.
14.10.12. Borrower shall notify Agent promptly in writing of any
fact or condition of which Borrower is aware which materially adversely
affects the value of the Collateral, including any adverse fact or
condition or the occurrence of any event which causes material loss or
depreciation in the value of any item of the Collateral, and the amount
of such loss or depreciation. Borrower shall provide such additional
information to Agent regarding the amount of any loss or depreciation in
value of the Collateral as Agent may request from time to time.
14.10.13. Borrower shall deliver to Agent within 120 days after
the close of each Fiscal Year, a statement of the Unfunded Liabilities
of each Pension Benefit Plan, certified as correct by an actuary
enrolled under ERISA.
14.10.14. Promptly upon request of Agent, Borrower shall deliver
to Agent copies of any statement, report, or certificate furnished to
any holder of Indebtedness of any Covered Person to the extent the
information contained in such statement, report, or certificate has not
already been delivered to Agent.
14.11. BORROWING OFFICER. Borrower shall keep on file with Agent at
all times an appropriate instrument naming each Borrowing Officer.
14.12. MAINTENANCE OF SECURITY INTERESTS OF SECURITY DOCUMENTS.
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14.12.1. PRESERVATION AND PERFECTION OF SECURITY INTERESTS.
Borrower shall promptly, upon the reasonable request of Agent and at
Borrower's expense, execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter file or record
in the appropriate governmental office, any document or instrument
supplementing or confirming the Security Documents or otherwise deemed
necessary by Agent to create, preserve or perfect any Security Interest
purported to be created by the Security Documents or to fully consummate
the transactions contemplated by the Loan Documents. The foregoing
actions by Borrower shall include (i) filing financing or continuation
statements, and amendments thereof, in form and substance satisfactory
to Agent; (ii) delivering to Agent the original certificates of title
for motor vehicles, or applications therefor duly executed, with Agent's
Security Interest for the ratable benefit of Lenders properly shown
thereon; (iii) delivering to Agent the originals of all instruments,
documents and chattel paper, and all other Collateral of which Agent
determines it should have physical possession in order to perfect and
protect Agent's Security Interest for the ratable benefit of Lenders
therein, duly endorsed or assigned to Agent without restriction; (iv)
delivering to Agent warehouse receipts covering any portion of the
Collateral located in warehouses and for which warehouse receipts are
issued; (v) transferring Inventory to warehouses designated by Agent;
(vi) delivering to Agent all letters of credit on which Borrower is
named beneficiary; (vii) placing a durable notice of the existence of
Agent's Security Interest for the ratable benefit of Lenders, acceptable
to Agent, upon such items of the Collateral as are designated by Agent;
and (viii) placing a notice of the existence of Agent's Security
Interest for the ratable benefit of Lenders, acceptable to Agent, upon
those writings evidencing the Collateral and the books and records of
Borrower pertaining to the Collateral, as designated by Agent.
14.12.2. COLLATERAL HELD BY WAREHOUSEMAN, BAILEE, ETC. If any
Collateral is at any time in the possession or control of a
warehouseman, bailee or any of Borrower's agents or processors, then
Borrower shall notify Agent thereof and shall notify such Person of
Agent's Security Interest for the ratable benefit of Lenders in such
Collateral and, upon Agent's request, instruct such Person to hold all
such Collateral for Agent's account subject to Agent's instructions. If
at any time any Collateral (other than Inventory not subject to the
negative covenant set forth in Section ) is located on any premises that
are not owned by Borrower, then Borrower shall obtain written waivers,
in form and substance satisfactory to Agent, of all present and future
Security Interests to which the owner or lessor or any mortgagee of such
premises may be entitled to assert against the Collateral.
14.12.3. COMPLIANCE WITH TERMS OF SECURITY DOCUMENTS. Borrower
shall comply with all of the terms, conditions and covenants in the
Security Documents to which Borrower is a party.
14.13. ACCOUNTING SYSTEM. Each Covered Person shall maintain a system
of accounting established and administered in accordance with GAAP. Without
limiting the generality of the foregoing:
14.13.1. ACCOUNT RECORDS. Each Covered Person shall maintain a
record of Accounts at its principal place of business that itemize each
Account of such Covered Person and describe the names and addresses of
the Account Debtors on such Accounts, all relevant invoice numbers,
invoice dates, and shipping dates, and the due dates, collection
histories, and aging of such Accounts.
14.13.2. INVENTORY RECORDS. Each Covered Person shall maintain
an inventory system satisfactory to Agent.
14.14. FINANCIAL STATEMENTS. Borrower shall deliver to each Lender:
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14.14.1. ANNUAL FINANCIAL STATEMENTS. Within 120 days after the
close of each Fiscal Year of Borrower, year-end consolidated and
consolidating financial statements of Holdings, Borrower and their
Subsidiaries, containing an audit report without qualification by an
independent certified public accounting firm selected by Borrower and
satisfactory to Agent, and accompanied by (a) a Compliance Certificate
of Borrower's chief financial officer, (b) a certificate of the
independent certified public accounting firm that examined such
financial statements to the effect that they have reviewed and are
familiar with this Agreement and that, in examining such financial
statements, they did not become aware of any fact or condition which
then constituted a Default or Event of Default, except for those, if
any, described in reasonable detail in such certificate, (c) any
management letter and report on internal controls delivered by such
independent certified public accounting firm in connection with their
audit, and (d) if requested by Agent, any summary prepared by such
independent certified public accounting firm and delivered to Borrower
of the adjustments proposed by the members of its audit team.
14.14.2. MONTHLY FINANCIAL STATEMENTS. Within 30 days after the
end of each month, unaudited consolidated and consolidating financial
statements of Holdings, Borrower and their Subsidiaries, in each case
accompanied by (i) a Compliance Certificate of Borrower's chief
financial officer, (ii) a statement comparing such financial statements
with budgeted projections for such month and for the elapsed portion of
the Fiscal Year of Borrower as contained in the annual budget prepared
for such Fiscal Year, (iii) a statement comparing the statements
delivered pursuant to clause (ii) above with the statements for the
equivalent months and equivalent elapsed periods during the prior Fiscal
Year of Borrower, and (iv) any routinely prepared management reports
requested by Agent. Such financial statements shall contain, at a
minimum, balance sheets, statements of earnings, and statements of cash
flows as of the end of the applicable period.
14.14.3. COMPLIANCE CERTIFICATES. Each "Compliance Certificate"
shall be in the form of Exhibit , shall contain detailed calculations of
the financial measurements referred to in Section for the relevant
periods, and shall contain statements by the signing officer to the
effect that, except as explained in reasonable detail in such Compliance
Certificate, (i) the attached financial statements are complete and
correct in all material respects (subject, in the case of financial
statements other than annual, to normal year-end audit adjustments) and
have been prepared in accordance with GAAP applied consistently
throughout the periods covered thereby and with prior periods (except as
disclosed therein), (ii) all of the representations and warranties of
Borrower contained in this Agreement and other Loan Documents are true
and correct as of the date such certification is given as if made on
such date, and (iii) there is no Existing Default. If any Compliance
Certificate delivered to Lender discloses an Existing Default or that a
representation or warranty is not true and correct, such Compliance
Certificate shall state what action Borrower has taken or proposes to
take with respect thereto.
14.15. OTHER FINANCIAL INFORMATION. Borrower shall also deliver the
following to Agent as specified below:
14.15.1. BORROWING BASE CERTIFICATE. On the Effective Date and
periodically thereafter (but at least monthly), but not more often than
weekly, a borrowing base certificate in substantially the form of
Exhibit (the "Borrowing Base Certificate") duly completed and signed by
Borrower's chief financial officer shall be delivered to Agent. If there
is an Unwaived Event of Default, or availability under the Revolving
Loan is less than $2,000,000, Borrower shall provide Borrowing Base
Certificates on a more frequent basis than set forth above if so
requested in writing by Agent in its discretion.
42
14.15.2. AGINGS REPORT. Within five days after Agent's request
in writing, a report of the aging of all Accounts of Borrower in such
reasonable detail as Agent may require.
14.15.3. OTHER REPORTS OR INFORMATION CONCERNING ACCOUNTS OR
INVENTORY. Such other reports and information, in form and detail
satisfactory to Agent, and documents as Agent may request in writing
from time to time concerning Accounts or Inventory including, to the
extent requested by Agent, copies of all invoices, bills of lading,
shipping receipts, purchase orders, and warehouse receipts.
14.15.4. STOCKHOLDER AND SEC REPORTS. Promptly after their
preparation, copies of any and all (i) proxy statements, financial
statements and reports which Borrower or any other Covered Person makes
available to its stockholders or its members, and (ii) reports,
registration statements and prospectuses, if any, filed by Borrower with
any securities exchange or the Securities and Exchange Commission or any
Governmental Authority succeeding to any of its functions.
14.15.5. PENSION BENEFIT PLAN REPORTS. Upon the request
of Agent in writing, a copy of each annual report or other filing or
notice filed with respect to each Pension Benefit Plan of any Covered
Person or any ERISA Affiliate.
14.15.6. TAX RETURNS. Upon the request of Agent in writing,
a copy of each federal, state, or local tax return or report filed by
each Covered Person.
14.16. REVIEW OF ACCOUNTS. Once per Fiscal Year, and promptly at Agent's
request if there is an Unwaived Event of Default, Borrower shall conduct a
review, or cause a review to be conducted, of its and every other Covered
Person's Accounts, bad debt reserves, and collection histories of Account
Debtors and promptly following such review provide Agent with a report of such
review in form and detail satisfactory to Agent.
14.17. INVENTORY. Once per Fiscal Year, and promptly at Agent's written
request if there is an Unwaived Event of Default, Borrower shall conduct a
physical count of its and every other Covered Person's Inventory and promptly
following the completion of such count provide Agent with a report thereof in
form and detail satisfactory to Agent, including the value of such Inventory (on
a first-in-first-out basis).
14.18. ANNUAL PROJECTIONS. As soon as available, but in any event not
later than 90 days after the commencement of each Fiscal Year of Borrower,
Borrower shall deliver to Agent a copy of Borrower's plan and forecast for the
next Fiscal Year (provided if such plan and forecast includes projections for
more than the next Fiscal Year, such projections and other detail should also be
delivered to Agent), which plan and forecast shall provide for detail on a
monthly basis and such further detail as Agent may require and shall include,
without limitation, projected balance sheets, statements of income and expense,
and statements of cash flows for Borrower and every other Covered Person.
14.19. OTHER INFORMATION. Upon the request of Agent, Borrower shall
promptly deliver to Agent such other information about the business, operations,
revenues, financial condition, property, or business prospects of Borrower and
every other Covered Person as Agent may, from time to time, reasonably request.
14.20. AUDITS BY AGENT. Agent or Persons authorized by and acting on
behalf of Agent or any Lender may at any time during normal business hours
audit the books and records, and inspect any of the property, of each Covered
Person from time to time upon reasonable notice to such Covered Person, and
43
in the course thereof may make copies or abstracts of such books and records and
discuss the affairs, finances and books and records of such Covered Person with
its accountants, officers and employees. Each Covered Person shall cooperate
with Agent and such Persons in the conduct of such audits and shall deliver to
Agent any instrument necessary for Agent to obtain records from any service
bureau maintaining records for such Covered Person. Borrower shall reimburse
Agent for all costs and expenses actually incurred by Agent in conducting each
audit during any period in which any Unwaived Event of Default exists.
Reimbursement for any such audits conducted during periods in which no Unwaived
Event of Default exists shall be limited to $500 per day per person involved in
conducting the audit plus Agent's other actual out of pocket expenses.
14.21. VERIFICATION OF ACCOUNTS AND NOTICES TO ACCOUNT DEBTORS. Agent
shall have the right at any time and from time to time, after first giving
either oral or written notice to Borrower, to verify the validity and amount of
any Account of Borrower or any other Covered Person and any other matter
relating to such Account, by communicating in writing or orally directly with
the Account Debtor or any Person who represents or Agent believes represents the
Account Debtor.
14.22. APPRAISALS OF COLLATERAL. Upon Agent's reasonable request at any
time, Borrower shall at its expense provide Agent with appraisals, prepared on a
basis satisfactory to Agent and from appraisers acceptable to Agent, of any or
all of the Collateral as Agent may specify.
14.23. ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall permit
any Lender and Persons authorized by Agent to discuss the affairs, finances and
accounts of such Covered Person with its officers and independent auditors as
often as Agent may reasonably request, and such Covered Person shall direct such
officers and independent auditors to cooperate with Agent and make full
disclosure to Agent of those matters that they may deem relevant to the
continuing ability of Borrower timely to pay and perform the Loan Obligations.
Each Lender agrees that it will not disclose to third parties any information
that it obtains about Borrower or its operations or finances that are designated
by Borrower as confidential or that Borrower has advised Lenders constitutes
non-public information. Lenders may, however, disclose such information to all
of their respective officers, attorneys, auditors, agents and representatives
who have a need to know such information in connection with the administration,
interpretation or enforcement of the Loan Documents or the lending and
collection activity contemplated therein. Lenders shall advise such Persons that
such information is to be treated as confidential. A Lender may also disclose
such information in any documents that it files in any legal proceeding to
pursue, enforce or preserve its rights under the Loan Documents to the extent
that such Lender's counsel advises in writing that such disclosure is reasonably
necessary. Lenders' non-disclosure obligation shall not apply to any information
that (i) is disclosed to a Lender by a third party not affiliated with or
employed by Borrower who does not have a commensurate duty of non-disclosure, or
(ii) becomes publicly known other than as a result of disclosure by a Lender.
14.24. ACQUISITION DOCUMENTS. Borrower shall fully perform all of its
obligations under all Acquisition Documents to which it is a party, and shall
promptly enforce all of its rights and remedies thereunder as it deems
appropriate in its reasonable business judgment; provided, however, that
Borrower shall not take any action or fail to take any action which would result
in a waiver or other loss of any material right or remedy of Borrower
thereunder. Without limiting the generality of the foregoing, Borrower shall
take all action necessary or appropriate to permit and shall not take any action
which would have any material adverse effect upon, the full enforcement of all
indemnification rights of Borrower against Seller under all Acquisition
Documents. Borrower shall not, without Agent's prior written consent (which
consent shall not be unreasonably withheld or delayed), modify, amend,
supplement, compromise, satisfy, release or discharge any of the Acquisition
Documents, any collateral securing the same, any Person liable directly or
indirectly with respect thereto, or any agreement relating to the Acquisition
Documents or the collateral therefor. Borrower shall notify Agent in writing
promptly after Borrower becomes aware thereof, of any
44
event or fact which could give rise to a claim by it for indemnification under
any of the Acquisition Documents, which when aggregated with any other claims
thereunder exceeds $250,000, and shall diligently pursue such right and report
to Agent on all further developments with respect thereto. If Borrower fails
after Agent's demand to pursue diligently any right under any of the Acquisition
Documents, or if there is an Unwaived Event of Default, then Agent may directly
enforce such right in its own or Borrower's name and may enter into such
settlements or other agreements with respect thereto as Agent determines.
Notwithstanding the foregoing, Borrower shall at all times remain liable to
observe and perform all of its duties and obligations under all of the
Acquisition Documents, and Agent's exercise of any of its rights with respect to
the Collateral shall not release Borrower from any of such duties or
obligations. Agent shall not be obligated to perform or fulfill any of
Borrower's duties or obligations under any of the Acquisition Documents or to
make any payment thereunder, or to make any inquiry as to the sufficiency of any
payment or property received by it thereunder or the sufficiency of performance
by any party thereunder, or to present or file any claim, or to take any action
to collect or enforce any performance or payment of any amounts, or any delivery
of any property.
14.25. INTEREST RATE PROTECTION. Borrower shall have entered into an
Interest Rate Protection Agreement as of the Effective Date covering at a
minimum $10,000,000 and shall have entered to an Interest Rate Protection
Agreement within 150 days after the Effective Date covering no less than an
additional $15,000,000.
14.26. FURTHER ASSURANCES. Borrower shall execute and deliver, or cause
to be executed and delivered, to Agent such documents and agreements, and shall
take or cause to be taken such actions, as Agent may from time to time request
to carry out the terms and conditions of this Agreement and the other Loan
Documents. At Agent's request, Borrower will use all reasonable efforts to
cooperate to ensure that Agent obtains a perfected first priority Security
Interest in any investment Borrower may have in any Person who is a distributor.
14.27. LANDLORD WAIVER. Within forty-five (45) days following the
Execution Date, Borrower shall deliver a fully-executed landlord waiver
regarding the leased real property located in the City of ▇▇▇▇▇, North Dakota in
form and substance reasonably satisfactory to Agent. In the event that Borrower
shall fail to deliver such fully-executed landlord waiver within such time
period, then Borrower shall promptly pay to Agent, for the ratable benefit of
each Lender, a fee payable as follows: $10,000 on the 46th day, and $10,000 each
thirty (30) days thereafter, not to exceed $50,000 in the aggregate; and any
Inventory located at such location shall not be Eligible Inventory.
15. NEGATIVE COVENANTS.
Borrower covenants and agrees that while any of the Commitments remains
in effect or any of the Loan Obligations are owing to Lenders by Borrower or any
of the Letters of Credit are outstanding, Borrower shall not, directly or
indirectly, do any of the following, or permit any Covered Person to do any of
the following, without the prior written consent of Required Lenders:
15.1. INVESTMENTS. Make any Investments in any other Person except
the following ("Permitted Investments"):
▇▇.▇.▇.▇▇▇▇▇▇▇▇▇▇▇ in (i) interest-bearing United States
government obligations; (ii) certificates of deposit issued by any
Lender; (iii) certificates of deposit issued by and time deposits with
any commercial bank chartered under the laws of the United States or any
state thereof having capital and surplus of not less than $500,000,000
(in each case, a "Permitted Financial Institution"); (iv) prime
commercial paper rated A1 or better by Standard and Poor's Corporation
or Prime P1 or better by ▇▇▇▇▇'▇ Investor Service, Inc.; or (v)
agreements involving
45
the sale to Borrower of United States government securities and their guaranteed
repurchase the next Business Day by a Permitted Financial Institution.
15.1.2. Accounts arising in the ordinary course of business and
payable in accordance with Borrower's customary trade terms.
15.1.3. Investments existing on the Execution Date and disclosed
in the Disclosure Schedule.
Borrower may request Agent to invest on behalf of Borrower all of the excess
cash in the Cash Collateral Account as of the end of a Business Day, but only in
Permitted Investments described in Section (ii) and (iv). Any such request will
only be honored by Agent if made by a Borrowing Officer and received by Agent
before 2:00 p.m. (St. Louis, Missouri time) on a Business Day; and unless a
different Permitted Investment is specifically requested, Agent will invest
excess funds in agreements involving the sale to Borrower of United States
government securities and their guarantied repurchase on the next Business Day
by Agent.
15.2. INDEBTEDNESS. Create, incur, assume, or allow to exist any
Indebtedness of any kind or description, except the following ("Permitted
Indebtedness"):
15.2.1.Indebtedness to trade creditors incurred in the ordinary
course of business, to the extent that it is not overdue past the
original due date by more than 90 days.
15.2.2. The Loan Obligations.
15.2.3. Indebtedness secured by Permitted Security Interests.
15.2.4. The Minnesota Mutual Subordinated Indebtedness.
15.2.5. The Harbour Subordinated Indebtedness and the Boatmen's
Subordinated Indebtedness.
15.2.6. Indebtedness permitted by Sections and hereof.
15.2.7. Intercompany Indebtedness permitted by Section hereof.
15.3. PREPAYMENTS. Voluntarily prepay any Indebtedness other than
(a) the Loan Obligations in accordance with the terms of the Loan Documents, and
(b) trade payables in the ordinary course of business.
15.4. INDIRECT OBLIGATIONS. Create, incur, assume or allow to exist
any Indirect Obligations except Indirect Obligations existing on the Execution
Date and disclosed in the Disclosure Schedule and up to $100,000 in the
aggregate at any one time ("Permitted Indirect Obligations").
15.5. SECURITY INTERESTS. Create, incur, assume or allow to exist
any Security Interest upon all or any part of its property, real or personal,
now owned or hereafter acquired except the following ("Permitted Security
Interests"):
▇▇.▇.▇.▇▇▇▇▇▇▇▇ Interests for taxes, assessments or governmental
charges not delinquent or being diligently contested in good faith and
by appropriate proceedings and for which adequate book reserves in
accordance with GAAP are maintained.
46
15.5.1. Security Interests arising out of deposits in connection
with workers' compensation insurance, unemployment insurance, old age
pensions, or other social security or retirement benefits legislation.
15.5.2. Deposits or pledges to secure bids, tenders, contracts
(other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds, and other obligations of like
nature arising in the ordinary course of business.
15.5.3. Security Interests imposed by any Law, such as
mechanics', workmen's, materialmen's, landlords', carriers', maritime,
or other like Security Interests arising in the ordinary course of
business which secure payment of obligations which are not past due or
which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
are maintained on Borrower's books.
15.5.4. Purchase money Security Interests securing payment of
the purchase price of capital assets acquired by Borrower after the
Execution Date in an amount not to exceed $100,000 in the aggregate
during any Fiscal Year of Borrower and $500,000 in the aggregate, but
only to the extent the aggregate purchase price thereof would not (when
aggregated with other Capital Expenditures of Borrower in the same
period) exceed the limits for Capital Expenditures prescribed in Section
.
15.5.5. Security Interests securing the Loan Obligations in
favor of Agent for the ratable benefit of Lenders.
15.5.6. Permitted Encumbrances and the Security Interests
existing on the Execution Date that are disclosed in the Disclosure
Schedule and are satisfactory to Lenders.
15.5.7. Security Interest permitted by Section hereof.
15.6. ACQUISITIONS. Acquire stock or other equity interest in a Person
or acquire all or a material part of the assets of a Person, regardless of the
form of the transaction.
15.7. BAILMENTS; CONSIGNMENTS; WAREHOUSING; INVENTORY OUTSIDE OF NORTH
DAKOTA, WISCONSIN OR MINNESOTA. Store any Inventory with a bailee, warehouseman,
consignee or pursuant to an express or implied agreement establishing a bailment
or consignment of Inventory or similar arrangement, unless Agent has received a
written acknowledgment satisfactory to Agent from the third party involved which
acknowledges the prior perfected Security Interest of Agent for the ratable
benefit of Lenders in such Inventory. Except as permitted by the preceding
sentence, maintain Inventory outside of the States of North Dakota, Wisconsin or
Minnesota in an amount greater than $300,000 at any time.
15.8. DISPOSAL OF PROPERTY. Sell, transfer, exchange, lease, or
otherwise dispose of any of its assets except the following shall be permitted:
(i) sales of its Inventory in the ordinary course of business, (ii) sales made
in connection with the purchase by Borrower of replacement equipment (other than
equipment subject to a Security Interest), provided that Borrower uses the
proceeds of any such sale to finance the purchase by Borrower of replacement
equipment and Borrower delivers to Agent written evidence of the use of the
proceeds for such purchase; or (iii) other sales as contemplated by Section
(iii); provided, however, no consent from the Required Lenders shall be required
for the sale of the Permitted Investments in (i) High-Trak, Inc. if the net cash
proceeds shall be at least the book value carried on Borrower's books, and (ii)
in Great Southern Rental and Sales, Inc. if the sale is performed in accordance
with the terms and conditions of that certain Stock Purchase Agreement by and
between Trak and Great Southern Rental and Sales, Inc., dated April 24, 1994.
Notwithstanding the foregoing, Borrower
47
may sell, transfer or otherwise dispose of obsolete or unusable equipment having
an orderly liquidation value no greater than $50,000 individually, and $100,000
in the aggregate in any Fiscal Year of Borrower, provided that (a) if such sale,
transfer or disposition is effected without replacement of such equipment, or if
such equipment is replaced by equipment leased by Borrower or by equipment
purchased by Borrower subject to a Permitted Security Interest, then Borrower
shall deliver all of the cash proceeds of any such sale, transfer or other
disposition to Agent for application to the Loan Obligations to the extent
required by Section , or (b) if such sale, transfer, or other disposition is
made in connection with the purchase by Borrower of replacement equipment (other
than equipment subject to a Security Interest), then Borrower shall use the
proceeds of any such sale, transfer or other disposition to finance the purchase
by Borrower of such replacement equipment and shall deliver to Agent written
evidence of the use of the proceeds for such purchase. All replacement equipment
purchased by Borrower shall be free and clear of all Security Interests and
Encumbrances, except for Permitted Security Interests.
15.9. DISTRIBUTIONS. Except with respect to intercompany loans or
transfers between Borrowers, or from either or both Borrower to Guarantor (but
not from Guarantor to its shareholders), directly or indirectly declare or make,
or incur any liability to make, any Distribution. For purposes of this Section,
a "Distribution" means and includes (i) any cash or in-kind dividend or
distribution, (ii) any acquisition or redemption of any outstanding stock,
membership, or partnership interest (except for any acquisition by Holdings of
its capital stock from former officers or employees of Borrower pursuant to
agreements in place as of the Execution Date), (iii) any retirement or
prepayment of debt securities before their regularly scheduled maturity dates,
and (iv) any loan or advance to a shareholder, partner, or member.
Notwithstanding the foregoing sentence, Borrower shall be permitted to make
payments to the former shareholders of Trak related to orders made under the
U.S. Army "ATLAS" contract, as identified in Section 12.20 to the Disclosure
Schedule.
15.10. CHANGE OF CONTROL. Permit the occurrence of a Change in Control
or a Control Event.
15.11. SECURITIES; CAPITAL STRUCTURE. Create any new class of stock,
issue any stock, or issue any other equity securities, or non-equity securities
or membership interests that are convertible into equity securities or
membership interests, unless the payments required by Section are made and, with
respect to Borrower or any of its Subsidiaries, all shares or membership
interests evidencing any such stock or security are simultaneously pledged to
Agent, for the ratable benefit of the Lenders, to secure the Loan Obligations,
in a manner and pursuant to documentation which in satisfactory to Agent and
Lenders; make any change in its capital structure which has or could have a
Material Adverse Effect on any Covered Person; or dispose of any Subsidiaries
existing on the date of this Agreement.
15.12. PAYMENTS ON THE MINNESOTA MUTUAL SUBORDINATED INDEBTEDNESS. Make
any payment of interest or prepayment of principal, or pay any fees (except
reimbursement for actual out-of-pocket cost and expenses, subject to the
subordination limitations contained in the Minnesota Mutual Subordinated
Documents), with regards to the Minnesota Mutual Subordinated Indebtedness;
provided, however, so long as there exists no Unwaived Event of Default,
Borrower may pay regularly scheduled interest and principal payments on the
Minnesota Mutual Subordinated Indebtedness.
15.13. PAYMENTS ON THE HARBOUR SUBORDINATED INDEBTEDNESS OR BOATMEN'S
SUBORDINATED INDEBTEDNESS. Make any payment of principal or cash payment of
interest, or pay any fees, with regards to the Harbour Subordinated Indebtedness
or the Boatmen's Subordinated Indebtedness.
15.14. CHANGE OF BUSINESS. Engage in any business other than
substantially as conducted on the Effective Date.
48
15.15. TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction or arrangement, including without limitation, the purchase, sale or
exchange of property of any kind or the rendering of any service, with any
Affiliate, or make any loans or advances to any Affiliate except as otherwise
permitted in Section below and except for intercompany transfers of funds
permitted by Section .
15.16. MANAGEMENT PAYMENTS. Make any payments to any Person (including,
without limitation, any Affiliate of a Covered Person) in consideration for
management, advisory and other services provided by such Person to any Covered
Person ("Management Payments") except that any Covered Person shall be permitted
to engage Harbour Group Industries, Inc. and/or Harbour Group Ltd. (each a
"Management Company"; collectively the "Management Companies") to provide
advisory and other services ordinarily provided by such Management Companies to
their customers, and any such Covered Person may pay such Management Company or
Companies all reasonable fees and expenses invoiced by such Management Company
or Companies in connection with such services; provided, however, that (i)
aggregate payments by all Covered Persons to such Management Companies during
the period commencing with the Effective Date through the end of Borrower's
Fiscal Year 1996 shall not exceed $100,000 and such aggregate payments made
during any Fiscal Year of Borrower thereafter shall not exceed $600,000, (ii)
for so long as there is an Existing Default, other than an Existing Default
under Section or Section , that has been in existence for more than 30
consecutive days no Covered Person shall be permitted to pay any such fees and
expenses, and (iii) for so long as there is an Existing Default under either
Section or Section no Covered Person shall be permitted to pay any such fees and
expenses. Any such Management Payments not made as a result of the preceding
sentence may be made at a later date when there is no Existing Default and the
payment of such deferred Management Payments will not cause any of the events
described in subsections (i), (ii) and (iii) above to occur.
15.17. NO DEFAULT ON INDEBTEDNESS OR MATERIAL AGREEMENTS. Default upon
or fail to pay any Indebtedness for money borrowed as the same matures, or
breach, violate, or be in default under any Material Agreement beyond the
applicable grace period provided therein.
15.18. CONFLICTING AGREEMENTS. Enter into any indenture, agreement,
instrument or other arrangement which, (a) directly or indirectly prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence and maintenance of the Loan
Obligations, the provisions of the Loan Documents, or the amending of any of the
Loan Documents or (b) contains any provision which would be violated or breached
by any Covered Person's performance of its obligations under any Loan Document.
15.19. BANK ACCOUNTS. Maintain any deposit accounts at institutions
other than Agent (i) except zero or pegged balance payroll accounts and ▇▇▇▇▇
cash accounts as described in the Disclosure Schedule and (ii) ▇▇▇▇▇ cash
accounts of which Borrower has notified Agent in writing and which have balances
not exceeding the aggregate $10,000.
15.20. SALE AND LEASEBACK TRANSACTIONS. Enter into any agreement or
arrangement with any Person providing for Borrower or any other Covered Person
to lease or rent property that Borrower or such other Covered Person has or will
sell or otherwise transfer to such Person.
15.21. NEW SUBSIDIARIES. Organize, create or acquire any Subsidiary.
15.22. FISCAL YEAR. Change its Fiscal Year.
15.23. TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT. Enter into
any transaction which has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.
49
15.24. TAX CONSOLIDATION. File or consent to the filing of any
consolidated, combined or unitary income tax return with any Person which is not
a Covered Person, or enter into or be party to any tax sharing agreement or
similar arrangement.
15.25. MINNESOTA MUTUAL; HARBOUR SUBORDINATED DOCUMENTS; BOATMEN'S
SUBORDINATED DOCUMENTS; ACQUISITION DOCUMENTS. Borrower shall not agree to, or
acquiesce to, any amendment, modification, or change to any of the Minnesota
Mutual Subordinated Documents, the Harbour Subordinated Documents, the Boatmen's
Subordinated Documents, or the Acquisition Documents.
15.26. AMENDMENTS TO CHARTER DOCUMENTS AND MATERIAL AGREEMENTS. Enter
into or otherwise consent to any material amendment or modification of the
Charter Documents of Borrower delivered to the Lenders as a condition to Lenders
making the initial Advances hereunder, or any amendment or modification to any
Material Agreement which would materially adversely effect the Agent or the
Lenders, the Collateral, or the Agent's or the Lenders' Security Interests in
the Collateral.
16. FINANCIAL COVENANTS.
16. SPECIAL DEFINITIONS. As used in this Section and elsewhere in
this Agreement, the following capitalized terms have the following meanings:
"Capital Expenditure" means an expenditure for an asset that must be
depreciated or amortized under GAAP, for goodwill, or for any asset that
under GAAP must be treated as a capital asset, including, without
limitation, payments under Capital Leases, the amount of which must be
recorded as an amortizable asset, but not including any such
expenditures to the extent made from Insurance/Condemnation Proceeds in
the manner described in Section (the full amount of the payments so
capitalized under GAAP to be made thereunder by Borrower shall be taken
into account in the calculation period such Capital Lease is entered
to). When calculating Capital Expenditures for the purposes of
calculating the Interest Rate Ratio in Section , the terms of the
parenthetical in the preceding sentence shall not apply and only the
amount of all payments actually made in connection with all such Capital
Leases during the applicable Interest Rate Calculation Period need to be
accounted for when calculating Capital Expenditures for such purpose.
"Consolidated" or "consolidated" when used in connection with any
calculation, means a calculation to be determined on a consolidated
basis for Holdings and all of its Subsidiaries, including each Borrower
and their Subsidiaries, in accordance with GAAP.
"Current Assets" means current assets as determined in accordance with
GAAP.
"Current Liabilities" means current liabilities as determined in
accordance with GAAP, excluding amounts outstanding under the Aggregate
Revolving Loan.
"Fixed Charges" means, as of any date of calculation, the sum of (i)
Interest Expense (excluding for this purpose all interest accrued as an
expense with respect to the Harbour Subordinated Indebtedness and the
Boatmen's Subordinated Indebtedness to the extent it is on Borrower's
Consolidated books), (ii) the sum of all principal payments on Total
Funded Debt scheduled to be made during the calculation period ending on
such date, (iii) federal, state and local income taxes accrued during
the calculation period ending on such date, and (iv) all Capital
Expenditures incurred during the calculation period ending on such date
(provided, however, that the parenthetical at the end of the first
sentence in the definition of "Capital Expenditures" shall not apply
when calculating Capital Expenditures for purposes of calculating Fixed
Charges, i.e, only the amount of all
50
payments actually made in connection with all such Capital Leases during the
applicable calculation period need to be accounted for in calculating Capital
Expenditures for the purposes of calculating Fixed Charges). For the purposes of
calculating Fixed Charges under this Agreement, the calculation period for Fixed
Charges shall be deemed to be the period from the Effective Date through any
date of calculation on or prior to July 31, 1997, and thereafter the calculation
period shall be the twelve month period immediately prior to the date of
calculation and Fixed Charges shall be calculated on a trailing twelve month
basis; provided, however, that each scheduled payment on the first of the month
of interest and principal on any of the Loans shall be deemed to have been made
on the immediately preceding day.
"Interest Expense" means, for any period of calculation, all interest
accrued as an expense in accordance with GAAP on Total Funded Debt
during such period.
"Net Income" means, for any period of calculation, "net income" as
determined in accordance with GAAP.
"Net Worth" means, as of any date, Total Assets MINUS Total Liabilities.
"Operating Cash Flow" means, as of any date of calculation, an amount
equal to the sum of (i) Net Income, (ii) federal, state and local income
tax expense, (iii) Interest Expense (including for this purpose all
interest accrued as an expense with respect to the Harbour Subordinated
Indebtedness or the Boatmen's Subordinated Indebtedness to the extent it
is on Borrower's Consolidated books), (iv) depreciation and amortization
expense, (v) losses on the sale or other disposition of assets, and (vi)
extraordinary losses, MINUS (a) gains on the sale or other disposition
of assets, and (b) extraordinary gains, all calculated for the
calculation period ending on such calculation date. For the purposes of
calculating Operating Cash Flow solely under Section and Section (and
any of the subsections thereunder and exhibits related thereto), the
calculation period for Operating Cash Flow shall be deemed to be the
period from the Effective Date through any date of calculation on or
prior to July 31, 1997 and thereafter the calculation period shall be
the twelve month period immediately prior to the date of calculation and
Operating Cash Flow shall be calculated on a trailing twelve month
basis.
"Total Assets" means the sum of all assets as presented in the balance
sheet in Borrower's most recent consolidated financial statements.
"Total Funded Debt" means, as of any time, the sum of the aggregate
outstanding principal balance of Borrower's Indebtedness and its
respective Subsidiaries' Indebtedness (including, without limitation,
the outstanding principal balance of the Aggregate Term 1 Loan, the
Aggregate Term 2 Loan, the Aggregate Revolving Loan, the Swingline Loan,
the unreimbursed amount of all draws on Letters of Credit, and the
outstanding principal balance of the Minnesota Mutual Subordinated
Indebtedness) at such time, but excluding the outstanding principal
balance of the Harbour Subordinated Indebtedness and the Boatmen's
Subordinated Indebtedness. For the purposes of calculating Total Funded
Debt under this Agreement, each scheduled payment on the first of the
month of interest and principal on the Loans shall be deemed to have
been made on the immediately preceding day.
"Total Liabilities" means the sum of all liabilities as presented in the
balance sheet in Borrower's most recent consolidated financial
statements (including, without limitation, the Minnesota Mutual
Subordinated Indebtedness, the Boatmen's Subordinated Indebtedness, and
the Harbour Subordinated Indebtedness).
51
All other capitalized terms used in this Section , not otherwise defined
elsewhere in this Agreement, shall have their meanings and shall be determined
under GAAP. For the purposes of calculating the amount of Borrower's and its
Subsidiaries' Indebtedness in this Section , each scheduled payment on the first
of the month of interest and principal on any of the Loans shall be deemed to
have been made on the immediately preceding day.
16.2. CAPITAL EXPENDITURES. Borrower and its Subsidiaries shall not make
Consolidated Capital Expenditures which in the aggregate exceed: (i) $5,500,000
during the period commencing with the Effective Date and ending September 30,
1997, (ii) $5,500,000 during Fiscal Year 1998, (iii) $8,800,000 during the
period commencing on the Effective Date and ending September 30, 1998, or (iv)
$4,400,000 for Fiscal Year 1999 or any Fiscal Year thereafter, and such amounts
may not be carried over from period to period.
16.3. CAPITAL LEASES. Borrower and its Subsidiaries shall not become
obligated as lessee(s) under any Capital Leases except Capital Leases existing
on the Execution Date and disclosed in the Disclosure Schedule and Capital
Leases entered into by Borrower and its Subsidiaries after the Execution Date
for capital assets whose aggregate cost if purchased would not exceed $25,000 in
any Fiscal Year and $50,000 in the aggregate.
16.4. LEASE RENTALS. Expenses incurred by Borrower and its Subsidiaries
as lessees under leases of property (whether real, personal, tangible,
intangible, or mixed property), other than Capital Leases, shall not exceed
$75,000 in the aggregate during any Fiscal Year and the aggregate amount of all
such expenses incurred on a cumulative basis after the Effective Date shall not
exceed $500,000.
16.5. MINIMUM CONSOLIDATED OPERATING CASH FLOW. Consolidated Operating
Cash Flow as of each calculation date set forth below, shall not be less than
the amount set forth opposite such calculation date:
===================================================== =========================================
CALCULATION DATES MINIMUM OPERATING CASH FLOW
===================================================== =========================================
October 31, 1996 and the last day of each month $2,900,000
thereafter ending with December 31, 1996
===================================================== =========================================
January 31, 1997 and the last day of each month $7,800,000
thereafter ending with March 31, 1997
===================================================== =========================================
April 30, 1997 and the last day of each month $14,900,000
thereafter ending with June 30, 1997
===================================================== =========================================
July 31, 1997 and the last day of each month $19,800,000
thereafter ending with September 30, 1997
===================================================== =========================================
October 31, 1997 and the last day of each month $21,400,000
thereafter ending with September 30, 1998
===================================================== =========================================
October 31, 1998 and the last day of each month $22,000,000
thereafter ending with September 30, 1999
===================================================== =========================================
October 31, 1999 and the last day of each month $23,000,000
thereafter
===================================================== =========================================
52
16.6. FIXED CHARGE COVERAGE. The ratio of (a) Consolidated Operating
Cash Flow as of each calculation date set forth below to (b) Consolidated Fixed
Charges as of such calculation date, shall not be less than the ratio set forth
opposite such calculation date:
================================================ ==============================================
CALCULATION DATES MINIMUM RATIO
================================================ ==============================================
October 31, 1996 and the last day of each 1.10 to 1.00
month thereafter
================================================ ==============================================
16.7. MINIMUM NET WORTH. Consolidated Net Worth shall at no time
during any fiscal period specified in the table below be less than the amount
specified for such period:
================================================ ==============================================
PERIOD MINIMUM NET WORTH
================================================ ==============================================
Effective Date through April 29, 1997 $11,000,000
================================================ ==============================================
April 30, 1997 through October 30, 1997 $13,100,000
================================================ ==============================================
October 31, 1997 through October 30, 1998 $16,000,000
================================================ ==============================================
October 31, 1998 and at any time thereafter $19,000,000
================================================ ==============================================
16.8. CONSOLIDATED TOTAL FUNDED DEBT TO CONSOLIDATED OPERATING CASH
FLOW. The ratio of (a) Consolidated Total Funded Debt outstanding on each
calculation date set forth below on such calculation date, to (b) Consolidated
Operating Cash Flow (for periods less than twelve months from the Effective
Date, annualized) as of such calculation date, shall not exceed the ratio set
forth opposite such calculation date:
===================================================== ========================================
CALCULATION DATES MAXIMUM RATIO
===================================================== ========================================
April 30, 1997 and the last day of each month 3.20 to 1.00
thereafter ending with March 31, 1998
===================================================== ========================================
April 30, 1998 and the last day of each month 2.80 to 1.00
thereafter ending with September 30, 1998
===================================================== ========================================
October 31, 1998 and the last day of each month 2.50 to 1.00
thereafter ending with March 31, 1999
===================================================== ========================================
April 30, 1999 and the last day of each month 2.00 to 1.00
thereafter
===================================================== ========================================
16.9. MINIMUM INTEREST COVERAGE. The ratio of (a) Consolidated Operating
Cash Flow as of each calculation date set forth below to (b) Consolidated
Interest Expense as of such calculation date, shall not be less than the ratio
set forth opposite such calculation date:
===================================================== ========================================
CALCULATION DATES MINIMUM RATIO
===================================================== ========================================
October 31, 1996 and the last day of each month 2.30 to 1.00
thereafter ending with March 31, 1997
===================================================== ========================================
53
===================================================== ========================================
April 30, 1997 and the last day of each month 3.00 to 1.00
thereafter ending with March 31, 1998
===================================================== ========================================
April 30, 1998 and the last day of each month 3.30 to 1.00
thereafter ending with September 30, 1999
===================================================== ========================================
October 31, 1999 and the last day of each month 3.70 to 1.00
thereafter
===================================================== ========================================
17. DEFAULT.
17.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an event of default (an "Event of Default") under this Agreement:
17.1.1.FAILURE TO PAY PRINCIPAL OR INTEREST. Failure of Borrower
or any Guarantor to pay any principal of the Loans or interest accrued
thereon when due.
17.1.2.FAILURE TO PAY OTHER AMOUNTS OWED TO LENDERS. Failure of
Borrower or any Guarantor to pay any of the Loan Obligations (other than
principal of the Loans or interest accrued thereon) within three (3)
Business Days after the date when due.
17.1.3.FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure of
any Covered Person to make any payment due on Indebtedness of such
Covered Person over $250,000 to Persons other than Lenders which
continues unwaived beyond any applicable grace period specified in the
documents evidencing such Indebtedness.
17.1.4.REPRESENTATIONS OR WARRANTIES. Any representation or
warranty made by Borrower in this Agreement, or any statement or
representation made in any certificate, report, opinion or other
document delivered pursuant to this Agreement (made by any Covered
Person), is discovered to have been false in any material respect when
made.
17.1.5.CERTAIN COVENANTS. Failure of any Covered Person to comply
with any of the covenants in ▇▇▇▇▇▇▇▇ , , , , , , , , , ▇▇ .
17.1.6.COVENANTS WITH 30 DAY CURE PERIODS. Failure of any Covered
Person to comply with any of the covenants in Section not listed in
Section above, which is not remedied or waived in writing by Agent
within 30 days after the day on which an offer of Borrower or Guarantor
first obtains knowledge of initial occurrence of such failure; provided,
however, that no such grace period shall apply, and an Event of Default
shall exist promptly upon such failure to comply, if such failure may
not, in Agent's reasonable determination, be cured by such Covered
Person during such 15 day period.
17.1.7.Intentionally omitted.
17.1.8.FAILURE TO COMPLY WITH OTHER TERMS OF LOAN DOCUMENTS.
Failure of any Covered Person to comply with any of the terms or
provisions of any of the Loan Documents applicable to it (other than a
failure which constitutes an Event of Default under any of Sections
through ) which is not remedied or waived in writing by Agent within 30
days after the initial occurrence of such failure; provided, however,
that no such grace period shall apply, and
54
an Event of Default shall exist promptly upon such failure to comply, if such
failure may not, in Agent's reasonable determination, be cured by such Covered
Person during such 30 day period.
17.1.9.Intentionally omitted.
17.1.10. ACCELERATION OF OTHER INDEBTEDNESS. Any Obligation of a
Covered Person (other than the Loan Obligations) under the Minnesota
Mutual Subordinated Indebtedness, the Boatmen's Subordinated
Indebtedness, or the Harbour Subordinated Indebtedness for the payment
of borrowed money becomes or is declared to be due and payable or
required to be prepaid (other than by a regularly scheduled prepayment)
prior to the original maturity thereof as a consequence of a default
with respect thereto by any Covered Person. Any Obligation of a Covered
Person (other than the Loan Obligations, the Minnesota Mutual
Subordinated Indebtedness, the Boatmen's Subordinated Indebtedness, and
the Harbour Subordinated Indebtedness) in excess of $250,000 for the
payment of borrowed money becomes or is declared to be due and payable
or required to be prepaid (other than by a regularly scheduled
prepayment) prior to the original maturity thereof as a consequence of a
default with respect thereto by any Covered Person.
17.1.11. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any
default or event of default by any Covered Person under the Minnesota
Mutual Subordinated Documents, the Harbour Subordinated Documents, the
Boatmen's Subordinated Documents, or the Acquisition Documents. The
occurrence of any default or event of default under any agreement to
which a Covered Person is a party (other than the Loan Documents, the
Minnesota Mutual Subordinated Documents, the Boatmen's Subordinated
Documents, the Harbour Subordinated Documents or the Acquisition
Documents), which default or breach continues unwaived beyond any
applicable grace period provided therein and either (i) involves an
amount in excess of $250,000 or (ii) would or could reasonably be
expected to have a Material Adverse Effect on such Covered Person.
17.1.12. BANKRUPTCY; INSOLVENCY; ETC. A Covered Person (i) fails
to pay, or admits in writing its inability to pay, its debts generally
as they become due, or otherwise becomes insolvent (however evidenced);
(ii) makes a general assignment for the benefit of creditors; (iii)
files a petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions or applies to any tribunal for any receiver or any trustee of
such Covered Person or any substantial part of its property; (iv)
commences any proceeding relating to such Covered Person under any
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter
in effect; (v) has commenced against it any such proceeding which
remains undismissed for a period of sixty (60) days, or by any act
indicates its consent to, approval of, or acquiescence in any such
proceeding or the appointment of any receiver of or any trustee for it
or of any substantial part of its property, or allows any such
receivership or trusteeship to continue undischarged for a period of
sixty (60) days; or (vi) takes any corporate action to authorize any of
the foregoing.
17.1.13. JUDGMENTS; ATTACHMENT; ETC. Any one or more judgments or
orders is entered against a Covered Person or any attachment or other
levy is made against the property of a Covered Person with respect to a
claim or claims involving in the aggregate liabilities (not paid or
fully covered by insurance, less the amount of reasonable deductibles in
effect on the Execution Date) in excess of $250,000, becomes final and
non-appealable or if timely appealed is not fully bonded and collection
thereof stayed pending the appeal.
17.1.14. PENSION BENEFIT PLAN TERMINATION, ETC. Any Pension
Benefit Plan termination by the PBGC or the appointment by the
appropriate United States District Court of a trustee to administer any
Pension Benefit Plan or to liquidate any Pension Benefit Plan; or any
55
event which constitutes grounds either for the termination of any Pension
Benefit Plan by PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any Pension Benefit Plan
shall have occurred and be continuing for thirty (30) days after Borrower has
notice of any such event; or any voluntary termination of any Pension Benefit
Plan which is a defined benefit pension plan as defined in Section 3(35) of
ERISA while such defined benefit pension plan has an accumulated funding
deficiency, unless Agent has been notified of such intent to voluntarily
terminate such plan and Lenders have given their consent and agreed that such
event shall not constitute a Default; or the plan administrator of any Pension
Benefit Plan applies under Section 412(d) of the Code for a waiver of the
minimum funding standards of Section 412(l) of the Code and Lenders determine
that the substantial business hardship upon which the application for such
waiver is based could subject any Covered Person or ERISA Affiliate to a
liability in excess of $100,000.
17.1.15. LIQUIDATION OR DISSOLUTION. A Covered Person files a
certificate of dissolution under applicable state law or the law of the
country in which it is organized or is liquidated or dissolved or
suspends or terminates the operation of its business, or has commenced
against it any action or proceeding for its liquidation or dissolution
or the winding up of its business, or takes any corporate action in
furtherance of any of the foregoing.
17.1.16. SEIZURE OF ASSETS. All or any part of the property of
Borrower or any other Covered Person is nationalized, expropriated,
seized or otherwise appropriated, or custody or control of such property
or of Borrower or any other Covered Person shall be assumed by any
Governmental Authority or any court of competent jurisdiction at the
instance of any Governmental Authority, unless the same is being
contested in good faith by proper proceedings diligently pursued and a
stay of enforcement is in effect; notwithstanding the foregoing to the
contrary, condemnation by any Government Authority of any real property
interest of any Covered Person which would not have a Material Adverse
Effect on such Covered Person shall not be an Event of Default under
this Section .
17.1.17. RACKETEERING PROCEEDING. There is filed against any
Covered Person in any civil or criminal action, suit or proceeding under
any federal or state racketeering statute (including, without
limitation, the Racketeer Influenced and Corrupt Organization Act of
1970), which action, suit or proceeding is not dismissed within 90 days
and could result in the confiscation or forfeiture of any material
portion of the Collateral.
17.1.18. LOAN DOCUMENTS; SECURITY INTERESTS. For any reason other
than the failure of Agent to take any action available to it to maintain
perfection of the Security Interests created in favor of Agent for the
ratable benefit of Lenders pursuant to the Loan Documents or the release
of such Security Interest by Agent, any Loan Document ceases to be in
full force and effect or any Security Interest with respect to any
portion of the Collateral intended to be secured thereby ceases to be,
or is not, valid, perfected and prior to all other Security Interests
(other than the Permitted Security Interests) or is terminated, revoked
or declared void or invalid.
17.1.19. LOSS TO COLLATERAL. Any loss, theft, damage or
destruction of any item or items of Collateral occurs which either (i)
has a Material Adverse Effect on any Covered Person, or (ii) materially
and adversely affects the operation of Borrower's business and is not
covered by insurance as required herein.
17.1.20. MATERIAL ADVERSE CHANGE. There occurs any material
adverse change in any Covered Person's property, business, operation,
or condition (financial or otherwise), or there occurs any event which
has or could have a Material Adverse Effect on any Covered Person.
56
17.1.21. GUARANTY. Any Guaranty fails to be in full force and
effect, or a breach or default shall occur under any Guaranty.
17.2. CROSS-DEFAULT. Any Event of Default under this Agreement will
constitute an event of default under any other agreement of Borrower and any
Guarantor with Agent or any Lender including, without limitation, each of the
other Loan Documents, and under any evidence of Indebtedness of Borrower and any
Guarantor held by Agent or any Lender, whether or not such is an event of
default specified therein.
17.3. RIGHTS AND REMEDIES IN THE EVENT OF DEFAULT.
17.3.1. TERMINATION OF COMMITMENTS. Upon an Event of Default
described in Section , the Commitments shall be deemed canceled without
presentment, demand or notice of any kind. Upon any other Event of
Default, and at any time thereafter so long as any Unwaived Event of
Default exists, the Required Lenders may cancel the Commitments. Such
cancellation may be without demand or notice of any kind, which Borrower
expressly waives.
17.3.2. ACCELERATION. Upon an Event of Default described in
Section , all of the outstanding Loan Obligations shall automatically
become immediately due and payable. Upon any other Event of Default, and
at any time thereafter so long as any Unwaived Event of Default exists,
Required Lenders may declare all of the outstanding Loan Obligations
immediately due and payable. Such acceleration in either case may be
without presentment, demand or notice of any kind, which Borrower
expressly waives.
17.3.3. RIGHT OF SET-OFF. Upon the occurrence of any Event of
Default and at any time and from time to time thereafter so long as any
Unwaived Event of Default exists, each Lender is hereby authorized,
without notice to Borrower (any such notice being expressly waived by
Borrower), to set off and apply against the Loan Obligations any and all
deposits (general or special, time or demand, provisional or final) at
any time held, or any other Indebtedness at any time owing by such
Lender to or for the credit or the account of Borrower, irrespective of
whether or not such Lender shall have made any demand under this
Agreement or the Notes and although such Loan Obligations may be
unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender may otherwise have.
17.3.4. NOTICE TO ACCOUNT DEBTORS. Upon the occurrence of any
Event of Default and at any time and from time to time thereafter so
long as any Unwaived Event of Default exists, Agent may (if Required
Lenders concur), without prior notice to Borrower, notify any or all
Account Debtors that the Accounts have been assigned to Agent for the
ratable benefit of Lenders and that Agent has a Security Interest
therein for the ratable benefit of Lenders, and Agent may direct, or
Borrower, at Agent's request, shall direct, any or all Account Debtors
to make all payments upon the Accounts directly to Agent for the ratable
benefit of Lenders.
17.3.5. ENTRY UPON PREMISES AND ACCESS TO INFORMATION. Upon an
Event of Default and at any time and from time to time thereafter so
long as any Unwaived Event of Default exists: Agent may (i) enter upon
the premises leased or owned by Borrower where Collateral is located (or
is believed to be located) without any obligation to pay rent to
Borrower, or any other place or places where Collateral is believed to
be located, (ii) render Collateral usable or saleable, (iii) remove
Collateral therefrom to the premises of Agent or any agent of Agent for
such time as Agent may desire in order effectively to collect or
liquidate Collateral; (iv) take possession of, and make copies and
abstracts of, Borrower's original books and records, obtain access to
Borrower's
57
data processing equipment, computer hardware and software relating to
any of the Collateral and, subject to any proprietary rights of third
parties, use all of the foregoing and the information contained
therein in any manner Agent deems appropriate in connection with the
exercise of Agent's rights; and (v) notify postal authorities to
change the address for delivery of Borrower's mail to an address
designated by Agent and to receive, open and process all mail
addressed to Borrower.
17.3.6. ENVIRONMENTAL ASSESSMENT. Upon an Event of Default and
at any time and from time to time thereafter so long as any Unwaived
Event of Default exists, Agent (or any person retained by Agent for the
purposes described in this paragraph) may, at its sole option, enter
upon any premises leased or owned by any Covered Person to perform an
environmental assessment of Borrower, any Covered Person, or any of the
Real Property Collateral. The purposes and scope of such assessment
shall be as defined by Agent. Those purposes may include determining
whether conditions at the property evidence non-compliance with any
Environmental Law, and whether operations at the property are being and
have been conducted in accordance with Environmental Laws. Such
assessment may include, without limitation, soil sampling and other
intrusive assessment methods. Such assessment shall be at the expense of
Borrower.
17.3.7. COMPLETION OF UNCOMPLETED INVENTORY ITEMS. Agent may
request that Borrower, and Borrower shall upon such request, use
Borrower's best efforts to obtain the consent of its customers to the
completion (before or after foreclosure by Agent of its security
interest therein) of the manufacture of all uncompleted Inventory items
that Borrower was manufacturing for such customers pursuant to contracts
or accepted purchase orders, and the commitment by such customers to
purchase such items upon their completion as provided in the relevant
contracts or accepted purchase orders. Borrower shall, as an
uncompensated agent for Lenders, complete the manufacture and shipment
of all such items as provided in the relevant contracts or accepted
purchase orders if Agent so directs.
17.3.8. BORROWER'S OBLIGATIONS. Upon the occurrence of an Event
of Default and at any time thereafter so long as any Unwaived Event
of Default exists, Borrower shall, if Agent so requests, assemble all
the movable tangible Collateral and make it available to Agent at a
place or places to be designated by Agent in its discretion.
17.3.9. SECURED PARTY RIGHTS. Upon an Event of Default and
acceleration of the Loan Obligations as provided herein, and at any time
and from time to time thereafter so long as any Unwaived Event of
Default exists:
17.3.9.1. Agent may exercise any or all of its rights
under the Security Documents as a secured party under the UCC and
any other applicable Law; and
17.3.9.2. Agent may sell or otherwise dispose of any or
all of the Collateral at public or private sale in a commercially
reasonable manner, which sale Agent may postpone from time to
time by announcement at the time and place of sale stated in the
notice of sale or by announcement at any adjourned sale without
being required to give a new notice of sale, all as Agent deems
advisable, for cash or credit. A Lender may become the purchaser
at any such sale if permissible under applicable Law, and such
Lender may, in lieu of actual payment of the purchase price,
offset the amount thereof against Borrower's obligations owing to
Lender, and Borrower agrees that such Lender has no obligation to
preserve rights to Collateral against prior parties or to marshal
any Collateral for the benefit of any Person.
58
In connection with the advertising for sale, selling, or otherwise realizing
upon any of the Collateral securing the obligations of Borrower to Lender, Agent
may use and is hereby granted a license to use, without charge or liability to
Agent or Lenders therefor, any of Borrower's labels, trade names, trademarks,
trade secrets, service marks, patents, patent applications, licenses,
certificates of authority, advertising materials, or any of Borrower's other
properties or interests in properties of similar nature, to the extent that such
use thereof is not prohibited by agreements under which Borrower has rights
therein, and all of Borrower's rights under license, franchise and similar
agreements shall inure to Lenders' benefit.
17.3.10. MISCELLANEOUS. Upon the occurrence of an Event of
Default and at any time thereafter and from time to time thereafter so
long as any Unwaived Event of Default exists, Lenders may exercise any
other rights and remedies available to Lenders under the Loan Documents
or otherwise available to Lenders at law or in equity.
17.3.11. APPLICATION OF FUNDS. Any funds received by Lenders or
Agent for the ratable benefit of Lenders with respect to the Loan
Obligations after any acceleration of the Loan Obligations as provided
herein, including proceeds of Collateral, shall be applied as follows:
(i) first, to reimburse Lenders prorata for any amounts due to Lenders
under Section ; (ii) second, to reimburse to Agent all unreimbursed
costs and expenses paid or incurred by Agent that are payable or
reimbursable by Borrower hereunder; (iii) third, to reimburse to Lenders
prorata all unreimbursed costs and expenses paid or incurred by Lenders
(including costs and expenses incurred by Agent as a Lender that are not
reimbursable as provided in the preceding clause) that are payable or
reimbursable by Borrower hereunder; (iv) fourth, to the payment of
accrued and unpaid fees due under the Loan Documents and all other
amounts due under the Loan Documents (other than the Loans and interest
accrued thereon); (v) fifth, to the payment of interest accrued on the
Loans prorata to each of the Lenders; (vi) sixth, to the payment of the
Loans prorata to each of the Lenders; and (vii) seventh, to the payment
of the other Loan Obligations prorata to each of the Lenders. Anything
herein to the contrary notwithstanding, if any Rate Hedging Obligations
of Borrower are owed to a Lender when funds or proceeds are applied to
the Loans, the amount thereof shall be deemed added to the Loans due to
such Lender so that such Lender will recover such amount on a PARI PASSU
basis with all the Loans upon application of funds and proceeds as
provided in this Section. Any amounts remaining after the application of
funds and proceeds as provided in this Section shall be paid to
Borrower, or to such other Persons as are legally entitled thereto.
17.4. LIMITATION OF LIABILITY; WAIVER. Agent and Lenders shall not be
liable to Borrower as a result of any commercially reasonable possession,
repossession, collection or sale by Agent of Collateral; and Borrower hereby
waives all rights of redemption from any such sale and the benefit of all
valuation, appraisal and exemption laws. If Agent seeks to take possession of
any of the Collateral by replevin or other court process after an Event of
Default, Borrower hereby irrevocably waives (i) the posting of any bonds, surety
and security relating thereto required by any statute, court rule or otherwise
as an incident to such possession, (ii) any demand for possession of the
Collateral prior to the commencement of any suit or action to recover possession
thereof, (iii) any requirement that Agent retain possession and not dispose of
any Collateral until after trial or final judgment, and (iv) to the extent
permitted by applicable Law, all rights to notice and hearing prior to the
exercise by Agent of Agent's right to repossess the Collateral without judicial
process or to replevy, attach or levy upon the Collateral without notice or
hearing. Agent shall have no obligation to preserve rights to the Collateral or
to ▇▇▇▇▇▇▇▇ any Collateral for the benefit of any Person.
59
17.5. NOTICE. Any notice of intended action required to be given by
Agent (including notice of a public or private sale of Collateral), if given as
provided in Section at least 10 days prior to such proposed action, shall be
effective and constitute reasonable and fair notice to Borrower.
18. AGENT AND LENDERS.
18.1. APPOINTMENT OF AGENT. Boatmen's is hereby appointed Agent. Each
Lender irrevocably authorizes Boatmen's to act as the Agent for such Lender.
Agent shall not have any duties or responsibilities except those expressly
stated in the Loan Documents, nor any fiduciary relationship with any Lender,
and no implied covenants, functions, duties, responsibilities, obligations or
liabilities shall be read into the Loan Documents or otherwise exist against
Agent by reason of this Agreement.
18.2. POWERS. Agent shall have and may exercise such powers hereunder as
are specifically delegated to Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. Agent shall have and may exercise
such powers hereunder as are specifically delegated to Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. Agent
shall have no implied duties to Lenders, or any obligation to Lenders to take
any action hereunder except action specifically provided by this Agreement to be
taken by Agent.
18.3. GENERAL IMMUNITY OF AGENT. Neither Agent, nor any of Agent's
directors, officers, agents, or employees shall be liable to any Lender for any
act or failure to act with respect to their respective duties hereunder that
does not constitute gross negligence or willful misconduct.
18.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Agent, and its
respective directors, officers, agents, and employees shall not be responsible
to Lenders for any recitals, reports, statements, warranties or representations
herein or in any Loan Document or be bound to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement.
18.5. ACTION ON INSTRUCTIONS OF REQUIRED LENDERS. Agent and its
respective directors, officers, agents, and employees shall in all cases be
fully protected in acting, or in refraining from acting, hereunder in accordance
with written instructions executed by Required Lenders, and such instructions
and any act or failure to act pursuant thereto shall be binding on all of
Lenders and on all holders of Notes.
18.6. EMPLOYMENT OF AGENTS AND COUNSEL. Agent may execute any of its
duties hereunder by or through employees, agents, and attorneys-in-fact and
shall not be answerable to Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Agent shall be entitled
to advice of counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder.
18.7. RELIANCE ON DOCUMENTS; COUNSEL. Agent shall be entitled to rely
upon any notice, consent, certificate, affidavit, letter, telegram, statement,
paper or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by it, which counsel may be its
employees.
18.8. AGENT'S REIMBURSEMENT. Lenders agree to reimburse and indemnify
Agent prorata according to their respective Commitments (i) for any amounts not
reimbursed by Borrower for which Agent is entitled to reimbursement by Borrower
under the Loan Documents (other than incurred by Agent or its legal counsel and
expenses advanced by Agent's legal counsel in connection with the preparation
and negotiation of the Loan Documents and the closing of the transactions
contemplated hereby), and (ii) for any other expenses incurred by Agent on
behalf of Lenders, in connection with the enforcement of the Loan Documents.
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18.9. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. Lenders agree to
reimburse and indemnify Agent for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of this Agreement or any
other document delivered in connection with this Agreement or the transactions
contemplated hereby or the enforcement of any of the terms hereof or of any such
other documents; provided, however, that no Lender shall be liable for any of
the foregoing to the extent arising from any act or failure to act of Agent that
constitutes gross negligence or willful misconduct with respect to its duties as
Agent.
18.10. RIGHTS AS A LENDER. With respect to the Commitments of, Advances
made and the Notes issued to Agent, Agent shall have the same rights and powers
hereunder as any Lender and may exercise the same as though it were not Agent,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity as a Lender hereunder. Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking or trust business with Borrower or any Subsidiary or Affiliate of
Borrower as if it were not Agent.
18.11. INDEPENDENT CREDIT DECISIONS. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender and based
on the financial statements prepared by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
18.12. SUCCESSOR AGENT. Agent may resign at any time by giving written
notice thereof to Lenders and the Borrower. Upon receipt of such notice of
Agent's resignation, Required Lenders may, after consultation with Borrower, and
subject to the requirements in this Section, appoint a successor Agent. If no
successor Agent shall have been so appointed by Required Lenders and shall have
accepted such appointment within thirty days after the retiring Agent's giving
notice of resignation, then the retiring Agent may appoint, on behalf of
Borrower and Lenders, a successor Agent. Such successor Agent shall be a
commercial bank having capital and retained earnings of at least $250,000,000.
Agent's resignation shall not be effective until a successor Agent has been
appointed and accepts such appointment. Upon a successor Agent's acceptance of
its appointment, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent as such,
and the resigning Agent shall be discharged from its duties and obligations as
Agent hereunder. After the resignation of Agent, the provisions of Section shall
continue in effect for the resigning Agent's benefit in respect of any act or
failure to act while it was Agent hereunder.
18.13. NOTIFICATION OF LENDERS. Each Lender agrees to use its good faith
efforts, upon becoming aware of anything which would likely have a Material
Adverse Effect on any Covered Person, to promptly notify Agent thereof. Agent
shall promptly deliver to each Lender copies of every written notice, demand,
report (including any financial report), or other writing which Agent gives to
or receives from Borrower and which itself (a) constitutes, or which contains
information about, something that would likely have a Material Adverse Effect
with respect to Borrower's Loan Obligations to such Lender or (b) is otherwise
delivered to Agent by Borrower pursuant to the Loan Documents and is deemed
material information by Agent in its sole discretion. Agent and its directors,
officers, agents, and employees shall have no liability to any Lender for
failure to deliver any such item to such Lender unless the failure constitutes
gross negligence or willful misconduct.
18.14. NO KNOWLEDGE OF DEFAULT. Agent shall not be deemed to have
knowledge of any Default or Event of Default unless Agent has received written
notice thereof from a Lender or the Borrower
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referring to this Agreement and describing such Default or Event of Default, or
Agent otherwise has actual knowledge thereof. If Agent receives such notice or
otherwise acquires such actual knowledge, Agent shall notify Lenders of the
same. Thereafter, regardless of whether Agent notified Lenders, Agent shall
solicit advice from Lenders as to the appropriate course of action, and take
such action (including but not limited to actions contemplated by Sections and )
as is directed by Lenders; provided, however, that unless and until Agent has
received such directions, Agent may at its option take such actions as it deems
appropriate without the direction of Lenders in circumstances where the ability
of Lenders to recover the Loan Obligations may otherwise be materially impaired.
18.15. COLLECTIONS AND DISTRIBUTIONS TO LENDERS BY AGENT. All interest,
fees, and payments of principal received by Agent for the account of Lenders
shall be distributed by Agent to Lenders in accordance with their prorata shares
of the outstanding Loan Obligations at the time of such distribution (or
entirely to Boatmen's in the case of interest, fees, and payments with respect
to the Swingline Loan) on the same Business Day when received, unless received
after 2:00 p.m. (St. Louis, Missouri time), in which case they shall be so
distributed on the next Business Day. All amounts received by any Lender on
account of the Loan Obligations, including amounts received by way of setoff,
shall be paid promptly to Agent for distribution to Lenders in accordance with
their prorata shares of the Loans. Such distributions shall be made according to
instructions that each Lender may give to Agent from time to time.
19. GENERAL.
19.1. LENDERS' RIGHT TO CURE. Lenders may from time to time, in their
absolute discretion, for Borrower's account and at Borrower's expense, pay (or,
with the consent of Required Lenders, make a Revolving Advance to pay) any
amount or do any act required of Borrower hereunder or requested by Agent or
Required Lenders to preserve, protect, maintain or enforce the Loan Obligations,
the Collateral or Agent's Security Interests therein for the ratable benefit of
Lenders, and which Borrower fails to pay or do, including payment of any
judgment against Borrower, insurance premium, taxes or assessments, warehouse
charge, finishing or processing charge, landlord's claim, and any other Security
Interest upon or with respect to the Collateral. All payments that Lenders make
pursuant to this Section and all out-of-pocket costs and expenses that Lenders
pay or incur in connection with any action taken by it hereunder shall be a part
of the Loan Obligations, the repayment of which shall be secured by the
Collateral. Any payment made or other action taken by Lenders pursuant to this
Section shall be without prejudice to any right to assert an Event of Default
hereunder and to pursue Lenders' other rights and remedies with respect thereto.
19.2. RIGHTS NOT EXCLUSIVE. Every right granted to Agent and Lenders
hereunder or under any other Loan Document or allowed to it at law or in
equity shall be deemed cumulative and may be exercised from time to time.
19.3. SURVIVAL OF AGREEMENTS. All covenants and agreements made herein
and in the other Loan Documents shall survive the execution and delivery of this
Agreement, the Notes and other Loan Documents and the making of every Advance.
All agreements, obligations and liabilities of Borrower under this Agreement
concerning the payment of money to Agent and Lenders, including Borrower's
obligations under Sections and , but excluding the obligation to repay the Loans
and interest accrued thereon, shall survive the repayment in full of the Loans
and interest accrued thereon, the return of the Notes to Borrower, the
termination of the Commitments and the expiration of all Letter of Credits.
19.4. ASSIGNMENTS AND PARTICIPATIONS.
19.4.1. PERMITTED ASSIGNMENTS. At any time after the Execution
Date any Lender may assign to one or more banks or financial
institutions all or a portion of its rights and obligations
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under this Agreement (including all or a portion of the Notes payable
to it), provided that the terms of assignment satisfy the following
requirements:
19.4.1.1. Agent shall have accepted the assignment,
which acceptance shall not be unreasonably withheld.
19.4.1.2. Each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement.
19.4.1.3. For each assignment involving the issuance and
transfer of Notes, the assigning Lender shall execute an
Assignment and Acceptance in the form attached hereto as Exhibit
(an "Assignment and Acceptance").
19.4.1.4. The minimum Commitment which shall be assigned
(which shall include the applicable portion of the assigning
Lender's Revolving Commitment, Term 1 Commitment, Term 2
Commitment, and Letter of Credit Commitment, which shall also be
assigned) is $5,000,000 or such lesser amount which constitutes
such Lender's entire Commitment; provided, however, that no such
minimum shall apply between Lenders and their Affiliates.
19.4.1.5. The assignee shall have an office located
in the United States.
Upon compliance with the foregoing, each such assignee shall be
deemed for all purposes under this Agreement and the other Loan
Documents to be "Lender" and Exhibit 3 shall be deemed to be amended to
reflect each such assignment.
19.4.2.CONSEQUENCES AND EFFECT OF ASSIGNMENTS.
19.4.2.1. From and after the effective date specified in
any Assignment and Acceptance, the assignee shall be deemed and
treated as a party to this Agreement and, to the extent that
rights and obligations hereunder and under the Notes held by the
assignor have been assigned or negotiated to the assignee
pursuant to such Assignment and Acceptance, to have the rights
and obligations of a Lender hereunder as fully as if such
assignee had been named as a Lender in this Agreement and of a
holder of such Notes, and the assignor shall, to the extent that
rights and obligations hereunder or under such Notes have been
assigned or negotiated by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its future
obligations under this Agreement.
19.4.2.2. By executing and delivering an Assignment and
Acceptance, the assignor thereunder and the assignee confirm to
and agree with each other and the other parties hereto as
follows: (i) the assignment made under such Assignment and
Acceptance is made under such Assignment and Acceptance without
recourse; (ii) such assignor makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of any Covered Person or the performance or observance
by any Covered Person of any of its Loan Obligations; (iii) such
assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements delivered
pursuant to Section hereof and such other Loan Documents and
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Agent, any of the Agent, such
assignor, or
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any other Lender, and based on such documents and information as
it deems appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(v) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender and a holder of a
Note.
19.4.3. ASSIGNMENT FEE. Any Lender who makes an assignment shall
pay to the Agent a one-time administrative fee of $3,500, which shall
not be reimbursed by Borrower.
19.4.4. AGENT TO RETAIN COPIES OF ASSIGNMENTS AND ACCEPTANCES.
Agent shall maintain a copy of each Assignment and Acceptance delivered
to and accepted by it.
19.4.5. NOTICE TO BORROWER OF ASSIGNMENT. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender, if Agent
accepts the assignment contemplated thereby, Agent shall give prompt
notice thereof to Borrower. Borrower shall execute and deliver
replacement Notes to the assignor and assignee as requested by Agent and
necessary to give effect to the assignment.
19.4.6. SALE OF PARTICIPATIONS. Each Lender may sell
participations to one or more banks or other entities as to all or a
portion of its rights and obligations under this Agreement provided that
the terms of sale satisfy the following requirements:
19.4.6.1. Such Lender's obligations under this Agreement
shall remain unchanged.
19.4.6.2. Such Lender shall remain solely responsible
to the other parties hereto for the performance of such
obligations.
19.4.6.3. Such Lender shall remain the holder of any
Notes issued to it for the purpose of this Agreement.
19.4.6.4. Such participations shall be in a minimum amount
of $5,000,000, except that there shall be no such minimum amount
between Lenders and their Affiliates or between Affiliates of
Lenders.
19.4.6.5. Borrower, Agent, and the other Lenders shall
continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and with regard to Advances and payments to be made
under this Agreement. Participation agreements between a Lender
and its participants may, however, provide that such Lender will
obtain the approval of such participant prior to such Lender
agreeing to any amendment or waiver of any provisions of this
Agreement which would (i) extend the final maturity of the Notes,
(ii) reduce the interest rates on the Loans, (iii) increase any
of the Commitments of the Lender granting the participation, or
(iv) release all or any substantial part of the Collateral other
than in accordance with the terms of the Loan Documents.
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The sale of any such participations which require Borrower to file a
registration statement with the Securities and Exchange Commission or
under the securities laws of any state shall not be permitted.
19.4.7.ASSIGNMENTS TO AFFILIATES. Any Lender may assign all or
any portion of its interest in the Loans to its Affiliates without the
acceptance or consent of Borrower or Agent (notwithstanding anything in
Section to the contrary), upon payment of the administrative fee
described in Section , and may assign all or any portion of its interest
in the Loans to the Federal Reserve Bank without acceptance or approval
of Agent or Borrower and without payment of any fees.
19.5. PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse to Agent
and the Lenders for all of Agent and the Lenders reasonable out-of-pocket costs
incurred in connection with Agent and the Lenders' due diligence review before
execution of the Loan Documents; the negotiation and preparation of the
commitment letter and the Loan Documents; the perfection of Agent's Security
Interests in any Collateral for the ratable benefit of the Lenders; the
interpretation of any of the Loan Documents; the enforcement of Agent and the
Lenders' rights and remedies under the Loan Documents after a Default or Event
of Default; any amendment of or supplementation to any of the Loan Documents;
and any waiver, consent or forbearance with respect to any Default or Event of
Default. Borrower further agrees to pay or reimburse to each Lender all of such
Lender's out-of-pocket costs incurred in connection with the enforcement of such
Lender's rights and remedies under the Loan Documents after a Default or Event
of Default. Out-of-pocket costs may include but are not limited to the
following, to the extent they are actually paid or incurred: title insurance
fees and premiums; the cost of searches for Security Interests existing against
Covered Persons; recording and filing fees; appraisal fees; environmental
consultant fees; litigation costs; and all attorneys' and paralegals' expenses
and reasonable fees. Attorneys' and paralegals' expenses may include but are not
limited to filing charges; telephone, data transmission, facsimile and other
communication costs; courier and other delivery charges; and photocopying
charges. Litigation costs may include but are not limited to filing fees,
deposition costs, expert witness fees, expenses of service of process, and other
such costs paid or incurred in any administrative, arbitration, or court
proceedings involving Agent, the Lenders and any Covered Person, including
proceedings under the Federal Bankruptcy Code. All costs which Borrower is
obligated to pay or reimburse to Agent or any Lender are Loan Obligations
payable to Agent or such Lender, secured by the Collateral, and are payable on
demand by Agent or such Lender.
19.6. GENERAL INDEMNITY.
19.6.1.Borrower shall pay, indemnify and hold harmless Agent and
each Lender and their respective directors, officers, employees, agents,
and representatives (collectively, the "Indemnified Parties") for, from
and against, and promptly reimburse the Indemnified Parties for, any and
all claims, damages, liabilities, losses, costs and expenses (including
reasonable attorneys' fees and expenses and amounts paid in settlement)
incurred, paid or sustained by the Indemnified Parties in connection
with, arising out of, based upon or otherwise involving or resulting
from any threatened, pending or completed action, suit, investigation or
other proceeding by, against or otherwise involving the Indemnified
Parties and in any way dealing with, relating to or otherwise involving
this Agreement, any of the other Loan Documents, or any transaction
contemplated hereby or thereby, except to the extent that they arise
from the gross negligence, bad faith or willful misconduct of any of the
Indemnified Parties. Borrower shall pay, indemnify and hold harmless the
Indemnified Parties for, from and against, and promptly reimburse the
Indemnified Parties for, any and all claims, damages, liabilities,
losses, costs and expenses (including reasonable attorneys' and
consultant fees and expenses, investigation and laboratory fees,
removal, remedial, response and corrective action costs, and amounts
paid in settlement) incurred,
65
paid or sustained by the Indemnified Parties as a result of the manufacture,
storage, transportation, release or disposal of any Hazardous Material on, from,
over or affecting any of the Collateral or any of the assets, properties, or
operations of any Covered Person or any predecessor in interest, directly or
indirectly, except to the extent that they arise from the gross negligence, bad
faith or willful misconduct of any of the Indemnified Parties. Borrower shall
pay, indemnify and hold harmless the Indemnified Parties for, from and against,
and shall promptly reimburse the Indemnified Parties for, any and all claims,
damages, liabilities, losses, costs and expenses (including reasonable
attorneys' fees and expenses and amounts paid in settlement) incurred, paid or
sustained by the Indemnified Parties, arising out of or relating to any
Acquisition Documents or enforcement by Agent of any of its rights with respect
thereto, except to the extent that they arise from the gross negligence, bad
faith or willful misconduct of any of the Indemnified Parties.
19.6.2.The obligations of Borrower under this Section shall
survive the termination of the Commitments, the expiration of the
Letters of Credit, the payment and satisfaction of all of the Loan
Obligations, and the release of the Collateral.
▇▇.▇.▇.▇▇ the extent that any of the indemnities required from
Borrower under this Section are unenforceable because they violate any
Law or public policy, Borrower shall pay the maximum amount which it is
permitted to pay under applicable Law.
19.7. LETTERS OF CREDIT. Borrower assumes all risks of the acts or
omissions of any beneficiary of any of the Letter of Credits. Neither the Letter
of Credit Issuer nor any of its directors, officers, employees, agents, or
representatives shall be liable or responsible for: (a) the use which may be
made of any of the Letter of Credits or for any acts or omissions of any
beneficiary in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Letter of Credit Issuer
against presentation of documents which, on their face, appear to comply with
the terms of any Letter of Credit, even though such documents may fail to bear
any reference or adequate reference to any such Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit in connection with which the Letter of Credit Issuer would,
pursuant to the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (as amended
from time to time), be absolved from liability. In furtherance and not in
limitation of the foregoing, the Letter of Credit Issuer may accept documents
that appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
19.8. CHANGES IN ACCOUNTING PRINCIPLES. If Borrower, at the end of its
Fiscal Year and with the concurrence of its independent certified public
accountants, changes the method of valuing the Inventory of Borrower, or if any
other changes in accounting principles from those used in the preparation of any
of the Financial Statements are required by or result from the promulgation of
principles, rules, regulations, guidelines, pronouncements or opinions by the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or bodies with similar functions), and
any of such changes result in a change in the method of calculation of, or
affect the results of such calculation of, any of the financial covenants,
standards or terms found herein, then the parties hereto agree to enter into and
diligently pursue negotiations in order to amend such financial covenants,
standards or terms so as to equitably reflect such changes, with the desired
result that the criteria for evaluating the financial condition and results of
operations of Borrower shall be the same after such changes as if such changes
had not been made; provided, however, that until such changes are made, all
financial covenants herein and all the provisions hereof which contemplate
financial calculation hereunder shall remain in full force and effect.
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19.9. LOAN RECORDS. The date and amount of all Advances to Borrower and
payments of amounts due from Borrower under the Loan Documents will be recorded
in the records that each Lender normally maintains for such types of
transactions. The failure to record, or any error in recording, any of the
foregoing shall not, however, affect the obligation of Borrower to repay the
Loans and other amounts payable under the Loan Documents. Borrower shall have
the burden of proving that a Lender's records are not correct. Borrower agrees
that a Lender's books and records showing the Loan Obligations and the
transactions pursuant to this Agreement shall be admissible in any action or
proceeding arising therefrom, and shall constitute prima facie proof thereof,
irrespective of whether any Loan Obligation is also evidenced by a promissory
note or other instrument. Agent will provide to Borrower a monthly statement of
Advances, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate and binding on Borrower and an
account stated (except for reversals and reapplications of payments as provided
in Section and corrections of errors discovered by such Lender), unless Borrower
notifies such Lender in writing to the contrary within ninety (90) days after
such statement is rendered. In the event a timely written notice of objections
is given by Borrower, only the items to which exception is expressly made will
be considered to be disputed by Borrower.
19.10. OTHER SECURITY AND GUARANTIES. Agent or any Lender may, without
notice or demand and without affecting Borrower's obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Loan Obligations and
exchange, enforce and release such collateral or any part thereof; and (b)
accept and hold any endorsement or guaranty of payment of all or any part of the
Loan Obligations and release or substitute any such endorser or guarantor, or
any Person who has given any Security Interest in any other collateral as
security for the payment of all or any part of the Loan Obligations, or any
other Person in any way obligated to pay all or any part of the Loan
Obligations.
19.11. CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT
SENTENCE, BORROWER, AGENT, AND LENDERS HEREBY AGREE TO THE EXCLUSIVE
JURISDICTION OF THE FEDERAL COURT OF THE EASTERN DISTRICT OF MISSOURI AND THE
STATE COURTS OF MISSOURI LOCATED IN ST. LOUIS COUNTY OR THE CITY OF ST. LOUIS,
MISSOURI, AND WAIVE ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH
RESPECT TO ANY ACTION INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING
THE RELATIONSHIP BETWEEN AGENT, LENDERS, AND BORROWER OR THE CONDUCT OF ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL BE HEARD ONLY IN THE
COURTS DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING: (1) AGENT OR LENDERS
SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS
PROPERTY IN ANY COURTS OF ANY OTHER JURISDICTION AGENT OR LENDERS DEEM NECESSARY
OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL, REAL ESTATE OR OTHER
SECURITY FOR THE LOAN OBLIGATIONS, AND (2) EACH OF THE PARTIES HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY
PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE
JURISDICTIONS.
19.12. SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO BORROWER AT ITS
ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF, AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE U.S. MAILS; OR AT AGENT'S OR LENDERS' OPTION, BY SERVICE UPON CT
CORPORATION, WHICH BORROWER IRREVOCABLY APPOINTS AS BORROWER'S AGENT FOR THE
PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF MISSOURI. AGENT OR
LENDERS SHALL PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED UPON
SAID AGENT TO BORROWER AT ITS ADDRESS ON
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THE SIGNATURE PAGES HEREOF. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF
AGENT OR LENDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
20. MISCELLANEOUS.
20.1. NOTICES. All notices, consents, requests and demands to or upon
the respective parties hereto shall be in writing, and shall be deemed to have
been given or made when delivered in person to those Persons listed on the
signature pages hereof or when deposited in the United States mail, postage
prepaid, or, in the case of telegraphic notice, or the overnight courier
services, when delivered to the telegraph company or overnight courier service,
or in the case of telex or telecopy notice, when sent, verification received, in
each case addressed as set forth on the signature pages hereof, or such other
address as either party may designate by notice to the other in accordance with
the terms of this paragraph. No notice given to or demand made on Borrower by
Agent or Lenders in any instance shall entitle Borrower to notice or demand in
any other instance.
20.2. AMENDMENTS, WAIVERS AND CONSENTS. Unless otherwise provided
herein, no amendment to or waiver of any provision of this Agreement, or of any
of the other Loan Documents, nor consent to any departure by Borrower herefrom
or therefrom, shall be effective unless it is in writing and signed by
authorized officers of Borrower and Required Lenders; provided, however, that
any such amendment, modification or consent shall be effective only in the
specific instance and for the purpose for which given, and no such amendment,
modification or consent shall, unless signed by authorized officers of Borrower
and all of the Lenders: (i) change the Letter of Credit Commitment or any
Revolving Commitment, or Term 1 Commitment or Term 2 Commitment of any Lender or
subject it to a greater obligation than expressly provided for herein, (ii)
reduce or forgive the principal of any Advance or change the rate, or mechanism
for determining the rate, of interest on any Advance or any fees or other
amounts payable by Borrower hereunder, (iii) change the regularly scheduled
dates for payments of principal or interest of any Advance or other fees or
amounts payable to Lenders under the Loan Documents (including, without
limitation, the Revolver Maturity Date), (iv) change the provisions of Section
to the detriment of any Lender, (v) change the definition of "Required Lenders"
hereunder, (vi) change the provisions of this Section, (vii) release any of the
Collateral (except in the ordinary course of business or as otherwise expressly
permitted by the terms of this Agreement) or any Covered Person from its
obligations under the Loan Documents, or (viii) change any provisions hereof
requiring ratable distributions to the Lenders. No notice to or demand on
Borrower in any case shall entitle Borrower to any other or further notice or
demand in similar or other circumstances. No failure by Agent or any Lender to
exercise, and no delay by Agent or any Lender in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by Agent or any Lender of any right, remedy, power or
privilege hereunder preclude any other exercise thereof, or the exercise of any
other right, remedy, power or privilege. Each and every right granted to Agent
and the Lenders hereunder or under any other Loan Document or other document
delivered hereunder or in connection with this Agreement or allowed to it at law
or in equity shall be deemed cumulative and may be exercised from time to time.
20.3. NO CONFLICTS. To the extent that any of the terms or conditions
contained in any of the Loan Documents conflict with the terms of this
Agreement, the terms and provisions of this Agreement shall be deemed to govern
and be controlling in all circumstances. Without limiting the generality of the
foregoing, any default, grant of security interest, or fee provision set forth
in any letter of credit application which would modify or supplement the terms
of this Agreement shall be deemed inconsistent with the terms of this Agreement.
20.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and all future holders
of the Notes and their respective successors and assigns, except that
Borrower may not assign, delegate or transfer any of its rights or
obligations under this Agreement
68
without the prior written consent of Agent and Required Lenders. With respect to
Borrower's successors and assigns, such successors and assigns shall include any
receiver, trustee or debtor-in-possession of or for Borrower.
20.5. SEVERABILITY. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition, unenforceability
or lack of authorization without invalidating the remaining provisions hereof or
affecting the validity, enforceability or legality of such provision in any
other jurisdiction unless the ineffectiveness of such provision would result in
such a material change as to cause completion of the transactions contemplated
hereby to be unreasonable.
20.6. COUNTERPARTS. This Agreement may be executed by the parties hereto
on any number of separate counterparts, and all such counterparts taken together
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Agreement to produce or account for more than one
counterpart signed by the party to be charged.
20.7. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement, the other
Loan Documents and the Notes and the rights and obligations of the parties
hereunder and thereunder shall be governed by and construed and interpreted in
accordance with the internal laws of the State of Missouri applicable to
contracts made and to be performed wholly within such state, without regard to
choice or conflict of laws provisions. This Agreement is solely for the benefit
of the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit, priority or interest under, or because of
the existence of, this Agreement.
20.8. COUNTERPART FACSIMILE EXECUTION. For purposes of this Agreement, a
document (or signature page thereto) signed and transmitted by facsimile machine
or telecopier is to be treated as an original document. The signature of any
Person thereon, for purposes hereof, is to be considered as an original
signature, and the document transmitted is to be considered to have the same
binding effect as an original signature on an original document. At the request
of any party hereto, any facsimile or telecopy document is to be re-executed in
original form by the Persons who executed the facsimile or telecopy document. No
party hereto may raise the use of a facsimile machine or telecopier or the fact
that any signature was transmitted through the use of a facsimile or telecopier
machine as a defense to the enforcement of this Agreement or any amendment or
other document executed in compliance with this Section.
20.9. NO OTHER AGREEMENTS; TERMINATION OF COMMITMENT LETTER AND TERM
SHEET. There are no other agreements between Agent, Lenders, and Borrower, oral
or written, concerning the subject matter of the Loan Documents, and all prior
agreements concerning the same subject matter, including the Commitment Letter,
are merged into the Loan Documents and thereby extinguished.
20.10. INCORPORATION BY REFERENCE. Subject to Section , all of
the terms of the other Loan Documents are incorporated in and made a part of
this Agreement by this reference.
20.11. BOATMEN'S SUBORDINATED DOCUMENTS. THE AGENT AND THE LENDERS EACH
ACKNOWLEDGE AND AGREE THAT THE BOATMEN'S SUBORDINATED INDEBTEDNESS IS
UNCONDITIONALLY GUARANTEED BY HARBOUR GROUP INVESTMENTS III, L.P. AS A PART OF
THAT GUARANTY AND PUT AGREEMENT, HARBOUR GROUP INVESTMENTS III, L.P HAS AGREED
ON THE EARLIER TO OCCUR OF (I) FEBRUARY 14, 1997, OR (II) THE FUNDING OF AN
INITIAL PUBLIC OFFERING, PRIVATE PLACEMENT OR OTHER EQUITY ISSUANCE OF HOLDINGS
(OTHER THAN THE ISSUANCE OF DE MINIMIS SHARES), FOR ANY REASON, TO PURCHASE THE
BOATMEN'S SUBORDINATED INDEBTEDNESS. ACCORDINGLY, THE AGENT AND THE LENDERS EACH
CONSENT TO THE FOREGOING ARRANGEMENT, AND CONSENT TO THE ASSIGNMENT, IF ANY, OF
THE BOATMEN'S
69
Subordinated Indebtedness and the Boatmen's Subordinated Documents to Harbour
Group Investments III, L.P.
20.12. STATUTORY NOTICE. The following notice is given pursuant to
Section 432.045 of the Missouri Revised Statutes; nothing contained in such
notice shall be deemed to limit or modify the terms of the Loan Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US
(CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE
COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
[THE NEXT TWO PAGES ARE THE SIGNATURE PAGES]
70
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by appropriate duly authorized officers as of the date first above
written.
"BORROWER"
Trak International, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
________________________________
Title: Vice President
_____________________________________
Lull Lift Corporation,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
________________________________________
Print Name: ▇▇▇▇▇ ▇. ▇▇▇▇
________________________________
Title: Vice President
_____________________________________
Notice Address:
c/o Harbour Group Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
TEL # (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Dickstein, Shapiro, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
TEL # (▇▇▇) ▇▇▇-▇▇▇▇
71
Signature page to Loan Agreement
dated as of August 16, 1996, between Trak International, Inc.,
Lull Lift Corporation,
The Boatmen's National Bank of St. Louis, as Agent, and
The Boatmen's National Bank of St. Louis,
Fleet Capital Corporation, and LaSalle National Bank
The Boatmen's National Bank of St. Louis,
as Agent and Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
________________________________________
Print Name: ▇▇▇▇ ▇▇▇▇▇▇
________________________________
Title: Vice President
_____________________________________
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Leveraged Finance Group
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
TEL # (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇ & Fingersh
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
TEL # (▇▇▇) ▇▇▇-▇▇▇▇
Fleet Capital Corporation,
a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________________
Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Title: Vice President
_____________________________________
LaSalle National Bank,
a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
________________________________________
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
________________________________
Title: Senior Vice President
_____________________________________
EXHIBIT
GLOSSARY AND INDEX OF DEFINED TERMS
"Account": as to any Person, the right of such Person to payment for goods sold
or leased or for services rendered by such Person.
"Account Assignment": the assignment of the Cash Collateral Account that is
executed and delivered to Agent for the benefit of Lenders as provided herein,
and all amendments, restatements, and replacements thereof.
"Account Debtor": the obligor on any Account.
"Acquisition": the acquisition of the assets and consummation of the
transactions contemplated by the Acquisition Documents.
"Acquisition Agreement": that certain Asset Purchase Agreement dated as of
August ___, 1996, between Lull and Seller, together with any and all other
documents, certificates, exhibits and schedules, and agreements executed in
connection therewith, or contemplated thereby.
"Acquisition Documents": (i) the Acquisition Agreement, and (ii) all amendments,
modifications, replacements, assignments, supplements, and restatements of the
foregoing, pursuant to which Borrower has purchased substantially all of the
assets of Lull.
"Adjusted Capital Expenditures" is defined in Section .
"Adjusted Operating Cash Flow" is defined in Section .
"Advance": a Revolving Advance, a Swingline Advance, a Term 1 Advance, or a Term
2 Advance.
"Advance Date" is defined in Section .
"Advance Request" is defined in Section .
"Affected Principal Amount" is defined in Section .
"Affiliate": with respect to any Person, (a) any other Person who is a partner,
director, officer, member, managing member, or stockholder of such Person; and
(b) any other Person which, directly or indirectly, is in control of, is
controlled by or is under common control with such Person, and any partner,
director, officer, member, managing member, or stockholder of such other Person
described. For purposes of this Agreement, control of a Person by another Person
shall be deemed to exist if such other Person has the power, directly or
indirectly, either to (i) vote twenty percent (20%) or more of the securities or
equity interests having the power to vote in an election of directors of such
Person which is a corporation or the management of the affairs of a Person which
is not a corporation, or (ii) direct the management of such Person, whether by
contract or otherwise and whether alone or in combination with others.
"Agent" is defined in the introductory paragraph of this Agreement.
"Aggregate Revolving CBR Loan": the sum of all Revolving CBR Advances.
"Aggregate Revolving Commitment" is defined in Section .
"Aggregate Revolving LIBOR Loan": the sum of all Revolving LIBOR Advances.
"Aggregate Revolving Loan": the sum of the Aggregate Revolving CBR Loan and the
Aggregate Revolving LIBOR Loan.
"Aggregate Term 1 CBR Loan": the sum of all Term 1 Loan CBR Advances.
"Aggregate Term 2 CBR Loan": the sum of all Term 2 Loan CBR Advances.
"Aggregate Term 1 Commitment" is defined in Section .
"Aggregate Term 2 Commitment" is defined in Section .
"Aggregate Term 1 LIBOR Loan": the sum of all Term 1 Loan LIBOR Advances.
"Aggregate Term 2 LIBOR Loan": the sum of all Term 2 Loan LIBOR Advances.
"Aggregate Term 1 Loan": the sum of the Aggregate Term 1 CBR Loan and the
Aggregate Term 1 LIBOR Loan.
"Aggregate Term 2 Loan": the sum of the Aggregate Term 2 CBR Loan and the
Aggregate Term 2 LIBOR Loan.
"Asbestos Material": either asbestos or asbestos-containing materials.
"Assignment and Acceptance": is defined in Section .
"Audit" is defined in Section .
"Boatmen's" is defined in the introductory paragraph of this Agreement.
"Boatmen's Subordinated Documents": means that certain Subordinated Note
Agreement, of even date herewith, executed by Holdings, and payable to the order
of The Boatmen's National Bank of St. Louis, in the original principal amount of
$14,000,000, together with any and all other documents, certificates, exhibits
and schedules, and agreements executed in connection therewith, or contemplated
thereby, as any of the foregoing may be amended, modified, replaced or restated
from time to time.
"Boatmen's Subordinated Indebtedness": means an originally issued principal
amount of no more than $14,000,000, which shall have been loaned to Holdings
pursuant to the Boatmen's Subordinated Documents which shall be subject to the
Boatmen's Subordination Agreement.
"Boatmen's Subordination Agreement": that certain Subordination Agreement of
even date herewith between Agent and Boatmen's (in its capacity as subordinated
lender), as amended, modified, replaced or restated from time to time.
"Borrower" is defined in the introductory paragraph of this Agreement.
"Borrowing Base" is defined in Section .
"Borrowing Base Certificate" is defined in Section .
"Borrowing Officer": as to Borrower, means the Chairman of the Board of
Directors, the President, the chief executive officer, the chief operating
officer, the chief financial officer, or the Treasurer, any Assistant Treasurer
or any Vice President in charge of a principal business unit.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the laws of either
the United States or the State of Missouri.
"Capital Expenditure" is defined in Section .
"Capital Lease": any lease that has been or should be capitalized under GAAP.
"Cash Collateral Account" is defined in Section .
"CBR": the per annum interest rate designated from time to time by Agent as its
Corporate Base Rate, which is a reference rate and does not necessarily
represent the lowest or best rate charged to any customer of Agent.
"CBR Advance": any Advance bearing interest at the Revolver Adjusted CBR or the
Term Loan Adjusted CBR.
"Change of Control": means (a) Holdings (or another corporation or partnership
owned directly or indirectly by Harbour Group Investments III, L.P. (or one of
its Affiliates) and Borrower's management) shall cease to own beneficially and
of record, free and clear of all Security Interests (other than any Security
Interest of Agent, for the ratable benefit of the Lenders), other encumbrances
or voting agreements, restrictions or trusts of any kind 100% of the outstanding
shares of the capital stock of Borrower, or (b) Harbour Group Investments III,
L.P. or any of its Affiliates shall cease to own beneficially and of record,
free and clear of all Security Interests, other encumbrances, or voting
agreements, restrictions or trusts of any kind at least (i) 80% of the
outstanding shares of capital stock of Holdings (or such other corporation which
becomes the parent of Borrower in accordance with the preceding clause (a)) on a
fully diluted basis and shares representing the right to elect a corresponding
percentage of directors of Holdings or (ii) equivalent ownership rights in any
partnership which becomes the parent of the Borrower in accordance with clause
(a).
"Charter Documents": the articles or certificate of incorporation and bylaws of
a corporation; the certificate of limited partnership and partnership agreement
of a limited partnership; the partnership agreement of a general partnership;
the operating agreement of a limited liability company; or the indenture of a
trust.
"Chattel Paper": the meaning given such term under the UCC.
"Claims Act": the Assignment of Claims Act of 1940, as amended from time to
time.
"COBRA": the Consolidated Omnibus Budget Reconciliation Act of 1985.
"Code": the Internal Revenue Code of 1986, as amended from time to time, and all
regulations thereunder, as amended from time to time, of the IRS.
"Collateral": all of the Real Property Collateral, Personal Property Collateral,
and other property in which Agent has a Security Interest for the ratable
benefit of Lenders and all proceeds and products thereof, and replacements
therefor.
"Commercial Letter of Credit": a commercial (documentary) letter of credit
issued by the Letter of Credit Issuer pursuant to the Letter of Credit
Commitment in Section .
"Commitment Fee" is defined in Section .
"Commitment Fee Rate" is defined in Section .
"Commitments": the Aggregate Revolving Commitment, the Swingline Commitment, the
Aggregate Term 1 Commitment, the Aggregate Term 2 Commitment, and the Letter of
Credit Commitment.
"Commonly Controlled Entity": a Person which is under common control with
another Person within the meaning of Section 414(b) or (c) of the Code.
"Compliance Certificate" is defined in Section .
"Consented Acquisition": an acquisition by any Covered Person of the outstanding
stock, or substantially all of the assets, of another Person or the merger of
any Covered Person with another Person, which has been consented to in writing
by each of Lenders.
"Consolidated" and "consolidated" are defined in Section .
"Contract": any contract, note, bond, indenture, deed, mortgage, deed of trust,
security agreement, pledge, hypothecation agreement, assignment, or other
agreement or undertaking, or any security.
"Control Event": means (a) the execution by any Covered Person of any letter of
intent with respect to any proposed transaction or event or series of
transactions or events that, individually or in the aggregate, could reasonably
be expected to result in a Change of Control, or (b) the execution of any
written agreement that, when fully performed by the parties thereto, would
result in a Change in Control.
"Conversion Date" is defined in Section .
"Covered Person" is defined in Section .
"Current Assets" is defined in Section .
"Current Liabilities" is defined in Section .
"Default": any of the events listed in Section of this Agreement, without giving
effect to any requirement for the giving of notice, for the lapse of time, or
both, or for the happening of any other condition, event or act.
"Disclosure Schedule" is defined in Section .
"Distribution" is defined in Section .
"Documents": the meaning given such term under the UCC.
"DOL": the United States Department of Labor.
"Dollars" and the sign "$": lawful money of the United States.
"Effective Date" is defined in Section .
"Eligible Accounts": only such Accounts of Borrower as Agent, in its sole
discretion, which shall not be unreasonably exercised, shall from time to time
elect to consider Eligible Accounts for the purposes of this
Agreement, PROVIDED, HOWEVER, that until Agent has given written notice to
Borrower disqualifying an Account, such Account shall be deemed to constitute an
Eligible Account to the extent not disqualified by any other provision of this
definition. Without limiting the discretion of Agent to consider Accounts of
Borrower not to be Eligible Accounts, and by way of example only of types of
Accounts that Agent will consider not to be Eligible Accounts, the following
classes of Accounts will not be Eligible Accounts, unless approved in writing by
Agent in each case: (i) any Account with respect to which Agent does not have a
valid and enforceable, first priority, perfected Security Interest; (ii) any
Account which remains unpaid as of 90 days after the original date of the
applicable invoice; (iii) any Account of a single Account Debtor if 25% or more
of the balances due on all Accounts of such Account Debtor are ineligible under
clause (i) or (ii); (iv) any Account with respect to which the Account Debtor is
(a) an Affiliate or employee of Borrower or (b) a supplier, creditor, sales
representative or distributor of Borrower, provided, however, that such Account
shall be ineligible only to the extent of any payable due and owing by Borrower
in favor of such Account Debtor; (v) any Account as to which the perfection of
Agent's Security Interest is governed by any federal, state or local statutory
requirements other than those of the UCC or the Claims Act; (vi) any Account
with respect to which the Account Debtor is the United States or any department,
agency, public corporation or other instrumentality thereof, unless filings and
acknowledgements in accordance with the Claims Act and any other steps necessary
to perfect Agent's Security Interest have been complied with to Agent's
satisfaction; (vii) notwithstanding subclause (ii) any Account with respect to
which the Account Debtor is not organized under the laws of the United States
and does not maintain its chief executive office within the United States and
any Account with respect to which the Account Debtor is the government of any
foreign country or any municipality or other political subdivision thereof, or
any department, agency, public corporation or other instrumentality thereof,
unless (x) either (a) the creditor with respect to such Account and Agent are
beneficiaries of a letter of credit in the amount of such Account that secures
such Account Debtor's payment on such Account and is in form and substance
satisfactory to Agent and has been issued by a bank satisfactory to Agent and,
if so required by Agent, confirmed by a bank satisfactory to Agent, or (b) the
creditor with respect to such Account has obtained for the benefit of Agent
F.C.I.A. insurance insuring such Account Debtor's payment of such Account, and
(y) such Account remains unpaid 60 days after the date due; (viii) any Account
with respect to which the Account Debtor is located in any state denying
creditors access to its courts without qualifying to do business in such state
or filing a notice in whatever form or substance, unless Borrower has so
qualified or filed to Agent's satisfaction; (ix) any Account with respect to
goods or services whose delivery or performance has been rejected by the Account
Debtor or whose earlier acceptance has been revoked; (x) any Account, the goods
giving rise to which have not been shipped and delivered to and accepted by the
Account Debtor or the services giving rise to which have not been performed by
Borrower, (xi) any Account arising from the delivery of goods or performance of
services for which an invoice has not been sent to the Account Debtor within ten
days after such delivery or performance; (xii) any Account owing by an Account
Debtor that is the subject of a bankruptcy or similar insolvency proceeding, has
made an assignment for the benefit of creditors, has acknowledged that it is
unable to pay its debts as they mature, or whose assets have been transferred to
a receiver or trustee, or who has ceased business as a going concern or, if an
individual, who is dead or has been judicially declared incompetent; (xiii) any
Account with respect to which the Account Debtor's obligation to pay the Account
is conditional upon the Account Debtor's approval or is otherwise subject to any
repurchase obligation or return right, as with sales made on a ▇▇▇▇-and-hold,
guarantied sale, sale-and-return, sale on approval (except with respect to
Accounts in connection with which Account Debtors are entitled to return
Inventory solely on the basis of the quality of such Inventory) or consignment
basis or, to the extent of any dilution resulting therefrom, Accounts arising
from a sale involving any cash discount other than cash discounts offered by
Borrower in the ordinary course of business, contra-account, credit memorandum
or other similar factor; (xiv) any Account owing by an Account Debtor that has a
disputed liability or any existing unresolved claim with respect to any other
Account due from such Account Debtor, or that has any right of setoff against
such Account, or to which Borrower is indebted in any way, but only to the
extent of such indebtedness, setoff, dispute or claim; (xv) any Account subject
to a chargeback from a volume discount or an advertising discount, but only to
the extent of such chargeback or discount; (xvi) any Account owing by an Account
Debtor whose Indebtedness to Borrower
exceeds a credit limit satisfactory to Agent, PROVIDED, HOWEVER, that until
Agent has given written notice to Borrower disqualifying an Account, such
Account shall not be disqualified under this clause; (xvii) any Account of an
Account Debtor with respect to particular goods still in the possession of
Borrower or included in Inventory of Borrower and against which the Account
Debtor has filed a financing statement under the UCC or has obtained or
purported to have obtained a Security Interest; (xviii) any Account with respect
to which the delivery of goods or performance of services is bonded; (xix) any
Account as to which Agent does not have the right or ability to obtain direct
payment to Agent; (xx) any Account with respect to which any of the
representations, warranties, covenants and agreements contained in any of the
Loan Documents are not or have ceased to be complete and correct or have been
breached; (xxi) any Account with respect to which, in whole or in part, a check
or other instrument for the payment of money has been received, presented for
payment and returned uncollected for any reason; (xxii) any Account which
represents a progress billing or as to which Borrower has extended the time for
payment without the consent of Agent (for purposes hereof, "progress billing"
being any invoice for goods sold or leased or services rendered under a contract
or agreement pursuant to which the Account Debtor's obligation to pay such
invoice is conditioned upon Borrower's completion of any further performance
under the contract or agreement); (xxiii) any Account which is evidenced by a
promissory note or other instrument or by chattel paper or which has been
reduced to judgment; (xxiv) any Account which arises out of a sale not made in
the ordinary course of Borrower's business; and (xxv) any Account as to which
Agent has determined in its absolute discretion that the prospect of payment or
collection on a timely basis is impaired or that Agent otherwise deems in its
absolute discretion to be uncreditworthy, PROVIDED, HOWEVER, that until Agent
has given written notice to Borrower disqualifying an Account, such Account
shall not be disqualified under this clause.
"Eligible Inventory": all Inventory of Borrower, except Inventory of Borrower
(i) that is obsolete, not in good condition, or not either currently usable or
currently saleable in the ordinary course of Borrower's business; (ii) that is
not subject to a valid and enforceable, first priority, perfected Security
Interest in favor of Agent, for the ratable benefit of Lenders; (iii) that is in
the possession of Borrower but not owned by Borrower; (iv) that is stored at a
location other than one of the locations listed in the Disclosure Statement,
unless approved by Agent in writing; (v) that is not satisfactory to Agent
because of its age, condition, type, or quantity, PROVIDED, HOWEVER, that until
Agent has given written notice to Borrower disqualifying any Inventory, such
Inventory shall not be disqualified under this clause; (vi) that is more than
two years old; (vii) to which Borrower does not have lawful and absolute title;
(viii) to which Borrower does not have the full and unqualified right to assign
and grant a Security Interest to Agent as security for the Loan Obligations;
(ix) which is subject to any Security Interest other than any of the Permitted
Security Interests described in Sections through , and ; (x) with respect to
which any of the representations, warranties, covenants and agreements contained
in any of the Loan Documents are not or have ceased to be complete and correct
or have been breached, or (xi) is not maintained in the States of Wisconsin,
Minnesota or North Dakota.
"Employment Law": ERISA, the Occupational Safety and Health Act, the Fair Labor
Standards Act, or any other Law pertaining to the terms or conditions of labor
or safety in the workplace.
"Encumbrance": as to any item of real or personal property any easement,
right-of-way, license, condition, or restrictive covenant or zoning, or similar
restriction, that is not a Security Interest but is enforceable by any Person
other than the record owner of such property.
"Environmental Law": shall mean any federal, state or local rule, law,
regulation, ordinance, code, or judgment (including, the common law and any
judicial or administrative interpretation, guidance, directive, policy,
statements, or opinions) relating to human health and safety, including, without
limitation, compliance with any Permit, the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Water Act, the Clean Air Act, or any
other Law pertaining to environmental quality or remediation of Hazardous
Material, as any of the foregoing are amended or modified from time to time.
"EPA": the United States Environmental Protection Agency.
"Equipment": the meaning given such term under the UCC.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended from
time to time.
"ERISA Affiliate": any trade or business (irrespective of whether incorporated)
which is a member of a group of which Borrower is a member and thereafter
treated as a single employer under ss.414(b), (c), (m) or (o) of the Code or
applicable Treasury Regulations.
"Event of Default": any of the events listed in Section of this Agreement as to
which any requirement for the giving of notice, for the lapse of time, or both,
or for the happening of any further condition, event or act has been satisfied.
"Excess Cash Flow" is defined in Section .
"Execution Date": the date when this Agreement has been executed.
"Exemption Certificate" is defined in Section .
"Existing Default": a Default which has occurred and is continuing, or an Event
of Default which has occurred, in each case which has not been waived in writing
by the Required Lenders.
"Federal Funds Rate": for any day, the rate per annum (rounded to the nearest
1/100 of 1% or, if there is no nearest 1/100 of 1%, then to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers on such day, as published by the Federal Reserve Bank of
St. Louis on the Business Day next succeeding such day, provided that (i) if the
day for which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to Agent on such day on such
transactions as determined by Agent.
"Financial Statements": financial statements of Borrower that are furnished to
Agent as required in Section of this Agreement.
"Finished Goods" is defined in Section .
"Fiscal Quarter": each three month period in a Covered Person's Fiscal Year.
"Fiscal Year": each Covered Person's fiscal year for financial accounting
purposes, which is a year of twelve calendar months ending on September 30 of
each year. Fiscal Year 1996 for each Covered Person commenced on the Effective
Date and will end on September 30.
"Fixed Charges" is defined in Section .
"Fixtures": the meaning given such term under the UCC.
"FRB": the Board of Governors of the Federal Reserve System and any successor
thereto or to the functions thereof.
"GAAP": those generally accepted accounting principles set forth in Statements
of the Financial Accounting Standards Board and in Opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants or
which have other substantial authoritative support in the United States and are
applicable in the circumstances, as applied on a consistent basis.
"General Intangibles": the meaning given such term under the UCC.
"Goods": the meaning given such term under the UCC.
"Governmental Authority": the federal government of the United States; the
government of any foreign country that is recognized by the United States or is
a member of the United Nations; any state of the United States; any local
government or municipality within the territory or under the jurisdiction of any
of the foregoing; any department, agency, division, or instrumentality of any of
the foregoing; and any court, arbitrator, or board of arbitrators whose orders
or judgements are enforceable by or within the territory of any of the
foregoing.
"Guaranties": each guaranty of part or all of the Loan Obligations executed and
delivered to Agent for the benefit of Lenders by any Guarantor including,
without limitation, Holdings, and all amendments, restatements, and replacements
thereof.
"Guarantor": means Holdings.
"Harbour Subordinated Documents": means that certain Amended and Restated
Subordinated Note Agreement, of even date herewith, executed by Trak, and
payable to the order of Harbour Group Investments III, L.P. in the original
principal amount of $2,000,000, together with any and all other documents,
certificates, exhibits and schedules, and agreements executed in connection
therewith, or contemplated thereby, as any of the foregoing may be amended,
modified, replaced or restated from time to time.
"Harbour Subordinated Indebtedness": means an originally issued principal amount
of no more than $2,000,000, which shall have been loaned to Borrower pursuant to
the Harbour Subordinated Documents which shall be subject to the Harbour
Subordination Agreement.
"Harbour Subordination Agreement": that certain Subordination Agreement of even
date herewith between Agent and Harbour Group Investments III, L.P., as amended,
modified, replaced or restated from time to time.
"Hazardous Material": any hazardous, radioactive, petroleum, petroleum derived
substances, polychlorinated byphenyls, urea formaldehyde, toxic, solid or
special waste, material, substance, pollutants, contaminants or constituent
thereof, or any other such substance (as defined under any applicable
Environmental Law), including Asbestos Material, in each case which substance is
regulated under any Environmental Law or otherwise required to be remediated
under any Environmental Law.
"Historical Financial Statements" is defined in Section .
"Holdings": Uniquip Corporation, a Delaware corporation.
"Indebtedness": as to any Person at any particular date, any contractual
obligation enforceable against such Person (i) to repay borrowed money; (ii) to
pay the deferred purchase price of property or services;
(iii) to make payments or reimbursements with respect to bank acceptances or to
a factor; (iv) to make payments or reimbursements with respect to letters of
credit whether or not there have been drawings thereunder; (v) with respect to
which there is any Security Interest in any property of such Person; (vi) to
make any payment or contribution to a Multi-Employer Plan; (vii) that is
evidenced by a note, bond, debenture or similar instrument; and (viii) under any
conditional sale agreement or title retention agreement.
"Indemnified Parties" is defined in Section .
"Indirect Obligation": as to any Person, (a) any guaranty by such Person of any
Obligation of another Person; (b) any Security Interest in any property of such
Person that secures any Obligation of another Person, (c) any enforceable
contractual requirement that such Person (i) purchase an Obligation of another
Person or any property that is security for such Obligation, (ii) advance or
contribute funds to another Person for the payment of an Obligation of such
other Person or to maintain the working capital, net worth or solvency of such
other Person as required in any documents evidencing an Obligation of such other
Person, (iii) purchase property, securities or services from another Person for
the purpose of assuring the beneficiary of any Obligation of such other Person
that such other Person has the ability to timely pay or discharge such
Obligation, (iv) grant a Security Interest in any property of such Person to
secure any Obligation of another Person, or (v) otherwise assure or hold
harmless the beneficiary of any Obligation of another Person against loss in
respect thereof; and (d) any other contractual requirement enforceable against
such Person that has the same substantive effect as any of the foregoing. The
term "Indirect Obligation" does not, however, include the indorsement by a
Person of instruments for deposit or collection in the ordinary course of
business or the liability of a general partner of a partnership for Obligations
of such partnership. The amount of any Indirect Obligation of a Person shall be
deemed to be the stated or determinable amount of the Obligation in respect of
which such Indirect Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by
such Person in good faith.
"Initial Financial Statements" is defined in Section .
"Instruments": the meaning given such term under the UCC.
"Insurance/Condemnation Proceeds": insurance proceeds payable as a consequence
of damage to or destruction of any of the Collateral and proceeds payable as a
consequence of condemnation or sale in lieu of condemnation of any of the
Collateral.
"Intellectual Property": as to any Person, any domestic or foreign patents or
patent applications of such Person, any inventions made or owned by such Person
upon which either domestic or foreign patent applications have not yet been
filed, any domestic or foreign trade names or trademarks of such Person, any
domestic or foreign trademark registrations or applications filed by such
Person, any domestic or foreign service marks of such Person, any domestic or
foreign service ▇▇▇▇ registrations and applications by such Person, any domestic
or foreign copyrights of such Person, any domestic or foreign copyright
registrations or applications by such Person, and any proprietary information or
trade secrets.
"Intellectual Property Assignment": each assignment of Intellectual Property
that Borrower executes and delivers to Agent for the benefit of Lenders, either
on or after the Execution Date, and all amendments, restatements, and
replacements thereof.
"Interest Expense" is defined in Section .
"Interest Period" is defined in Section .
"Interest Rate Protection Agreement": an agreement in form and substance
acceptable to Agent designed to protect Borrower from the fluctuations of
interest rates, whether in the form of an interest rate cap, interest rate swap
or exchange, interest rate corridor, or interest rate collar.
"Interest Rate Ratio Calculation Date" is defined in Section .
"Inventory": goods owned and held by a Person for sale, lease or resale or
furnished or to be furnished under contracts for services, and raw materials,
goods in process, materials, component parts and supplies used or consumed, or
held for use or consumption in such Person's business.
"Investment": (a) a loan or advance of money or property to a Person, (b) stock
or other equity interest in a Person, (c) a debt instrument issued by a Person,
whether or not convertible to stock or other equity interest in such Person, or
(d) any other interest in or rights with respect to a Person which include, in
whole or in part, a right to share, with or without conditions or restrictions,
some or all of the revenues or net income of such Person.
"IRS": the Internal Revenue Service of the United States.
"Law": any statute, rule, regulation, order, judgment, award or decree of any
Governmental Authority.
"Lenders": shall collectively mean (a) The Boatmen's National Bank of St. Louis,
(b) each of the other banks and financial institutions listed on the signature
pages hereof, and (c) all banks and financial institutions which take assignment
from time to time of all or a portion any of the foregoing's rights and
obligations under the Agreement pursuant to the terms of Section and an
Assignment and Acceptance.
"Lenders' Exposure": The sum of the Aggregate Revolving Loan, the Aggregate
Swingline Loan, the Aggregate Term 1 Loan, the Aggregate Term 2 Loan, and the
Letter of Credit Exposure.
"Lending Office": ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇; Attention: Leveraged
Lending.
"Letter of Credit": a Standby Letter of Credit issued by the Letter of Credit
Issuer pursuant to the Letter of Credit Commitment in Section .
"Letter of Credit Commitment" is defined in Section .
"Letter of Credit Exposure": the undrawn amount of all outstanding letters of
credit issued for the account of Borrower under the Letter of Credit Commitment,
plus all amounts drawn on such letters of credit and not reimbursed by Borrower.
"Letter of Credit Fee" is defined in Section .
"Letter of Credit Issuer": The Boatmen's National Bank of St. Louis.
"Letter of Credit Request" is defined in Section .
"LIBOR Advance": an Advance bearing interest at the Revolver Adjusted LIBO Rate
or the Term Loan Adjusted LIBO Rate.
"LIBO Rate": an interest rate per annum equal to the quotient (rounded to the
nearest 0.001%) of
(i) the rate at which Dollar deposits in immediately available funds,
approximately equal in amount to the applicable Advance and for a
maturity equal to the applicable Interest Period for such
Advance, are offered or available in the London Interbank Market for Eurodollars
as of 11:00 a.m. (London time) two Business Days before the applicable Advance
Date or Conversion Date, as reported on Telerate Screen LIBO page 3750, and if
such Telerate Screen no longer exists at any time subsequent to the Effective
Date, then the equivalent thereof,
divided by
(ii) a number equal to one minus the decimal equivalent of the aggregate
of the maximum rates during the applicable Interest Period of all
reserve requirements (including, without limitation, marginal,
emergency, supplemental and special reserves), established by the FRB or
any other Governmental Authority to which any Lender is subject, in
respect of "Eurocurrency liabilities" as referred to in Regulation D,
including but not limited to those imposed under Regulation D. (The
amount of every LIBOR Advance shall be deemed to constitute a
Eurocurrency liability and as such shall be deemed to be subject to such
reserve requirements without benefit of credits for proration,
exceptions or offsets which may be available from time to time to any
Lender under Regulation D.) The LIBO Rate shall be adjusted
automatically on and as of the effective date of any change in any such
reserve requirements.
"Loan": a Revolving Loan, a Swingline Loan, or a Term Loan.
"Loan Documents": this Agreement, the Notes, the Security Documents and all
other agreements, certificates, documents, instruments and other writings
executed in connection herewith, or from time to time executed in connection
herewith, as any may be amended, modified, restated or replaced from time to
time.
"Loan Obligations": all of Borrower's Indebtedness owing to Lenders under the
Loan Documents, whether as principal, interest, fees or otherwise, all
reimbursement obligations of Borrower to Lenders with respect to the Letter of
Credit Exposure, all obligations of Borrower to any Lender under Rate Hedging
Obligations or the like or options therefor, and all other obligations and
liabilities of Borrower to Lenders under the Loan Documents (including all
extensions, renewals, modifications, rearrangements, restructures, replacements
and refinancings of the foregoing, whether or not the same involve modifications
to interest rates or other payment terms), whether now existing or hereafter
created, absolute or contingent, direct or indirect, joint or several, secured
or unsecured, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, and whether or not
presently contemplated by Borrower and Lenders in the Loan Documents.
"Lockboxes" is defined in Section .
"Lull" is defined in the introductory paragraph of this Agreement.
"Management Agreement" is defined in Section .
"Management Payments" is defined in Section .
"Mandatory Advance" is defined in Section .
"Material Adverse Effect": as to any Covered Person and with respect to any
event or occurrence of whatever nature (including any adverse determination in
any litigation, arbitration, investigation or proceeding), a material adverse
effect on the business, operations, revenues, financial condition, property, or
business prospects of such Covered Person taken as a whole, or the value of the
Collateral, or the ability of such Covered Person to timely pay or perform such
Covered Person's Obligations generally, or in the
case of Borrower specifically, the ability of Borrower to pay or perform any of
Borrower's Obligations to Lender.
"Material Agreement": as to any Person, any Contract to which such Person is a
party or by which such Person is bound which, if violated or breached, would
have a Material Adverse Effect on such Person or any Covered Person; the
Minnesota Mutual Subordinated Documents, the Harbour Subordinated Documents, the
Boatmen's Subordinated Documents, and the Acquisition Documents are deemed to be
Material Agreements of the Covered Person a party thereto.
"Material Law": any Law whose violation by a Person could reasonably be expected
to have a Material Adverse Effect with respect to such Person.
"Material License": (i) as to any Covered Person, any Permit or consent from a
Governmental Authority or other Person and any registration and filing with a
Governmental Authority or other Person which if not obtained, held or made by
such Covered Person would have a Material Adverse Effect with respect to such
Covered Person or any other Covered Person, and (ii) as to any Covered Person
who is a party to this Agreement or any of the other Loan Documents, any
license, permit or consent from a Governmental Authority or other Person and any
registration or filing with a Governmental Authority or other Person that is
necessary for the execution or performance by such party, or the validity or
enforceability against such party, of this Agreement or such other Loan
Document.
"Material Obligation": as to any Person, an Obligation of such Person which if
not fully and timely paid or performed would have a Material Adverse Effect on
such Person.
"Material Proceeding": any litigation, investigation or other proceeding by or
before any Governmental Authority (i) which involves any of the Loan Documents
or any of the transactions contemplated thereby, or involves a Covered Person as
a party or any property of a Covered Person, and would have a Material Adverse
Effect with respect to any Covered Person if adversely determined, (ii) in which
there has been issued an injunction, writ, temporary restraining order or any
other order of any nature which purports to restrain or enjoin the making of any
Advance, the consummation of any other transaction contemplated by the Loan
Documents, or the enforceability of any provision of any of the Loan Documents,
(iii) which involves the actual or alleged breach or violation by a Covered
Person of, or default by a Covered Person under, any Material Agreement, or (iv)
which involves the actual or alleged violation by a Covered Person of any
Material Law.
"Maturity": as to any Indebtedness, the time when it becomes payable in full,
whether at a regularly scheduled time, because of acceleration or otherwise.
"Maximum Available Amount" is defined in Section .
"Maximum Swingline Amount" is defined in Section .
"Minnesota Mutual": means The Minnesota Mutual Life Insurance Company.
"Minnesota Mutual Subordinated Documents": means that certain Note Purchase
Agreement dated as of August 16, 1995, as amended from time to time, executed by
Trak, and payable to the order of Minnesota Mutual in the original principal
amount of $5,000,000, together with any and all other documents, certificates,
exhibits and schedules, and agreements executed in connection therewith, or
contemplated thereby, as any of the foregoing may be amended, modified, replaced
or restated from time to time.
"Minnesota Mutual Subordinated Indebtedness": means an originally issued
principal amount of no more than $5,000,000, which shall have been loaned to
Trak pursuant to the Minnesota Mutual Subordinated Documents
"Mortgage": is defined in Section .
"Multi-employer Plan": a Pension Benefit Plan which is a multi-employer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Income": is defined in Section .
"Net Worth" is defined in Section .
"Non-bank Lender" is defined in Section .
"Note": the Swingline Note, any Revolving Note, any Term 1 Note, or any Term 2
Note.
"Notice of Conversion/Continuation" is defined in Section .
"Obligation": as to any Person, any Indebtedness of such Person, any guaranty by
such Person of any Indebtedness of another Person, and any contractual
requirement enforceable against such Person that does not constitute
Indebtedness of such Person or a guaranty by such Person but which would involve
the expenditure of money by such Person if complied with or enforced.
"Operating Cash Flow" is defined in Section .
"Operating Lease": any lease that is not a Capital Lease.
"Overadvance" is defined in Section .
"PBGC": the Pension Benefit Guaranty Corporation.
"Pension Benefit Plan": any pension or profit-sharing plan which is covered by
Title I of ERISA and all other benefit plans in respect of which a Covered
Person or a Commonly Controlled Entity of such Covered Person is an "employer"
as defined in Section 3(5) of ERISA.
"Permits": shall mean all governmental licenses, approvals, regulations,
authorizations and permits, including, without limitation, any of the foregoing
issued pursuant to, under or related to, any Environmental Law.
"Permitted Encumbrances": those Encumbrances listed in Schedule B-1 of the
mortgagee title insurance policies required to be delivered by Borrower to Agent
as a condition to Lenders making the initial Advance and such other Encumbrances
consented to in writing by the Lenders.
"Permitted Financial Institution" is defined in Section .
"Permitted Indebtedness" is defined in Section .
"Permitted Indirect Obligations" is defined in Section .
"Permitted Investments" is defined in Section .
"Permitted Security Interests" is defined in Section .
"Person": any individual, partnership, corporation, trust, unincorporated
association, joint venture, limited liability company, Governmental Authority,
or other organization in any form that has the legal capacity to ▇▇▇ or be sued.
If the context so implies or requires, the term Person includes Borrower.
"Personal Property Collateral": all of the Goods, Equipment, Accounts,
Inventory, Instruments, Documents, Chattel Paper, General Intangibles and other
personal property of Borrower, whether now owned or hereafter acquired, and all
proceeds thereof, in which Agent at any time holds a Security Interest for the
benefit of Lenders.
"Rate Hedging Obligation": of a Person means any and all Obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced, or acquired (including all renewals, extensions,
modifications thereof and substitutions therefor), under (a) any Interest Rate
Protection Agreement and any and all other agreements, devices or arrangements
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities, or exchange transactions, including, but not limited to,
Dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants, and (b) any
and all cancellations, buybacks, reversals, terminations or assignments of any
of the foregoing.
"Real Property Collateral": the real property of Borrower described in
Attachment 1 to the Disclosure Schedule and all other real property in which
Agent at any time holds a Security Interest for the benefit of Lenders pursuant
to a Mortgage.
"Regulation D", "Regulation G", "Regulation T", "Regulation U", and "Regulations
X", mean, respectively, Regulation D issued by the FRB, Regulation G issued by
the FRB, Regulation T issued by the FRB, Regulation U issued by the FRB, and
Regulation X issued by the FRB,.
"Remaining Interest Period" is defined in Section .
"Reportable Event": a reportable event as defined in Title IV of ERISA or the
regulations thereunder.
"Required Lenders" is defined in Section .
"Revolver Adjusted CBR" is defined in Section .
"Revolver Adjusted LIBO Rate" is defined in Section .
"Revolver CBR Spread" is defined in Section .
"Revolver LIBO Spread" is defined in Section .
"Revolver Maturity Date" is defined in Section .
"Revolving Advance" is defined in Section .
"Revolving CBR Advance": a Revolving Advance bearing interest at the Revolver
Adjusted CBR.
"Revolving Commitment" is defined in Section .
"Revolving LIBOR Advance": a Revolving Advance bearing interest at the Revolver
Adjusted LIBO Rate.
"Revolving Loan": each Lender's prorata share of the Aggregate Revolving Loan.
"Revolving Note" is defined in Section .
"Revolving Notes" is defined in Section .
"Rights Assignment": means that certain Rights Assignment Agreement between
Borrower and Agent (for the ratable benefit of the Lenders), of even date
herewith (as amended, modified, restated or replaced from time to time),
pursuant to which the Borrower has assigned and granted a security interest in
its rights (but not its obligations) under the Acquisition Documents, as more
fully described therein.
"Security Agreement": each security agreement covering Goods, Equipment,
Accounts, Inventory, Instruments, Documents, Chattel Paper, General Intangibles
or other personal property or the proceeds of the any of the foregoing that
Borrower or any other Covered Person executes and delivers to Agent for the
benefit of Lenders, either on or after the Execution Date, and all amendments,
modifications, restatements, and replacements thereof.
"Security Documents": all of the documents described in Section , together with
any similar documents (whether or not enumerated in Section ) that Borrower or
any other Person (including, without limitation, Holdings) executes and delivers
to Agent for the benefit of Lenders on or after the Execution Date to secure
part or all of the Loan Obligations, and all amendments, modifications,
restatements, and replacements thereof.
"Security Interest": as to any item of tangible or intangible property, any
interest therein or right with respect thereto that secures an Obligation or
Indirect Obligation, whether such interest or right is created under a Contract,
or by operation of law or statute (such as but not limited to a statutory lien
for work or materials), or as a result of a judgment, or which arises under any
form of preferential or title retention agreement or arrangement (including a
conditional sale agreement or a lease) that has substantially the same economic
effect as any of the foregoing.
"Seller": shall collectively mean Lull, Lull Industries, Inc., Badger ▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Settlement Date" is defined in Section .
"Solvent": as to any Person, such Person not being "insolvent" within the
meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act (the "UFTA") or Section 428.014 of the Missouri Revised
Statutes, (ii) such Person not having unreasonably small capital, within the
meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA or Section
428.024 of the Missouri Revised Statutes, and (iii) such Person not being unable
to pay such Person's debts as they become due within the meaning of Section 548
of the Bankruptcy Code, Section 4 of the UFTA or Section 428.024 of the Missouri
Revised Statutes.
"Standby Letter of Credit": a standby letter of credit issued by the Letter of
Credit Issuer pursuant to the Letter of Credit Commitment in Section .
"Stock Pledge Agreement": (i) any stock pledge agreement that Borrower executes
and delivers to Agent for the ratable benefit of Lenders, either on or after the
Execution Date, as provided herein, and all amendments, restatements, and
replacements thereof, and (ii) any stock pledge agreement that Holdings
or any Subsidiary of Holdings or Borrower executes and delivers to Agent for the
ratable benefit of Lenders, either on or after the Execution Date, as provided
herein, and all amendments, restatements, and replacements thereof.
"Subsidiary": as to any Person, a corporation with respect to which more than
20% of the outstanding shares of stock of each class having ordinary voting
power (other than stock having such power only by reason of the happening of a
contingency) is at the time owned by such Person or by one or more Subsidiaries
of such Person; provided, however, that the Trak distributors disclosed on
Schedule 12.18 to the Disclosure Schedule shall not be deemed to be Subsidiaries
of any Covered Person.
"Swingline Advance" is defined in Section .
"Swingline Commitment" is defined in Section .
"Swingline Loan" is defined in Section .
"Swingline Note" is defined in Section .
"Target Company": the Person whose assets or stock are acquired by a Covered
Person in a Consented Acquisition, or if applicable, with which a Covered Person
has merged in a Consented Acquisition.
"Tax": as to any Person, any tax, assessment, fee, or other charge levied by a
Governmental Authority on the income or property of such Person, including any
interest or penalties thereon, and which is payable by such Person.
"Term 1 Advance" is defined in Section .
"Term 2 Advance" is defined in Section .
"Term 1 Commitment" is defined in Section .
"Term 2 Commitment" is defined in Section .
"Term 1 Loan": each Lender's prorata share of the Aggregate Term 1 Loan.
"Term 2 Loan": each Lender's prorata share of the Aggregate Term 2 Loan.
"Term Loan Adjusted CBR" is defined in Section .
"Term Loan Adjusted LIBO Rate" is defined in Section .
"Term 1 Loan CBR Advance": a Term 1 Advance bearing interest at the Term Loan
Adjusted CBR.
"Term 2 Loan CBR Advance": a Term 2 Advance bearing interest at the Term Loan
Adjusted CBR.
"Term Loan CBR Spread" is defined in Section .
"Term Loan LIBO Spread" is defined in Section .
"Term 1 Loan LIBOR Advance": a Term 1 Advance bearing interest at the Term Loan
Adjusted LIBO Rate.
"Term 2 Loan LIBOR Advance": a Term 2 Advance bearing interest at the Term Loan
Adjusted LIBO Rate.
"Term Maturity Date" is defined in Section .
"Term 1 Note" is defined in Section .
"Term 1 Notes" is defined in Section .
"Term 2 Note" is defined in Section .
"Term 2 Notes" is defined in Section .
"this Agreement": this document (including every document that is stated herein
to be an appendix, exhibit or schedule hereto, whether or not physically
attached to this document), as amended, modified, restated or replaced from time
to time.
"Total Assets" is defined in Section .
"Total Funded Debt" is defined in Section .
"Total Liabilities" is defined in Section .
"Trak" is defined in the introductory paragraph of this Agreement.
"UCC": the Uniform Commercial Code as in effect from time to time in the State
of Missouri or such other similar statute as in effect from time to time in
Missouri or any other appropriate jurisdiction.
"Unfunded Liabilities": means the amount (if any) by which the present value of
all vested and unvested accrued benefits under a Pension Benefit Plan exceeds
the fair market value of assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plan using PBGC actuarial
assumptions for Pension Benefit Plan terminations.
"United States": when used in a geographical sense, all the states of the United
States of America and the District of Columbia; and when used in a legal
jurisdictional sense, the government of the country that is the United States of
America.
"Unused Aggregate Revolving Commitment" is defined in Section .
"Unwaived Event of Default": an Event of Default which has occurred, and which
has not been waived in writing by the Required Lenders.
"Welfare Benefit Plan": any plan described by Section 3(1) of ERISA.
EXHIBIT
LENDERS' COMMITMENTS AND PRORATA SHARES
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LENDER TOTALS REVOLVING TERM 1 TERM 2 PRORATA
COMMITMENT COMMITMENT COMMITMENT SHARES
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The Boatmen's National $45,000,700 $13,235,500 $28,588,680 $3,176,520 52.942%
Bank of St. Louis
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Fleet Capital $19,999,650 $5,882,250 $12,705,660 $1,411,740 23.529%
Corporation
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LaSalle National Bank $19,999,650 $5,882,250 $12,705,660 $1,411,740 23.529%
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AGGREGATES $85,000,000 $25,000,000 $54,000,000 $6,000,000 100.0000%
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