Exhibit 10(b)
TERM LOAN AGREEMENT
dated as of June 30, 2003
among
ADESA CALIFORNIA, INC.
as Borrower
THE LENDERS FROM TIME TO TIME PARTY HERETO
and
SUNTRUST BANK
as Administrative Agent
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS; CONSTRUCTION............................................1
SECTION 1.1. Definitions.........................................1
SECTION 1.2. Accounting Terms and Determination.................14
SECTION 1.3. Terms Generally....................................14
ARTICLE II AMOUNT AND TERMS OF THE COMMITMENTS; SECURITY FOR TERM LOANS.......14
SECTION 2.1. General Description of Facility....................14
SECTION 2.2. Term Loan Commitments..............................14
SECTION 2.3. Funding of Term Loans..............................15
SECTION 2.4. Interest Elections.................................15
SECTION 2.5. Repayment of Loans.................................15
SECTION 2.6. Notes..............................................15
SECTION 2.7. Optional Prepayments...............................16
SECTION 2.8. Interest on Term Loans.............................16
SECTION 2.9. Fees...............................................16
SECTION 2.10. Computation of Interest and Fees...................17
SECTION 2.11. Inability to Determine Interest Rates..............17
SECTION 2.12. Illegality.........................................17
SECTION 2.13. Increased Costs....................................17
SECTION 2.14. Funding Indemnity..................................18
SECTION 2.15. Taxes..............................................18
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs...............................19
SECTION 2.17. Mitigation of Obligations..........................20
SECTION 2.18. Security for Obligations...........................20
ARTICLE III CONDITIONS PRECEDENT TO TERM LOANS................................20
SECTION 3.1. Conditions To Effectiveness........................20
SECTION 3.2. Delivery of Documents..............................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................23
SECTION 4.1. Organization; Corporate Power......................23
SECTION 4.2. Authority..........................................23
SECTION 4.3. Due Execution and Delivery of Loan Documents.......23
SECTION 4.4. No Conflicts.......................................23
SECTION 4.5. Governmental Consents..............................23
SECTION 4.6. Governmental Regulation............................23
SECTION 4.7. Requirements of Law................................23
SECTION 4.8. Rights in Respect of the Real Property.............23
SECTION 4.9. Taxes..............................................23
SECTION 4.10. Use of Proceeds; Margin Regulations................24
SECTION 4.11. ERISA Event........................................24
SECTION 4.12. Solvency...........................................24
SECTION 4.13. Disclosure.........................................24
SECTION 4.14. Title to Collateral................................24
SECTION 4.15. Other Obligations..................................24
SECTION 4.16. Financial Statements...............................24
SECTION 4.17. Litigation and Environmental Matters...............25
SECTION 4.18. Real Property......................................25
ARTICLE V AFFIRMATIVE COVENANTS...............................................25
SECTION 5.1. Financial Statements and Other Information.........25
SECTION 5.2. Notices of Material Events.........................27
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SECTION 5.3. Corporate Existence................................27
SECTION 5.4. Compliance with Laws, Etc..........................27
SECTION 5.5. Payment of Taxes and Claims........................27
SECTION 5.6. Books and Records..................................27
SECTION 5.7. Visitation, Inspection, Etc........................28
SECTION 5.8. Maintenance of Properties; Insurance...............28
SECTION 5.9. Further Assurances.................................28
SECTION 5.10. Use of Proceeds....................................28
ARTICLE VI FINANCIAL COVENANTS................................................28
SECTION 6.1. Maximum Total Funded Debt to EBITDA Ratio..........28
SECTION 6.2. Fixed Charge Coverage Ratio........................28
SECTION 6.3. Consolidated Minimum Net Worth.....................28
ARTICLE VII NEGATIVE COVENANTS................................................29
SECTION 7.1. Negative Pledge....................................29
SECTION 7.2. Fundamental Changes................................29
SECTION 7.3. Transactions with Affiliates.......................30
SECTION 7.4. Restrictive Agreements.............................30
SECTION 7.5. Sale and Leaseback Transactions....................30
SECTION 7.6. Hedging Agreements.................................30
SECTION 7.7. Amendment to Material Documents....................30
SECTION 7.8. Accounting Changes.................................30
ARTICLE VIII EVENTS OF DEFAULT................................................30
SECTION 8.1. Events of Default..................................30
ARTICLE IX THE ADMINISTRATIVE AGENT...........................................33
SECTION 9.1. Appointment of Administrative Agent................33
SECTION 9.2. Nature of Duties of Administrative Agent...........33
SECTION 9.3. Lack of Reliance on the Administrative Agent.......33
SECTION 9.4. Certain Rights of the Administrative Agent.........33
SECTION 9.5. Reliance by Administrative Agent...................34
SECTION 9.6. The Administrative Agent in its
Individual Capacity...............................34
SECTION 9.7. Successor Administrative Agent.....................34
ARTICLE X MISCELLANEOUS.......................................................35
SECTION 10.1. Notices............................................35
SECTION 10.2. Waiver; Amendments.................................36
SECTION 10.3. Expenses; Indemnification..........................37
SECTION 10.4. Successors and Assigns.............................38
SECTION 10.5. Governing Law; Jurisdiction; Consent to
Service of Process................................39
SECTION 10.6. WAIVER OF JURY TRIAL...............................40
SECTION 10.7. Right of Setoff....................................40
SECTION 10.8. Counterparts; Integration..........................40
SECTION 10.9. Effectiveness; Survival............................40
SECTION 10.10. Severability.......................................40
SECTION 10.11. Confidentiality....................................41
SECTION 10.12. Interest Rate Limitation...........................41
Schedules
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Schedule 4.17 - Environmental Matters
Schedule 7.1 - Existing Liens
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Exhibits
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Exhibit A - Term Note
Exhibit B - Form of Assignment and Acceptance
Exhibit C - Form of Deed of Trust and Security
Agreement, Fixture Filing and
Assignment of Leases and Rents
Exhibit D - Form of Guaranty Agreement
Exhibit E - Form of Indemnity, Subrogation and
Contribution Agreement
Exhibit 2.4 - Form of Continuation/Conversion
Exhibit 3.1(b)(viii) - Form of Secretary's Certificate
Exhibit 3.1(b)(xi) - Form of Officer's Certificate
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TERM LOAN AGREEMENT
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THIS TERM LOAN AGREEMENT (this "AGREEMENT") is made and
entered into as of June 30, 2003, by and among ADESA CALIFORNIA, INC., a
California corporation (the "BORROWER"), the several banks and other financial
institutions from time to time party hereto (the "LENDERS"), and SUNTRUST BANK,
in its capacity as Administrative Agent for the Lenders (the "ADMINISTRATIVE
AGENT").
W I T N E S S E T H:
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WHEREAS, the Borrower has requested that the Lenders make term
loans in an aggregate principal amount equal to $45,000,000 to the Borrower for
the purpose of refinancing certain existing liabilities and obligations of the
Borrower;
WHEREAS, subject to the terms and conditions of this
Agreement, the Lenders severally, to the extent of their respective Commitments,
are willing severally to make the term loans to the Borrower.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the Borrower, the Lenders and the
Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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SECTION 1.1. DEFINITIONS. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):
"ADESA" shall mean ADESA Corporation, an Indiana corporation,
its legal representatives and permitted successors and assigns.
"ADJUSTED LIBO RATE" shall mean, with respect to each Interest
Period for a LIBOR Loan, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR (for such Interest Period)
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1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean the
aggregate of the maximum reserve percentages (including, without limitation, any
emergency, supplemental, special or other marginal reserves) expressed as a
decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to
which the Administrative Agent is subject with respect to the Adjusted LIBO Rate
pursuant to regulations issued by the Board of Governors of the Federal Reserve
System (or any Governmental Authority succeeding to any of its principal
functions) with respect to eurocurrency funding (currently referred to as
"eurocurrency liabilities" under Regulation D). The LIBOR Reserve Percentage
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such
term in the opening paragraph hereof, and shall include its legal
representatives, successors and assigns.
"ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to
each Lender, an administrative questionnaire in the form prepared by the
Administrative Agent and submitted to the Administrative Agent duly completed by
such Lender.
"AFFILIATE" shall mean, as to any Person, any other Person
that directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"AFTER-TAX BASIS" shall mean (a) with respect to any payment
to be received by an Indemnitee, the amount of such payment supplemented by a
further payment or payments so that, after deducting from such payments the
amount of all Taxes (net of any current credits, deductions or other Tax
benefits arising from the payment by the Indemnitee of any amount, including
Taxes, for which the payment to be received is made) imposed currently on the
Indemnitee by any Governmental Authority or taxing authority with respect to
such payments, the balance of such payments shall be equal to the original
payment to be received and (b) with respect to any payment to be made by any
Indemnitee, the amount of such payment supplemented by a further payment or
payments so that, after increasing such payment by the amount of any current
credits or other Tax benefits realized by the Indemnitee under the laws of any
Governmental Authority or taxing authority resulting from the making of such
payments, the sum of such payments (net of such credits or benefits) shall be
equal to the original payment to be made; provided, however, for the purposes of
this definition, and for purposes of any payment to be made to an Indemnitee or
by an Indemnitee on an after-tax basis, it shall be assumed that (i) federal,
state and local taxes are payable at the highest combined marginal federal and
state statutory income tax rate (taking into account the deductibility of state
income taxes for federal income tax purposes) applicable to corporations from
time to time and (ii) such Indemnitee or the recipient of such payment from an
Indemnitee has sufficient income to utilize any deductions, credits (other than
foreign tax credits, the use of which shall be determined on an actual basis)
and other Tax benefits arising from any payments described in clause (b) of this
definition.
"ALLETE" shall mean ALLETE, Inc., a Minnesota corporation, its
legal representatives and permitted successors and
assigns.
"ALTERATIONS" shall mean fixtures, alterations, improvements,
modifications and additions to the Real Property.
"APPLICABLE LAW" means, each as and to the extent applicable:
all laws (including Environmental Laws), rules, regulations (including proposed,
temporary and final income tax regulations), statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of any Governmental
Authority, judgments, decrees, injunctions, writs, and orders or like action of
any court, arbitrator or other administrative, judicial or quasi-judicial
tribunal or agency of competent jurisdiction (including those pertaining to
health, safety or the environment (including wetlands) and those pertaining to
the construction, use or occupancy of any Mortgaged Property).
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and
for each Type of Loan, the "LENDING OFFICE" of such Lender (or an Affiliate of
such Lender) designated for such Type of Loan in the Administrative
Questionnaire submitted by such Lender or such other office of such Lender (or
an Affiliate of such Lender) as such Lender may from time to time specify to the
Administrative Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.
"APPLICABLE MARGIN" shall mean, for any day, (a) with respect
to Base Rate Loans, the applicable rate per annum set forth below under the
heading "Base Rate Loans," and (b) with respect to LIBOR Loans, the applicable
rate per annum set forth below under the heading "LIBOR Loans," as the case may
be, based upon the ratings by Moody's and S&P, respectively, applicable on such
date to the Index Debt:
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INDEX DEBT BASE RATE LOANS LIBOR LOANS
(PER ANNUM) (PER ANNUM)
----------------------- --------------------------- -------------------------
Category 1 0.00% 0.875%
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Category 2 0.00% 1.00%
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Category 3 0.25% 1.375%
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Category 4 0.75% 1.875%
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Category 5 1.25% 2.25%
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For purposes of the foregoing, (a) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in Category 5;
(b) if the ratings established or deemed to have been established by Moody's and
S&P for the Index Debt shall fall within different Categories, the Applicable
Margin shall be based on the higher of the two ratings; PROVIDED, that if the
difference in such ratings is more than two Categories, then the Category that
is one Category below the highest rating shall apply; and (c) if the ratings
established or deemed to have been established by Moody's and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the earlier of (i) the
date on which it is first announced by the applicable rating agency and (ii) the
date on which ADESA gives notice of such change to the Administrative Agent. For
the purposes hereof, ADESA and ALLETE shall be required to notify the
Administrative Agent of such change immediately upon gaining knowledge of such
change. Each change in the Applicable Margin shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change, or if either such rating agency shall
cease to be in the business of rating corporate debt obligations, ADESA, ALLETE,
the Lenders and the Administrative Agent shall negotiate in good faith to amend
this definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Margin shall be determined by reference to the rating
most recently in effect prior to such change or cessation.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Lender and an assignee (with the consent of any
party whose consent is required by SECTION 10.4(b)) and accepted by the
Administrative Agent, in the form of EXHIBIT B attached hereto or any other form
approved by the Administrative Agent.
"BASE RATE" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following rates) the higher
of (a) the per annum rate which the Administrative Agent publicly announces from
time to time as its prime lending rate, as in effect from time to time, and (b)
the Federal Funds Rate, as in effect from time to time, plus one-half of one
percent (0.50%) per annum. The Administrative Agent's prime lending rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to customers. The Administrative Agent may make commercial
loans or other loans at rates of interest at, above or below the Administrative
Agent's prime lending rate. Each change in the Administrative Agent's prime
lending rate shall be effective from and including the date such change is
publicly announced as being effective.
"BASE RATE LOAN" shall mean the Term Loan of a Lender bearing
interest at the Base Rate.
"BORROWER" shall have the meaning in the introductory
paragraph hereof, and shall include its legal representatives and permitted
successors and assigns.
"BUSINESS DAY" shall mean (a) any day other than a Saturday,
Sunday or other day on which commercial banks in Atlanta, Georgia are authorized
or required by law to close and (b) if such day relates to a payment or
prepayment of principal or interest on, a conversion of or into, or an Interest
Period for, a LIBOR Loan or a notice with respect to any of the foregoing, any
day on which dealings in Dollars are carried on in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person shall mean all
obligations of such Person to pay rent or other amounts under any lease (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CATEGORY 1" means A- or higher by S&P or A3 or higher by
Moody's.
"CATEGORY 2" means BBB+ or higher by S&P or Baa1 or higher by
Moody's (but not Category 1).
"CATEGORY 3" means BBB or higher by S&P or Baa2 or higher by
Moody's (but not Category 1 or Category 2).
3
"CATEGORY 4" means BBB- or higher by S&P or Baa3 or higher by
Moody's (but not Category 1, Category 2 or Category 3).
"CATEGORY 5" means lower than BBB- by S&P and lower than Baa3
by Moody's.
"CHANGE IN LAW" shall mean (a) the adoption of any applicable
law, rule or regulation after the date of this Agreement, (b) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (c) compliance by any Lender (or its Applicable Lending Office)
(or for purposes of Section 2.19(b), by such Lender's holding company, if
applicable) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"CHANGE IN CONTROL" shall mean the occurrence of one or more
of the following events: (a)any sale, lease, exchange or other transfer (in a
single transaction or a series of related transactions) of all or substantially
all of the assets of any Loan Party to any Person or "group" (within the meaning
of the Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder in effect on the date hereof), (b)the acquisition
of ownership, directly or indirectly, beneficially or of record, by any Person
or "group" (within the meaning of the Securities Exchange Act and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) of 20% or more of the outstanding shares of the voting stock of any Loan
Party; or (c)occupation of a majority of the seats (other than vacant seats) on
the board of directors of any Loan Party who were neither (i)nominated by the
current board of directors or (ii)appointed by directors so nominated.
"CLAIM" shall mean (a) an assertion by a Governmental
Authority or any other Person as to which, in each case, the Administrative
Agent has made a good faith determination that the assertion may properly be
made by the party asserting the same, that the assertion, on its face, is not
without foundation and that the interests of the Administrative Agent or any
Lender require that the assertion be treated as presenting a bona fide risk of a
Material Adverse Event, and (b) all other liabilities, obligations, damages,
losses, demands, penalties, fines, claims, actions, suits, judgments,
proceedings, settlements, utility charges, costs, expenses and disbursements
(including, without limitation, reasonable legal fees and expenses) of any kind
and nature whatsoever.
"CLOSING DATE" shall mean the date on which the conditions
precedent set forth in SECTION 3.1 have been satisfied or waived in accordance
with SECTION 10.2.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time, and any successor statute.
"COMMITMENT" shall mean, with respect to each Lender, the
obligation of such Lender to make a Term Loan hereunder on the Closing Date, in
a principal amount not exceeding the amount set forth with respect to such
Lender on the signature pages to this Agreement. The aggregate principal amount
of all Lenders' Commitments is $45,000,000.
"CONDEMNATION" shall mean any condemnation, requisition,
confiscation, seizure, permanent use or other taking or sale of the use,
occupancy or title to the Real Property or any part thereof in, by or on account
of any actual eminent domain proceeding or other action by any Governmental
Authority or other Person under the power of eminent domain or any transfer in
lieu of or in anticipation thereof, which in any case does not constitute an
Event of Taking. A Condemnation shall be deemed to have "occurred" on the
earliest of the dates that use is prevented or occupancy or title is taken.
"CONSOLIDATED AMORTIZATION" shall mean, for any period,
amortization expense of the Consolidated Companies determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED COMPANIES" shall mean, collectively, ADESA and
all of its Subsidiaries, if any, and "CONSOLIDATED COMPANY" shall mean,
individually, ADESA or any of its Subsidiaries, if any.
"CONSOLIDATED DEPRECIATION" shall mean, for the Consolidated
Companies for any period, depreciation expense of the Consolidated Companies
determined on a consolidated basis in accordance with GAAP.
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"CONSOLIDATED EBITDA" shall mean, for the Consolidated
Companies for any period, an amount equal to the sum of (a) Consolidated Net
Income for such period plus (b) to the extent deducted in determining
Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)
Consolidated Income Taxes, (iii) Consolidated Depreciation, (iv) Consolidated
Amortization and (v) all other non-cash charges, determined on a consolidated
basis in accordance with GAAP in each case for such period; PROVIDED, HOWEVER,
that with respect to any Person, or substantially all of the assets of a Person,
that becomes a Subsidiary of, or was merged with or consolidated into, or
acquired by, a Consolidated Company in accordance with the terms of this
Agreement during such period, "EBITDA" shall also include the EBITDA of such
Person or the EBITDA attributable to such assets during such period as if such
Person or assets were acquired as of the first day of such period.
"CONSOLIDATED FIXED CHARGES" shall mean, for the Consolidated
Companies for any period, the sum (without duplication) of (a) the current
maturities of all Consolidated Long Term Indebtedness scheduled during the four
consecutive Fiscal Quarters immediately following the Fiscal Quarter in which
such date occurs, PLUS (b) Consolidated Lease Expense, PLUS (c) Interest Expense
measured for the four consecutive Fiscal Quarters ending on such date, or if
such date of determination is not the last day of any Fiscal Quarter, then
ending immediately prior to such date of determination, determined on a
consolidated basis in accordance with GAAP for such period.
"CONSOLIDATED INCOME TAXES" shall mean, for the Consolidated
Companies for any period, any provision made by any of the Consolidated
Companies in respect of such period for income taxes or other taxes payable by
any Consolidated Company in respect of its income or profits.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for the
Consolidated Companies for any period, the sum of (a) total cash interest
expense, including without limitation the interest component of any payments in
respect of Capital Lease Obligations capitalized or expensed during such period
(whether or not actually paid during such period) PLUS (b) the net amount
payable (or minus the net amount receivable) under Hedging Agreements during
such period (whether or not actually paid or received during such period),
determined on a consolidated basis in accordance with GAAP for such period.
"CONSOLIDATED LEASE EXPENSE" shall mean, for the Consolidated
Companies for any period, the aggregate amount of fixed and contingent rentals
payable by the Consolidated Companies with respect to leases of real and
personal property (excluding Capital Lease Obligations) determined on a
consolidated basis in accordance with GAAP for such period.
"CONSOLIDATED LONG TERM INDEBTEDNESS" shall mean, for the
Consolidated Companies for any period, (a) all Indebtedness which at the time of
incurrence or issuance, has a final maturity or term greater than one year or
which is renewable at the option of the obligor thereof for a term of greater
than one year from the date of original incurrence or issuance or (b)
Indebtedness which at the time of incurrence or issuance has a final maturity or
term of less than one year and which is intended to be repaid out of proceeds of
other Consolidated Long Term Indebtedness.
"CONSOLIDATED NET INCOME (LOSS)" shall mean, for any period,
the net income (or loss), after deducting all operating expenses, provisions for
taxes and reserves (including reserves for deferred income tax) and all other
proper deductions, of the Consolidated Companies for such period (taken as a
single accounting period) determined on a consolidated basis in accordance with
GAAP, including any income or loss of any Person accrued prior to the date such
Person becomes a Subsidiary of any Consolidated Company or is merged into or
consolidated with any Consolidated Company or all or substantially all of such
Person's assets are acquired by any Consolidated Company, but excluding
therefrom (to the extent otherwise included therein) (a) any extraordinary
items, (b) any gains attributable to write-ups of assets and (c) any equity
interest of the Consolidated Companies in the unremitted earnings of any Person
that is not a Subsidiary.
"CONSOLIDATED NET WORTH" shall mean, as of any date, the total
stockholders' equity of the Consolidated Companies determined on a consolidated
basis in accordance with GAAP.
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"CONSOLIDATED TOTAL FUNDED DEBT" shall mean, as of any date of
determination, all outstanding Indebtedness of the Consolidated Companies
measured on a consolidated basis in accordance with GAAP as of such date.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, contract, undertaking, agreement, instrument or other document to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject (including, without limitation,
any restrictive covenant affecting any of the properties of such Person).
"CONTROL" shall mean the power, directly or indirectly, either
to (i) vote 5% or more of securities having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person or
(ii) direct or cause the direction of the management and policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "CONTROLLING", "CONTROLLED BY", and "UNDER COMMON CONTROL WITH" have
meanings correlative thereto.
"DEED OF TRUST" shall mean the Deed of Trust and Security
Agreement, Fixture Filing and Assignment of Leases and Rents substantially in
the form of EXHIBIT C, made by the Borrower in favor of Chicago Title Insurance
Company, as Trustee, for the benefit of the Administrative Agent on behalf of
the Lenders, and any modifications, amendments, supplements or restatements
thereof.
"DEFAULT" shall mean any condition or event that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default.
"DEFAULT INTEREST" shall have the meaning set forth in SECTION
2.8(b).
"DEFAULT RATE" means the LESSER of (a) the highest interest
rate permitted by Applicable Law and (b) an interest rate per annum (calculated
on the basis of a 365-day (or 366-day, if appropriate) year equal to [2.0]%
above the Base Rate in effect from time to time.
"DOLLAR(S)" and the sign "$" shall mean lawful money of the
United States of America.
"ENVIRONMENTAL LAWS" shall mean all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" shall mean any liability, contingent
or otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of ADESA or any Subsidiary directly
or indirectly resulting from or based upon (a) any actual or alleged violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" shall mean any trade or business (whether or
not incorporated), which, together with ADESA, is treated as a single employer
under SECTION 414(b) or (c) of the Code or, solely for the purposes of SECTION
302 of ERISA and SECTION 412 of the Code, is treated as a single employer under
SECTION 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in
6
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by ADESA or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by ADESA or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by ADESA or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by ADESA or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from ADESA or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"EVENT OF DEFAULT" shall have the meaning provided in Article
VIII.
"EVENT OF LOSS" shall have the meaning provided in Section
2.13 of the Deed of Trust.
"EVENT OF TAKING" shall have the meaning provided in Section
2.14 of the Deed of Trust.
"EXCLUDED TAXES" shall mean with respect to the Administrative
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender, any withholding tax that is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with SECTION 2.15(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
SECTION 2.15(a).
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the
Federal Funds Rate for such day shall be the average rounded upwards, if
necessary, to the next 1/100th of 1% of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent.
"FINANCIAL OFFICER" shall mean the chief financial officer,
principal accounting officer, treasurer or controller of ADESA whose signature
and incumbency shall have been certified to the Administrative Agent and the
Lenders from time to time. Unless otherwise specified, all references to a
Financial Officer herein shall mean a Financial Officer of ADESA.
"FISCAL QUARTER" shall mean a fiscal quarter of ADESA.
"FISCAL YEAR" shall mean the fiscal year of ADESA.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated EBITDA measured for
the four consecutive Fiscal Quarters ending on such date, or if such date of
determination is not the last day of any Fiscal Quarter, then ending immediately
prior to such date of determination, PLUS (ii) Consolidated Lease Expense, to
Consolidated Fixed Charges.
"FOREIGN LENDER" shall mean any Lender that is organized under
the laws of a jurisdiction other than that of the Borrower. For purposes of this
definition, the United States of America or any State thereof or the District of
Columbia shall constitute one jurisdiction.
7
"GAAP" shall mean generally accepted accounting principles in
the United States applied on a consistent basis and subject to the terms of
SECTION 1.2.
"GOVERNMENTAL AUTHORITY" shall include the country, the state,
county, city and political subdivisions in which any Person or such Person's
Property is located or which exercises valid jurisdiction over any such Person
or such Person's Property, and any court, agency, authority, department,
commission, board, bureau or instrumentality of any of them or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including
monetary authorities which exercises valid jurisdiction over any such Person or
such Person's Property. Unless otherwise specified, all references to
Governmental Authority herein shall mean a Governmental Authority having
jurisdiction over, where applicable, ADESA, the Subsidiaries or any of their
Property or the Administrative Agent or any Lender.
"GUARANTEE" of or by any Person (the "GUARANTOR") shall mean
any obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly and including any obligation, direct or indirect, of the guarantor
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued in support of
such Indebtedness or obligation; PROVIDED, that the term "GUARANTEE" shall not
include endorsements for collection or deposits in the ordinary course of
business. The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
Guarantee is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith. The term
"GUARANTEE" used as a verb has a corresponding meaning.
"GUARANTORS" shall mean, collectively and individually, ADESA
and ALLETE.
"GUARANTY AGREEMENT" shall mean the Guaranty Agreement
substantially in the form of EXHIBIT D, made by the Guarantors, jointly and
severally, in favor of the Administrative Agent for the benefit of the Lenders,
and any modifications, amendments, supplements or restatements thereof.
"HAZARDOUS MATERIALS" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"HEDGING AGREEMENTS" shall mean interest rate swap, cap or
collar agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, commodity agreements and other
similar agreements or arrangements designed to protect against fluctuations in
interest rates, currency values or commodity values.
"IMPROVEMENTS" shall mean all buildings, structures and
improvements now or hereafter located on the Real Property, all water and water
rights (whether riparian, appropriative, or otherwise, and whether or not
appurtenant), pumps and pumping stations used in connection therewith and all
shares of stock evidencing the same, all machinery, equipment, appliances,
furnishings, inventory, fixtures and other property used or usable in connection
with the Real Property and/or the buildings, structures and improvements now or
hereafter located thereon, including, but not limited to, all storage tanks and
pipelines, gas, electric, heating, cooling, air conditioning, refrigeration, and
plumbing fixtures and equipment, which have been or may hereafter be attached or
affixed in any manner to any such buildings, structures or improvements or used
or useful in connection therewith, and any and all additions thereto and
substitutions and replacements thereof, and any and all Alterations (including
all restorations, repairs, replacements and rebuilding of such buildings,
structures and improvements) thereto.
8
"INDEBTEDNESS" of any Person shall mean, without duplication
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(c) all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business that are nor overdue by more than 90 days), (d) all obligations of
such Person under any conditional sale or other title retention agreement(s)
relating to property acquired by such Person, (e) all Capital Lease Obligations
of such Person, (f) all obligations, contingent or otherwise, of such Person in
respect of letters of credit, acceptances or similar extensions of credit, (g)
all Guarantees of such Person of the type of Indebtedness described in clauses
(a) through (f) above, (h) all Indebtedness of a third party secured by any Lien
on property owned by such Person, whether or not such Indebtedness has been
assumed by such Person, (i) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any common
stock of such Person, (j) all other obligations and liabilities of such Person
that are required by GAAP to be shown as liabilities on the balance sheet of
such Person (other than reserves required under GAAP), and (k) Off-Balance Sheet
Liabilities. The Indebtedness of any Person shall include the Indebtedness of
any partnership or joint venture in which such Person is a general partner or a
joint venturer, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded
Taxes.
"INDEMNITY AND CONTRIBUTION AGREEMENT" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
EXHIBIT E, among the Loan Parties and the Administrative Agent, and any
modifications, amendments, supplements or restatements thereof.
"INDEMNITEE" shall have the meaning set forth in SECTION
10.3(b).
"INDEX DEBT" shall mean ALLETE'S corporate credit rating.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Loan,
a period of one, two, three or six months; PROVIDED, that:
(a) the initial Interest Period for each LIBOR Loan shall
commence on the date of this Agreement and each Interest Period occurring
thereafter in respect of such LIBOR Loan shall commence on the day on which the
next preceding Interest Period expires;
(b) if any Interest Period would otherwise end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless such Business Day falls in another calendar
month, in which case such Interest Period would end on the next preceding
Business Day;
(c) any Interest Period which 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 such calendar month; and
(d) no Interest Period may extend beyond the Maturity Date.
"KNOWLEDGE" shall mean, in the case of the Borrower, the
actual knowledge of any executive officer of the Borrower that is primarily
responsible for the Transaction and/or for the operation or management of the
Real Property or, in the case of any other Loan Party, the actual knowledge of
any executive officer of such Loan Party that is primarily responsible for the
Transaction.
"LENDERS" shall have the meaning assigned to such term in the
opening paragraph of this Agreement, and shall include their respective legal
representatives and permitted successors and assigns.
"LIBOR" shall mean, for any applicable Interest Period, the
rate per annum for deposits in Dollars for a period equal to such Interest
Period appearing on the display designated as Page 3750 on the Dow Jones Markets
Service (or such other page on that service or such other service designated by
the British Banker's Association for the display of such Association's Interest
Settlement Rates for Dollar deposits) as of 11:00 a.m. (London, England time) on
the day that is two Business Days prior to the first day of the Interest Period
or if such
9
Page 3750 is unavailable for any reason at such time, the rate which appears on
the Reuters Screen ISDA Page as of such date and such time; PROVIDED, that if
the Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Interest Period, LIBOR shall mean the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at
which deposits in Dollars are offered to the Administrative Agent two (2)
Business Days preceding the first day of such Interest Period by leading banks
in the London interbank market as of 10:00 a.m. for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Loans.
"LIBOR LOAN" shall mean the Term Loan of a Lender bearing
interest at the Adjusted LIBO Rate.
"LIEN" shall mean any mortgage, pledge, security interest,
lien (statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other arrangement having the practical effect of the
foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).
"LOANS" shall mean the Term Loans which, at any time and from
time to time, shall consist solely of Base Rate Loans or LIBOR Loans, except as
otherwise set forth in SECTION 2.12.
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Notes, the Security Documents, the Guaranty Agreement, the Indemnity and
Contribution Agreement, and any and all other instruments, agreements, documents
and writings executed in connection with any of the foregoing.
"LOAN PARTIES" shall mean the Borrower and/or the Guarantors.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any
event, act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences whether or not
related, a material adverse change in, or a material adverse effect on, (a) the
business, results of operations, financial condition, assets, liabilities or
prospects of the Consolidated Companies taken as a whole or of ALLETE, (b) the
ability of the Loan Parties to perform any of their respective obligations under
the Loan Documents, (c) the rights, benefits and remedies of the Administrative
Agent and the Lenders under any of the Loan Documents, (d) the legality,
validity or enforceability of any of the Loan Documents, (e) the value, utility
or useful life of the Mortgaged Property, or (f) the priority, perfection or
status of the Administrative Agent's or any Lender's interest in the Mortgaged
Property.
"MATERIAL CONTRACTS" shall mean any contract or other
agreement, written or oral, of any Loan Party or any of its Subsidiaries that
are required to be disclosed as "material" in such Loan Party's filings with the
SEC and any other contract or agreement, written or oral, of any Loan Party or
any of its Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than
the Term Loans) or obligations in respect of one or more Hedging Agreements, of
any one or more of the Consolidated Companies in an aggregate principal amount
exceeding $1,000,000. For purposes of determining Material Indebtedness, the
"principal amount" of the obligations of any Consolidated Company in respect to
any Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Consolidated Company would be
required to pay if such Hedging Agreement were terminated at such time.
"MATURITY DATE" shall mean the earlier of (i) July 30, 2006,
or (ii) the date on which the principal amount of all outstanding Term Loans
have been declared or automatically have become due and payable (whether by
acceleration or otherwise).
"MOODY'S" shall mean Moody's Investors Service, Inc.
10
"MULTIEMPLOYER PLAN" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"NOTES" shall mean, collectively, the promissory notes of the
Borrower payable to the order of the applicable Lender in the principal amount
of such Lender's Commitment, in substantially the form of EXHIBIT A, and any and
all allonges thereto, and any modifications, amendments, renewals, extensions or
replacements thereof.
"NOTICE OF CONVERSION/CONTINUATION" shall mean the notice
given by the Borrower to the Administrative Agent in respect of the conversion
or continuation of an outstanding Borrowing as provided in SECTION 2.4(b)
hereof.
"OBLIGATIONS" shall mean (a) all amounts owing by the Loan
Parties to the Administrative Agent or any Lender pursuant to or in connection
with this Agreement or any other Loan Document, including without limitation,
all principal (including any future or further advances), interest (including
any interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
any Loan Party, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to the Administrative Agent and any Lender incurred
pursuant to this Agreement or any other Loan Document), whether direct or
indirect, absolute or contingent, liquidated or unliquidated, now existing or
hereafter arising hereunder or thereunder, together with all renewals,
extensions, modifications or refinancings thereof, and (b) all obligations of
the Loan Parties, monetary or otherwise, under each interest rate Hedging
Agreement relating to Obligations referred to in the preceding clause (a)
entered into with any counterparty that was a Lender (or an Affiliate thereof)
at the time such Hedging Agreement was entered into.
"OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i)
any repurchase obligation or liability of such Person with respect to accounts
or notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not create a liability on the
balance sheet of such Person, (iii) any liability of such Person under any
so-called "synthetic" lease transaction or (iv) any obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheet of such Person.
"OFFICER'S CERTIFICATE" of a Person shall mean a certificate
signed by the Chairman of the Board, the President, any Vice President, any
Senior Vice President, any Administrative Vice President, the Treasurer, any
Assistant Treasurer, the Controller or the Secretary of such Person, signing
alone.
"OTHER TAXES" shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"PARTICIPANT" shall have the meaning set forth in SECTION
10.4(c).
"PAYMENT OFFICE" shall mean the office of the Administrative
Agent located at 25 Park Place, N.E., Atlanta, Georgia 30303, or such other
location as to which the Administrative Agent shall have given written notice to
the Borrower and the other Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA, and any successor entity performing similar
functions.
"PERMITTED ENCUMBRANCES" shall mean:
(a) Liens imposed by law for taxes not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business for amounts not yet
11
due or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained in
accordance with GAAP;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance
and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment and attachment liens not giving rise to an Event
of Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Consolidated
Companies taken as a whole, including without limitation, easements, zoning
restrictions, rights-of-way and other encumbrances on title to the Real
Property to the extent permitted by the Deed of Trust; and
(g) Liens described in the Title Policy;
PROVIDED, that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness (other than the Obligations).
"PERSON" shall mean any individual, partnership, firm,
corporation, association, joint venture, limited liability company, trust or
other entity, or any Governmental Authority.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the ADESA or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRO RATA SHARE" shall mean, with respect to any Lender at any
time, a percentage, the numerator of which shall be such Lender's Commitment and
the denominator of which shall be the sum of all Lenders' Commitments; or if the
Loans have been declared to be due and payable, a percentage, the numerator of
which shall be such Lender's Term Loan and the denominator of which shall be the
sum of the aggregate outstanding Term Loans of all Lenders.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"REAL PROPERTY" shall mean the land described in Exhibit A to
the Deed of Trust.
"REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time, and any successor regulations.
"RELATED PARTIES" shall mean, with respect to any specified
Person, such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
12
"REQUIRED LENDERS" shall mean, at any time, Lenders holding
sixty-six and two-thirds percent (66 2/3%) or more of the aggregate outstanding
Term Loans at such time.
"REQUIREMENT OF LAW" means, as to any Person, the Certificate
of Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" shall mean the Chairman or Vice Chairman
of the Board of Directors, the Chairman or Vice Chairman of the Executive
Committee of the Board of Directors, the President, any Senior Vice President or
Executive Vice President, any Vice President, any Administrative Vice President,
the Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the applicable Loan Party or such other representative of such Loan
Party as may be designated in writing by any one of the foregoing with the
consent of the Administrative Agent; and, with respect to the financial
covenants only, the Financial Officer.
"S&P" shall mean Standard & Poor's Ratings Service, a division
of The McGraw-Hill Corporation.
"SEC" shall mean the United States Securities and Exchange
Commission, or any successor Governmental Authority.
"SECURITIES" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities", or any certificates of interest,
shares, or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITIES EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended.
"SECURITY DOCUMENTS" shall mean the Deed of Trust, financing
statements and any other documents or agreements, however described, securing
the Obligations, or any of them, or perfecting the Administrative Agent's or any
Lender's lien on or security interest in the collateral described therein.
"SUBSIDIARY" shall mean, with respect to any Person (the
"PARENT"), any corporation, partnership, joint venture, limited liability
company, association or other entity the accounts of which would be consolidated
with those of the parent in the parent's consolidated financial statements if
such financial statements were prepared in accordance with GAAP as of such date,
as well as any other corporation, partnership, joint venture, limited liability
company, association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent. Unless otherwise indicated, all references to "SUBSIDIARY" hereunder
shall mean a Subsidiary of ADESA.
"TAXES" shall mean any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"TERM LOAN" shall have the meaning set forth in SECTION 2.1.
"TITLE INSURANCE COMPANY" shall mean Chicago Title Insurance
Company or other title company reasonably acceptable to the Administrative
Agent.
"TITLE POLICY" shall have the meaning set forth in Section
3.1(b)(vi) of this Agreement.
13
"TOTAL FUNDED DEBT TO EBITDA RATIO" shall mean, as of any date
of determination, the ratio of (a) Consolidated Total Funded Debt as of such
date to (ii) Consolidated EBITDA measured for the four Fiscal Quarter period
ending on such date, or if such date is not the last day of any Fiscal Quarter,
then ending immediately prior to such date.
"TRANSACTION" shall mean any and all the transactions and
activities referred to in or contemplated by the Loan Documents.
"TYPE," when used in reference to a Term Loan, refers to
whether the rate of interest on such Term Loan, or any portion thereof, is
determined by reference to the Adjusted LIBO Rate or the Base Rate.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATION. Unless otherwise defined
or specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for such
changes approved by ADESA's independent public accountants) with the most recent
audited consolidated financial statement of the Consolidated Companies delivered
pursuant to SECTION 5.1(a); PROVIDED, that if ADESA notifies the Administrative
Agent that ADESA wishes to amend any covenant in Article VI to eliminate the
effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies ADESA that the Required Lenders wish to amend
Article VI for such purpose), then ADESA's compliance with such covenant shall
be determined on the basis of GAAP in effect immediately before the relevant
change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to ADESA and the Required Lenders.
SECTION 1.3. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall". In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and "hereunder" and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Administrative
Agent's principal office, unless otherwise indicated.
ARTICLE II
AMOUNT AND TERMS OF THE COMMITMENTS; SECURITY FOR TERM LOANS
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SECTION 2.1. GENERAL DESCRIPTION OF FACILITY. Subject to and upon the terms
and conditions herein set forth, each Lender severally agrees to make a Term
Loan to the Borrower in a principal amount not exceeding such Lender's
Commitment on the Closing Date.
SECTION 2.2. TERM LOAN COMMITMENTS. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make a single loan (each, a "TERM
LOAN") to the Borrower on the Closing Date in a principal amount not to exceed
the Commitment of such Lender; PROVIDED, that if for any reason the full amount
of such Lender's Commitment is not fully drawn on the Closing Date, the undrawn
portion thereof shall automatically be cancelled. The Term Loan Commitments
shall terminate on the Closing Date upon the making of the Term Loans as
provided herein. The Term Loans shall be, from time to time, either all Base
Rate Loans or all LIBOR
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Loans, except as otherwise set forth in SECTION 2.12; PROVIDED, that on the
Closing Date all Term Loans shall be Base Rate Loans. The execution and delivery
of this Agreement by the Borrower and the satisfaction of all conditions
precedent pursuant to SECTION 3.1 shall be deemed to constitute the Borrower's
request to borrow the Term Loans on the Closing Date.
SECTION 2.3. FUNDING OF TERM LOANS. Each Lender will make available the
Term Loan to be made by it hereunder on the Closing Date by wire transfer in
immediately available funds by 11:00 a.m. to the Administrative Agent at the
Payment Office. The Administrative Agent will make such Term Loans available to
the Borrower by promptly crediting the amounts that it receives, in like funds
by the close of business on such proposed date, to an account maintained by the
Borrower with the Administrative Agent or at the Borrower's option, by effecting
a wire transfer of such amounts to an account designated by the Borrower to the
Administrative Agent.
SECTION 2.4. INTEREST ELECTIONS.
(a) On the Closing Date, the Term Loans shall be Base Rate
Loans. Thereafter, the Borrower may elect to convert the Term Loans into a
different Type or to continue such Loans, and in the case of LIBOR Loans, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may NOT elect different options with respect to different portions of the Term
Loans, i.e., the Term Loans shall be either all Base Rate Loans or all LIBOR
Loans.
(b) To make an election pursuant to this Section, the Borrower
shall give the Administrative Agent prior written notice (or telephonic notice
promptly confirmed in writing) of the Term Loans (a "NOTICE OF
CONVERSION/CONTINUATION") that are to be converted or continued, as the case may
be, (x) prior to 10:00 a.m. one (1) Business Day prior to the requested date of
a conversion into Base Rate Loans and (y) prior to 11:00 a.m. three (3) Business
Days prior to a continuation of or conversion into LIBOR Loans. Each such Notice
of Conversion/Continuation shall be irrevocable and shall specify (i) the
effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (ii) whether the
resulting Term Loans are to be Base Rate Loans or LIBOR Loans; and (iii) if the
resulting Term Loans are to be LIBOR Loans, the Interest Period applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of "INTEREST PERIOD". If any such Notice of
Continuation/Conversion requests LIBOR Loans but does not specify an Interest
Period, the Borrower shall be deemed to have selected an Interest Period of one
(1) month.
(c) If, on the expiration of any Interest Period in respect of
LIBOR Loans, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such LIBOR Loans are repaid as provided
herein, the Borrower shall be deemed to have elected to convert such LIBOR Loans
to Base Rate Loans. The Term Loans may not be converted into, or continued as,
LIBOR Loans if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of LIBOR Loans shall be permitted except on the last day
of the Interest Period in respect thereof.
(d) Upon receipt of any Notice of Conversion/Continuation, the
Administrative Agent shall promptly notify each Lender of the details thereof.
SECTION 2.5. REPAYMENT OF LOANS. The Borrower unconditionally promises to
pay to the Administrative Agent for the account of each Lender the then unpaid
principal amount of the Term Loan of such Lender on the Maturity Date.
SECTION 2.6. NOTES. The Term Loan made by each Lender to the Borrower on
the Closing Date shall be evidenced by a Note of the Borrower, payable to the
order of such Lender, in the amount of such Lender's Commitment (or, if less,
the principal amount of the Term Loan made by such Lender to the Borrower on the
Closing Date). Each Lender shall maintain in accordance with its usual practice
appropriate records evidencing the indebtedness of the Borrower to such Lender
resulting from the Term Loan made by such Lender to the Borrower, including the
amounts of principal and interest payable thereon and paid to such Lender from
time to time under this Agreement. The Administrative Agent shall maintain
appropriate records in which shall be recorded (i) the Term Loan Commitment of
each Lender, (ii) the amount of the Term Loan made hereunder by each Lender, the
Type thereof and the Interest Period applicable thereto, (iii) the date of each
continuation thereof pursuant to SECTION 2.4, (iv) the date of each conversion
thereof to another Type pursuant to SECTION 2.4, (v) the date and amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder in
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respect of the Term Loan of such Lender and (vi) both the date and amount of any
sum received by the Administrative Agent hereunder from the Borrower in respect
of the Term Loans and each Lender's Pro Rata Share thereof. The entries made in
such records shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, that the failure or
delay of any Lender or the Administrative Agent in maintaining or making entries
into any such record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Term Loan (both principal and unpaid
accrued interest) of such Lender in accordance with the terms of this Agreement.
SECTION 2.7. OPTIONAL PREPAYMENTS. The Borrower shall have the right at any
time and from time to time to prepay the Term Loans, in whole or in part,
without premium or penalty, by giving irrevocable written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent no later than
(i) in the case of prepayment of LIBOR Loans, 11:00 a.m. not less than three (3)
Business Days prior to any such prepayment, and (ii) in the case of any
prepayment of Base Rate Loans, not less than one Business Day prior to the date
of such prepayment. Each such notice shall be irrevocable and shall specify the
proposed date of such prepayment and the principal amount of the Term Loans, or
portion thereof, to be prepaid. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each affected Lender of the contents
thereof and of such Lender's Pro Rata Share of any such prepayment. If such
notice is given, the aggregate amount specified in such notice shall be due and
payable on the date designated in such notice, together with accrued interest to
such date on the amount so prepaid in accordance with SECTION 2.8(e); PROVIDED,
that if LIBOR Loans are prepaid on a date other than the last day of an Interest
Period applicable thereto, the Borrower shall also pay all amounts required
pursuant to SECTION 2.14. Each partial prepayment of the Term Loans shall be in
an amount not less than $1,000,000 or a larger multiple of $1,000,000. Each
prepayment of the Term Loans shall be applied ratably.
SECTION 2.8. INTEREST ON TERM LOANS.
(a) The Borrower shall pay interest on Base Rate Loans at the
Base Rate in effect from time to time and on LIBOR Loans at the Adjusted LIBO
Rate for the applicable Interest Period in effect for such Loans, PLUS, in each
case, the Applicable Margin in effect from time to time.
(b) While an Event of Default exists or after acceleration, at
the option of the Required Lenders, the Borrower shall pay interest ("DEFAULT
INTEREST") with respect to the Term Loans and all other outstanding Obligations
at the Default Rate.
(c) Interest on the principal amount of the Term Loans shall
accrue from and including the date such Term Loans are made to but excluding the
date of any repayment thereof. Interest on all outstanding Base Rate Loans shall
be payable monthly in arrears on the last day of each calendar month and on the
Maturity Date. Interest on all outstanding LIBOR Loans shall be payable on the
last day of each Interest Period applicable thereto, and, in the case of any
LIBOR Loans having an Interest Period in excess of three months, on each day
which occurs every three months after the initial date of such Interest Period,
and on the Maturity Date. Interest on Term Loans which are converted into Loans
of another Type or which are repaid or prepaid shall be payable on the date of
such conversion or on the date of any such repayment or prepayment (on the
amount repaid or prepaid) thereof. All Default Interest shall be payable on
demand.
(d) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder and shall promptly notify the Borrower
and the Lenders of such rate in writing (or by telephone, promptly confirmed in
writing). Any such determination shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 2.9. FEES.
(a) AGENCY FEES. The Borrower shall pay to the Administrative
Agent for its own account fees in the amounts and at the times previously agreed
upon the Borrower and the Administrative Agent.
(b) CLOSING FEE. The Borrower shall pay to the Administrative
Agent, for the ratable benefit of each Lender, a closing fee equal to 0.25%
multiplied by the aggregate Term Loan Commitments. The closing fee shall be due
and payable on the Closing Date.
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SECTION 2.10. COMPUTATION OF INTEREST AND FEES. All computations of
interest (other than Default Interest) and fees hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable (to the extent computed on the basis of the days
elapsed). Each determination by the Administrative Agent of an interest amount
or fee hereunder shall be made in good faith and, except for manifest error,
shall be final, conclusive and binding for all purposes.
SECTION 2.11. INABILITY TO DETERMINE INTEREST RATES. If prior to the
commencement of any Interest Period for LIBOR Loans,
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant interbank market, adequate means do not
exist for ascertaining LIBOR for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to such Lenders (or Lender, as the case may be) of making,
funding or maintaining their (or its, as the case may be) LIBOR Loans for such
Interest Period,
the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. In the case of LIBOR Loans, until the Administrative
Agent shall notify the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, (i) the obligations of the Lenders to
continue or convert outstanding Term Loans as or into LIBOR Loans shall be
suspended and (ii) all LIBOR Loans shall be converted into Base Rate Loans on
the last day of the then current Interest Period applicable thereto unless the
Borrower prepays such LIBOR Loans in accordance with this Agreement.
SECTION 2.12. ILLEGALITY. If any Change in Law shall make in unlawful or
impossible for any Lender to maintain or fund LIBOR Loans and such Lender shall
so notify the Administrative Agent, the Administrative Agent shall promptly give
notice thereof to the Borrower and the other Lenders, whereupon until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender to
continue or convert an outstanding Base Rate Loan as or into a LIBOR Loan, shall
be suspended and such outstanding LIBOR Loan shall be converted to a Base Rate
Loan either (a) on the last day of the then current Interest Period applicable
to such LIBOR Loan if such Lender may lawfully continue to maintain such LIBOR
Loan to such date or (b) immediately if such Lender shall determine that it may
not lawfully continue to maintain such LIBOR Loan to such date. Notwithstanding
the foregoing, the affected Lender shall, prior to giving such notice to the
Administrative Agent, designate a different Applicable Lending Office if such
designation would avoid the need for giving such notice and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.
SECTION 2.13. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the
determination of the Adjusted LIBO Rate hereunder against assets of,
deposits with or for the account of, or credit extended by, any Lender
(except any such reserve requirement reflected in the Adjusted LIBO Rate);
or
(ii) impose on any Lender or the eurodollar interbank market
any other condition affecting this Agreement or a LIBOR Loan made by such
Lender;
and the result of the foregoing is to increase the cost to such Lender of
converting into, continuing or maintaining a LIBOR Loan or to increase the cost
to such Lender or to reduce the amount received or receivable by such Lender
hereunder (whether of principal, interest or any other amount), then the
Borrower shall promptly pay, upon written notice from and demand by such Lender
on the Borrower (with a copy of such notice and demand to the Administrative
Agent), to the Administrative Agent for the account of such Lender, within five
(5) Business Days
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after the date of such notice and demand, additional amount or amounts
sufficient to compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender's capital
(or on the capital of such Lender's parent corporation) as a consequence of its
obligations hereunder to a level below that which such Lender or such Lender's
parent corporation could have achieved but for such Change in Law (taking into
consideration such Lender's policies or the policies of such Lender's parent
corporation with respect to capital adequacy) then, from time to time, within
five (5) Business Days after receipt by the Borrower of written demand by such
Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender or such
Lender's parent corporation for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or such Lender's parent corporation,
as the case may be, specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower (with a copy to the Administrative Agent) and shall be
conclusive, absent manifest error. The Borrower shall pay any such Lender such
amount or amounts within ten (10) days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation.
SECTION 2.14. FUNDING INDEMNITY. In the event of (a) the payment of any
principal of a LIBOR Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a LIBOR Loan other than on the last day of the
Interest Period applicable thereto, or (c) the failure by the Borrower to
prepay, convert or continue any LIBOR Loan on the date specified in any
applicable notice (regardless of whether such notice is withdrawn or revoked),
then, in any such event, the Borrower shall compensate each Lender, within five
(5) Business Days after written demand from such Lender, for any loss, cost or
expense attributable to such event. In the case of a LIBOR Loan, such loss, cost
or expense shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest that would have accrued on the
principal amount of such LIBOR Loan if such event had not occurred at the
Adjusted LIBO Rate applicable to such LIBOR Loan for the period from the date of
such event to the last day of the then current Interest Period therefor (or in
the case of a failure to convert or continue, for the period that would have
been the Interest Period for such LIBOR Loan) over (ii) the amount of interest
that would accrue on the principal amount of such LIBOR Loan for the same period
if the Adjusted LIBO Rate were set on the date such LIBOR Loan was prepaid or
converted or the date on which the Borrower failed to convert or continue such
LIBOR Loan. A certificate as to any additional amount payable under this SECTION
2.14 submitted to the Borrower by any Lender shall be conclusive, absent
manifest error.
SECTION 2.15. TAXES.
(a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; PROVIDED, that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or any Lender, as the case may be,
shall receive an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, on an After-Tax Basis, within five (5) Business Days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other
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Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate. Without limiting the generality
of the foregoing, each Foreign Lender agrees that it will deliver to the
Administrative Agent and the Borrower (or in the case of a Participant, to the
Lender from which the related participation shall have been purchased) (i) two
(2) duly completed copies of Internal Revenue Service Form W8-BEN or W8-ECT, or
any successor form thereto, as the case may be, certifying in each case that
such Foreign Lender is entitled to receive payments made by the Borrower
hereunder and under the Notes payable to it, without deduction or withholding of
any United States federal income taxes and (ii) a duly completed Internal
Revenue Service Form W-8 or W-9, or any successor form thereto, as the case may
be, to establish an exemption from United State backup withholding tax. Each
such Foreign Lender shall deliver to the Borrower and the Administrative Agent
such forms on or before the date that it becomes a party to this Agreement (or
in the case of a Participant, on or before the date such Participant purchases
the related participation). In addition, each such Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Lender. Each such Lender shall promptly notify the Borrower
and the Administrative Agent at any time that it determines that it is no longer
in a position to provide any previously delivered certificate to the Borrower
(or any other form of certification adopted by the U.S. taxing authorities for
such purpose).
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS.
(a) The Borrower shall make each payment required to be made
by it hereunder (whether of principal, interest or fees, or of amounts payable
under SECTION 2.13, 2.14 OR 2.15, or otherwise) prior to 12:00 noon, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at the Payment Office, except that
payments pursuant to SECTIONS 2.13, 2.14 and 2.15 and 10.3 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be made payable for the period
of such extension. All payments hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-of or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on its Term Loan that would result in such Lender receiving payment of
a greater proportion of the aggregate amount of its Term Loan and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Term Loans of the other Lenders to the extent necessary so
that the benefit of all
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such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Term
Loans; PROVIDED, that (i) if any such participations are purchased and all or
any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in its
Term Loan to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount or amounts
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to SECTION 2.16(d) or 10.3(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.
SECTION 2.17. MITIGATION OF OBLIGATIONS. If any Lender requests
compensation under SECTION 2.13, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to SECTION 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable under
SECTION 2.13 or SECTION 2.15, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all costs and expenses incurred by any Lender in connection with such
designation or assignment.
SECTION 2.18. SECURITY FOR OBLIGATIONS. The Term Loans and all of the other
Obligations shall be secured by the collateral described and set forth in the
Security Documents and shall be unconditionally and irrevocably guaranteed by
the Guarantors.
ARTICLE III
CONDITIONS PRECEDENT TO TERM LOANS
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SECTION 3.1. CONDITIONS TO EFFECTIVENESS. The obligations of the Lenders to
make the Term Loans hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
SECTION 10.2).
(a) PAYMENT OF FEES. The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to the Closing
Date, including reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel to the
Administrative Agent) required to be reimbursed or paid by the Borrower
hereunder, under any other Loan Document and under any agreement with the
Administrative Agent.
(b) DOCUMENTS. The Administrative Agent (or its counsel) shall
have received the following:
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(i) a counterpart of this Agreement signed by or on
behalf of each party thereto or written evidence satisfactory
to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement;
(ii) the duly executed Notes payable to the applicable
Lender;
(iii) the duly executed Deed of Trust in form for
recording in the appropriate public records, together with
separate UCC-1 financing statements and, if required by
applicable law, UCC-2 financing statements, to be filed with
the Secretary of State of the State of organization of the
Borrower (or other appropriate filing office) and the county
where the Real Property is located, respectively, and such
other Uniform Commercial Code financing statements as the
Administrative Agent or any Lender deems necessary or
desirable in order to perfect the liens and security interests
created or purported to be created by the Security Documents
and, further, together with evidence of the payment of all
recording and filing fees and taxes with respect to any
recordings or filings made;
(iv) the duly executed Guaranty Agreement and Indemnity
and Contribution Agreement;
(v) a current California Land Title Survey of the Real
Property certified to the Administrative Agent in a form and
substance reasonably satisfactory to the Administrative Agent
and prepared within six (6) months of such Closing Date (or
such other time period agreed to by the Administrative Agent)
by a Person reasonably satisfactory to the Administrative
Agent;
(vi) an ALTA Mortgagee's Policy of Title Insurance,
including such affirmative endorsements as the Administrative
Agent shall reasonably request, issued by a title insurance
company reasonably acceptable to the Administrative Agent in
the aggregate amount of the Term Loans, insuring the Deed of
Trust to be a valid first lien on the Real Property, free and
clear of all defects and encumbrances except such as the
Administrative Agent and its counsel shall approve, and
otherwise in form and substance reasonably satisfactory to the
Administrative Agent (the "TITLE POLICY");
(vii) certificates of insurance evidencing compliance
with the insurance provisions of the Security Documents
(including the naming of the Administrative Agent and the
Lenders as mortgagee, additional insured and/or loss payee, as
applicable, with respect to such insurance, as their interests
may appear), in form and substance reasonably satisfactory to
the Administrative Agent;
(viii) a certificate of the Secretary or Assistant
Secretary of each Loan Party, attaching and certifying as to
(1) the Board of Directors' (or appropriate committee's)
resolution duly authorizing the execution, delivery and
performance by it of each of the Loan Documents to which it is
or will be a party, (2) the incumbency and signatures of
persons authorized to execute and deliver such documents on
its behalf, (3) its articles or certificate of incorporation,
certified as of a recent date by the Secretary of State of the
state of its incorporation and (4) its by-laws;
(ix) good standing or active status certificates for each
Loan Party from the appropriate offices of the states of such
Loan Party's incorporation and principal place of business;
(x) a favorable written opinion of Ice Miller and/or
local counsel in the jurisdiction where the Real Property is
located, as counsel to the Loan Parties, addressed to the
Administrative Agent and each of the Lenders, and covering
such matters relating to the Loan Parties, the Loan Documents
and the Transaction as the Administrative Agent or the
Required Lenders shall reasonably request;
21
(xi) a certificate, dated the Closing Date and signed by
a Responsible Officer, confirming compliance with the
conditions set forth in paragraphs (c), (d), (e) and (f) of
this Section 3.1;
(xii) certified copies of all consents, approvals,
authorizations, registrations or filings required to be made
or obtained by each Loan Party in connection with the Term
Loans and any Indebtedness being refinanced with the proceeds
of the Term Loans;
(xiii) duly executed payoff letters, in form and
substance satisfactory to the Administrative Agent, executed
by each creditor holding Indebtedness to be refinanced at
closing;
(xiv) copies of all documents and instruments, including
all consents, authorizations and filings, required or
advisable under any Requirement of Law or by any material
contractual obligation of the Loan Parties, in connection with
the execution, delivery, performance, validity and
enforceability of the Loan Documents and the other documents
to be executed and delivered under this Agreement, and such
consents, authorizations, filings and orders shall be in full
force and effect and all applicable waiting periods shall have
expired;
(xv) a duly executed loan closing statement; and
(xvi) such other executed documents, instruments,
opinions and other items as may have been reasonably requested
by the Administrative Agent or its counsel in connection with
the Term Loans.
(c) LITIGATION. No action or proceeding shall have been
instituted or, to the knowledge of any Loan Party, threatened nor shall any
governmental action, suit, proceeding or investigation be instituted or
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or proposed to be issued by any Governmental Authority,
to set aside, restrain, enjoin or prevent the performance of this Agreement or
the Transaction or which is reasonably likely to materially adversely affect the
Real Property or the Transaction or which would reasonably be expected to result
in a Material Adverse Effect.
(d) LEGALITY. In the opinion of the Administrative Agent or
its counsel, the Transaction shall not violate any Applicable Law, and no change
shall have occurred or been proposed in Applicable Law that would make it
illegal for the Administrative Agent or any Lender to participate in the
Transaction.
(e) NO EVENTS. (i) No Default, Event of Default, Event of Loss
or Event of Taking relating to the Real Property shall have occurred and be
continuing, (ii) no action shall be pending or threatened by a Governmental
Authority to initiate a Condemnation or an Event of Taking, and (iii) there
shall not have occurred any event that would reasonably be expected to have a
Material Adverse Effect since December 31, 2002.
(f) REPRESENTATIONS. Each representation and warranty of the
parties hereto or to any other Loan Document contained herein or in any other
Loan Document shall be true and correct in all material respects as though made
on and as of such Closing Date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date.
SECTION 3.2. DELIVERY OF DOCUMENTS. All of the Loan Documents,
certificates, legal opinions and other documents and papers referred to in this
Article III, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Lenders and, except for the
Notes, in sufficient counterparts or copies for each of the Lenders and shall be
in form and substance satisfactory in all respects to the Administrative Agent.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Effective as of the date of execution of this Agreement, each
of the Borrower and ADESA represents and warrants to the Administrative Agent
and each Lender as follows:
SECTION 4.1. ORGANIZATION; CORPORATE POWER. It (i) is a corporation duly
organized, validly existing under the laws of the jurisdiction of its
organization, and it has not filed, and does not have pending, articles of
dissolution in such jurisdiction, (ii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where the
failure to be duly qualified and in good standing would have a Material Adverse
Effect and (iii) has all requisite corporate power and authority to own, operate
and encumber its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the Transaction.
SECTION 4.2. AUTHORITY. It has the requisite corporate power and authority
to execute, deliver and perform the Loan Documents executed or to be executed by
it; and the execution, delivery and performance (or recording or filing, as the
case may be) of the Loan Documents, and the consummation of the Transaction
contemplated on its part thereby, have been duly approved by its Board of
Directors and no other corporate proceedings on its part are necessary to
consummate the Transaction.
SECTION 4.3. DUE EXECUTION AND DELIVERY OF LOAN DOCUMENTS. The Loan
Documents executed by it have been duly executed and delivered (or recorded or
filed, as the case may be) by it, and, in each case, constitute its legal, valid
and binding obligation, enforceable against it in accordance with the respective
terms of each such Loan Document, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
limiting creditors' rights generally or by equitable principles generally.
SECTION 4.4. NO CONFLICTS. The execution, delivery and performance by it of
each Loan Document to which it is a party and of each Transaction do not and
will not (i) violate any Applicable Law or Contractual Obligation binding on it
the consequences of which violation, singly or in the aggregate, would have a
Material Adverse Effect, (ii) result in or require the creation or imposition of
any Lien whatsoever on the Real Property (other than Permitted Liens) or (iii)
require any approval of stockholders which has not been obtained.
SECTION 4.5. GOVERNMENTAL CONSENTS. Except as have been made, obtained or
given, no filing or registration with, consent or approval of, notice to, with
or by any Governmental Authority is required to authorize, or is required in
connection with, the execution, delivery and performance by it of the Loan
Documents to which it is a party, the use of the proceeds of the Term Loans made
to effect the refinancing of certain existing liabilities and obligations of the
Borrower related to the Real Property, or the legality, validity, binding effect
or enforceability of any Loan Document.
SECTION 4.6. GOVERNMENTAL REGULATION. It is not an "investment company" or
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.7. REQUIREMENTS OF LAW. It is in compliance with all Requirements
of Law applicable to it and its business, in each case where the failure to so
comply would have a Material Adverse Effect, either individually or together
with other such cases.
SECTION 4.8. RIGHTS IN RESPECT OF THE REAL PROPERTY. It is not a party to
any contract or agreement to sell any interest in the Real Property or any part
thereof.
SECTION 4.9. TAXES. It and its Affiliates have filed all tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
levied upon them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent, except for any taxes and assessments (a) the failure of
which to timely pay would not have a Material Adverse Effect or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings, and as to
23
which there is no imminent threat of forfeiture, and with respect to which it or
a Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP; it knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect; and the charges,
accruals and reserves on its books in respect of Federal, state or other taxes
for all fiscal periods are adequate.
SECTION 4.10. USE OF PROCEEDS; MARGIN REGULATIONS. The Borrower will apply
the proceeds of the Term Loans as set forth in SECTION 5.10 hereof; no part of
the proceeds from the Term Loans will be used, directly or indirectly by it, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
207), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve it in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220).
SECTION 4.11. ERISA EVENT. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$1,000,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Standards No. 87)
did not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $1,000,000 the fair market value of the assets of
all such underfunded Plans.
SECTION 4.12. SOLVENCY. The Transaction has not been entered into by it in
contemplation of its insolvency nor has such Transaction been entered into with
the intent to hinder, delay or defraud its equity holders or its creditors.
SECTION 4.13. DISCLOSURE. Neither this Agreement nor any of the other Loan
Documents, nor any certificate or other document furnished to any other party
hereto by it or on its behalf pursuant to any Loan Document contains, or will
contain, as of its date, any untrue statement of a material fact or omits to
state or will omit to state, as of its date, a material fact necessary in order
to make the statements contained herein and therein not misleading. There are no
facts known to it which, individually or in the aggregate, materially adversely
affect, or could reasonably be expected to materially adversely affect, its
condition, business or affairs or its respective properties and assets, taken as
a whole, which have not been disclosed herein or in written materials delivered
to any other party hereto in connection with the negotiation of the Loan
Documents.
SECTION 4.14. TITLE TO COLLATERAL. The Borrower owns good and marketable
title to the Real Property and the other collateral pledged as security for its
obligations in connection with the Transaction free and clear of all liens and
encumbrances, except as ser forth in the Title Policy or otherwise disclosed in
writing to the Administrative Agent and the Lenders.
SECTION 4.15. OTHER OBLIGATIONS. It is not a party to or bound by any
agreement, contract, instrument or understanding or commitment of any kind or
subject to any corporate or other restriction, the performance or observance of
which by it now or, as far it can reasonably foresee, will have a Material
Adverse Effect, financial or otherwise, upon the assets or business of the
Consolidated Companies taken as a whole; and neither it nor any other Person to
a contract or agreement material to its financial condition or operations, taken
as a whole, is in default under any such contract or agreement, and no event has
occurred which, but for the giving of notice or the passage of time, or both,
would constitute a default thereunder.
SECTION 4.16. FINANCIAL STATEMENTS. The consolidated balance sheets of the
Consolidated Companies as of the quarterly period most recently ended before the
Closing Date and the statements of income for the period then ended, heretofore
furnished to the Administrative Agent and each Lender, are true and complete,
have been prepared in accordance with GAAP (except for the absence of footnotes
and the lack of year end adjustments) and fairly present in all material
respects the consolidated financial condition of the Consolidated Companies as
of the date thereof and the results of their operations for the period then
ended. Since the date thereof, there has been no material adverse change in the
financial condition, properties or businesses of the Consolidated Companies
which has not been disclosed in writing by ADESA to the Administrative Agent and
each Lender.
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SECTION 4.17. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) No litigation, investigation or proceeding of or before
any arbitrators or Governmental Authorities is pending against or, to its
knowledge, threatened against or affecting it or any of its Subsidiaries (i) as
to which there is a reasonable possibility of an adverse determination that
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect or (ii) which in any manner draws into question the
validity or enforceability of this Agreement or any other Loan Document.
(b) To its knowledge, except for the matters set forth on
SCHEDULE 4.17, neither it nor any of its Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability which, in any such case under clauses (i), (ii), (iii)
or (iv) above, could reasonably be expected to have a Material Adverse Effect.
SECTION 4.18. REAL PROPERTY. The present condition of the Real Property
conforms in all material respects with all conditions or requirements of all
existing permits and approvals issued with respect to such Real Property, and
the Borrower's use of such Real Property does not violate any Applicable Law,
except for any such violations that have not had, and would not have, a Material
Adverse Effect. To the Knowledge of the Borrower, no material notices,
complaints or orders of violation or non-compliance have been issued or
threatened or contemplated by any Governmental Authority with respect to the
Real Property or any present or intended future use thereof. All material
agreements, easements and other rights, public or private, which are necessary
to permit the lawful use and operation of the Real Property and which are
necessary to permit the lawful use and operation of all utilities, driveways,
roads and other means of egress and ingress to and from the same have been
obtained and are in full force and effect, and the Borrower has no Knowledge of
any pending material modification or cancellation of any of the same.
All representations and warranties made in this Article IV shall survive making
of the Term Loans and delivery of the Loan Documents, and shall remain in effect
until all of the Obligations are fully and irrevocably paid.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
Each of ADESA and the Borrower covenants and agrees that so
long as any of the Obligations remain outstanding and unpaid:
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. ADESA shall
deliver or cause to be delivered to the Administrative Agent and each Lender:
(a) As soon as practicable, and in any event within forty-five
(45) days after the close of each of the first three quarterly accounting
periods in each Fiscal Year, the consolidated balance sheet of the Consolidated
Companies as at the end of such quarterly period and the related consolidated
statements of operations for such quarterly period and for the elapsed portion
of the current Fiscal Year ended with the last day of such quarterly period, and
setting forth comparative consolidated figures for the related periods in the
prior Fiscal Year, which financial statements shall be certified by a duly
authorized officer of ADESA that they fairly present in all material respects
the consolidated financial condition of the Consolidated Companies as at the
dates indicated, subject to changes resulting from audit and normal year-end
adjustments, provided that so long as ADESA is subject to informational
requirements of the Securities Exchange Act and in accordance therewith files
reports and other information with the SEC, the Administrative Agent and the
Lenders shall be deemed to have been furnished with the foregoing reports and
forms so long as such reports and forms are available for electronic access at
the SEC's homepage on the internet;
(b) As soon as practicable, and in any event within one
hundred twenty (120) days after the end of each Fiscal Year, consolidated
balance sheets of the Consolidated Companies as at the end of such Fiscal Year
and the related consolidated statements of earnings, shareholders' equity and
changes in cash flows of the Consolidated Companies for such Fiscal Year,
setting forth in comparative form the consolidated figures for the
25
Consolidated Companies for the previous Fiscal Year, all in reasonable detail
and accompanied by a report thereon of PricewaterhouseCoopers or other
independent public accountants of recognized national standing selected by ADESA
which report shall be unqualified as to the scope of audit and as to the status
of the Consolidated Companies as a going concern and shall state that such
consolidated financial statements present fairly in all material respects the
financial position of the Consolidated Companies as at the dates indicated and
the results of their operations and cash flows for the periods indicated in
conformity with GAAP (or, in the event of a change in accounting principles,
such accountants' concurrence with such change) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards, provided that so
long as ADESA is subject to informational requirements of the Securities
Exchange Act and in accordance therewith files reports and other information
with the SEC, the Administrative Agent and the Lenders shall be deemed to have
been furnished with the foregoing reports and forms so long as such reports and
forms are available for electronic access at the SEC's homepage on the internet;
(c) Together with each delivery of any financial statements
pursuant to clauses (a) and (b) of this subsection, an officer's certificate of
ADESA, executed by a duly authorized officer of ADESA, stating (i) that the
signer has instituted procedures for the review of the terms of this Agreement
and the principal Loan Documents and the review in reasonable detail of the
transactions and conditions of the Consolidated Companies taken as a whole
during the accounting period covered by such financial statements, and that such
review has not disclosed the existence, during or at the end of such accounting
period, nor does the signer have knowledge of the existence as of the date of
such officer's certificate, of any condition or event which constitutes a
Default or an Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
ADESA has taken, is taking and proposes to take with respect thereto, (ii) that,
to the best of such officer's knowledge, the financial statements delivered
pursuant to clause (a) of this subsection present fairly in all material
respects the financial position of the Consolidated Companies as at the dates
indicated and the results of their operations and cash flows for the periods
indicated in conformity with GAAP, (iii) that ADESA is in compliance with each
of the covenants contained in Article VI hereof, and setting out in reasonable
detail the data and calculations upon which the officer bases such statement and
(iv) whether any change in GAAP or the application thereof has occurred since
the date of ADESA's audited financial statements referred to in SECTION 4.16
and, if any change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) Promptly, and in any event within five (5) Business Days
after an executive officer of ADESA or the Borrower obtains knowledge thereof,
notice of (A) the occurrence of any event which constitutes an Event of Default
which notice shall specify the nature thereof, the period of existence thereof
and what action ADESA or the Borrower proposes to take with respect thereto and
(B) any litigation or governmental proceedings pending against ADESA or the
Borrower which, if determined adversely to ADESA or the Borrower, would have a
Material Adverse Effect on the ability of ADESA or the Borrower to perform under
the Loan Documents;
(e) With reasonable promptness, such information with respect
to the financial condition of ADESA, the Borrower or the Real Property as from
time to time may be reasonably requested by the Administrative Agent or any
Lender; PROVIDED, HOWEVER, that the Administrative Agent and each Lender shall
keep such information confidential, except in connection with enforcement or
exercise of the Administrative Agent's or such Lender's rights under this
Agreement or the other Loan Documents, or otherwise available at law or in
equity; and PROVIDED FURTHER, HOWEVER, that the Administrative Agent and each
Lender may disclose such information to the extent necessary to respond to
inquiries of bank regulatory authorities or to comply with legal process or any
other legal disclosure obligations, or to the extent such information has been
made publicly available by parties other than the Administrative Agent or any
Lender;
(f) Promptly after the same are available to it, during any
period in which ADESA shall be or become a reporting company under the
Securities Exchange Act, ADESA shall deliver to the Administrative Agent and
each Lender copies of the annual report of ADESA and each filing made by ADESA
or any Affiliate thereof with the SEC; and
(g) promptly following any request therefor, such other
information regarding the results of operations, business affairs and financial
condition of ADESA or any Subsidiary as the Administrative Agent or any Lender
may reasonably request.
26
SECTION 5.2. NOTICES OF MATERIAL EVENTS. It will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or, to
its knowledge, affecting it or any of its Subsidiaries which, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any event or any other development by
which it or any of its Subsidiaries (i) fails to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses, which individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability to it or any of its Subsidiaries in an aggregate amount
exceeding $1,000,000; and
(e) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied
by a written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
SECTION 5.3. CORPORATE EXISTENCE. It will at all times preserve and keep in
full force and effect its corporate existence. ADESA will at all times preserve
and keep in full force and effect the corporate, partnership or limited
liability company existence of each of its Subsidiaries (unless merged into
ADESA or a Subsidiary) and all rights and franchises of ADESA and its
Subsidiaries unless, in the good faith judgment of ADESA, the termination of or
failure to preserve and keep in full force and effect such corporate existence,
right or franchise could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 5.4. COMPLIANCE WITH LAWS, ETC. It will, and will cause each of its
Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5. PAYMENT OF TAXES AND CLAIMS. It will, and will cause each of
its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on the properties or assets of ADESA or any
Subsidiary; PROVIDED, that neither ADESA nor any Subsidiary need pay any such
tax or assessment or claims if (a) the amount, applicability or validity thereof
is contested by ADESA or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and ADESA or such Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of ADESA or such
Subsidiary, as applicable, or (b) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
SECTION 5.6. BOOKS AND RECORDS. It will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in
27
relation to its business and activities to the extent necessary to prepare the
consolidated financial statements of the Consolidated Companies in conformity
with GAAP.
SECTION 5.7. VISITATION, INSPECTION, ETC. It will, and will cause each of
its Subsidiaries to, permit any representative of the Administrative Agent or
any Lender, to visit and inspect its properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with any of its officers and with its independent
certified public accountants, all at such reasonable times and as often as the
Administrative Agent or any Lender may reasonably request after reasonable prior
notice to ADESA.
SECTION 5.8. MAINTENANCE OF PROPERTIES; INSURANCE. It will, and will cause
each of its Subsidiaries (a) to maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times; PROVIDED, that this
SECTION 5.8 shall not prevent ADESA or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and ADESA has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and (b) maintain with financially
sound and reputable insurance companies, insurance with respect to its
properties and business, and the properties and business of its Subsidiaries,
against loss or damage of the kinds customarily insured against by companies in
the same or similar businesses operating in the same or similar locations.
SECTION 5.9. FURTHER ASSURANCES. Upon the written request of the
Administrative Agent or any Lender, the Borrower, at its own cost and expense,
will cause all financing statements (including precautionary financing
statements), fixture filings and other similar documents to be signed by it and
recorded or filed at such places and times in such manner as may be necessary or
requested by the Administrative Agent or such Lender to preserve, protect and
perfect the interest of the Administrative Agent and the Lenders in the Real
Property as contemplated by the Security Documents.
SECTION 5.10. USE OF PROCEEDS. The Borrower will use the proceeds of the
Term Loans to refinance certain of its existing liabilities and obligations
relating to the Real Property. No part of the proceeds of the Term Loans will be
used, whether directly or indirectly, for any purpose that would violate any
rule or regulation of the Board of Governors of the Federal Reserve System,
including Regulations T, U or X.
ARTICLE VI
FINANCIAL COVENANTS
-------------------
ADESA covenants and agrees that so long as any of the
Obligations remain outstanding and unpaid:
SECTION 6.1. MAXIMUM TOTAL FUNDED DEBT TO EBITDA RATIO. It will maintain,
as of the last day of each Fiscal Quarter, commencing with the Fiscal Quarter
ending June 30, 2003, a Total Funded Debt to EBITDA Ratio of not greater than
3.50:1.00.
SECTION 6.2. FIXED CHARGE COVERAGE RATIO. It will maintain, as of the last
day of each Fiscal Quarter, commencing with the Fiscal Quarter ending June 30,
2003, a Fixed Charge Coverage Ratio of not less than 1.30:1.00.
SECTION 6.3. CONSOLIDATED MINIMUM NET WORTH. It will maintain at all times
a Consolidated Net Worth of not less than $747,400,000 with such minimum amount
to be permanently increased at the end of each Fiscal Quarter, commencing with
the Fiscal Quarter ending on June 30, 2003, by an amount equal to twenty-five
percent (25%) of Consolidated Net Income for such Fiscal Quarter; PROVIDED,
HOWEVER, in the event that the Consolidated Companies suffer a net loss for any
Fiscal Quarter, Consolidated Net Income shall be deemed to be $0 for such Fiscal
Quarter, so that in no event shall Consolidated Net Worth at the end of any
Fiscal Quarter be less than that required at the end of the preceding Fiscal
Quarter.
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ARTICLE VII
NEGATIVE COVENANTS
------------------
Each of ADESA and the Borrower covenants and agrees that so
long as any of the Obligations remain outstanding and unpaid:
SECTION 7.1. NEGATIVE PLEDGE. It will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its
assets or property now owned or hereafter acquired or, except:
(a) Liens created in favor of the Administrative Agent for the
benefit of the Lenders pursuant to the Loan Documents;
(b) Permitted Encumbrances;
(c) any Liens on any property or asset of ADESA or any
Subsidiary existing on the Closing Date set forth on SCHEDULE 7.1; PROVIDED,
that such Lien shall not apply to any other property or asset of ADESA or such
Subsidiary;
(d) purchase money Liens upon or in any fixed or capital
assets to secure the purchase price or the cost of construction or improvement
of such fixed or capital assets or to secure Indebtedness incurred solely for
the purpose of financing the acquisition, construction or improvement of such
fixed or capital assets (including Liens securing any Capital Lease
Obligations); PROVIDED, that (i) such Lien attaches to such asset concurrently
or within 90 days after the acquisition, improvement or completion of the
construction thereof; (ii) such Lien does not extend to any other asset; and
(iii) the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets and does not cause a
violation of any of the financial covenants contained in Article VI;
(e) any Lien (i) existing on any asset of any Person at the
time such Person becomes a Subsidiary of ADESA or any Subsidiary, (ii) existing
on any asset of any Person at the time such Person is merged with or into ADESA
or any Subsidiary or (iii) existing on any asset prior to the acquisition
thereof by ADESA or any Subsidiary; PROVIDED, that any such Lien was not created
in the contemplation of any of the foregoing and any such Lien secures only
those obligations which it secures on the date that such Person becomes a
Subsidiary or the date of such merger or the date of such acquisition; and
(f) extensions, renewals, or replacements of any Lien referred
to in paragraphs (a) through (d) of this Section; PROVIDED, that the principal
amount of the Indebtedness secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets originally encumbered
thereby.
SECTION 7.2. FUNDAMENTAL CHANGES.
(a) It will not, and will not permit any Subsidiary to, merge
into or consolidate into any other Person, or permit any other Person to merge
into or consolidate with it, or sell, lease, transfer or otherwise dispose of
(in a single transaction or a series of transactions) all or substantially all
of its assets (in each case, whether now owned or hereafter acquired) or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired) or liquidate or dissolve; PROVIDED, that if at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) ADESA or any
Subsidiary may merge with a Person if ADESA (or such Subsidiary if ADESA is not
a party to such merger) is the surviving Person, (ii) any Subsidiary may merge
into another Subsidiary; PROVIDED, that if any party to such merger is the
Borrower, the Borrower shall be the surviving Person, (iii) any Subsidiary may
sell, transfer, lease or otherwise dispose of all or substantially all of its
assets to ADESA or the Borrower and (iv) any Subsidiary (other than the
Borrower) may liquidate or dissolve if ADESA determines in good faith that such
liquidation or dissolution is in the best interests of ADESA or such Subsidiary
and is not materially disadvantageous to the Lenders; PROVIDED, that any such
merger involving a Person that is not a wholly-owned Subsidiary immediately
prior to such merger shall not be permitted. Notwithstanding the foregoing and
upon notice to the Administrative Agent, ADESA shall be allowed to restructure
Automotive Finance Company from a Subsidiary to a company wholly-owned by ALLETE
Automotive Services, Inc., a wholly-owned Subsidiary of ALLETE.
29
(b) It will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by ADESA and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
SECTION 7.3. TRANSACTIONS WITH AFFILIATES. It will not, and will not permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) in the ordinary course of business at prices and on terms and
conditions not less favorable to it or such Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties, and (b) transactions between
or among ADESA and its wholly-owned Subsidiaries not involving any other
Affiliates.
SECTION 7.4. RESTRICTIVE AGREEMENTS. It will not, and will not permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement that prohibits, restricts or imposes any condition upon (a) the
ability of ADESA or any Subsidiary to create, incur or permit any Lien upon any
of its assets or properties, whether now owned or hereafter acquired, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to its common stock, to make or repay loans or advances to ADESA or any other
Subsidiary, to Guarantee Indebtedness of ADESA or any other Subsidiary or to
transfer any of its property or assets to ADESA or the Borrower; PROVIDED, that
(i) the foregoing shall not apply to restrictions or conditions imposed by law
or by this Agreement or any other Loan Document, (ii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is sold and such sale is permitted
hereunder, and (iii) clause (a) shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof.
SECTION 7.5. [INTENTIONALLY LEFT BLANK].
SECTION 7.6. HEDGING AGREEMENTS. It will not, and will not permit any of
the Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which ADESA or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities. Solely for the avoidance of doubt, ADESA
acknowledges that a Hedging Agreement entered into for speculative purposes or
of a speculative nature (which shall be deemed to include any Hedging Agreement
under which ADESA or any of the Subsidiaries is or may become obliged to make
any payment (i) in connection with the purchase by any third party of any common
stock or any Indebtedness or (ii) as a result of changes in the market value of
any common stock or any Indebtedness) is not a Hedging Agreement entered into in
the ordinary course of business to hedge or mitigate risks.
SECTION 7.7. AMENDMENT TO MATERIAL DOCUMENTS. It will not, and will not
permit any Subsidiary to, amend, modify or waive any of its rights in a manner
materially adverse to the Lenders under (a) its certificate of incorporation,
bylaws or other organizational documents or (b) any material contracts.
SECTION 7.8. ACCOUNTING CHANGES. It will not, and will not permit any
Subsidiary to, make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change the fiscal year of ADESA or of
any Subsidiary, except to change the fiscal year of a Subsidiary to conform its
fiscal year to that of ADESA.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
SECTION 8.1. EVENTS OF DEFAULT. If any of the following events (each an
"EVENT OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Term
Loan when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Term
Loan or any fee or any other amount (other than an amount payable under clause
(a) of this Article) payable under this Agreement or any other
30
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three (3) Business Days; or
(c) any representation or warranty made or deemed made by or
on behalf of ADESA or the Borrower in or in connection with this Agreement or
any other Loan Document (including the Schedules attached thereto) and any
amendments or modifications hereof or waivers hereunder, or in any certificate,
report, financial statement or other document submitted to the Administrative
Agent or the Lenders by ADESA or the Borrower or any representative of ADESA or
the Borrower pursuant to or in connection with this Agreement or any other Loan
Document shall prove to be incorrect in any material respect when made or deemed
made or submitted; or
(d) ADESA or the Borrower shall fail to observe or perform any
covenant or agreement contained in SECTIONS 5.2, 5.3 (with respect to the
applicable party's existence) or ARTICLES VI or VII; or
(e) ADESA or the Borrower shall fail in any material respect
to timely observe or perform any covenant or agreement contained in this
Agreement (other than those referred to in clauses (a), (b) and (d) above) or
any other Loan Document to be performed or observed by it hereunder or under
such other Loan Document and such failure shall continue for a period of thirty
(30) days after the earlier of (i) ADESA's or Borrower's receipt of written
notice thereof from the Administrative Agent or any Lender or (ii) ADESA or
Borrower shall have knowledge of such failure; PROVIDED, HOWEVER, that if such
failure is capable of cure, but is not capable of cure within such thirty day
period, so long as ADESA or Borrower shall be diligently pursuing such cure,
such failure shall not constitute an Event of Default unless it shall continue
for a period of ninety (90) days after the earlier of (x) ADESA's or Borrower's
receipt of written notice thereof from the Administrative Agent or any Lender or
(y) ADESA or Borrower shall have knowledge of such failure; or
(f) any of the Consolidated Companies (whether as primary
obligor or as guarantor or other surety) shall fail to pay any principal of or
premium or interest on any Material Indebtedness that is outstanding, when and
as the same shall become due and payable (whether at scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the agreement
or instrument evidencing such Material Indebtedness; or any other event shall
occur or condition shall exist under any agreement or instrument relating to
such Material Indebtedness and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or permit the acceleration of, the maturity of
such Material Indebtedness; or any such Material Indebtedness shall be declared
to be due and payable; or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or any offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
(g) any Loan Party shall (i) commence a voluntary case or
other proceeding or file any petition seeking liquidation, reorganization or
other relief under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this Section, (iii) apply for or consent to the appointment of
a custodian, trustee, receiver, liquidator or other similar official for such
Loan Party or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, or (vi)
take any action for the purpose of effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of any Loan Party or its debts, or any substantial part
of its assets, under any federal, state or foreign bankruptcy, insolvency or
other similar law now or hereafter in effect or (ii) the appointment of a
custodian, trustee, receiver, liquidator or other similar official for any Loan
Party or for a substantial part of its assets, and in any such case, such
proceeding or petition shall remain undismissed for a period of ninety (90) days
or an order or decree approving or ordering any of the foregoing shall be
entered; or
(i) any Loan Party shall become unable to pay, shall admit in
writing its inability to pay, or shall fail to pay, its debts as they become
due; or
31
(j) any Loan Party ceases to do business as presently
conducted or seeks to dissolve; or
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with other ERISA Events that have
occurred, could reasonably be expected to result in liability to ADESA or any
Subsidiary in an aggregate amount exceeding $1,000,000; or
(l) one or more non-interlocutory judgments, non-interlocutory
orders, decrees of arbitration awards shall be entered against any Loan Party or
any Subsidiary of a Loan Party involving in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $5,000,000 or more (in the case of ADESA and its
Subsidiaries on a consolidated basis) or $20,000,000 or more (in the case of
ALLETE) and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of sixty (60) days after the entry thereof; or
(m) any non-monetary judgment, order or decree is entered
against any Loan Party or any Subsidiary of a Loan Party which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be a
period of twenty (20) consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(n) a Change in Control shall occur or exist; or
(o) any Loan Document ceases to be in full force and effect or
the validity or enforceability thereof is disaffirmed by or on behalf of any
Loan Party, or at any time it is or becomes unlawful for any Loan Party to
perform or comply with its obligations under any Loan Document, or any action at
law, suit or in equity or other legal proceeding to cancel, revoke or rescind
any Loan Document shall be commenced by or on behalf of any Loan Party or the
obligations of any Loan Party under any Loan Document are not or cease to be
legal, valid and binding on such Loan Party; or
(p) if the Deed of Trust at any time does not constitute a
first Lien on the Real Property and other collateral encumbered thereby; or
(q) if a Claim is made that the Real Property or the
Improvements do not comply with any Applicable Law or an action is instituted in
any court or administrative agency with jurisdiction over the Real Property or
the Borrower in which a Claim is made as to whether the Real Property or the
Improvements do so comply, which is not resolved in the Borrower's favor within
thirty (30) days after the commencement thereof except for such Claims as the
Borrower is diligently contesting in good faith as long as the enforcement
thereof is stayed; or
(r) if an Event of Loss or an Event of Taking occurs;
(s) if a Material Adverse Event shall occur which is not
otherwise specifically dealt with under this Article VII;
(t) a default occurs under any of the other Loan Documents
which is not timely cured within any applicable grace period provided therein;
then, and in every such event (other than an event with respect to any Loan
Party described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Loan Parties, in
addition to the exercise of any rights and remedies under any of the other Loan
Documents, take any or all of the following actions, at the same or different
times: (i) declare the principal of and any accrued interest on the Term Loans,
and all other Obligations owing hereunder, to be, whereupon the same shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Loan Party, (ii)
exercise any remedy contained in the Security Documents and (iii) exercise any
and all other remedies contained in any other Loan Document; and that, if an
Event of Default specified in either clause (g) or (h) shall occur, the
principal of the Term Loans then outstanding, together with accrued interest
thereon, and all fees, and all other Obligations shall
32
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Loan Parties.
ARTICLE IX
THE ADMINISTRATIVE AGENT
------------------------
SECTION 9.1. APPOINTMENT OF ADMINISTRATIVE AGENT. Each Lender irrevocably
appoints SunTrust Bank as the Administrative Agent and authorizes it to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent under this Agreement and the other Loan Documents, together
with all such actions and powers that are reasonably incidental thereto. The
Administrative Agent may perform any of its duties hereunder by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers through their respective Related Parties. The exculpatory
provisions set forth in this Article shall apply to any such sub-agent and the
Related Parties of the Administrative Agent and any such sub-agent and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.
SECTION 9.2. NATURE OF DUTIES OF ADMINISTRATIVE AGENT. The Administrative
Agent shall not have any duties or obligations except those expressly set forth
in this Agreement and the other Loan Documents. Without limiting the generality
of the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default or an Event
of Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except those discretionary rights and powers expressly contemplated by
the Loan Documents that the Administrative Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in SECTION
10.2), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Loan Party
or any of its Subsidiaries that is communicated to or obtained by the
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in SECTION 10.2) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall not be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to the Administrative Agent by a Loan Party or any Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements, or other terms and conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article III or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
SECTION 9.3. LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT. Each of the
Lenders acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each of the Lenders also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it has deemed
appropriate, continue to make its own decisions in taking or not taking of any
action under or based on this Agreement, any related agreement or any document
furnished hereunder or thereunder.
SECTION 9.4. CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any action or actions (including the failure to act) in connection
with this Agreement, the Administrative Agent shall be entitled to refrain from
such act or taking such act, unless and until it shall have received
instructions from such Lenders; and the Administrative Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
33
refraining from acting hereunder in accordance with the instructions of the
Required Lenders where required by the terms of this Agreement.
SECTION 9.5. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing believed by it to be genuine and to have been signed, sent or
made by the proper Person. The Administrative Agent may also rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper Person and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (including counsel for any
Loan Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or not taken by it in accordance with
the advice of such counsel, accountants or experts.
SECTION 9.6. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The bank
serving as the Administrative Agent shall have the same rights and powers under
this Agreement and any other Loan Document in its capacity as a Lender as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Administrative Agent; and the terms "LENDERS", "REQUIRED LENDERS",
"HOLDERS OF NOTES", or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual
capacity. The bank acting as the Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with any Loan Party or any Subsidiary or Affiliate of any Loan Party as
if it were not the Administrative Agent hereunder.
SECTION 9.7. SUCCESSOR ADMINISTRATIVE AGENT.
(a) The Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Loan Parties. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor Administrative
Agent, subject to the approval by the Loan Parties provided that no Default or
Event of Default shall exist at such time. If no successor Administrative Agent
shall have been so appointed, and shall have accepted such appointment within
thirty (30) days after the retiring Administrative Agent gives notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a commercial
bank organized under the laws of the United States of America or any state
thereof or a bank which maintains an office in the United States, having a
combined capital and surplus of at least $500,000,000.
(b) Upon the acceptance of its appointment as the
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. If within forty-five (45) days
after written notice is given of the retiring Administrative Agent's resignation
under this SECTION 9.7 no successor Administrative Agent shall have been
appointed and shall have accepted such appointment, then on such 45th day (i)
the retiring Administrative Agent's resignation shall become effective, (ii) the
retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time as the Required Lenders appoint a successor
Administrative Agent as provided above. After any retiring Administrative
Agent's resignation hereunder, the provisions of this Article IX shall continue
in effect for the benefit of such retiring Administrative Agent and its
representatives and agents in respect of any actions taken or not taken by any
of them while it was serving as the Administrative Agent.
34
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.1. NOTICES.
(a) Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications to any party herein to be effective shall be in writing and shall
be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
To any Loan Party: On or before March 31, 2004:
ADESA Corporation
310 East 96th Street
Suite 400
Indianapolis, Indiana 46240
Attention: Paul Lips, CFO
Telecopy Number: (317) 249-4240
After March 31, 2004:
ADESA Corporation
13085 Hamilton Crossing Blvd.
Carmel, Indiana 46032
Attention: Paul Lips, CFO
Telecopy Number: [TBD]
With copies to: ALLETE, Inc.
30 West Superior Street
Duluth, MN 55802
Attention: James Vizanko, CFO
Telecopy Number: (218) 723-3912
General Counsel
ALLETE, Inc.
30 West Superior Street
Duluth, MN 55802
Telecopy Number: (218) 723-3960
On or before March 31, 2004:
General Counsel
ADESA Corporation
310 East 96th Street
Suite 400
Indianapolis, Indiana 46240
Telecopy Number: (317) 249-4501
After March 31, 2004:
General Counsel
ADESA Corporation
13085 Hamilton Crossing Blvd.
Carmel, Indiana 46032
Telecopy Number: [TBD]
35
To the Administrative Agent: SunTrust Bank
200 South Orange Avenue/MC #1106
Orlando, Florida 32801
Attention: Edward Wooten, Director
Telecopy Number: (407) 237-4076
To the Lenders: SunTrust Bank
200 South Orange Avenue/MC #1106
Orlando, Florida 32801
Attention: Edward Wooten, Director
Telecopy Number: (407) 237-4076
Harris Trust and Savings Bank
111 West Monroe Street
10th Floor West
Chicago, Illinois 60603
Attention: Thad D. Rasche, Vice President
and
Peter Christopoulos, Associate
Telecopy Number: (312) 461-5225
LaSalle Bank National Association
One American Square, Suite 1600
Indianapolis, IN 46282
Attention: Matthew Doye, Assistant
Vice President
Telecopy Number: (317) 756-7021
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the mails or if
delivered, upon delivery; PROVIDED, that notices delivered to the Administrative
Agent shall not be effective until actually received by such Person at its
address specified in this SECTION 10.1.
(b) Any agreement of the Administrative Agent and the Lenders
herein to receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Loan Parties. The Administrative Agent and
the Lenders shall be entitled to rely on the authority of any Person purporting
to be a Person authorized by the Loan Parties to give such notice and the
Administrative Agent and Lenders shall not have any liability to any Loan Party
or other Person on account of any action taken or not taken by the
Administrative Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay the Loans and all
other Obligations hereunder shall not be affected in any way or to any extent by
any failure of the Administrative Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Lenders to be contained
in any such telephonic or facsimile notice.
SECTION 10.2. WAIVER; AMENDMENTS.
(a) No failure or delay by the Administrative Agent or any
Lender in exercising any right or power hereunder or any other Loan Document,
and no course of dealing between any Loan Party and the Administrative Agent or
any Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Administrative Agent and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies provided by law. No waiver of any provision of this Agreement
or any other Loan Document or consent to any departure by any Loan Party
therefrom shall in any event
36
be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
(b) No amendment or waiver of any provision of this Agreement
or the other Loan Documents, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by each of the Loan Parties and the Required Lenders or each of the
Loan Parties and the Administrative Agent with the consent of the Required
Lenders and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; PROVIDED, that no
amendment or waiver shall: (i) reduce the principal amount of any Term Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (ii) postpone the
date fixed for any payment of any principal of, or interest on, any Term Loan or
interest thereon or any fees hereunder or reduce the amount of, waive or excuse
any such payment, or extend the Maturity Date, without the written consent of
each Lender affected thereby, (iii) change SECTION 2.16(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby , without the
written consent of each Lender, (iv) change any of the provisions of this
Section or the definition of "REQUIRED LENDERS" or any other provision hereof
specifying the number or percentage of Lenders which are required to waive,
amend or modify any rights hereunder or make any determination or grant any
consent hereunder, without the consent of each Lender; (v) release any Guarantor
or limit the liability of any such Guarantor under the Guaranty Agreement; (vi)
release all or substantially all collateral securing any of the Obligations or
agree to subordinate any Lien in such collateral to any other creditor of the
Borrower; PROVIDED FURTHER, that no such agreement shall amend, modify or
otherwise affect the rights, duties or obligations of the Administrative Agent
without the prior written consent of the Administrative Agent. The Borrower
agrees to pay to each Lender an administration fee equal to $2,500 for each
amendment, supplement or other modification of, or waiver in respect of, any
Loan Document, which fee shall be payable as of the effective date of such
amendment, supplement, modification or waiver (and the Administrative Agent is
authorized by the Borrower to debit amounts on deposit in any of Borrower's
accounts maintained with the Administrative Agent for such payment).
SECTION 10.3. EXPENSES; INDEMNIFICATION.
(a) The Borrower shall pay (i) all reasonable, out-of-pocket
costs and expenses of the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and its Affiliates, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents and any amendments, modifications or waivers thereof (whether or not
the Transaction shall be consummated), and (ii) all out-of-pocket costs and
expenses (including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside counsel)
incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Term Loans
made hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent and
each Lender and each Related Party, on an After-Tax Basis, of any of the
foregoing (each, an "INDEMNITEE") against, and hold each of them harmless from,
any and all costs, losses, liabilities, claims, damages and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
which may be incurred by or asserted against any Indemnitee arising out of, in
connection with or as a result of (i) the execution or delivery of this
Agreement or any other agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations hereunder or
the consummation of the Transaction, (ii) the Term Loans or any actual or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned by the Borrower or
any Subsidiary or any Environmental Liability related in any way to the Borrower
or any Subsidiary or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; PROVIDED, that the Borrower shall not be obligated to indemnify
any Indemnitee for any of the foregoing arising out of such Indemnitee's gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final and nonappealable judgment.
(c) The Borrower shall pay, and hold the Administrative Agent
and each of the Lenders harmless from and against, any and all present and
future stamp, documentary, and other similar taxes with respect
37
to this Agreement and any other Loan Documents, any collateral described
therein, or any payments due thereunder, and save the Administrative Agent and
each Lender harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes.
(d) To the extent that the Borrower fails to pay any amount
required to be paid to the Administrative Agent under clauses (a), (b) or (c)
hereof, each Lender severally agrees to pay to the Administrative Agent such
Lender's Pro Rata Share (determined as of the time that the unreimbursed expense
or indemnity payment is sought) of such unpaid amount; PROVIDED, that the
unreimbursed expense or indemnified payment, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent in its capacity as such.
(e) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to actual or direct damages) arising out of, in connection with or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the transactions contemplated therein, the Term Loans or the use of
proceeds thereof.
(f) All amounts due under this Section shall be payable
promptly after written demand therefor.
SECTION 10.4. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void).
(b) Any Lender may at any time assign to one or more assignees
all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including all or a portion of the Term Loan at the time
owing to it); PROVIDED, that (i) except in the case of an assignment to a Lender
or an Affiliate of a Lender , each of the Borrower and the Administrative Agent
must give their prior written consent (which consent shall not be unreasonably
withheld or delayed), (ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire amount of the assigning
Lender's Term Loan hereunder or an assignment while an Event of Default has
occurred and is continuing, the amount of the Term Loan of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 (unless the Borrower and the
Administrative Agent shall otherwise consent), (iii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender's rights and obligations under this Agreement and the other Loan
Documents, (iv) the assigning Lender and the assignee shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee payable by the assigning Lender or the assignee
(as determined between such Persons) in an amount equal to $2,500 and (v) such
assignee, if it is not a Lender, shall deliver a duly completed Administrative
Questionnaire to the Administrative Agent, in form and substance satisfactory to
the Administrative Agent; PROVIDED, that any consent of the Borrower otherwise
required hereunder shall not be required if an Event of Default has occurred and
is continuing. Upon the execution and delivery of the Assignment and Acceptance
and payment by such assignee to the assigning Lender of an amount equal to the
purchase price agreed between such Persons, such assignee shall become a party
to this Agreement and any other Loan Documents to which such assigning Lender is
a party and, to the extent of such interest assigned by such Assignment and
Acceptance, shall have the rights and obligations of a Lender under this
Agreement, and the assigning Lender shall be released from its obligations
hereunder to a corresponding extent (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of SECTIONS 2.13, 2.14 and 2.15 and 10.3. Upon
the consummation of any such assignment hereunder, the assigning Lender, the
Administrative Agent and the Borrower shall make appropriate arrangements to
have new Notes issued if so requested by either or both the assigning Lender or
the assignee. Any assignment or other transfer by a Lender that does not fully
comply with the terms of this clause (b) shall be treated for purposes of this
Agreement as a sale of a participation pursuant to clause (c) below.
38
(c) Any Lender may at any time, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a "PARTICIPANT") in all or a portion of such Lender's rights
and obligations under this Agreement (including all or a portion of the Term
Loan owing to it); PROVIDED, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of its obligations
hereunder, and (iii) the Borrower, the Administrative 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
the other Loan Documents. Any agreement between such Lender and the Participant
with respect to such participation shall provide that such Lender shall retain
the sole right and responsibility to enforce this Agreement and the other Loan
Documents and the right to approve any amendment, modification or waiver of this
Agreement and the other Loan Documents; PROVIDED, that such participation
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver of this Agreement
described in the first proviso of SECTION 10.2(b) that affects the Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
SECTIONS 2.13, 2.14 and 2.15 to the same extent as if it were a Lender hereunder
and had acquired its interest by assignment pursuant to paragraph (b); PROVIDED,
that no Participant shall be entitled to receive any greater payment under
SECTION 2.13 or 2.15 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant unless the
sale of such participation is made with the Borrower's prior written consent. To
the extent permitted by law, the Borrower agrees that each Participant shall be
entitled to the benefits of SECTION 2.16 as though it were a Lender, PROVIDED,
that such Participant agrees to share with the Lenders the proceeds thereof in
accordance with SECTION 2.16 as fully as if it were a Lender hereunder. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of SECTION 2.15 unless the Borrower is notified of such
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with SECTION 2.15(e) as though it were a
Lender hereunder.
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement and its Notes
(if any) to secure its obligations to a Federal Reserve Bank without complying
with this Section; PROVIDED, that no such pledge or assignment shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
SECTION 10.5. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) This Agreement and the other Loan Documents shall be
construed in accordance with and be governed by the law (without giving effect
to the conflict of law principles thereof) of the State of Florida.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the non-exclusive jurisdiction of the
United States District Court of the Middle District of Florida, and of any state
court of the State of Florida located in Orange County and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the Transaction, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Florida state court or , to the
extent permitted by Applicable Law, such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding described in paragraph (b) of this Section and
brought in any court referred to in paragraph (b) of this Section. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the
service of process in the manner provided for notices in SECTION 10.1. Nothing
in this Agreement or in any other Loan Document will affect the right of any
party hereto to serve process in any other manner permitted by law.
39
SECTION 10.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTION (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 10.7. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
each Lender shall have the right, at any time or from time to time upon the
occurrence and during the continuance of an Event of Default, without prior
notice to the Loan Parties, any such notice being expressly waived by the Loan
Parties to the extent permitted by Applicable Law, to set off and apply against
all deposits (general or special, time or demand, provisional or final) of any
Loan Party at any time held or other obligations at any time owing by such
Lender to or for the credit or the account of such Loan Party against any and
all Obligations held by such Lender irrespective of whether such Lender shall
have made demand hereunder and although such Obligations may be unmatured. Each
Lender agrees promptly to notify the Administrative Agent and each Loan Party
after any such set-off and any application made by such Lender; PROVIDED, that
the failure to give such notice shall not affect the validity of such set-off
and application.
SECTION 10.8. COUNTERPARTS; INTEGRATION. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters.
SECTION 10.9. EFFECTIVENESS; SURVIVAL.
(a) This Agreement shall become effective on the date (the
"EFFECTIVE DATE") on which all of the parties hereto shall have signed a
counterpart hereof (whether the same or different counterparts) and have
delivered the same to the Administrative Agent pursuant to SECTION 3.1(b) or, in
the case of the Lenders, shall have given to the Administrative Agent written or
facsimile notice (actually received) that the same has been signed and mailed to
the Administrative Agent; PROVIDED, HOWEVER, notwithstanding execution of this
Agreement by the Loan Parties and each of the Lenders party hereto and
satisfaction (or waiver) of each of the conditions set forth in SECTION 3.1,
this Agreement shall not be or become effective and binding upon the parties
until executed and accepted by the Administrative Agent in its capacity as such
on behalf of the Lenders.
(b) All covenants, agreements, representations and warranties
made by the Loan Parties herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of the Term Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Term Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid. The provisions of SECTIONS 2.13, 2.14, 2.15, and 10.3 and Article IX
shall survive and remain in full force and effect regardless of the consummation
of the Transaction, the repayment of the Term Loans or the termination of this
Agreement or any provision hereof. All representations and warranties made
herein, in the certificates, reports, notices, and other documents delivered
pursuant to this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, and the making of the Term Loans.
SECTION 10.10. SEVERABILITY. Any provision of this Agreement or any other
Loan Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such
40
illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and
the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 10.11. CONFIDENTIALITY. The Administrative Agent and each Lender
agrees to take normal and reasonable precautions to maintain the confidentiality
of any information designated in writing as confidential and provided to it by
any Loan Party or any Subsidiary of any such Loan Party, except that such
information may be disclosed (i) to any Related Party of the Administrative
Agent or any such Lender, including without limitation accountants, legal
counsel and other advisors, (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iii) to the extent
requested by any regulatory agency or authority, (iv) to the extent that such
information becomes publicly available other than as a result of a breach of
this Section, or which becomes available to the Administrative Agent, any Lender
or any Related Party of any of the foregoing on a nonconfidential basis from a
source other than a Loan Party, (v) in connection with the exercise of any
remedy hereunder or any suit, action or proceeding relating to this Agreement or
the enforcement of rights hereunder, and (ix) subject to provisions
substantially similar to this SECTION 10.11, to any actual or prospective
assignee or Participant, or (vi) with the consent of the applicable Loan Party.
Any Person required to maintain the confidentiality of any information as
provided for in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such information as such Person would accord its
own confidential information.
SECTION 10.12. INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Term Loan,
together with all fees, charges and other amounts which may be treated as
interest on such Loan under applicable law (collectively, the "CHARGES"), shall
exceed the maximum lawful rate of interest (the "MAXIMUM RATE") which may be
contracted for, charged, taken, received or reserved by a Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest and
Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of
repayment, shall have been received by such Lender.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed [under seal in the case of each Loan Party] by
their respective authorized officers as of the day and year first above written.
ADESA CALIFORNIA, INC.
By: /s/ James P. Hallett
-----------------------------------------
Name: James P. Hallett
Title: President
[SEAL]
SUNTRUST BANK,
as Administrative Agent and as a Lender
By: /s/ Chris Aguilar
-----------------------------------------
Name: Chris Aguilar
Title: Managing Director
Term Loan Commitment: $16,050,000
S-1
HARRIS TRUST AND SAVINGS BANK,
as a Lender
By: /s/ Thad D. Rasche
-----------------------------------------
Name: Thad D. Rasche
Title: Vice President
Term Loan Commitment: $14,475,000
42
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Matthew Doye
-----------------------------------------
Name: Matthew Doye
Title: AVP
Term Loan Commitment: $14,475,000
43
JOINDER BY GUARANTORS
---------------------
Each of the Guarantors hereby join in the execution of this
Agreement for the purpose of signifying its consent to and approval of, and its
agreement to be bound by, the terms and conditions of this Agreement applicable
to it.
Dated as of the 30th day of June, 2003.
ADESA CORPORATION
By: /s/ James P. Hallett
-----------------------------------------
Name: James P. Hallett
Title: President and CEO
[SEAL]
ALLETE, INC.
By: /s/ Steven W. Tyacke
-----------------------------------------
Name: Steven W. Tyacke
Title: Assistant General Counsel
[SEAL]
S-4