REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
DATED as of January 28, 1999
by and among
MORGAN DRIVE AWAY, INC.,
TDI, INC.,
MORGAN FINANCE, INC.
and
THE MORGAN GROUP, INC., as Guarantor,
and
BANKBOSTON, N.A., individually and as Agent,
and
The Lending Institutions Listed on Schedule 1 hereto
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION...................................1
1.1. Definitions....................................................1
1.2. Rules of Interpretation.......................................15
2. THE REVOLVING CREDIT FACILITY............................................16
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2.1. Commitment to Lend............................................16
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2.2. Commitment Fee................................................16
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2.3. Reduction of Total Commitment.................................16
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2.4. The Revolving Credit Notes....................................17
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2.5. Interest on Revolving Credit Loans............................17
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2.6. Requests for Revolving Credit Loans...........................17
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2.7. Conversion Options............................................17
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2.7.1. Conversion to Different Type of Revolving
Credit Loan.....................................17
2.7.2. Continuation of Type of Revolving Credit Loan......18
2.7.3. Eurodollar Rate Loans..............................18
2.8. Funds for Revolving Credit Loan...............................18
2.8.1. Funding Procedures.................................18
2.8.2. Advances by Agent..................................19
2.9. Term Out Date.................................................19
2.10. Change in Borrowing Base.....................................19
3. REPAYMENT OF THE REVOLVING CREDIT LOANS..................................19
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3.1. Maturity......................................................19
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3.2. Mandatory Repayments of Revolving Credit Loans................19
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3.3. Optional Repayments of Revolving Credit Loans.................20
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4. THE TERM LOAN............................................................20
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4.1. Conversion of Revolving Credit Loans into the Term Loan.......20
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4.2. Mandatory Payments of Principal of Term Loan..................20
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4.3. Optional Prepayment of Term Loan..............................21
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4.4. Interest on Term Loan.........................................21
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4.4.1. Interest Rates.....................................21
4.4.2. Notification by Borrowers..........................21
4.4.3. Amounts, etc.......................................21
5. LETTERS OF CREDIT........................................................22
5.1. Letter of Credit Commitments..................................22
5.1.1. Commitment to Issue Letters of Credit..............22
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5.1.2. Letter of Credit Applications......................22
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5.1.3. Terms of Letters of Credit.........................22
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5.1.4. Reimbursement Obligations of Banks.................22
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5.1.5. Participations of Banks............................22
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5.2. Reimbursement Obligation of the Borrower......................23
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5.3. Letter of Credit Payments.....................................23
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5.4. Reliance by Issuer............................................24
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5.5. Letter of Credit Fee..........................................24
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6. CERTAIN GENERAL PROVISIONS...............................................24
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6.1. Closing Fee...................................................24
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6.2. Agent's Fee...................................................24
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6.3. Overadvance Fee...............................................24
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6.4. Funds for Payments............................................25
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6.4.1. Payments to Agent..................................25
6.4.2. No Offset, etc.....................................25
6.5. Computations..................................................25
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6.6. Inability to Determine Eurodollar Rate........................25
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6.7. Illegality....................................................26
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6.8. Additional Costs, etc.........................................26
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6.9. Capital Adequacy..............................................27
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6.10. Certificate..................................................27
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6.11. Indemnity....................................................28
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6.12. Interest After Default.......................................28
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6.13. Concerning Joint and Several Liability of the Borrowers......28
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7. COLLATERAL SECURITY AND GUARANTIES.......................................31
7.1. Security of Borrower..........................................31
7.2. Guaranties and Security of the Parent and Subsidiaries........31
8. REPRESENTATIONS AND WARRANTIES...........................................31
8.1. Corporate Authority...........................................31
8.1.1. Incorporation; Good Standing.......................31
8.1.2. Authorization......................................31
8.1.3. Enforceability.....................................32
8.2. Governmental Approvals........................................32
8.3. Title to Properties...........................................32
8.4. Financial Statements..........................................32
8.4.1. Fiscal Year........................................32
8.4.2. Financial Statements...............................32
8.5. No Material Changes, etc......................................32
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8.6. Franchises, Patents, Copyrights, etc..........................33
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8.7. Litigation....................................................33
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8.8. No Materially Adverse Contracts, etc..........................33
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8.9. Compliance with Other Instruments, Laws, etc..................33
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8.10. Tax Status...................................................33
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8.11. No Event of Default..........................................33
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8.12. Holding Company and Investment Company Acts..................34
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8.13. Absence of Financing Statements, etc.........................34
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8.14. Perfection of Security Interest..............................34
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8.15. Certain Transactions.........................................34
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8.16. Employee Benefit Plans.......................................34
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8.16.1. In General........................................34
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8.16.2. Terminability of Welfare Plans....................34
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8.16.3. Guaranteed Pension Plans..........................35
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8.16.4. Multiemployer Plans...............................35
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8.17. Use of Proceeds..............................................35
8.17.1. General...........................................35
8.17.2. Regulations U and X...............................35
8.18. Hazardous Substances.........................................35
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8.19. Subsidiaries, etc............................................37
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8.20. Year 2000 Problem............................................37
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8.21. Disclosure...................................................37
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8.22. Title and Registration.......................................37
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8.23. Operating Rights.............................................37
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9. AFFIRMATIVE COVENANTS OF THE BORROWER....................................38
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9.1. Punctual Payment..............................................38
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9.2. Maintenance of Office.........................................38
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9.3. Records and Accounts..........................................38
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9.4. Financial Statements, Certificates and Information............38
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9.5. Notices.......................................................39
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9.5.1. Defaults...........................................40
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9.5.2. Environmental Events...............................40
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9.5.3. Notification of Claim against Collateral...........40
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9.5.4. Notice of Litigation and Judgments.................40
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9.6. Corporate Existence; Maintenance of Properties................40
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9.7. Insurance.....................................................41
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9.8. Taxes.........................................................41
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9.9. Inspection of Properties and Books, etc.......................41
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9.9.1. General............................................41
9.9.2. Collateral Reports.................................41
9.9.3. Communications with Accountants....................42
9.10. Compliance with Laws, Contracts, Licenses, and Permits.......42
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9.11. Employee Benefit Plans.......................................42
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9.12. Use of Proceeds..............................................42
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9.13. Title and Registration.......................................42
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9.14. Operating Rights.............................................42
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9.15. Further Assurances...........................................43
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10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER..............................43
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10.1. Restrictions on Indebtedness.................................43
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10.2. Restrictions on Liens........................................43
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10.3. Restrictions on Investments..................................44
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10.4. Distributions................................................45
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10.5. Merger, Consolidation and Disposition of Assets..............46
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10.5.1. Mergers and Acquisitions..........................46
10.5.2. Disposition of Assets.............................47
10.6. Sale and Leaseback...........................................47
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10.7. Compliance with Environmental Laws...........................47
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10.8. Employee Benefit Plans.......................................47
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10.9. Business Activities..........................................48
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10.10. Fiscal Year.................................................48
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10.11. Transactions with Affiliates................................48
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10.12. Subsidiary Distributions....................................48
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11. FINANCIAL COVENANTS OF THE BORROWER.....................................48
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11.1. Leverage Ratio...............................................48
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11.2. Cash Flow Coverage Ratio.....................................49
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11.3. Interest Coverage Ratio......................................49
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11.4. Capital Expenditures.........................................49
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11.5. Consolidated Net Worth.......................................49
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12. CLOSING CONDITIONS......................................................50
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12.1. Loan Documents...............................................50
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12.2. Certified Copies of Charter Documents........................50
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12.3. Corporate Action.............................................50
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12.4. Incumbency Certificate.......................................50
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12.5. Validity of Liens............................................50
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12.6. Perfection Certificates and UCC Search Results...............50
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12.7. Certificates of Insurance....................................50
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12.8. Borrowing Base Report........................................51
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12.9. Accounts Receivable/Contractor Loans Aging Report............51
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12.10. Solvency Certificate........................................51
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12.11. Opinion of Counsel..........................................51
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12.12. Payment of Fees.............................................51
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12.13. Payoff Letter...............................................51
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13. CONDITIONS TO ALL BORROWINGS............................................51
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13.1. Representations True; No Event of Default....................51
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13.2. No Legal Impediment..........................................52
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13.3. Governmental Regulation......................................52
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13.4. Proceedings and Documents....................................52
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13.5. Borrowing Base Report........................................52
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14. EVENTS OF DEFAULT; ACCELERATION; ETC....................................52
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14.1. Events of Default and Acceleration...........................52
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14.2. Termination of Commitments...................................55
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14.3. Remedies.....................................................55
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14.4. Distribution of Collateral Proceeds..........................55
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15. SETOFF..................................................................56
16. THE AGENT...............................................................57
16.1. Authorization................................................57
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16.2. Employees and Agents.........................................57
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16.3. No Liability.................................................57
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16.4. No Representations...........................................58
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16.4.1. General...........................................58
16.4.2. Closing Documentation, etc........................58
16.5. Payments.....................................................58
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16.5.1. Payments to Agent.................................58
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16.5.2. Distribution by Agent.............................58
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16.5.3. Delinquent Banks..................................59
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16.6. Holders of Notes.............................................59
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16.7. Indemnity....................................................59
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16.8. Agent as Bank................................................59
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16.9. Resignation..................................................60
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17. EXPENSES AND INDEMNIFICATION............................................60
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17.1. Expenses.....................................................60
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17.2. Indemnification..............................................60
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17.3. Survival.....................................................61
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18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...........................61
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18.1. Sharing of Information with Section 20 Subsidiary............61
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18.2. Confidentiality..............................................61
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18.3. Prior Notification...........................................62
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18.4. Other........................................................62
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19. SURVIVAL OF COVENANTS, ETC..............................................62
20. ASSIGNMENT AND PARTICIPATION............................................62
20.1. Conditions to Assignment by Banks............................62
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20.2. Certain Representations and Warranties; Limitations;
Covenants.................................................63
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20.3. Register.....................................................64
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20.4. New Notes....................................................64
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20.5. Participations...............................................64
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20.6. Disclosure...................................................65
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20.7. Assignee or Participant Affiliated with the Borrower.........65
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20.8. Miscellaneous Assignment Provisions..........................65
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20.9. Assignment by Borrower.......................................66
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21. NOTICES, ETC............................................................66
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22. GOVERNING LAW...........................................................66
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23. HEADINGS................................................................67
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24. COUNTERPARTS............................................................67
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25. ENTIRE AGREEMENT, ETC...................................................67
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26. WAIVER OF JURY TRIAL....................................................67
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27. CONSENTS, AMENDMENTS, WAIVERS, ETC......................................67
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28. SEVERABILITY............................................................68
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Schedules and Exhibits
Schedule 1 Banks; Commitments
Schedule 8.3 Title to Properties; Leases
Schedule 8.5 Material Changes
Schedule 8.7 Litigation
Schedule 8.18 Hazardous Substances
Schedule 8.19 Subsidiaries
Schedule 8.23 Operating Rights
Schedule 9.7 Insurance
Schedule 10.1 Permitted Indebtedness
Schedule 10.2 Permitted Liens
Schedule 10.3 Restrictions on Investments
Exhibit A Form of Borrowing Base Report
Exhibit B Form of Loan Request
Exhibit C Form of Term Note
Exhibit D Form of Compliance Certificate
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT (this "Credit Agreement")
is made as of January 28, 1999, by and among MORGAN DRIVE AWAY, INC., an Indiana
corporation having its principal place of business at 2746 Old U.S. Route 20
West, Elkhart, Indiana 46515 ("Morgan"), TDI, INC., an Indiana corporation
having its principal place of business at 2746 Old U.S. Route 20 West, Elkhart,
Indiana 46515 ("TDI"), MORGAN FINANCE, INC., an Indiana corporation having its
principal place of business at 2746 Old U.S. Route 20 West, Elkhart, Indiana
46515 ("Finance" and, collectively with Morgan and TDI, the "Borrowers" and,
each individually, a "Borrower"), THE MORGAN GROUP, INC., a Delaware corporation
with offices at 2746 Old U.S. Route 20 West, Elkhart, Indiana 46515 (the
"Parent" and, collectively with the Borrowers, the "Obligors"), and BANKBOSTON,
N.A. ("BKB") individually and as agent (the "Agent") for itself and the other
lending institutions from time to time party hereto and the other lending
institutions listed on Schedule 1.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions.
The following terms shall have the meanings set forth in this ss.1 or
elsewhere in the provisions of this Credit Agreement referred to below:
Accounts Receivable. All rights of the Borrowers to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrowers to payment for services rendered in the ordinary course
of business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is delivered by the Borrowers pursuant
to ss.9.4(d) hereof.
Affiliate. Any Person that would be considered to be an affiliate of
another Person under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if such other Person
were issuing securities.
Agent's Fee Letter. The letter agreement regarding fees, dated or to be
dated on or prior to the Closing Date, among the Borrowers and the Agent.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent. BKB, acting as agent for the Banks.
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Agent's Special Counsel. Bingham Dana LLP or such other counsel as may
be approved by the Agent.
Applicable Base Rate Margin. The applicable margin with respect to Base
Rate Loans as set forth in the Pricing Table.
Applicable Commitment Fee. The applicable rate with respect to the
Commitment Fee as set forth in the Pricing Table.
Applicable Eurodollar Rate Margin. The applicable margin with respect
to Eurodollar Rate Loans as set forth in the Pricing Table.
Applicable Overadvance Amount. At the relevant time of reference
thereto, an amount determined by the Agent by reference to the most recent
Compliance Certificate delivered to the Agent pursuant to ss.9.4(d) hereof., not
to exceed, (a) when the Leverage Ratio is greater than or equal to 2.00 to 1.00,
$2,000,000 outstanding in the aggregate, and (b) when the Leverage Ratio is less
than 2.00 to 1.00, $5,000,000 outstanding in the aggregate; provided, that in
the case of (a) above, no such overadvances shall remain outstanding for a
period of more than 180 days within any calendar year (of which at least 60 such
days must be consecutive), and, in the case of (b) above, no such overadvances
in excess of $2,000,000 shall remain outstanding for a period of more than 60
consecutive days within any calendar year.
Assignment and Acceptance. See ss.20.1.
Average Borrowing Base. For any fiscal quarter, the sum of the
Borrowing Base in effect on the last day of each month contained within such
fiscal quarter divided by three.
Average Utilization. For any fiscal quarter, the sum of the average
daily amount of (a) outstanding Loans, plus (b) the Maximum Drawing Amount plus
(c) Unpaid Reimbursement Obligations.
Balance Sheet Date. September 30, 1998.
Banks. BKB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.20.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.
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BKB. See preamble.
Borrower. See preamble.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.9.4(f), as adjusted pursuant
to the provisions below, which is equal to the sum of:
(a) 85.00% of Eligible Accounts Receivable for which invoices
have been issued and are payable; plus
(b) 85.00% of the sum of (i) the In Transit Amount, minus (ii)
the Eligible Reserve; plus
(c) 70.00% of Contractor Loans; plus
(d) Qualified Investments.
The Agent may, in its discretion, from time to time, upon five (5) days' prior
notice to the Borrowers, reduce the lending formula with respect to Eligible
Accounts Receivable to the extent that the Agent determines that: (i) the
dilution with respect of the Accounts Receivable for any period has increased in
any material respect or may be reasonably anticipated to increase in any
material respect above historical levels, or (ii) the general creditworthiness
of account debtors or other obligors of the Borrowers has declined. In
determining whether to reduce the lending formula, the Agent may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts Receivable.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of each of the Borrowers, prepared on a consolidated basis and
in substantially the form of Exhibit A hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by any
Obligor or any of their Subsidiaries in connection with the purchase or lease by
any Obligor or any of their Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles; provided, however,
that amounts paid or Indebtedness incurred by any Obligor or any of their
Subsidiaries in connection with any Permitted Acquisition shall not be included
in the calculation of Capital Expenditures.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee
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or obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
Cash Flow Coverage Ratio. See ss.11.2.
CERCLA. See ss.8.18(a).
Closing Date. The first date on which the conditions set forth in ss.12
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrowers
that are or are intended to be subject to the security interests and mortgages
created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrowers, as the same may be reduced from time
to time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See ss.9.4(d) hereof.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Parent and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated EBITDA. With respect to any fiscal period of the
Borrowers, an amount equal to the sum of (a) Consolidated Net Income for such
period, plus, without duplication, (b) Consolidated Total Interest Expense for
such period, plus (c) the aggregate amount of income tax expense of the Obligors
and their Subsidiaries deducted in the calculation of Consolidated Net Income
for such period, plus (e) the aggregate amount of consolidated depreciation and
amortization of the Obligors and their Subsidiaries deducted in the calculation
of Consolidated Net Income for such period, minus (f) to the extent included in
the calculation of Consolidated Net Income for such period, interest income of
the Obligors and their Subsidiaries for such period.
Consolidated Funded Debt. As at any date of determination, an amount
equal to the sum (without duplication) of (a) the aggregate amount of
Indebtedness of the Obligors and their Subsidiaries determined on a consolidated
basis, related to the borrowing of money (including Indebtedness evidenced by
notes or bonds), purchase money indebtedness, or in respect of capitalized
leases, plus (b) the Maximum Drawing Amount of all Letters of Credit and any
other letters of credit outstanding, plus (c) all such Indebtedness guaranteed
by any Obligor or any of their Subsidiaries (other than guaranty obligations
between Affiliates), in each case as determined in accordance with Generally
Accepted Accounting Principles.
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Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Parent and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, less, to the extent otherwise includable in the
computations of Consolidated Net Worth, any subscriptions receivable.
Consolidated Revenues. For any period, the consolidated revenues of the
Obligors and their Subsidiaries as determined in accordance with generally
accepted accounting principles.
Consolidated Tangible Net Worth. Consolidated Net Worth less the sum
of:
(A) the total book value of all assets of the Obligors and
their Subsidiaries properly classified as intangible assets under
generally accepted accounting principles, including such items as good
will, the purchase price of acquired assets in excess of the fair
market value thereof, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(B) all amounts representing any write-up in the book value of
any assets of the Obligors or their Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date.
Consolidated Total Assets. All assets ("consolidated balance sheet
assets") of the Parent and its Subsidiaries determined on a consolidated basis
in accordance with generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Parent and its
Subsidiaries during such period on all Indebtedness of the Parent and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Consolidated Total Liabilities. All liabilities of the Parent and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and classified as such on the consolidated
balance sheet of the Parent and its Subsidiaries and all other Indebtedness of
the Parent and its Subsidiaries, whether or not so classified.
Contractor Loans. All Indebtedness of owner/operators to any of the
Borrowers or their Subsidiaries evidenced by promissory notes executed by such
owner/operator and payable to the order of such Borrower or such Subsidiary and
secured by a perfected, first-priority security interest in the vehicles used by
such owner/operator in the conduct of their business; provided, that, Contractor
Loans shall not include (a) all Indebtedness on which principal or interest
payments from the owner/operator to such Borrower or such Subsidiary are more
than thirty (30) days past due, (b) Indebtedness incurred by any owner/operator
not currently employed by the Borrower or Subsidiary to which the Indebtedness
is owed, or (c) Indebtedness of any owner/operator to the Borrowers and their
Subsidiaries to the extent such Indebtedness exceeds $40,000.
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Conversion Request. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with ss.2.7.
Credit Agreement. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto.
Default. See ss.14.1.
Delinquent Bank. See ss.16.5.3.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any Obligor, other than
dividends payable solely in shares of common stock of such Obligor; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of any Obligor, directly or indirectly through a Subsidiary of such
Obligor or otherwise; the return of capital by any Obligor to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of any Obligor.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, the Term Out Date, and the date on which any Revolving Credit
Loan is converted or continued in accordance with ss.2.7 or all or any portion
of the Term Loan is converted or continued in accordance with ss.4.5(b).
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable)
(a) that the Borrowers reasonably and in good faith determine to be
collectible;
(b) that are with account debtors or other obligors that (i) are not
Affiliates of any Borrower, (ii) purchased the goods or services giving rise to
the relevant Account Receivable in an arm's length transaction, (iii) are not
insolvent or involved in any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are, in the Agent's reasonable judgment, creditworthy;
(c) that are in payment of obligations that have been fully performed,
do not consist of progress billings or bill and hold invoices and are not
subject to dispute or any other similar claims that would reduce the cash amount
payable therefor;
(d) that are not subject to any pledge, restriction, security interest
or other lien or encumbrance other than those created by the Loan Documents;
-7-
(e) in which the Agent has a valid and perfected first priority
security interest;
(f) that (i) are not outstanding for more than seventy-five (75) days
past the date of the respective invoices therefor or (ii) the Borrowers
establish to the reasonable satisfaction of the Agent that such Accounts
Receivable have not been outstanding for more than ninety (90) days past the
date of the respective invoices therefor;
(g) that are not due from an account debtor or other obligor located in
Minnesota unless the Borrower to whom the account is owing (i) has received a
certificate of authority to do business and is in good standing in such state or
(ii) has filed a notice of business activities report with the appropriate
office or agency of such state for the current year;
(h) that are not due from any single account debtor or other obligor if
more than twenty percent (20%) of the aggregate amount of all Accounts
Receivable owing from such account debtor or other obligor would otherwise not
be Eligible Accounts Receivable, unless otherwise allowed by the Agent;
(i) that are payable in Dollars;
(j) that are not payable from an office outside of the United States;
and
(k) that are not secured by a letter of credit, or other form of
collateral acceptable to the Agent, unless the Agent has a prior, perfected
security interest in such letter of credit or in such other collateral.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Eligible Reserve. As of any date on which a Borrowing Base Report is
delivered to the Agent, that portion of those Accounts Receivable included in
the In Transit Amount contained in such Borrowing Base Report which, in the
Borrowers' reasonable and prudent judgment based upon the Borrowers' experience
with Accounts Receivable of such type (but at all times subject to the approval
of the Agent in its sole discretion) are out of the period (i.e., as to which,
on such delivery date, the applicable transportation services have not been
completed, necessary documents in respect thereof have not been delivered, or
both) and which were identified in the Borrowing Base Report as of the end of
the immediately preceding month.
-8-
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained of contributed to by the Borrowers or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.8.18(a).
EPA. See ss.8.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrowers under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in U.S. dollar deposits) in London.
Eurodollar Lending Office. Initially, the office of the Bank designated
as such by notice to the Borrowers; thereafter, such other office of the Bank,
if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the rate per annum for the
Reference Bank (rounded upwards to the nearest 1/16 of one percent) of the rate
at which such Reference Bank's Eurodollar Lending Office is offered Dollar
deposits two Eurodollar Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, 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 Eurodollar Rate Loan of the Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Loans bearing interest calculated by reference
to the Eurodollar Rate.
Event of Default. See ss.14.1.
Excluded Subsidiary. Interstate Indemnity Company, a Vermont
corporation and a wholly- owned Subsidiary of the Parent.
Fee Letter. The letter agreement regarding fees, dated or to be dated
on or prior to the Closing Date, among the Borrowers and the Banks.
-9-
Fronting Fee. See ss.5.5.
generally accepted accounting principles. (a) When used in ss.11,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrowers or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
Date, made by the Parent and its Subsidiaries (other than the Excluded
Subsidiary) not party to this Credit Agreement in favor of the Banks and the
Agent pursuant to which the Parent and such Subsidiaries guaranty to the Banks
and the Agent the payment and performance of the Obligations and in form and
substance satisfactory to the Banks and the Agent.
Hazardous Substances. See ss.8.18(b).
In Transit Amount. As of any date during a month, an amount equal to
the aggregate amount of Accounts Receivable for all transportation services of a
Borrower which the Borrowers have included in their Borrowing Base Report as of
the end of the immediately preceding month, which otherwise meet all of the
criteria to be Eligible Accounts Receivable, but as to which, although
transportation services in respect thereof were completed as of such month end,
or, to the extent such services were not completed, there were Eligible Reserves
set against them, invoices for such transportation services have not yet been
issued.
Indebtedness. All obligations, contingent and otherwise, which in
accordance with Generally Accepted Accounting Principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including, without limitation, in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect; (b) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations, whether direct or indirect, in respect of Indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase
-10-
Indebtedness, or to assure the owner of Indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the Indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan, and (b) as to any Eurodollar Rate Loan in
respect of which the Interest Period is (i) 3 months or less, the last day of
such Interest Period and (ii) more than 3 months, the date that is 3 months from
the first day of such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
or as otherwise required by the terms of this Credit Agreement (i) for any Base
Rate Loan, the last day of the calendar quarter; and (ii) for any Eurodollar
Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period commencing on
the last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(B) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(C) if the Borrowers shall fail to give notice as provided in
ss.2.7, the Borrowers shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar 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 Eurodollar Business Day of a calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan
that would otherwise extend beyond the Maturity Date shall end on the
Maturity Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98) as promulgated by the Institute
of International Banking Law & Practice, Inc., or any successor code of standby
letter of credit practices among banks adopted by the Agent in the ordinary
course of its business as a standby letter of credit issuer and in effect at the
time of issuance of such Letter of Credit.
-11-
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See ss.5.1.1.
Letter of Credit Application. See ss.5.1.1.
Letter of Credit Fee. See ss.5.1.1.
Letter of Credit Participation. See ss.5.1.4.
Leverage Ratio. See ss.11.1.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.
Loan Request. See ss.2.6.
Loans. The Revolving Credit Loans and the Term Loan.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date, and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment; provided,
however, that in the event less than three Banks are party hereto as of such
date, then Majority Banks shall be deemed to mean all Banks.
Maturity Date. The date of the third anniversary of the Term Out Date.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Motor Vehicle Equipment. All trucks, trailers, tractors, service
vehicles, automobiles, tires, and all related equipment and accessions, with
respect to which the Parent or any of its Subsidiaries now or hereafter has full
and unencumbered title (except for liens permitted under ss.10.2 hereof), which
are used or usable by the Parent and its Subsidiaries in their business
operations.
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Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Notes. The Term Notes and the Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities of any of
the Obligors and their Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made or Reimbursement Obligations incurred or any of
the Notes, Letter of Credit Application, Letters of Credit or obligations under
any forward contract, futures contract, swap, option or other financing
agreement or arrangement (including, without limitation, caps, floors, collars
and similar arrangements), the value of which is dependent upon interest rates,
currency exchange rates, commodities or other indices, between any of the
Obligors and any of the Banks or other instruments at any time evidencing any
thereof.
Obligors. See preamble.
outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
Parent. See preamble.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreement.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.10.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pricing Table. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "Rate Adjustment
Period"), the applicable margin shall be the applicable percentage set forth
below with respect to the Borrowers' Leverage Ratio, as determined at the end of
the fiscal quarter of the Borrowers and their Subsidiaries ending immediately
prior to the applicable Rate Adjustment Period:
Level Leverage Ratio EURODOLLAR Base Rate Applicable Commitment
Applicable Margin Margin Fee
- -----------------------------------------------------------------------------------------------------------
I Greater than or equal to 3.00 2.000% 0.500% 0.500%
to 1.00
- -----------------------------------------------------------------------------------------------------------
II Less than 3.00 to 1.00 and 1.750% 0.250% 0.500%
greater than or equal to 2.25 to
1.00
- -----------------------------------------------------------------------------------------------------------
III Less than 2.25 to 1.00 and 1.500% 0.000% 0.375%
greater than or equal to 1.50 to
1.00
- -----------------------------------------------------------------------------------------------------------
IV Less than 1.50 to 1.00 and 1.250% 0.000% 0.375%
greater than or equal to 1.00 to
1.00
- -----------------------------------------------------------------------------------------------------------
V Less than 1.00 to 1.00 1.000% 0.000% 0.375%
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Notwithstanding the foregoing, (a) for the period commencing on the
Closing Date through the end of the month in which the quarterly compliance
certificate for the fiscal quarter ending March 31, 1999 is delivered pursuant
to ss.9.4(d) hereof, the applicable margin for Loans shall be that percentage
corresponding to Level II in the table above, and (b) if the Borrowers fail to
deliver any Compliance Certificate pursuant to ss.9.4(d) hereof, then for the
period commencing on the first day of the month immediately following the date
such Compliance Certificate was due through the date immediately preceding the
Adjustment Date that occurs immediately following the date on which such
Compliance Certificate is delivered, the applicable margin for Loans shall be
that percentage corresponding to Level I in the table above.
Qualified Investment. Any Investment by any Borrower in demand
deposits, certificates of deposit, bankers acceptances, time deposits or
securities commonly known as "commercial paper" issued by BKB having a maturity
not less than seven (7) days from the date of purchase by such Borrower.
RCRA. See ss.8.18(a).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Parent or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Bank. BKB.
Register. See ss.20.3.
Reimbursement Obligation. The Borrowers' obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.5.2.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrowers pursuant to ss.2.
Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.
Revolving Credit Notes. See ss.2.4.
Rights. See ss.9.14.
SARA. See ss.8.18(a).
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Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreement. The Security Agreement, dated or to be dated on or
prior to the Closing Date, among the Obligors, the Subsidiaries of Morgan and
the Agent and in form and substance satisfactory to the Banks and the Agent.
Security Documents. The Guaranty, the Security Agreement, the Stock
Pledge Agreement, the Trademark Agreement and all other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
Stock Pledge Agreement. The Stock Pledge Agreement, dated or to be
dated on or prior to the Closing Date, between the Parent and the Agent and in
form and substance satisfactory to the Banks and the Agent.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Term Loan. The term loan made or to be made by the Banks to the
Borrowers on the Term Out Date pursuant to ss.4.1.
Term Note. See ss.4.2.
Term Note Record. A Record with respect to a Term Note.
Term Out Date. See ss.2.9.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Trademark Agreement. The Trademark Collateral Security and Pledge
Agreement, dated or to be dated on or prior to the Closing Date, between MDA
Corp., an Oregon corporation and a wholly-owned Subsidiary of Morgan, and the
Agent and in form and substance satisfactory to the Banks and the Agent.
Type. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Unapplied Cash. The amount of cash and cash equivalents received as
payment from trade debtors on Accounts Receivable as such is reflected on the
consolidated balance sheet of the Obligors and their Subsidiaries.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter
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of credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Agent and the Banks on the date specified in,
and in accordance with, ss.5.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
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(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend.
Subject to the terms and conditions set forth in this Credit Agreement,
each of the Banks severally agrees to lend to the Borrowers and the Borrowers
may borrow, repay, and reborrow from time to time from the Closing Date up to
but not including the Term Out Date upon notice by the Borrowers to the Agent
given in accordance with ss.2.6, such sums as are requested by the Borrowers up
to a maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) plus
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at
any time exceed the lesser of (a) the Total Commitment and (b)(i) the Borrowing
Base plus (ii) the Applicable Overadvance Amount. The Revolving Credit Loans
shall be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by each of the Borrowers that the conditions set
forth in ss.12 and ss.13, in the case of the initial Revolving Credit Loans to
be made on the Closing Date, and ss.13, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.
2.2. Commitment Fee. Each of t he Borrowers jointly and severally
agrees to pay to the Agent for the accounts of the Banks in accordance with
their respective Commitment Percentages a commitment fee equal to the Applicable
Commitment Fee multiplied by the average daily amount during each calendar
quarter or portion thereof from the date hereof to the Term Out Date by which
the Total Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Term Out Date or any
earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrowers shall have the right
at any time and from time to time upon seven (7) days
-17-
prior written notice to the Agent to reduce by $1,000,000 or an integral
multiple thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the
Borrowers delivered pursuant to this ss.2.3, the Agent will notify the Banks of
the substance thereof. Upon the effective date of any such reduction or
termination, the Borrowers shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrowers in substantially the
form of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the
Closing Date and completed with appropriate insertions. One Revolving Credit
Note shall be payable to the order of each Bank in a principal amount equal to
such Bank's Commitment or, if less, the outstanding amount of all Revolving
Credit Loans made by such Bank, plus interest accrued thereon, as set forth
below. The Borrowers irrevocably authorize each Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Bank's Revolving
Credit Note, an appropriate notation on such Bank's Revolving Credit Note Record
reflecting the making of such Revolving Credit Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Bank's Revolving Credit Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrowers hereunder or under any Revolving Credit Note to make payments
of principal of or interest on any Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided
in ss.6.11, (a) each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at a rate per annum equal to the sum of (i)
the Base Rate plus (ii) the Applicable Base Rate Margin, and (b) each Eurodollar
Rate Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect thereto
at a rate per annum equal to the sum of (i) the Eurodollar Rate plus (ii) the
Applicable Eurodollar Rate Margin. The Borrowers jointly and severally agree to
pay interest on the Revolving Credit Loans or any portion thereof outstanding
during each Interest Period in arrears on each Interest Payment Date applicable
to such Interest Period.
2.6. Requests for Revolving Credit Loans.
The Borrowers shall give to the Agent written notice in the form of
Exhibit B hereto (or telephonic notice confirmed in a writing in the form of
Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a "Loan
Request") no less than (a) one (1) Business Day prior to the proposed Drawdown
Date of any Base Rate Loan and (b) three (3) Eurodollar Business Days prior to
the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (i) the principal amount of the Revolving Credit Loan requested, (ii)
the proposed Drawdown Date of such
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Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan
and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrowers and shall obligate the
Borrowers to accept the Revolving Credit Loan requested from the Banks on the
proposed Drawdown Date. Each Loan Request shall be in a minimum aggregate amount
of $200,000 or a multiple of $100,000 in excess thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan.
The Borrowers may elect from time to time to convert
any outstanding Revolving Credit Loan to a Revolving Credit
Loan of another Type, provided that (a) with respect to any
such conversion of a Base Rate Loan to a Eurodollar Rate Loan,
the Borrower shall give the Agent at least three (3)
Eurodollar Business Days prior written notice of such
election; (b) with respect to any such conversion of a
Eurodollar Rate Loan to a Base Rate Loan, the Borrowers shall
give the Agent at least one (1) Business Day prior written
notice of such election; (c) with respect to any such
conversion of a Eurodollar Rate Loan into a Base Rate Loan,
such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Loan may be
converted into a Eurodollar Rate Loan when any Default or
Event of Default has occurred and is continuing. On the date
on which such conversion is being made each Bank shall take
such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Revolving Credit Loans
of any Type may be converted into a Revolving Credit Loan of
another Type as provided herein, provided that any partial
conversion shall be in an aggregate principal amount of
$200,000 or a multiple of $100,000 in excess thereof. Each
Conversion Request relating to the conversion of a Revolving
Credit Loan to a Eurodollar Rate Loan shall be irrevocable by
the Borrowers.
2.7.2. Continuation of Type of Revolving Credit Loan.
Any Revolving Credit Loan of any Type may be
continued as a Revolving Credit Loan of the same Type upon the
expiration of an Interest Period with respect thereto by
compliance by the Borrowers with the notice provisions
contained in ss.2.7.1; provided that no Eurodollar Rate Loan
may be continued as such when any Default or Event of Default
has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of the
Agent active upon the Borrower's account have actual
knowledge. In the event that the Borrower fails to provide any
such notice with respect to the continuation of any Eurodollar
Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto. The Agent shall
notify the Banks promptly when any such automatic conversion
contemplated by this ss.2.7 is scheduled to occur.
2.7.3. Eurodollar Rate Loans.
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Any conversion to or from Eurodollar Rate Loans shall be in
such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of all Eurodollar
Rate Loans having the same Interest Period shall not be less than
$200,000 or a whole multiple of $100,000 in excess thereof. The
Borrowers shall not have more than four (4) Eurodollar Rate Loans
outstanding at any time.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures.
Not later than 11:00 a.m. (Boston time) on the
proposed Drawdown Date of any Revolving Credit Loans, each of
the Banks will make available to the Agent, at the Agent's
Head Office, in immediately available funds, the amount of
such Bank's Commitment Percentage of the amount of the
requested Revolving Credit Loans. Upon receipt from each Bank
of such amount, and upon receipt of the documents required by
ss.ss.12 and 13 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will
make available to the Borrowers the aggregate amount of such
Revolving Credit Loans made available to the Agent by the
Banks. The failure or refusal of any Bank to make available to
the Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from
its several obligation hereunder to make available to the
Agent the amount of such other Bank's Commitment Percentage of
any requested Revolving Credit Loans.
2.8.2. Advances by Agent.
The Agent may, unless notified to the contrary by any
Bank prior to a Drawdown Date, assume that such Bank has made
available to the Agent on such Drawdown Date the amount of
such Bank's Commitment Percentage of the Revolving Credit
Loans to be made on such Drawdown Date, and the Agent may (but
it shall not be required to), in reliance upon such
assumption, make available to the Borrower a corresponding
amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day
included in such period, times (b) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, times
(c) a fraction, the numerator of which is the number of days
that elapse from and including such Drawdown Date to the date
on which the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans shall become immediately available
to the Agent, and the denominator of which is 365. A statement
of the Agent submitted to such Bank with respect to any
amounts owing under this paragraph shall be prima facie
evidence of the amount due and owing to the Agent by such
Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent
by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrowers on demand, with interest thereon at
the rate per annum applicable to the Revolving Credit Loans
made on such Drawdown Date.
2.9. Term Out Date. The Term Out Date shall initially be January 28,
2001, provided, that if the Borrowers shall request in writing to the Banks, at
least one hundred eighty (180) days prior to such date, a one-year extension of
the Term Out Date and the Banks shall have approved such request in writing at
least ninety (90) days prior to such date, the Term Out Date shall be deemed to
be the next anniversary of such date or such other date as the Banks and the
Borrowers may agree. The Term Out Date shall be determined in a like manner in
subsequent periods.
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2.10. Change in Borrowing Base.
The Borrowing Base shall be determined monthly by the Agent by
reference to the Borrowing Base Report. The Agent shall give to the Borrowers
written notice of any change in the Borrowing Base determined by the Agent in
its reasonable discretion. In determining any changes to the Borrowing Base, the
Agent shall consider those factors customarily relied upon by the Agent in like
circumstances, including, without limitation, the collateral report delivered
pursuant to ss.9.9.2, reliance upon which by the Agent shall be deemed
reasonable. Such notice shall be effective upon its receipt by the Borrowers.
Prior to the time that such notice becomes effective the Borrowing Base shall be
computed as it would have been computed in the absence of such notice.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. Subject to ss.4.1 hereof, each of the Borrowers jointly
and severally promises to pay on the Term Out Date, and there shall become
absolutely due and payable on the Term Out Date, all of the Revolving Credit
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (a) the
Total Commitment and (b)(i) the Borrowing Base plus (ii) the Applicable
Overadvance Amount, then the Borrowers shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks for application:
first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit
Loans; and third, to provide to the Agent cash collateral for Reimbursement
Obligations as contemplated by ss.5.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
3.3. Optional Repayments of Revolving Credit Loans. The Borrowers shall
have the right, at their election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this ss.3.3 made on any date other than
the last day of the Interest Period relating thereto shall be subject to the
payment by the Borrowers of any applicable costs associated with such prepayment
as set forth in ss.6.10 hereof. The Borrower shall give the Agent, no later than
2:00 p.m., Boston time, at least
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three (3) Business Days prior written notice of any proposed prepayment pursuant
to this ss.3.3, specifying the proposed date of prepayment of Revolving Credit
Loans and the principal amount to be prepaid. Each such partial prepayment of
the Revolving Credit Loans shall be in an integral multiple of $100,000, shall
be accompanied by the payment of accrued interest on the principal prepaid to
the date of prepayment and shall be applied, in the absence of instruction by
the Borrowers, first to the principal of Base Rate Loans and then to the
principal of Eurodollar Rate Loans, at the Agent's option. Each partial
prepayment shall be allocated among the Banks, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each Bank's Revolving
Credit Note, with adjustments to the extent practicable to equalize any prior
repayments not exactly in proportion.
4. THE TERM LOAN.
4.1. Conversion of Revolving Credit Loans into the Term Loan. Subject
to the terms and conditions set forth in this Credit Agreement, including
without limitation the satisfaction of the conditions set forth in ss.12 and the
execution and delivery by the Borrowers of the Term Notes to the Banks, on the
Term Out Date the aggregate amount of outstanding Revolving Credit Loans shall
be converted to a Term Loan in the aggregate principal amount equal to the
aggregate outstanding principal balance of the Revolving Credit Loans on such
date held by the Banks. The Term Loan outstanding after conversion shall be
evidenced by separate promissory notes in substantially the form of Exhibit C
hereto (each a "Term Note") executed and delivered by the Borrowers and payable
to the order of each Bank in the principal amount of the Revolving Credit Loans
held by such Bank on the Term Out Date.
4.2. Mandatory Payments of Principal of Term Loan. The Borrowers
jointly and severally promise to pay to the Agent for the account of the Banks
the principal amount of the Term Loan in twelve (12) consecutive quarterly
installments, each equal as near as possible to 1/12th of the principal amount
of the Term Loan outstanding on the Term Out Date, such installments payable on
the last day of each fiscal quarter, commencing on the first such date following
the Term Out Date, with a final payment on the Maturity Date in an amount equal
to the unpaid balance of the Term Loan.
4.3. Optional Prepayment of Term Loan. The Borrowers shall have the
right at any time to prepay the Term Notes on or before the Maturity Date, as a
whole, or in part, upon not less than three (3) Business Days prior written
notice to the Agent, without premium or penalty, provided that (a) each partial
prepayment shall be in the principal amount of $100,000 or a multiple of
$100,000 in excess thereof, (b) any portion of any Eurodollar Rate Loan which
has been prepaid on any date other than the last day of the Interest Period
relating thereto shall be subject to payment by the Borrowers of any applicable
costs associated with such prepayment as set forth in ss.6.10 hereof, and (iii)
each partial prepayment shall be allocated amount the banks, in proportion, as
nearly as practicable, to the respective outstanding amount of each Bank's Term
Note, with adjustments to the extent practicable to equalize any prior
prepayments not exactly in proportion. Any prepayment of principal of the Term
Loan shall include all interest accrued to the date of prepayment and shall be
applied in the inverse order against the remaining scheduled installments of
principal due on the Term Loan. No amount repaid with respect to the Term Loan
may be reborrowed.
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4.4. Interest on Term Loan.
4.4.1. Interest Rates. Except as otherwise provided in
ss.6.11, (a) all or any portion of the Term Loan which is a Base Rate
Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with
respect thereto at the rate per annum equal to the sum of (i) the Base
Rate plus (ii) the Applicable Base Rate Margin plus (iii) 0.25% and (b)
all or any portion of the Term Loan which is a Eurodollar Rate Loan
shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the sum of (I) the Eurodollar
Rate plus (II) the Applicable Eurodollar Rate Margin plus (III) 0.25%.
The Borrowers jointly and severally promise to pay interest on the Term
Loan or any portion thereof outstanding during each Interest Period in
arrears on the Interest Payment Date applicable to such Interest
Period.
4.4.2. Notification by Borrowers. The Borrowers shall notify
the Agent, such notice to be irrevocable, at least three (3) Eurodollar
Business Days prior to the Drawdown Date of the Term Loan if all or any
portion of the Term Loan is to be a Eurodollar Rate Loan. After the
Term Loan has been made, the provisions of ss.2.7 shall apply mutatis
mutandis with respect to all or any portion of the Term Loan so that
the Borrowers may have the same interest rate options with respect to
all or any portion of the Term Loan as they would be entitled to with
respect to the Revolving Credit Loans.
4.4.3. Amounts, etc. Any portion of the Term Loan bearing
interest at the Eurodollar Rate relating to any Interest Period shall
be in the amount of $200,000 or a multiple of $100,000 in excess
thereof except that a portion of the Term Loan bearing interest at the
Eurodollar Rate Loan may be in an amount of $200,000 or greater (with
no restriction as to multiples of $100,000) solely if the reason for
such nonconformance is a mandatory principal payment of the Term Loan.
No Interest Period relating to the Term Loan or any portion thereof
bearing interest at the Eurodollar Rate shall extend beyond the date on
which a regularly scheduled installment payment of the principal of the
Term Loan is to be made unless a portion of the Term Loan at least
equal to such installment payment has an Interest Period ending on such
date.
5. LETTERS OF CREDIT.
5.1. Letter of Credit Commitments.
5.1.1. Commitment to Issue Letters of Credit. Subject
to the terms and conditions hereof and the execution and
delivery by the Borrowers of a letter of credit application on
the Agent's customary form (a "Letter of Credit Application"),
the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in ss.5.1.4 and upon the
representations and warranties of the Borrowers contained
herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrowers one or more standby
or documentary letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time
by the Borrower and agreed to by the Agent; provided, however,
that, after giving effect to such request, (a) the sum of the
aggregate Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed $12,000,000 at any one time and
(b) the sum of (i) the Maximum Drawing Amount on all Letters
of Credit, (ii) all Unpaid Reimbursement Obligations, and
(iii) the amount of all Revolving Credit Loans outstanding
shall not exceed the lesser of (A) the Total Commitment and
(B)(I) the Borrowing Base plus (II) the Applicable Overadvance
Amount.
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5.1.2. Letter of Credit Applications. Each Letter of
Credit Application shall be completed to the satisfaction of
the Agent. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of
this Credit Agreement, then the provisions of this Credit
Agreement shall, to the extent of any such inconsistency,
govern.
5.1.3. Terms of Letters of Credit. Each Letter of
Credit issued, extended or renewed hereunder shall, among
other things, (a) provide for the payment of sight drafts for
honor thereunder when presented in accordance with the terms
thereof and when accompanied by the documents described
therein, and (b) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is
confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the first
anniversary of the Term Out Date. Each Letter of Credit so
issued, extended or renewed shall be subject to the Uniform
Customs or, in the case of a standby Letter of Credit, either
the Uniform Customs or the International Standby Practices.
5.1.4. Reimbursement Obligations of Banks. Each Bank
severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of
such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under
each Letter of Credit to the extent that such amount is not
reimbursed by the Borrowers pursuant to ss.5.2 (such agreement
for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
5.1.5. Participations of Banks. Each such payment
made by a Bank shall be treated as the purchase by such Bank
of a participating interest in the Borrowers' Reimbursement
Obligation under ss.5.2 in an amount equal to such payment.
Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to ss.5.2.
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5.2. Reimbursement Obligation of the Borrower. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby jointly and severally agree to
reimburse or pay to the Agent, for the account of the Agent or (as the case may
be) the Banks, with respect to each Letter of Credit issued, extended or renewed
by the Agent hereunder,
(a) except as otherwise expressly provided in ss.5.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Agent under or with respect
to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Agent or
any Bank in connection with any payment made by the Agent or any Bank
under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.14, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrowers under this ss.5.2 at any time from the date such amounts become
due and payable (whether as stated in this ss.5.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.6.11 for overdue principal on the
Revolving Credit Loans.
5.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrowers fail to reimburse the Agent as
provided in ss.5.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (b) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times
(c) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or
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otherwise made payment to the date on which such Bank's Commitment Percentage of
such Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 360. The responsibility of the Agent to
the Borrowers and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
5.4. Reliance by Issuer. To the extent not inconsistent with this ss.5,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Credit Agreement in accordance with a request of the Majority
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Revolving Credit
Notes or of a Letter of Credit Participation.
5.5. Letter of Credit Fee. The Borrowers jointly and severally agree to
pay to the Agent a fee (the "Letter of Credit Fee") for each Letter of Credit
issued or renewed by the Agent at a rate per annum (except as provided in
ss.6.11 hereof) equal to the Applicable Margin for Eurodollar Rate Loans in
effect from time to time on the Maximum Drawing Amount of such Letter of Credit
for the period such Letter of Credit is outstanding, plus, at any time two or
more Banks are party to this Credit Agreement, an issuance fee in respect of
each Letter of Credit equal to 1/8% on the face amount of each such Letter of
Credit (the "Fronting Fee"). The Agent shall, promptly in turn, remit to each
Bank such Bank's Commitment Percentage of the Letter of Credit Fee (but not the
Fronting Fee which shall be for the account of the Agent). In respect of each
Letter of Credit, each of the Borrowers shall also pay to the Agent for the
Agent's own account, the Agent's customary issuance, amendment, negotiation or
document examination and other administrative fees as in effect from time to
time. The Letter of Credit Fee, Fronting Fee and any additional fees shall be
payable quarterly in arrears on the last day of each calendar quarter.
6. CERTAIN GENERAL PROVISIONS.
6.1. Closing Fee. The Borrowers jointly and severally agree to pay all
fees referred to in the Fee Letter which are payable on the Closing Date in
accordance with the terms of the Fee Letter.
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6.2. Agent's Fee. In the event that any Bank joins this Credit
Agreement at the request of the Borrowers pursuant to ss.20 hereof, then the
Borrowers jointly and severally agree to pay to the Agent annually in advance,
for the Agent's own account, on the date of such Bank's joinder hereto and on
each anniversary of such date thereafter, an Agent's fee in the amount of set
forth in the Agent's Fee Letter.
6.3. Overadvance Fee. T he Borrowers jointly and severally agree to pay
to the Agent for the accounts of the Banks in accordance with their respective
Commitment Percentages an overadvance fee for each calendar quarter in which the
Average Utilization exceeds the Average Borrowing Base, in an amount equal to
0.125% multiplied by the excess of the Average Utilization less the Average
Borrowing Base for each such quarter. The overadvance fee shall be payable
quarterly in arrears on the last day of the first month of each calendar quarter
for the immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Term Out Date or any
earlier date on which the Commitments shall terminate.
6.4. Funds for Payments.
6.4.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees,
Fronting Fees, fees set out in the Fee Letter and the Agent's Fee
Letter and any other amounts due hereunder or under any of the other
Loan Documents shall be made on the due date thereof to the Agent in
Dollars, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other place that the Agent may from time
to time designate, in each case at or about 11:00 a.m. (Boston,
Massachusetts, time or other local time at the place of payment) and in
immediately available funds.
6.4.2. No Offset, etc. All payments by the Borrowers hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
unless the Borrowers are compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrowers with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrowers will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document,
such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation
been imposed upon the Borrowers. The Borrowers will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the
Borrowers hereunder or under such other Loan Document.
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6.5. Computations. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Revolving Credit Note
Records and the Term Note Records from time to time shall be considered correct
and binding on the Borrowers unless within five (5) Business Days after receipt
of any notice by the Agent or any of the Banks of such outstanding amount, the
Agent or such Bank shall notify the Borrower to the contrary.
6.6. Inability to Determine Eurodollar Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrowers and the Banks) to the Borrowers and
the Banks. In such event (a) any Loan Request or Conversion Request with respect
to Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each Eurodollar Rate Loan will automatically,
on the last day of the then current Interest Period relating thereto, become a
Base Rate Loan, and (c) the obligations of the Banks to make Eurodollar Rate
Loans shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrowers and the Banks.
6.7. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrowers and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrowers hereby jointly and severally
agree promptly to pay the Agent for the account of such Bank, upon demand by
such Bank, any additional amounts necessary to compensate such Bank for any
costs incurred by such Bank in making any conversion in accordance with this
ss.6.6, including any interest or fees payable by such Bank to lenders of funds
obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.
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6.8. Additional Costs, etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent),
or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts payable
to any Bank or the Agent under this Credit Agreement or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of
the Loans or such Bank's Commitment forms a part, and the result of any
of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or such Bank's Commitment or any Letter of Credit,
or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as often
as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
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6.9. Capital Adequacy. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans, Letters of Credit or commitment fees to a level below that
which such Bank or the Agent could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or the Agent's then
existing policies with respect to capital adequacy and assuming full utilization
of such entity's capital) by any amount deemed by such Bank or (as the case may
be) the Agent to be material, then such Bank or the Agent may notify the
Borrowers of such fact. To the extent that the amount of such reduction in the
return on capital is not reflected in the Base Rate, the Borrowers jointly and
severally agree to pay such Bank or (as the case may be) the Agent for the
amount of such reduction in the return on capital as and when such reduction is
determined upon presentation by such Bank or (as the case may be) the Agent of a
certificate in accordance with ss.6.10 hereof. Each Bank shall allocate such
cost increases among its customers in good faith and on an equitable basis.
6.10. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.6.8 or 6.9 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrowers, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.11. Indemnity.
The Borrowers jointly and severally agree to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment of the principal amount of
or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain its Eurodollar Rate
Loans, (b) default by the Borrowers in making a borrowing or conversion after
the Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with ss.2.6 or ss.2.7 or (c)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.
6.12. Interest After Default. Upon the occurrence and during the
continuance of any Event of Default, amounts payable under any of the Loan
Documents shall bear interest (compounded monthly and payable on demand in
respect of overdue amounts) at a rate per annum which is equal to two percent
(2%) above the rate of interest otherwise applicable to such amounts (or if no
rate of interest is otherwise applicable, two percent (2%) above the Base Rate)
until such amount is paid in
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full or (as the case may be) such Event of Default has been cured or waived in
writing by the Banks (after as well as before judgment).
6.13. Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder and under the other Loan Documents in consideration
of the financial accommodations to be provided by the Agent and the
Banks under this Credit Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the
undertakings of each other Borrowers to accept joint and several
liability for the Obligations.
(b) The Borrowers, jointly and severally, hereby irrevocably
and unconditionally accept, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations
(including, without limitation, any Obligations arising under this
ss.6.13), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each of the
Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail
to make any payment with respect to any of the Obligations as and when
due or to perform any of the Obligations in accordance with the terms
thereof, then in each such event the other Borrowers will make such
payment with respect to, or perform, such Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this ss.6.13 constitute the full recourse Obligations of
each of the Borrowers enforceable against each such corporation to the
full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Credit Agreement or the other Loan
Documents or any other circumstance whatsoever as to the other
Borrowers.
(e) Except as otherwise expressly provided herein, each
Borrower hereby waives promptness, diligence, presentment, demand,
protest, notice of acceptance of its joint and several liability,
notice of any and all advances of the Loans made under this Credit
Agreement and the Notes, notice of occurrence of any Default or Event
of Default (except to the extent notice is expressly required to be
given pursuant to the terms of this Credit Agreement or any of the
other Loan Documents), or of any demand for any payment under this
Credit Agreement, notice of any action at any time taken or omitted by
the Agent or any Bank under or in respect of any of the Obligations
hereunder, any requirement of diligence and, generally, all demands,
notices and other formalities of every kind in connection with this
Credit Agreement and the other Loan Documents. Each Borrower hereby
waives all defenses which may be available by virtue of any valuation,
stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshaling of assets of the Borrowers and any
other entity or Person primarily or secondarily liable with respect to
any of the Obligations, and all suretyship defenses generally. Each
Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment, or place or manner for
payment, compromise, refinancing, consolidation or renewals of any of
the Obligations hereunder, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the
Agent or any Bank at any time or times in respect of
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any default by any Borrower in the performance or satisfaction of any
term, covenant, condition or provision of this Credit Agreement and the
other Loan Documents, any and all other indulgences whatsoever by the
Agent or any Bank in respect of any of the Obligations hereunder, and
the taking, addition, substitution or release, in whole or in part, at
any time or times, of any security for any of such Obligations or the
addition, substiution or release, in whole or in part, of any Borrower
or any other entity or Person primarily or secondarily liable for any
Obligation. Such Borrower further agrees that its Obligations shall not
be released or discharged, in whole or in part, or otherwise affected
by the adequacy of any rights which the Agent or any Bank may have
against any collateral security or other means of obtaining repayment
of any of the Obligations, the impairment of any collateral security
securing the Obligations, including, without limitation, the failure to
protect or preserve any rights which the Agent or any Bank may have in
such collateral security or the substitution, exchange, surrender,
release, loss or destruction of any such collateral security, any other
act or omission which might in any manner or to any extent vary the
risk of such Borrower, or otherwise operate as a release or discharge
of such Borrower, all of which may be done without notice to such
Borrower; provided, however, that the foregoing shall in no way be
deemed to create commercially unreasonable standards as to the Agent or
any Bank's duties as secured party under the Loan Documents (as such
rights and duties are set forth therein). If for any reason any of the
other Borrowers has no legal existence or is under no legal obligation
to discharge any of the Obligations, or if any of the Obligations have
become irrecoverable from any of the other Borrowers by reason of such
other Borrower's insolvency, bankruptcy or reorganization or by other
operation of law or for any reason, this Credit Agreement and the other
Loan Documents to which it is a party shall nevertheless be binding on
such Borrower to the same extent as if such Borrower at all times had
been the sole obligor on such Obligations. Without limiting the
generality of the foregoing, each Borrower assents to any other action
or delay in acting or failure to act on the part of the Bank,
including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with
applicable laws or regulations thereunder which might, but for the
provisions of this ss.6.13, afford grounds for terminating, discharging
or relieving such Borrower, in whole or in part, from any of its
obligations under this ss.6.13, it being the intention of each Borrower
that, so long as any of the Obligations hereunder remain unsatisfied,
the obligations of such Borrower under this ss.6.13 shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each Borrower under this ss.6.12 shall
not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to either reconstruction or similar proceeding
with respect to any Borrower, or the Agent or any Bank. The joint and
several liability of the Borrowers hereunder shall continue in full
force and effect notwithstanding any absorption, merger, amalgamation
or any other change whatsoever in the name, ownership, membership,
constitution or place of formation of any Borrower or the Agent or any
Bank. Each of the Borrowers acknowledges and confirms that it has
itself established its own adequate means of obtaining from the other
Borrowers on a continuing basis all information desired by such
Borrower concerning the financial condition of the other Borrowers and
that each such Borrower will look to the other Borrowers and not to the
Agent or any Bank in order for such Borrower to keep adequately
informed of changes in each of the other Borrower's financial
conditions.
(f) The provisions of this ss.6.13 are made for the benefit of
the Agent and the Banks and their respective successors and assigns,
and may be enforced by it or them from time to
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time against any of the Borrowers as often as occasion therefor may
arise and without requirement on the part of the Agent or any Bank or
such successor or assign first to marshall any of its or their claims
or to exercise any of its or their rights against the other Borrowers
or to exhaust any remedies available to it or them against the other
Borrowers or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this ss.6.12 shall remain in effect until all
of the Obligations shall have been paid in full or otherwise fully
satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Agent or the Banks upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this ss.6.13 will forthwith be reinstated in effect, as
though such payment had not been made.
(g) Each of the Borrowers hereby agrees that it will not
enforce any of its rights of reimbursement, contribution, subrogation
or the like against the other Borrowers with respect to any liability
incurred by it hereunder or under any of the other Loan Documents, any
payments made by it to the Agent or the Banks with respect to any of
the Obligations or any collateral security therefor until such time as
all of the Obligations have been irrevocably paid in full in cash. Any
claim which any Borrower may have against the other Borrowers with
respect to any payments to the Agent or the Banks hereunder or under
any other Loan Documents are hereby expressly made subordinate and
junior in right of payment, without limitation as to any increases in
the Obligations arising hereunder or thereunder, to the prior payment
in full of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower,
its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full before any payment or distribution of
any character, whether in cash, securities or other property, shall be
made to the other Borrowers therefor.
(h) Each of the Borrowers hereby agrees that the payment of
any amounts due with respect to the indebtedness owing by any Borrower
to the other Borrowers is hereby subordinated to the prior payment in
full in cash of the Obligations. Each Borrower hereby agrees that after
the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, sue for or otherwise attempt to
collect any indebtedness of the other Borrowers owing to such Borrower
until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect,
enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as
trustee for the Agent and the Banks and be paid over to the Agent and
the Banks to be applied to repay the Obligations.
7. COLLATERAL SECURITY AND GUARANTIES.
7.1. Security of Borrower. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of the Borrowers
other than Real Estate, whether now owned or hereafter acquired, pursuant to the
terms of the Security Documents to which each of the Borrowers are party.
Notwithstanding the foregoing, upon request by the Agent to the Borrowers, the
Agent may further secure the Obligations by receiving from the
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Borrowers a perfected first priority security interest in any or all of the Real
Estate.
7.2. Guaranties and Security of the Parent and Subsidiaries.
The Obligations shall also be guaranteed pursuant to the terms of the
Guaranty. The obligations of the Parent and its Subsidiaries party thereto under
the Guaranty shall be in turn secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of the Parent and such Subsidiaries, whether now owned
or hereafter acquired, pursuant to the terms of the Security Documents to which
the Parent and such Subsidiaries are party.
8. REPRESENTATIONS AND WARRANTIES.
The Obligors jointly and severally represent and warrant to the Banks
and the Agent as follows:
8.1. Corporate Authority.
8.1.1. Incorporation; Good Standing. Each of the
Obligors and their Subsidiaries (a) is a corporation duly
organized, validly existing and in good standing under the
laws of its state of incorporation, (b) has all requisite
corporate power to own its property and conduct its business
as now conducted and as presently contemplated, and (c) is in
good standing as a foreign corporation and is duly authorized
to do business in each jurisdiction where such qualification
is necessary except where a failure to be so qualified would
not have a materially adverse effect on the business, assets
or financial condition of the Obligors.
8.1.2. Authorization. The execution, delivery and
performance of this Credit Agreement and the other Loan
Documents to which any Obligor is or is to become a party and
the transactions contemplated hereby and thereby (a) are
within the corporate authority of such Person, (b) have been
duly authorized by all necessary corporate proceedings, (c) do
not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which
such Obligor is subject or any judgment, order, writ,
injunction, license or permit applicable to such Obligor and
(d) do not conflict with any provision of the corporate
charter or bylaws of, or any agreement or other instrument
binding upon, such Obligor.
8.1.3. Enforceability. The execution and delivery of
this Credit Agreement and the other Loan Documents to which
any Obligor is or is to become a party will result in valid
and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting generally the
enforcement
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of creditors' rights and except to the extent that
availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
8.2. Governmental Approvals. The execution, delivery and performance by
each of the Obligors of this Credit Agreement and the other Loan Documents to
which such Obligor is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than those already obtained.
8.3. Title to Properties. Except as indicated on Schedule 8.3 hereto,
the Obligors and their Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Obligors and their Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
8.4. Financial Statements.
8.4.1. Fiscal Year. Each of the Obligors and each of their
Subsidiaries has a fiscal year which is the twelve months ending on
December 31 of each calendar year.
8.4.2. Financial Statements. There has been furnished to each
of the Banks a consolidated balance sheet of the Obligors and their
Subsidiaries as at December 31, 1997, and a consolidated statement of
income of the Obligors and their Subsidiaries for the fiscal year then
ended, certified by Ernst & Young. In addition, there has been
furnished to each of the Banks unaudited consolidated balance sheets
and unaudited consolidated statements of income of the Obligors and
their Subsidiaries for each of the quarterly periods through the
Balance Sheet Date. Such balance sheet and statement of income have
been prepared in accordance with generally accepted accounting
principles and fairly present the financial condition of the Borrower
as at the close of business on the date thereof and the results of
operations for the periods ending on such dates. There are no
contingent liabilities of the Obligors or their Subsidiaries as of such
dates involving material amounts, known to the officers of the
Obligors, which were not disclosed in such balance sheets and the notes
related thereto.
8.5. No Material Changes, etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Obligors and their Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Obligors and their Subsidiaries as at the Balance Sheet
Date, or the consolidated statement of income for the fiscal year then ended,
other than changes in the ordinary course of business that have not had any
materially adverse effect either individually or in the aggregate on the
business or financial condition of the Obligors or any of their Subsidiaries.
Except as set forth in Schedule 8.5, since the Balance Sheet Date, the Parent
has not made any Distribution.
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8.6. Franchises, Patents, Copyrights, etc. Each of the Obligors and
their Subsidiaries possess all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
8.7. Litigation. Except as set forth in Schedule 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against any Obligor or any of their Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Obligors and their
Subsidiaries or materially impair the right of the Obligors and their
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Obligors and their Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
8.8. No Materially Adverse Contracts, etc. None of the Obligors nor any
of their Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Obligors or any of their Subsidiaries. None
of the Obligors nor any of their Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Obligors' officers, to
have any materially adverse effect on the business of any Obligor or any of
their Subsidiaries.
8.9. Compliance with Other Instruments, Laws, etc. None of the Obligors
nor any of their Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of any Obligor or any of their Subsidiaries.
8.10. Tax Status. Each of the Obligors and their Subsidiaries (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of each of
the Obligors know of no basis for any such claim.
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8.11. No Event of Default. No Default or Event of Default has occurred
and is continuing.
8.12. Holding Company and Investment Company Acts. None of the Obligors
nor any of their Subsidiaries is a "holding company", or a "subsidiary company"
of a "holding company", or an affiliate" of a "holding company", as such terms
are defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.13. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of any Obligor or any of their Subsidiaries or any
rights relating thereto.
8.14. Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Obligors are the
owners of the Collateral free from any lien, security interest, encumbrance and
any other claim or demand, except for Permitted Liens.
8.15. Certain Transactions. Except for arm's length transactions
pursuant to which any Obligor or any of their Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than such Obligor or
such Subsidiary could obtain from third parties, none of the officers,
directors, or employees of any Obligor or any of their Subsidiaries is presently
a party to any transaction with any Obligor or any of their Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of any Obligor, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
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8.16. Employee Benefit Plans.
8.16.1. In General. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA. The Obligors have heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
8.16.2. Terminability of Welfare Plans. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Obligors may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Obligors without liability to any Person other than for claims
arising prior to termination.
8.16.3. Guaranteed Pension Plans. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and none of the Obligors nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by any Obligor
or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event (other than an ERISA
Reportable Event as to which the requirement of 30 days notice has been
waived), or any other event or condition which presents a material risk
of termination of any Guaranteed Pension Plan by the PBGC. Based on the
latest valuation of each Guaranteed Pension Plan (which in each case
occurred within twelve months of the date of this representation), and
on the actuarial methods and assumptions employed for that valuation,
the aggregate benefit liabilities of all such Guaranteed Pension Plans
within the meaning of ss.4001 of ERISA did not exceed the aggregate
value of the assets of all such Guaranteed Pension Plans, disregarding
for this purpose the benefit liabilities and assets of any Guaranteed
Pension Plan with assets in excess of benefit liabilities.
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8.16.4. Multiemployer Plans. None of the Obligors nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. None of the Obligors nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of ss.4241 or ss.4245 of ERISA or is at
risk of entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA.
8.17. Use of Proceeds.
8.17.1. General. The proceeds of the Loans shall be used to
refinance existing Indebtedness, for working capital, capital asset
purchases, for permitted Distributions pursuant to ss.10.4,
acquisitions and general corporate purposes. The Borrowers will obtain
Letters of Credit for self insurance retention and related insurance
purposes and general corporate purposes.
8.17.2. Regulations U and X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
8.18. Hazardous Substances. Each of the Obligors has taken all
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) none of the Parent, its Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery
Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act,
or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would have a material adverse
effect on the environment or the business, assets or financial
condition of the Parent or any of its Subsidiaries;
(b) neither the Parent nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority,
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(i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substances as
defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant as
defined by 42 U.S.C. ss.9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that the Parent or any of its Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 8.18 attached hereto: (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is
located on any portion of the Real Estate; (ii) in the course of any
activities conducted by the Parent, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Parent or its Subsidiaries, which releases would have
a material adverse effect on the value of any of the Real Estate or
adjacent properties or the environment; (iv) to the best of the
Obligors' knowledge, there have been no releases on, upon, from or into
any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located
on, and which would have a material adverse effect on the value of, the
Real Estate; and (v) in addition, any Hazardous Substances that have
been generated on any of the Real Estate have been transported offsite
only by carriers having an identification number issued by the EPA,
treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the best
of the Obligors' knowledge, operating in compliance with such permits
and applicable Environmental Laws; and
(d) None of the Parent and its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby.
8.19. Subsidiaries, etc. Schedule 8.19 lists all Subsidiaries of the
Obligors. Except as set forth on Schedule 8.19
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hereto, none of the Obligors nor any Subsidiary of any Obligor is engaged in any
joint venture or partnership with any other Person.
8.20. Year 2000 Problem. Each of the Obligors and their Subsidiaries
have (a) reviewed the areas within their businesses and operations which could
be adversely affected by failure to become "Year 2000 Compliant" (i.e. that
computer applications, imbedded microchips and other systems used by the
Obligors or any of their Subsidiaries, will be able properly to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999), (b) developed a detailed plan and timetable
to become Year 2000 Compliant in a timely manner, and (c) committed adequate
resources to support the Year 2000 plan of the Obligors and their Subsidiaries.
Based upon such review, the Obligors reasonably believe that the Obligors and
their Subsidiaries will become "Year 2000 Compliant" in a timely manner except
to the extent that failure to do so will not have any materially adverse effect
on the business or financial condition of the Obligors or any of their
Subsidiaries.
8.21. Disclosure. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to any Obligor or any of their Subsidiaries in the
case of any document or information not furnished by any Obligor or any of their
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. There is no fact known to any Obligor or any of their Subsidiaries
which materially adversely affects, or which is reasonably likely in the future
to materially adversely affect, the business, assets, financial condition or
prospects of any Obligor or any of their Subsidiaries, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
8.22. Title and Registration. All Motor Vehicle Equipment which, under
applicable law, is required to be registered is properly registered in the name
of the Parent or the appropriate Subsidiary of the Parent, and all Motor Vehicle
Equipment, the ownership of which, under applicable law, is evidenced by a
certificate of title, is properly titled in the name of the Parent or the
appropriate Subsidiary of the Parent.
8.23. Operating Rights. The Parent and its Subsidiaries have all
certificates of convenience and necessity and operating rights necessary to
conduct interstate and intrastate transportation businesses consisting of
transporting cars and trucks in and between the states listed on Schedule 8.23
attached hereto. Each of such certificates of convenience and necessity and
operating rights is listed on Schedule 8.23 attached hereto, and is in full
force and effect.
9. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Obligors jointly and severally covenant and agree that, so long as
any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Bank has any obligation to
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make any Loans or the Agent has any obligation to issue, extend or renew any
Letters of Credit:
9.1. Punctual Payment. Each of the Borrowers will duly and punctually
pay or cause to be paid the principal and interest on the Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which any Borrower is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
9.2. Maintenance of Office. Each of the Obligors will maintain its
chief executive office in Elkhart, Indiana, or at such other place in the United
States of America as such Obligor shall designate upon thirty (30) days prior
written notice to the Agent, where notices, presentations and demands to or upon
such Obligor in respect of the Loan Documents to which such Obligor is a party
may be given or made.
9.3. Records and Accounts. Each of the Obligors will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in accordance with
generally accepted accounting principles, (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves, and (c) at all times engage
Ernst & Young or other independent certified public accountants satisfactory to
the Agent as the independent certified public accountants of the Obligors and
their Subsidiaries and will not permit more than thirty (30) days to elapse
between the cessation of such firm's (or any successor firm's) engagement as the
independent certified public accountants of the Obligors and their Subsidiaries
and the appointment in such capacity of a successor firm as shall be
satisfactory to the Agent.
9.4. Financial Statements, Certificates and Information. The Obligors
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Obligors, the
consolidated balance sheet of the Parent and its Subsidiaries, each as
at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, and certified
without qualification by Ernst & Young or by other independent
certified public accountants satisfactory to the Agent, together with a
written statement from such accountants to the effect that they have
read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such accountants
shall have obtained knowledge of any then existing Default or Event of
Default they shall disclose in such statement any such Default or Event
of Default; provided that such accountants shall not be liable to the
Banks for failure to obtain knowledge of any Default or Event of
Default;
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(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter, copies of
the unaudited consolidated balance sheet of the Parent and its
Subsidiaries, as at the end of such quarter, the related consolidated
statement of income and consolidated statement of cash flow for the
portion of the fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Obligors that the information contained in such
financial statements fairly presents the financial position of the
Parent and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within thirty
(30) days after the end of each month in each fiscal year of the
Obligors, copies of all monthly financial statements and summaries
delivered to the officers or directors of the Borrowers for such month;
provided, that the Agent reserves the right to receive upon request to
the Borrowers, as soon as practicable, but in any event within thirty
(30) days after the end of such month, unaudited monthly consolidated
financial statements of the Parent and its Subsidiaries for such month,
each prepared in accordance with generally accepted accounting
principles, together with a certification by the principal financial or
accounting officer of the Obligors that the information contained in
such financial statements fairly presents the financial condition of
the Parent and its Subsidiaries on the date thereof (subject to
year-end adjustments);
(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Obligors in substantially the form of Exhibit D hereto and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in ss.11 and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the
Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Parent;
(f) within fifteen (15) days after the end of each calendar
month or at such earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing Base as at the end of
such calendar month or other date so requested by the Agent;
(g) within fifteen (15) days after the end of each fiscal
quarter, a detailed Accounts Receivable and Contractor Loans aging
report;
(h) within fifteen (15) days after the end of each calendar
month, a summary Accounts Receivable and Contractor Loans aging report;
provided, that the Agent reserves the right to receive upon request to
the Borrowers a detailed Accounts Receivable and Contractor Loans aging
report;
(i) from time to time such other financial data and
information (including accountants' management letters) as the Agent or
any Bank may reasonably request.
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9.5. Notices.
9.5.1. Defaults. The Borrowers will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which any Obligor of any Subsidiary of any Obligor is a
party or obligor, whether as principal, guarantor, surety or otherwise,
the Borrowers shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature
of the claimed default.
9.5.2. Environmental Events. The Borrowers will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that any Obligor or any of their Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to materially affect the assets,
liabilities, financial conditions or operations of any Obligor or any
of their Subsidiaries, or the Agent's security interests pursuant to
the Security Documents.
9.5.3. Notification of Claim against Collateral. The Borrowers
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims, withholdings or
other defenses to which any of the Collateral or any of the Real
Estate, or the Agent's rights with respect to the Collateral, are
subject.
9.5.4. Notice of Litigation and Judgments. The Obligors will,
and will cause each of their Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting any Obligor or any of
their Subsidiaries or to which any Obligor or any of their Subsidiaries
is or becomes a party involving an uninsured claim against any Obligor
or any of their Subsidiaries that could reasonably be expected to have
a materially adverse effect on any Obligor or any of their Subsidiaries
and stating the nature and status of such litigation or proceedings.
The Obligors will, and will cause each of their Subsidiaries to, give
notice to the Agent and each of the Banks, in writing, in form and
detail satisfactory to the Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against any Obligor or
any of their Subsidiaries in an amount in excess of $250,000.
9.6. Corporate Existence; Maintenance of Properties. Each of the
Obligors will do or cause to be done all things necessary to preserve and keep
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in full force and effect its corporate existence, rights and franchises and
those of its Subsidiaries and will not, and will not cause or permit any of its
Subsidiaries to, convert to a limited liability company. Each of the Obligors
(a) will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of such Obligor may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this ss.9.6 shall prevent such Obligor from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of such
Obligor, desirable in the conduct of its or their business and that do not in
the aggregate materially adversely affect the business of the Obligors and their
Subsidiaries on a consolidated basis.
9.7. Insurance. Each of the Obligors will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreement and the Obligors' current insurance coverages which are described in
Schedule 9.7.
9.8. Taxes. Each of the Obligors will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Obligor or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and provided further that the Obligors
and each Subsidiary of the Obligors will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor.
9.9. Inspection of Properties and Books, etc.
9.9.1. General. The Obligors shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Obligors or any of their
Subsidiaries, to examine the books of account of the Obligors and their
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and
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accounts of the Obligors and their Subsidiaries with, and to
be advised as to the same by, its and their officers, all at
such reasonable times and intervals as the Agent or any Bank
may reasonably request.
9.9.2. Collateral Reports. No more frequently than
two times during each calendar year, or more frequently as
determined by the Agent if an Event of Default shall have
occurred and be continuing, upon the request of the Agent, the
Borrowers will obtain and deliver to the Agent, or, if the
Agent so elects, will cooperate with the Agent in the Agent's
obtaining, a report of an independent collateral auditor
satisfactory to the Agent (which may be affiliated with one of
the Banks) with respect to the Accounts Receivable and
Contractor Loans included in the Borrowing Base, which report
shall indicate whether or not the information set forth in the
Borrowing Base Report most recently delivered is accurate and
complete in all material respects based upon a review by such
auditors of the Accounts Receivable (including verification
with respect to the amount, aging, identity and credit of the
respective account debtors and the billing practices of the
Borrowers). All such collateral value reports shall be
conducted and made at the expense of the Borrowers.
9.9.3. Communications with Accountants. Each of the
Borrowers authorize the Agent and, if accompanied by the
Agent, the Banks to communicate directly with the Borrowers'
independent certified public accountants and authorizes such
accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents
and schedules including copies of any management letter with
respect to the business, financial condition and other affairs
of the Obligors or any of their Subsidiaries. At the request
of the Agent, the Borrowers shall deliver a letter addressed
to such accountants instructing them to comply with the
provisions of this ss.9.9.3.
9.10. Compliance with Laws, Contracts, Licenses, and Permits. Each of
the Obligors will, and will cause each of their Subsidiaries to, comply with (a)
the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (b) the provisions of its charter documents
and by-laws, (c) all material agreements and material instruments by which it or
any of its properties may be bound and (d) all applicable decrees, orders, and
judgments. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that any Obligor or any of their Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which such
Obligor or such Subsidiary is a party, such Obligor will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of such Obligor or such Subsidiary to obtain
such authorization, consent, approval, permit or license and, upon request by
the Agent or the Banks, furnish the Agent and the Banks with evidence thereof.
9.11. Employee Benefit Plans. Each of the Obligors will (a) promptly
upon filing the same with the Department of Labor or
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Internal Revenue Service upon request of the Agent, furnish to the Agent a copy
of the most recent actuarial statement required to be submitted under ss.103(d)
of ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan and (b) promptly upon receipt or dispatch,
furnish to the Agent any notice, report or demand sent or received in respect of
a Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under ss.ss.4041A,
4202, 4219, 4242, or 4245 of ERISA.
9.12. Use of Proceeds. The Borrowers will use the proceeds of the Loans
solely to refinance existing Indebtedness, for working capital, capital asset
purchases, for permitted Distributions pursuant to ss.10.4, acquisitions and
other general corporate purposes. The Borrowers will obtain Letters of Credit
solely for insurance self retention and related insurance purposes and other
general corporate purposes.
9.13. Title and Registration. Each of the Parent and its Subsidiaries
will cause all Motor Vehicle Equipment, now owned or hereafter acquired by the
Parent or any of its Subsidiaries, which, under applicable law, is required to
be registered, to be properly registered in the name of such Person and cause
all Motor Vehicle Equipment, now owned or hereafter acquired by the Parent or
any of its Subsidiaries, the ownership of which, under applicable law, is
evidenced by a certificate of title, to be properly titled in the name of such
Person.
9.14. Operating Rights. Each of the Parent and its Subsidiaries will
keep in full force and effect each of the certificates of convenience and
necessity, licenses, permits, operating rights and operating authorizations
listed on Schedule 8.23 attached hereto (collectively, "Rights"); provided that
any of such Rights may be permitted to lapse if (i) it shall no longer be
necessary to the conduct of the business of the Parent and its Subsidiaries or
(ii) the Subsidiary owning such Right shall merge into another Subsidiary of the
Parent. In the event of the lapse or termination of any such Right, the
Borrowers shall promptly deliver to the Agent and the Banks an updated Schedule
8.23.
9.15. Further Assurances. The Obligors will, and will cause each of
their Subsidiaries to, cooperate with the Banks and the Agent and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
Each of the Obligors covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Agent has any obligations to
issue, extend or renew any Letters of Credit:
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10.1. Restrictions on Indebtedness. The Obligors will not, and will not
permit any of their Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness,
provided that any Obligor or any Subsidiary of any Obligor (other than the
Excluded Subsidiary) may create, incur, assume, guarantee or be or remain liable
or suffer to be created, incurred, assumed, guaranteed or made liable with
respect to:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) Indebtedness assumed in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary or under any Capitalized Lease not to exceed the
aggregate amount of $150,000 at any one time
(d) unsecured Indebtedness incurred as a portion of the
consideration for Permitted Acquisitions not exceed the aggregate
amount of $2,000,000 at any one time;
(e) Indebtedness existing on the date hereof and listed and
described on Schedule 10.1 hereto; and
(f) Indebtedness of an Obligor to any other Obligor.
10.2. Restrictions on Liens. The Obligors will not, and will not permit
any of their Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; (e) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (f) of the definition of the
term "Indebtedness," with or without recourse; or (g) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits any of the Borrowers or any of their
Subsidiaries from creating or incurring any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest other than in favor of the Agent
for the benefit of the Banks and the Agent under the Loan Documents and other
than customary anti-assignment provisions in leases and licensing agreements
entered into by such Borrower or such Subsidiary in the ordinary course of its
business, provided that any Obligor or any of its Subsidiaries (other than the
Excluded Subsidiary) may create or incur or suffer to be created or incurred or
to exist:
(i) liens in favor of such Obligor on all or part of the
assets of Subsidiaries of
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such Obligor securing Indebtedness owing by Subsidiaries of such
Obligor to such Obligor;
(ii) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(iii) liens existing on the date hereof and listed on Schedule
10.2 hereto;
(iv) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.10.1(c), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired; and
(v) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents.
10.3. Restrictions on Investments. The Obligors will not, and will not
permit any of their Subsidiaries to, make or permit to exist or to remain
outstanding any Investment, provided that any Obligor or any of its Subsidiaries
(other than the Excluded Subsidiary, except to the extent of (a), (b) and (c)
below) may make or permit to exist or to remain outstanding Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by any Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of any Bank or any United States banks
having total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 10.3 hereto;
(e) Investments with respect to Indebtedness permitted by
ss.10.1(e) so long as such entities remain Obligors;
(f) Investments with respect to Indebtedness permitted by
ss.10.1(d);
(g) Investments consisting of the Guaranty or Investments by
any Borrower in Subsidiaries of such Borrower existing on the Closing
Date;
(h) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.10.5.2; and
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(i) Investments consisting of Contractor Loans;
provided, however, that, with the exception of demand deposits referred to in
ss.10.3(b), such Investments will be considered Investments permitted by this
ss.10.3 only if all actions have been taken to the satisfaction of the Agent to
provide to the Agent, for the benefit of the Banks and the Agent, a first
priority perfected security interest in all of such Investments free of all
encumbrances other than Permitted Liens.
10.4. Distributions.
(a) The Borrowers and their Subsidiaries will not make any
Distributions except that so long as no Default or Event of Default
shall have occurred and be continuing and none would result therefrom,
any of the Borrowers and their Subsidiaries may make Distributions to
the Parent or to another Borrower.
(b) The Parent will not make any Distributions, except that:
(i) so long as no Default or Event of Default shall
have occurred and be continuing and none would result therefrom, the
Parent may make Distributions in the form of dividends to the holders
of its common stock in an amount not to exceed $200,000 in the
aggregate for any fiscal year; and
(ii) so long as no Default or Event of Default shall
have occurred and be continuing and none would result therefrom, the
Parent may make Distributions in the form of a purchase of its own
shares of common stock in the open market in a cumulative aggregate
amount not to exceed $1,500,000 over the term of this Credit Agreement;
and
(iii) so long as the Obligors and their Subsidiaries
would remain in compliance with the Cash Flow Coverage Ratio as set
forth in ss.11.2 for the most recently ended fiscal quarter after
adding to the denominator of the Cash Flow Coverage Ratio all
Distributions made in (ii) above, then the Parent may make
Distributions in the form of a purchase of its own shares of common
stock in the open market in an additional aggregate amount not to
exceed $300,000 in any fiscal year; provided, that, at the time of such
additional purchase, and after giving effect thereto, the sum of the
outstanding amount of the Loans, the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations does not exceed the Borrowing Base.
10.5. Merger, Consolidation and Disposition of Assets.
10.5.1. Mergers and Acquisitions. The Obligors will not, and
will not permit any of their Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except acquisitions
by any Borrower of other Persons which thereby become Subsidiaries, or
divisions or business segments of such other Persons (whether by way of
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purchase of assets or capital stock, merger or otherwise)
(each a "Permitted Acquisition"), provided, that:
(a) any asset or stock acquisition is in the same
line of business as such Borrower or a related business;
(b) no Default or Event of Default shall exist at the
time of, and none shall exist after giving effect to, such
merger, consolidation or acquisition;
(c) such Borrower has delivered to the Agent fifteen
(15) days' prior written notice of such acquisition, which
notice shall provide the Agent with a reasonably detailed
description of the proposed acquisition, including, without
limitation, historical financial statements, appraisals, any
analysis performed by consultants and other information
reasonably requested by the Agent;
(d) subject to Permitted Liens, such Borrower or its
Subsidiary, as the case may be, has taken all necessary action
to grant to the Agent a perfected first priority security
interest in all assets acquired pursuant to any such
acquisition, whether by stock or asset acquisition;
(e) no portion of the Revolving Credit Loans will be
used to purchase or carry margin securities or margin stock as
defined in Regulations U and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Parts 221 and 224
(except in a so-called "going private" transaction effected in
compliance with such Regulations, in which such securities or
stock, immediately upon such purchase, no longer constitute
margin securities or margin stock, such that the Revolving
Credit Loans will not at any time be secured directly or
indirectly, by any margin securities or margin stock);
(f) the business to be acquired would not subject the
Agent or the Banks to regulatory or third party approvals in
connection with the exercise of any of their rights and
remedies under this Credit Agreement or any other Loan
Document;
(g) the business and assets so acquired shall be
acquired free and clear of all liens and encumbrances (other
than as permitted hereunder) and shall be located in the
United States;
(h) no contingent obligations or liabilities will be
incurred or assumed in connection with such acquisition which
could reasonably be expected to have a material adverse effect
on the business condition (financial or otherwise),
operations, performance or properties of any of the Obligors
or their Subsidiaries taken as a whole;
(i) the Borrowers have delivered to the Agent a pro
forma Compliance Certificate evidencing pro forma compliance
with each of the covenants in ss.11 of this Credit Agreement
and a certificate of the chief financial officer of the
Borrowers to the effect that (A) each of the Borrowers will be
solvent upon consummation of such acquisition and, (B) the pro
forma Compliance Certificate fairly presents the
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financial condition of the Borrowers and their Subsidiaries as
of the most recently completed fiscal quarter end and after
giving effect to such acquisition on a pro forma basis; and
(j) cash consideration to be paid by such Borrower in
connection with such acquisition or series of related
acquisitions occurring within the most recently completed
period of four consecutive fiscal quarters (including cash
deferred payments, contingent or otherwise, and the aggregate
amount of all assumed Indebtedness) shall not exceed
$3,000,000 in the aggregate.
10.5.2. Disposition of Assets. The Obligors will not, and will
not permit any of their Subsidiaries to, become a party to or agree to
or effect any disposition of assets, other than the sale of inventory,
and the disposition of obsolete assets, in each case in the ordinary
course of business consistent with past practices.
10.6. Sale and Leaseback. Except in connection with any Contractor
Loan, t he Obligors will not, and will not permit any of their Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby any Obligor or any
Subsidiary of any Obligor shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that any
Obligor or any Subsidiary of any Obligor intends to use for substantially the
same purpose as the property being sold or transferred.
10.7. Compliance with Environmental Laws. The Obligors will not, and
will not permit any of their Subsidiaries to conduct any activity that would
violate any Environmental Law.
10.8. Employee Benefit Plans. None of the Obligors nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for any Obligor or any of their Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of any Obligor or any of their Subsidiaries pursuant to
ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
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(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
10.9. Business Activities. Each of the Obligors will not, and will not
permit any of their Subsidiaries to, engage directly or indirectly (whether
through Subsidiaries or otherwise) in any type of business other than the
businesses conducted by them on the Closing Date and in related businesses.
10.10. Fiscal Year. Each of the Obligors will not, and will not permit
any of their Subsidiaries to, change the date of the end of its fiscal year from
that set forth in ss.8.4.1.
10.11. Transactions with Affiliates. Each of the Obligors will not, and
will not permit any of their Subsidiaries to, engage in any transaction with any
Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of any Obligor, any corporation, partnership,
trust or other entity in which any such Affiliate has a substantial interest or
is an officer, director, trustee or partner, on terms more favorable to such
Person than would have been obtainable on an arm's-length basis in the ordinary
course of business.
10.12. Subsidiary Distributions. The Obligors will not, and will not
permit any of their Subsidiaries to, enter into any arrangement or otherwise
become subject to any restriction or requirement which has the effect of
prohibiting or limiting any Subsidiary's ability to make Distributions to the
Obligors.
11. FINANCIAL COVENANTS OF THE BORROWER.
Each of the Obligors covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit:
11.1. Leverage Ratio. The Obligors and their Subsidiaries will not
permit, as at any time during any period described in the table set forth below,
the ratio of Consolidated Funded Debt to Consolidated Tangible Net Worth (the
"Leverage Ratio") to exceed the ratio set forth opposite such period in such
table:
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Fiscal Period Ratio
Closing Date through 6/29/99 4.00:1.00
6/30/99 through 12/30/99 3.50:1.00
12/31/99 and thereafter 3.00:1.00
11.2. Cash Flow Coverage Ratio. The Obligors and their Subsidiaries
will not permit, as at the end of any fiscal quarter of the Obligors ending
during any period described in the table set forth below, the ratio of (a)
Consolidated EBITDA for the period of four consecutive fiscal quarters then
ending to (b) the sum of (1) Consolidated Total Interest Expense for such period
plus (2) scheduled principal payments with respect to Consolidated Funded Debt
(including capitalized lease payments) due and payable during such period to be
less than the ratio set forth opposite such period in such table:
Fiscal Period Ratio
Closing Date through 6/30/99 1.20:1.00
7/01/99 and thereafter 1.50:1.00
provided, that, scheduled principal payments with respect to Consolidated Funded
Debt shall be deemed to include an amount equal to twenty percent 20% of the sum
of (A) outstanding Revolving Credit Loans plus (B) Unpaid Reimbursement
Obligations as at the end of such fiscal quarter.
11.3. Interest Coverage Ratio. The Obligors and their Subsidiaries will
not permit, as at the end of any fiscal quarter of the Obligors ending during
any period described in the table set forth below, the ratio of (a) Consolidated
EBITDA for the period of four consecutive fiscal quarters then ending to (b)
Consolidated Total Interest Expense for such period to be less than the ratio
set forth opposite such period in such table:
Period Ratio
Closing Date through 6/30/99 3.00:1.00
7/1/99 and thereafter 4.00:1.00
11.4. Capital Expenditures. The Obligors and their Subsidiaries will
not make, as at the end of any fiscal quarter for the period of four consecutive
fiscal quarters then ending, Capital Expenditures that exceed, in the aggregate,
0.75% of Consolidated Revenues for such period of four consecutive fiscal
quarters.
11.5. Consolidated Net Worth. The Obligors and their Subsidiaries will
not permit Consolidated Net Worth at any time to be less than the sum of (a)
$12,000,000, plus (b) on a cumulative basis, 50% of positive Consolidated Net
Income for each fiscal quarter beginning with the fiscal quarter ended March 31,
1999, plus (c) 100% of the proceeds of any sale by any Borrower of equity
securities issued by such Borrower, minus
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(d) Distributions permitted under ss.10.4 of this Credit
Agreement up to an aggregate of $1,500,000.
12. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and the Term Loan and of the Agent to issue any initial Letters of Credit shall
be subject to the satisfaction of the following conditions precedent:
12.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
12.2. Certified Copies of Charter Documents. Each of the Banks shall
have received from each of the Obligors a copy, certified by a duly authorized
officer of such Person to be true and complete on the Closing Date, of each of
(a) its charter or other incorporation documents as in effect on such date of
certification, and (b) its by-laws as in effect on such date.
12.3. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by each of the Obligors of this Credit
Agreement and the other Loan Documents to which it is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Banks shall have been provided to each of the Banks.
12.4. Incumbency Certificate. Each of the Banks shall have received
from each of the Obligors an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of such Obligor, and giving the name
and bearing a specimen signature of each individual who shall be authorized: (a)
to sign, in the name and on behalf of each of the Obligors, each of the Loan
Documents and Subordination Documents to which such Obligor is or is to become a
party; (b) in the case of the Borrowers, to make Loan Requests and Conversion
Requests and to apply for Letters of Credit; and (c) to give notices and to take
other action on its behalf under the Loan Documents.
12.5. Validity of Liens. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
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12.6. Perfection Certificates and UCC Search Results. The Agent shall
have received from each of the Borrower and its Subsidiaries a completed and
fully executed Perfection Certificate and the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.
12.7. Certificates of Insurance. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreement and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
12.8. Borrowing Base Report. The Agent shall have received from the
Borrowers the initial Borrowing Base Report dated as of the most recent fiscal
month end.
12.9. Accounts Receivable/Contractor Loans Aging Report. The Agent
shall have received from the Borrowers the most recent Accounts Receivable aging
report and Contractor Loans aging report of the Borrowers, both dated as of a
date which shall be no more than fifteen (15) days prior to the Closing Date and
the Borrowers shall have notified the Agent in writing on the Closing Date of
any material deviation from the Accounts Receivable or Contractor Loan values
reflected in the applicable aging report and shall have provided the Agent with
such supplementary documentation as the Agent may reasonably request.
12.10. Solvency Certificate. Each of the Banks shall have received an
officer's certificate of each of the Obligors dated as of the Closing Date as to
the solvency of the Obligors following the consummation of the transactions
contemplated herein and in form and substance satisfactory to the Banks.
12.11. Opinion of Counsel. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Barnes & Thornburg, counsel to the Borrower and its Subsidiaries;
12.12. Payment of Fees. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the Closing Fee pursuant to ss.6.1.
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12.13. Payoff Letter. The Agent shall have received a payoff letter
from KeyBank National Association, indicating the amount of the loan obligations
of the Borrowers to KeyBank National Association to be discharged on the Closing
Date and an acknowledgment by KeyBank National Association that upon receipt of
such funds it will forthwith execute and deliver to the Agent for filing all
termination statements and take such other actions as may be necessary to
discharge all security interests granted by any of the Obligors or any of their
Subsidiaries in favor of KeyBank National Association.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan and of the Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
13.1. Representations True; No Event of Default. Each of the
representations and warranties of any of the Obligors and their Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
13.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
13.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
13.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
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13.5. Borrowing Base Report. The Agent shall have received the most
recent Borrowing Base Report required to be delivered to the Agent in accordance
with ss.9.4(f) and, if requested by the Agent, a Borrowing Base Report dated
within five (5) days of the Drawdown Date of such Loan or of the date of
issuance, extension or renewal of such Letter of Credit.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrowers shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrowers or the Parent, as applicable, shall fail to
pay within two (2) days any interest on the Loans, the commitment fee,
any Letter of Credit Fee, the Agent's fee, or other sums due hereunder
or under any of the other Loan Documents when the same shall become due
and payable, whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(c) any Obligor shall fail to comply with any of its covenants
contained inss.9, 10 or 11;
(d) any Obligor shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other
than those specified elsewhere in this ss.14.1) for fifteen (15) days
after written notice of such failure has been given to the Borrowers by
the Agent;
(e) any representation or warranty of any Obligor in this
Credit Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection with this
Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(f) any Obligor or any of their Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases for amounts which individually or in the aggregate equal or
exceed $25,000, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money or credit received or in respect
of any Capitalized Leases for amounts which individually or in the
aggregate equal or exceed $25,000 for such period of time as would
permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof, or any such holder or holders shall
rescind or shall have a right to rescind the purchase of any such
obligations;
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(g) any Obligor shall make an assignment for the benefit of
creditors, or admit in writing its inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or
apply for the appointment of a trustee or other custodian, liquidator
or receiver of any Obligor or their Subsidiaries or of any substantial
part of the assets of any Obligor or any of their Subsidiaries or shall
commence any case or other proceeding relating to any Obligor or any of
their Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if
any such petition or application shall be filed or any such case or
other proceeding shall be commenced against any Obligor or any of their
Subsidiaries and any Obligor or any of their Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein
or such petition or application shall not have been dismissed within
forty-five (45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Obligor or any of
their Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of any Obligor or any of their Subsidiaries in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against any Obligor or any of their Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Obligors or their Subsidiaries exceeds in the aggregate $500,000;
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of any Obligor or
any of their Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;
(k) any Obligor or any ERISA Affiliate incurs any liability to
the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in
an aggregate amount exceeding $50,000, or any Obligor or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $50,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), provided that the Agent determines in its
reasonable discretion that such event (A) could be expected to result
in liability of any Obligor or any of their Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $50,000
and (B) could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District
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Court of a trustee to administer such Guaranteed Pension Plan or for
the imposition of a lien in favor of such Guaranteed Pension Plan; or
(ii) the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by
the PBGC of proceedings to terminate such Guaranteed Pension Plan;
(l) any Obligor or any of their Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any court
or any administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for more
than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities of the Borrower or any of
its Subsidiaries;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by any Obligor or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of such Obligor
or such Subsidiary;
(o) any Obligor or any of their Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought or threatened against any Obligor or any of
their Subsidiaries, a punishment for which in any such case could
include the forfeiture of any assets of such Obligor or such Subsidiary
included in the Borrowing Base or any assets of such Obligor or such
Subsidiary not included in the Borrowing Base but having a fair market
value in excess of $100,000; or
(p) the Lynch Corporation, or an entity spun off pro-rata to
Lynch Corporation shareholders, Mario Gabelli, and/or other entities
controlled, directly or indirectly, by Mario Gabelli shall at any time,
legally or beneficially, directly or indirectly, have collectively less
than fifty percent (50%) of the voting power of the common stock of the
Parent, as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of the Parent or
the Parent shall cease to own, directly or indirectly, one hundred
percent (100%) of the shares of the common stock of any other Obligor;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrowers declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by each of the Borrowers; provided that in the event of
any Event of Default specified in ss.ss.14.1(g) or 14.1(h), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
14.2. Termination of Commitments. If any one or more of the Events of
Default specified in ss.14.1(g) or ss.14.1(h) shall occur, any
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unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the
Borrowers and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall have
occurred and be continuing, the Agent may and, upon the request of the Majority
Banks, shall, by notice to the Borrowers, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion of the
credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve any Obligor or any of their
Subsidiaries of any of the Obligations.
14.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.14.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
14.4. Distribution of Collateral Proceeds. If following the occurrence
or during the continuance of any Default or Event of Default, the Agent or any
Bank, as the case may be, receives any monies in connection with the enforcement
of any the Security Documents, or otherwise with respect to the realization upon
any of the Collateral, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
(i) distributions shall be made (A) pari passu among Obligations with
respect to the Agent's fee payable pursuant to ss.6.2 and all other
Obligations and (B) with respect to each type of Obligation owing to
the Banks, such as interest, principal, fees and expenses, among the
Banks pro rata, and (ii) the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and
payable;
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(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
15. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrowers and any securities or other property of the Borrowers
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrowers, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against the Borrowers at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by, or Reimbursement Obligations owed to, such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement obligations owed
it, its proportionate payment as contemplated by this Credit Agreement; provided
that if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.
16. THE AGENT.
16.1. Authorization.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an
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independent contractor. The use of the term "Agent" is for convenience
only and is used to describe, as a form of convention, the independent
contractual relationship between the Agent and each of the Banks.
Nothing contained in this Credit Agreement nor the other Loan Documents
shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
16.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers.
16.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
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16.4. No Representations.
16.4.1. General. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or
for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of any Obligor or
any of their Subsidiaries, or be bound to ascertain or inquire as to
the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the
Notes or to inspect any of the properties, books or records of any
Obligor or any of their Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to
it by the Borrowers or any holder of any of the Notes shall have been
duly authorized or is true, accurate and complete. The Agent has not
made nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Banks, with respect to
the credit worthiness or financial conditions of any Obligor or any of
their Subsidiaries. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based upon
such information and documents as it has deemed appropriate, made its
own credit analysis and decision to enter into this Credit Agreement.
16.4.2. Closing Documentation, etc. For purposes of
determining compliance with the conditions set forth in ss.12, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent to
such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Bank, unless an officer of the Agent active
upon the Borrowers' account shall have received notice from such Bank
prior to the Closing Date specifying such Bank's objection thereto and
such objection shall not have been withdrawn by notice to the Agent to
such effect on or prior to the Closing Date.
16.5. Payments.
16.5.1. Payments to Agent. A payment by the Borrowers to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
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16.5.2. Distribution by Agent. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a
court of competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is
to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
16.5.3. Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of ss.15 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of,
their respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
16.6. Holders of Notes. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
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16.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrowers as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
16.8. Agent as Bank. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
16.9. Resignation. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrowers. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a rating of not less than A or its equivalent by Standard &
Poor's Corporation. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
17. EXPENSES AND INDEMNIFICATION.
17.1. Expenses. The Borrowers jointly and severally agree to pay (a)
the reasonable costs of producing and reproducing this Credit Agreement, the
other Loan Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto) payable
by the Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's net income) on or with respect to the transactions contemplated by this
Credit Agreement (the Borrower hereby agreeing to indemnify the Agent and each
Bank with respect thereto), (c) the reasonable fees, expenses and disbursements
of the Agent's Special Counsel or any local counsel to the Agent incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon payment in full in
cash of all of the Obligations or pursuant to any terms of such Loan
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Document for providing for such cancellation, (d) the fees, expenses and
disbursements of the Agent or any of its affiliates incurred by the Agent or
such affiliate in connection with the preparation, syndication, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (e) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or the Agent, and reasonable consulting, accounting, appraisal, investment
banking and similar professional fees and charges) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against any Obligor or any of their Subsidiaries or
the administration thereof after the occurrence of a Default or Event of Default
and (ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with any
Obligor or any of their Subsidiaries and (f) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches,
UCC filings or mortgage recordings.
17.2. Indemnification. Each of the Borrowers agrees to indemnify and
hold harmless the Agent, its affiliates and the Banks from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by any Obligor or any of their Subsidiaries of
the proceeds of any of the Loans or Letters of Credit, (b) any Obligor or any of
their Subsidiaries entering into or performing this Credit Agreement or any of
the other Loan Documents or (b) with respect to any Obligor or any of their
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, each of the
Borrowers agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Borrowers under this
ss.17.2 are unenforceable for any reason, each of the Borrowers hereby agrees to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law.
17.3. Survival. The covenants contained in this ss.17 shall survive
payment or satisfaction in full of all other Obligations.
18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
18.1. Sharing of Information with Section 20 Subsidiary. Each of the
Borrowers acknowledges that from time to time financial advisory, investment
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banking and other services may be offered or provided to any Obligor or one or
more of its Subsidiaries, in connection with this Credit Agreement or otherwise,
by a Section 20 Subsidiary. Each of the Obligors, for itself and each of its
Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary to share with the
Agent and each Bank any information delivered to such Section 20 Subsidiary by
any Obligor or any of their Subsidiaries, and (b) the Agent and each Bank to
share with such Section 20 Subsidiary any information delivered to the Agent or
such Bank by any Obligor or any of their Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
18.2. Confidentiality. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by any Obligor or any of their
Subsidiaries pursuant to this Credit Agreement that is identified by such Person
as being confidential at the time the same is delivered to the Banks or the
Agent, provided that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this ss.18, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in ss.18.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of ss.20.6. Moreover, each of
the Agent, the Banks and any Section 20 Subsidiary is hereby expressly permitted
by the Borrowers to refer to any of the Obligors and their Subsidiaries in
connection with any advertising, promotion or marketing undertaken by the Agent,
such Bank or such Section 20 Subsidiary and, for such purpose, the Agent, such
Bank or such Section 20 Subsidiary may utilize any trade name, trademark, logo
or other distinctive symbol associated with any of the Obligors or any of their
Subsidiaries or any of their businesses.
18.3. Prior Notification. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrowers of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
18.4. Other. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
any Obligor or any of their Subsidiaries. The obligations of each Bank under
this ss.18 shall supersede and replace the obligations of such Bank
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under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrowers prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Loans or Reimbursement Obligations from any Bank.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of any Obligor or any of their Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of any Obligor or any of
their Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by such
Obligor or such Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (a) the
Agent shall have given its prior written consent to such assignment, (b) each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (c) each
assignment shall be in an amount that is a whole multiple of $5,000,000, and (d)
the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit G hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in ss.20.3, be
released from its obligations under this Credit Agreement.
20.2. Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
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(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
any Obligor and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by any Obligor and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.8.4 and ss.9.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
20.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a
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register or similar list (the "Register") for the recordation of the names and
addresses of the Banks and the Commitment Percentage of, and principal amount of
the Revolving Credit Loans owing to and Letter of Credit Participations
purchased by, the Banks from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Banks may treat each Person whose name is recorded in the Register as a Bank
hereunder for all purposes of this Credit Agreement. The Register shall be
available for inspection by the Borrower and the Banks at any reasonable time
and from time to time upon reasonable prior notice. Upon each such recordation,
the assigning Bank agrees to pay to the Agent a registration fee in the sum of
$3,500.
20.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrowers, at their own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.20.4, the Borrowers shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrowers.
20.5. Participations. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) any such sale or participation shall not affect the rights and duties
of the selling Bank hereunder to the Borrowers and (b) the only rights granted
to the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Bank as it relates to such participant, reduce the amount
of any commitment fees or Letter of Credit Fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest.
20.6. Disclosure. Each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat
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in confidence such information unless such information otherwise becomes public
knowledge, (b) not to disclose such information to a third party, except as
required by law or legal process and (c) not to make use of such information for
purposes of transactions unrelated to such contemplated assignment or
participation. For purposes of this ss.20.6 an assignee or participant or
potential assignee or participant may include a counterparty with whom such Bank
has entered into or potentially might enter into a derivative contract
referenced to credit or other risks or events arising under this Credit
Agreement or any other Loan Document.
20.7. Assignee or Participant Affiliated with the Borrower.
If any assignee Bank is an Affiliate of a Borrower, then any such
assignee Bank shall have no right to vote as a Bank hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to ss.14.1 or
ss.14.2, and the determination of the Majority Banks shall for all purposes of
this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans or Reimbursement Obligations.
If any Bank sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is a Borrower or an Affiliate
of a Borrower, then such transferor Bank shall promptly notify the Agent of the
sale of such participation. A transferor Bank shall have no right to vote as a
Bank hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to ss.14.1 or ss.14.2 to the extent that such participation is
beneficially owned by a Borrower or any Affiliate of a Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.
20.8. Miscellaneous Assignment Provisions. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this ss.20 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Credit Agreement (including
all or any portion of its Notes) to any of the twelve Federal Reserve Banks
organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
20.9. Assignment by Borrower. None of the Borrowers shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
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21. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Obligors, at 2746 Old U.S.Route 20 West,
Elkhart, Indiana 46515, Attention: Dennis Duerksen, Chief Financial
Officer, or at such other address for notice as the Borrowers shall
last have furnished in writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Mail Stop:
01-08-01, Boston, Massachusetts 02110, USA, Attention: Katherine A.
Brand, Vice President, or such other address for notice as the Agent
shall last have furnished in writing to the Person giving the notice;
and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
22. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH OF THE
BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH
OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN ss.21. EACH OF
THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
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23. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.27.
26. WAIVER OF JURY TRIAL.
Each of the Obligors hereby waives its right to a jury trial with
respect to any action or claim arising out of any dispute in connection with
this Credit Agreement, the Notes or any of the other Loan Documents, any rights
or obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, each of the Obligors hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. Each of the Obligors
(a) certifies that no representative, agent or attorney of any Bank or the Agent
has represented, expressly or otherwise, that such Bank or the Agent would not,
in the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by any Obligor or any
of their Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrowers and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Notes (other than interest accruing
pursuant to ss.6.11.2 following the effective date of any waiver by the Majority
Banks of the Default or Event of Default relating thereto) or the amount of the
commitment fee or Letter of Credit Fees may not be decreased without the written
consent of each Bank affected thereby; the amount of the Commitments
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may not be increased without the written consent of the Borrowers and of each
Bank affected thereby; the Term Out Date and the Maturity Date may not be
postponed without the written consent of each Bank affected thereby; this ss.27
and the definition of Majority Banks may not be amended, without the written
consent of all of the Banks; and the amount of the Agent's Fee or any Letter of
Credit Fees payable for the Agent's account and ss.16 may not be amended without
the written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances.
28. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
MORGAN DRIVE AWAY, INC.
By: /s/ Dennis R. Duerksen
Name: Dennis R. Duerksen
Title: CFO
TDI, INC.
By: /s/ Dennis R. Duerksen
Name: Dennis R. Duerksen
Title: CFO
THE MORGAN GROUP, INC.
By: /s/ Dennis R. Duerksen
Name: Dennis R. Duerksen
Title: CFO
MORGAN FINANCE, INC.
By: /s/ Dennis R. Duerksen
Name: Dennis R. Duerksen
Title: CFO
BANKBOSTON, N.A., individually
and as Agent
By: /s/ Katherine A. Brand
Katherine A. Brand
Vice President