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EX-10(i)
CREDIT AGREEMENT
BY AND BETWEEN
OIL-DRI CORPORATION OF AMERICA
AND
HARRIS TRUST AND SAVINGS BANK
DATED AS OF SEPTEMBER 21, 1994
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TABLE OF CONTENTS
SECTION DESCRIPTION PAGE
SECTION 1. THE CREDITS 1
Section 1.1. Revolving Credit 1
Section 1.2. Term Loan 1
Section 1.3. Manner and Disbursement of Loans 2
SECTION 2. INTEREST ON REVOLVING CREDIT LOANS AND CHANGE IN
CIRCUMSTANCES
Section 2.1. Interest Rate Options 3
Section 2.2. Computation of Interest 3
Section 2.3. Manner of Rate Selection 4
Section 2.4. Change of Law 4
Section 2.5. Unavailability of Deposits or Inability to 4
Ascertain Adjusted LIBOR 4
Section 2.6. Taxes and Increased Costs 5
Section 2.7. Funding Indemnity 6
Section 2.8. Lending Branch 6
Section 2.9. Discretion of Bank as to Manner of Funding 6
SECTION 3. COMPENSATING BALANCES, PREPAYMENTS, TERMINATIONS,
EXTENSIONS, APPLICATIONS AND CAPITAL ADEQUACY 7
Section 3.1. Compensating Balances 7
Section 3.2. Voluntary Prepayments 7
Section 3.3. Terminations 8
Section 3.4. Extensions of the Revolving Credit Commitment 8
Section 3.5. Place and Application of Payments 8
Section 3.6. Notations 8
Section 3.7. Change in Capital Adequacy Requirements 9
SECTION 4. DEFINITIONS; INTERPRETATION 9
Section 4.1. Definitions 9
Section 4.2. Interpretation 15
SECTION 5. REPRESENTATIONS AND WARRANTIES 15
Section 5.1. Organization and Qualification 15
Section 5.2. Subsidiaries 15
Section 5.3. Corporate Authority and Validity of
Obligations 16
Section 5.4. Use of Proceeds; Margin Stock 16
Section 5.5. Financial Reports 17
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Section 5.6. No Material Adverse Change 17
Section 5.7. Full Disclosure 17
Section 5.8. Good Title 17
Section 5.9. Litigation and Other Controversies 17
Section 5.10. Taxes 17
Section 5.11. Approvals 18
Section 5.12. Affiliate Transactions 18
Section 5.13. Investment Company; Public Utility Holding Company 18
Section 5.14. ERISA 18
Section 5.15. Compliance with Laws 18
Section 5.16. Other Agreements 19
Section 5.17. No Default 19
SECTION 6. CONDITIONS PRECEDENT 19
Section 6.1. All Advances. 19
Section 6.2. Initial Advance 19
SECTION 7. COVENANTS 20
Section 7.1. Maintenance of Business 20
Section 7.2. Maintenance of Properties 21
Section 7.3. Taxes and Assessments 21
Section 7.4. Insurance 21
Section 7.5. Financial Reports 21
Section 7.6. Inspection 23
Section 7.7. Tangible Net Worth 23
Section 7.8. Leverage Ratio 23
Section 7.9. Liens 23
Section 7.10. Investments, Loans, Advances and Guaranties 24
Section 7.11. Mergers, Consolidations and Sales 25
Section 7.12. Maintenance of Subsidiaries 25
Section 7.13. ERISA 25
Section 7.14. Compliance with Laws 26
Section 7.15. Burdensome Contracts With Affiliates 26
Section 7.16. Change in the Nature of Business 26
SECTION 8. EVENTS OF DEFAULT AND REMEDIES 26
Section 8.1. Events of Default. 26
Section 8.2. Non-Bankruptcy Defaults. 28
Section 8.3. Bankruptcy Defaults 28
SECTION 9. MISCELLANEOUS 29
Section 9.1. Holidays 29
Section 9.2. No Waiver, Cumulative Remedies 29
Section 9.3. Amendments, Etc 29
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Section 9.4. Costs and Expenses 29
Section 9.5. Documentary Taxes 29
Section 9.6. Survival of Representations 30
Section 9.7. Survival of Indemnities 30
Section 9.8. Notices 30
Section 9.9. Personal Jurisdiction 31
Section 9.10. Waiver of Jury Trial 32
Section 9.11. Construction 32
Section 9.12. Headings 32
Section 9.13. Severability of Provisions 32
Section 9.14. Counterparts 32
Section 9.15. Binding Nature, Governing Law, Etc. 32
Signature 33
Exhibit A - Revolving Credit Note
Exhibit B - Term Loan Note
Exhibit C - Compliance Certificate
Schedule 5.2 - Subsidiaries
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OIL-DRI CORPORATION OF AMERICA
CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
Ladies and Gentlemen:
The undersigned, Oil-Dri Corporation of America, a Delaware
corporation (the "Company"), applies to you (the "Bank") for your commitment,
subject to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, to make a revolving
credit (the "Revolving Credit") and a term loan available to the Company, all
as more fully hereinafter set forth.
Section 1. The Credits.
Section 1.1. Revolving Credit. Subject to the terms and conditions
hereof, the Bank agrees to extend a Revolving Credit to the Company which may
be availed of by the Company from time to time during the period from and
including the date hereof to but not including the Termination Date, at which
time the commitment of the Bank to extend credit under the Revolving Credit
shall expire. The Revolving Credit may be utilized by the Company in the form
of loans (individually a "Revolving Credit Loan" and collectively the
"Revolving Credit Loans"), provided that the aggregate principal amount of
Revolving Credit Loans outstanding at any one time shall not exceed $5,000,000
(the "Revolving Credit Commitment", as such amount may be reduced pursuant to
Section 3.3 hereof). Each Revolving Credit Loan shall be in a minimum amount
of $200,000 or such greater amount which is an integral multiple of $100,000.
Each Revolving Credit Loan shall be made against and evidenced by a single
promissory note of the Company in the form (with appropriate insertions)
attached hereto as Exhibit A (the "Revolving Credit Note") payable to the
order of the Bank in the principal amount of $5,000,000. The Revolving Credit
Note shall be dated the date of issuance thereof, be expressed to bear interest
as set forth in Section 2 hereof, and be expressed to mature on the Termination
Date. Without regard to the principal amount of the Revolving Credit Note
stated on its face, the actual principal amount at any time outstanding and
owing by the Company on account of the Revolving Credit Note shall be the sum
of all Revolving Credit Loans made under this Section less all payments of
principal actually received by the Bank. During the period from and including
the date hereof to but not including the Termination Date, the Company may use
the Revolving Credit Commitment by borrowing, repaying and reborrowing
Revolving Credit Loans in whole or in part, all in accordance with the terms
and conditions of this Agreement.
Section 1.2. Term Loan. Subject to the terms and conditions hereof,
the Bank also agrees to make a term loan (the "Term Loan") concurrently herewith
to the Company in a single advance in the principal amount of $5,000,000.
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The Term Loan shall be made against the evidenced by a single promissory
note of the Company in the form (with appropriate insertions) attached hereto as
Exhibit B (the "Term Note") dated the date of issuance thereof and payable to
the order of the Bank in the original principal amount of the Term Loan.
The Term Note shall be issued in substitution and replacement for, and
shall evidence the unpaid principal balance of that certain Promissory Note of
the Company dated April 20, 1994 payable to the order of the Bank in the face
principal amount of $5,000,000 (the "Present Note"). Upon the execution and
delivery to the Bank of the Term Note, the Present Note shall be deemed
cancelled without further action by the Company or the Bank.
The Term Note shall be expressed to bear interest (computed on the
basis of a year of 360 days for the actual number of days elapsed) on the
unpaid principal amount thereof from the date the Term Loan is made until
maturity (whether by lapse of time, acceleration or otherwise) at the rate per
annum equal at all times to 7.78% and after maturity until paid in full at the
rate per annum equal at all times to 10.78%. Interest on the Term Loan prior
to maturity shall be payable quarterly in arrears on the last day of each
March, June, September and December in each year (commencing September 30,
1994) and at maturity. Interest after maturity shall be due and payable upon
demand. The Term Note shall be expressed to mature in six installments,
commencing on June 20, 1996 and continuing on June 21, 1999 and on the 20th day
of June in the years 2000, 2001, 2002 and 2003, with the first installment in
the amount of $500,000, the second installment in the amount of $1,950,000, the
third installment in the amount of $900,000, the fourth and fifth installments
each in the amount of $650,000 and the last such installment in the full amount
of the then unpaid balance of the Term Note. No amount paid or prepaid on the
Term Note may be reborrowed.
Section 1.3. Manner and Disbursement of Loans. The Company shall give
written or telephonic notice to the Bank (which notice shall be irrevocable once
given and, if given by telephone, shall be promptly confirmed in writing) by no
later than 11:00 a.m. (Chicago time) on the date the Company requests the Bank
to make a Revolving Credit Loan hereunder; provided, however, that telephonic
notice may only be given by a Class A Authorized Representative. Each such
notice shall specify (i) the date of the Revolving Credit Loan requested (which
must be a Business Day) and (ii) and the amount of such Revolving Credit Loan.
The Company agrees that the Bank may rely upon any written or telephonic notice
given by any person the Bank reasonably and in good faith believes is an
Authorized Representative without the necessity of independent investigation
and, in the event any telephonic notice conflicts with the written confirmation,
such notice shall govern if the Bank has acted in reasonable reliance thereon.
Subject to the provisions of Section 6 hereof, the proceeds of each Loan shall
be made available to the Company at the principal office of the Bank in Chicago,
Illinois, in immediately available funds. Each Revolving Credit Loan shall
initially constitute part of the Domestic Rate Portion except to the extent the
Company has otherwise timely elected as provided in Section 2 hereof.
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SECTION 2. INTEREST ON REVOLVING CREDIT LOANS AND CHANGE IN
CIRCUMSTANCES.
Section 2.1. Interest Rate Options. (a) Subject to all of the terms
and conditions of this Section 2, portions of the principal indebtedness
evidenced by the Revolving Credit Note (all of the indebtedness evidenced by the
Revolving Credit Note bearing interest at the same rate for the same period of
time being hereinafter referred to as a "Portion") may, at the option of the
Company, bear interest with reference to the Domestic Rate (the "Domestic Rate
Portion") or with reference to an Adjusted LIBOR ("LIBOR Portions") and Portions
may be converted from time to time from one basis to the other. All of the
indebtedness evidenced by the Revolving Credit Note which is not part of a LIBOR
Portion shall constitute a single Domestic Rate Portion. All of the indebtedness
evidenced by the Revolving Credit Note which bears interest with reference to a
particular Adjusted LIBOR for a particular Interest Period shall constitute a
single LIBOR Portion. There shall not be more than eight (8) LIBOR Portions
applicable to the Revolving Credit Note outstanding at any one time. Anything
contained herein to the contrary notwithstanding, the obligation of the Bank to
create, continue or effect by conversion any LIBOR Portion shall be conditioned
upon the fact that at the time no Default or Event of Default shall have
occurred and be continuing. The Company hereby promises to pay interest on each
Portion at the rates and times specified in this Section 2.
(b) Domestic Rate Portion. The Domestic Rate Portion shall bear
interest at the rate per annum equal to the Domestic Rate as in effect from
time to time, provided that if the Domestic Rate Portion or any part thereof is
not paid when due (whether by lapse of time, acceleration or otherwise) such
Portion shall bear interest, whether before or after judgment, until payment in
full thereof at the rate per annum determined by adding 2% to the interest rate
which would otherwise be applicable thereto from time to time. Interest on the
Domestic Rate Portion shall be payable quarter-annually on the last day of each
March, June, September and December, in each year (commencing September 30,
1994) and at maturity of the Revolving Credit Note and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall be due and payable
upon demand. Any change in the interest rate on the Domestic Rate Portion
resulting from a change in the Domestic Rate shall be effective on the date of
the relevant change in the Domestic Rate.
(c) LIBOR Portions. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at a rate per annum determined by adding 1/2
of 1% to the Adjusted LIBOR for such Interest Period, provided that if any LIBOR
Portion is not paid when due (whether by lapse of time, acceleration or
otherwise) such Portion shall bear interest, whether before or after judgment,
until payment in full thereof through the end of the Interest Period then
applicable thereto at the rate per annum determined by adding 2-1/2% to the
interest rate which would otherwise be applicable thereto, and effective at the
end of such Interest Period such LIBOR Portion shall automatically be converted
into and added to the Domestic Rate Portion and shall thereafter bear interest
at the interest rate applicable to the Domestic Rate Portion after default.
Interest on each LIBOR Portion shall be due and payable on the last day of each
Interest Period applicable thereto and, with respect to any Interest Period
applicable to a LIBOR Portion in excess of three (3) months, on the date
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occurring every three (3) months after the date such Interest
Period began and at the end of such Interest Period, and interest after
maturity (whether by lapse of time, acceleration or otherwise) shall be
due and payable upon demand. The Company shall notify the Bank on or
before 11:00 a.m. (Chicago time) on the third Business Day preceding the end
of an Interest Period applicable to a LIBOR Portion whether such LIBOR
Portion is to continue as a LIBOR Portion, in which event the Company shall
notify the Bank of the new Interest Period selected therefor, and in the
event the Company shall fail to so notify the Bank, such LIBOR Portion
shall automatically be converted into and added to the Domestic Rate
Portion as of and on the last day of such Interest Period. Each LIBOR
Portion shall be in a minimum amount of $500,000 or such greater amount which
is an integral multiple of $100,000.
Section 2.2. Computation of Interest. All interest on the Revolving
Credit Note shall be computed on the basis of a year of 360 days for the actual
number of days elapsed.
Section 2.3. Manner of Rate Selection. The Company shall notify the
Bank by 11:00 a.m. (Chicago time) at least three (3) Business Days prior to the
date upon which the Company requests that any LIBOR Portion be created or that
any part of the Domestic Rate Portion be converted into a LIBOR Portion (each
such notice to specify in each instance the amount thereof and the Interest
Period selected therefor). If any request is made to convert a LIBOR Portion
into the Domestic Rate Portion, such conversion shall only be made so as to
become effective as of the last day of the Interest Period applicable thereto.
All requests for the creation, continuance and conversion of Portions under this
Agreement shall be irrevocable. Such requests may be written or oral and the
Bank is hereby authorized to honor telephonic requests for creations,
continuances and conversions received by it from any person the Bank reasonably
and in good faith believes to be a Class A Authorized Representative without the
need of independent investigation, the Company hereby indemnifying the Bank from
any liability or loss ensuing from so acting.
Section 2.4. Change of Law. Notwithstanding any other provisions of
this Agreement or the Revolving Credit Note, if at any time the Bank shall
determine reasonably and in good faith that any change in applicable laws,
treaties or regulations or in the interpretation thereof makes it unlawful for
the Bank to create or continue to maintain any LIBOR Portion, it shall promptly
so notify the Company and the obligation of the Bank to create, continue or
maintain any such LIBOR Portion under this Agreement shall terminate until it is
no longer unlawful for the Bank to create, continue or maintain such LIBOR
Portion. The Company, on demand, shall, if the continued maintenance of any
such LIBOR Portion is unlawful, thereupon prepay the outstanding principal
amount of the affected LIBOR Portion, together with all interest accrued thereon
and all other amounts payable to the Bank with respect thereto under this
Agreement; provided, however, that the Company may elect to convert the
principal amount of the affected LIBOR Portion into the Domestic Rate Portion,
subject to the terms and conditions of this Agreement.
Section 2.5. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR. Notwithstanding any other provision of this Agreement or the
Revolving Credit Note, if prior to the commencement of any Interest Period, the
Bank shall determine reasonably and
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in good faith that deposits in the amount of any LIBOR
Portion scheduled to be outstanding during such Interest Period are not
readily available to the Bank in the interbank eurodollar market or, by
reason of circumstances affecting the interbank eurodollar market, adequate
and reasonable means do not exist for ascertaining Adjusted LIBOR,
then the Bank shall promptly give notice thereof to the Company and the
obligations of the Bank to create, continue or effect by conversion any such
LIBOR Portion in such amount and for such Interest Period shall
terminate until deposits in such amount and for the Interest Period selected by
the Company shall again be readily available in the interbank eurodollar
market and adequate and reasonable means exist for ascertaining Adjusted
LIBOR.
Section 2.6. Taxes and Increased Costs. With respect to any LIBOR
Portion, if the Bank shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over the Bank or its lending branch or the LIBOR Portions
contemplated by this Agreement (whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special deposit
or similar requirement against assets held by, or deposits in or for the
account of, or loans by, or any other acquisition of funds or disbursements
by, the Bank which is not in any instance already accounted for in
computing the Adjusted LIBOR
(ii) subject the Bank, any LIBOR Portion or the Revolving Credit
Note to the extent it evidences such a Portion to any tax (including,
without limitation, any United States interest equalization tax or
similar tax however named applicable to the acquisition or holding of debt
obligations and any interest or penalties with respect thereto), duty,
charge, stamp tax, fee, deduction or withholding in respect of
this Agreement, any LIBOR Portion or the Revolving Credit Note to the
extent it evidences such a Portion, except such taxes as may be measured by
the overall net income or gross receipts of the Bank or its lending
branches and imposed by the jurisdiction, or any political subdivision or
taxing authority thereof, in which the Bank's principal executive office
or its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from the Company to the Bank hereunder or under the
Revolving Credit Note to the extent it evidences any LIBOR Portion
(other than by a change in taxation of the overall net income or
gross receipts of the Bank); or
(iv) impose on the Bank any penalty with respect to the
foregoing or any other condition regarding this Agreement, its disbursement,
any LIBOR Portion or the Revolving Credit Note to the extent it evidences
any LIBOR Portion;
and the Bank shall determine reasonably and in good faith that the
result of any of the foregoing is to increase the cost (whether by incurring a
cost or adding to a cost) to the
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Bank of creating or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by the Bank (without
benefit of, or credit for, any prorations, exemption, credits or other
offsets available under any such laws, treaties, regulations, guidelines or
interpretations thereof), then the Company shall pay on demand to the Bank from
time to time as specified by the Bank such additional amounts as are sufficient
to compensate and indemnify it for such increased cost or reduced amount. If
the Bank makes such a claim for compensation, it shall provide to the Company a
certificate setting forth the computation of the increased cost or reduced
amount as a result of any event mentioned herein in reasonable detail and such
certificate shall be prima facie correct.
Section 2.7. Funding Indemnity. In the event the Bank shall incur
any loss, cost or expense (including, without limitation, any loss (including
loss of profit), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired or contracted to be acquired by
the Bank to fund or maintain any LIBOR Portion or the relending or reinvesting
of such deposits or other funds or amounts paid or prepaid to the Bank) as a
result of:
(i) any payment of a LIBOR Portion on a date other than the last day
of the then applicable Interest Period for any reason, whether before or
after default, and whether or not such payment is required by any
provisions of this Agreement, but in any event excluding such a payment to
the extent required by Section 2.4 hereof; or
(ii) any failure by the Company to create, borrow, continue or
effect by conversion a LIBOR Portion on the date specified in a notice
given pursuant to this Agreement unless such failure results from the Bank's
inability or unwillingness pursuant to Sections 2.4 or 2.5 hereof to create,
continue or effect by conversion such LIBOR Portions;
then upon the demand of the Bank, the Company shall pay to the
Bank such amount as will reimburse the Bank for such loss, cost or expense.
If the Bank requests such a reimbursement, it shall provide to the
Company a certificate setting forth the computation of the loss, cost or
expense giving rise to the request for reimbursement in reasonable detail
and such certificate shall be prima facie correct.
Section 2.8. Lending Branch. The Bank may, at its option, elect to
make, fund or maintain Portions of the Revolving Credit Loans hereunder at such
of its branches or offices as the Bank may from time to time elect. To the
extent reasonably possible, the Bank shall designate an alternate branch or
funding office with respect to the LIBOR Portions to reduce any liability of the
Company to the Bank under Section 2.6 hereof or to avoid the unavailability of
an interest rate option under Section 2.5 hereof, so long as such designation is
not otherwise disadvantageous to the Bank.
Section 2.9. Discretion of Bank as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, the Bank shall
be entitled to fund and maintain its funding of all or any part of the Revolving
Credit Note in any manner it sees fit, it being understood, however, that for
the purposes of this Agreement all determinations hereunder
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(including, without limitation, determinations under Sections 2.5, 2.6
and 2.7 hereof) shall be made as if the Bank had actually funded and maintained
each LIBOR Portion during each Interest Period applicable thereto through the
purchase of deposits in the interbank eurodollar market in the amount of such
LIBOR Portion, having a maturity corresponding to such Interest Period, and
bearing an interest rate equal to the LIBOR for such Interest Period.
SECTION 3. COMPENSATING BALANCES, PREPAYMENTS, TERMINATIONS, EXTENSIONS,
APPLICATIONS AND CAPITAL ADEQUACY.
Section 3.1. Compensating Balances. The Company shall maintain with
the Bank a daily average deposit balance of at least $100,000.
Section 3.2. Voluntary Prepayments. (a) Term Loan. If the Company
prepays any principal amount of the Term Loan before its scheduled due date
(whether as the result of an acceleration, voluntary prepayment, or otherwise),
the Company shall pay to the Bank a funding indemnity equal to the cost to the
Bank of then acquiring an interest rate swap agreement (or an equivalent
instrument or instruments) with another interest rate swap dealer of the highest
credit standing in a notional principal amount equal to the amount of such
prepayment (including any scheduled amortization of such amount) to the
scheduled due date of such prepaid principal amount under which the Bank would
pay quarter-annually a floating rate of interest based upon three month LIBOR
and such other dealer would pay to the Bank on the regularly scheduled interest
payment dates for the Term Loan a fixed rate of interest equal to the interest
rate on the Term Loan.
(b) Domestic Rate Portions. The Company shall have the privilege of
prepaying without premium or penalty and in whole or in part (but if in part,
then in an amount not less than $200,000) the Domestic Rate Portion of the
Revolving Credit Note at any time upon notice to the Bank prior to 11:00 a.m.
(Chicago time) on the date fixed for prepayment, each such prepayment to be made
by the payment of the principal amount to be prepaid and accrued interest
thereon to the date of prepayment.
(c) LIBOR Portion. Except as otherwise required by Section 2.4 hereof,
the Company may prepay any LIBOR Portion of the Revolving Credit Note only on
the last date of the then applicable Interest Period, in whole or in part (but
if in part, then in an amount not less than $500,000 or such greater amount
which is an integral multiple of $100,000), upon three (3) Business Days' prior
notice to the Bank (which notice shall be irrevocable once given, must be
received by the Bank no later than 11:00 a.m. (Chicago time) on the third
Business Day preceding the date of such prepayment, and shall specify the
principal amount to be repaid); provided, however, that the outstanding
principal amount of any LIBOR Portion of the Revolving Credit Note prepaid in
part shall not be less than $500,000 or such greater amount which is an integral
multiple of $100,000 after giving effect to such prepayment. Any such
prepayment shall be effected by payment of the principal amount to be prepaid
and accrued interest thereon to the end of the applicable Interest Period.
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Section 3.3. Terminations. The Company shall have the right at any
time and from time to time, upon three (3) Business Days' prior notice to the
Bank, to terminate without premium or penalty and in whole or in part (but if in
part, then in an amount not less than $500,000) the Revolving Credit Commitment,
provided that the Revolving Credit Commitment may not bereduced to an amount
less than the aggregate principal amount of the Revolving Credit Loans then
outstanding. Any termination of the Revolving Credit Commitment pursuant to
this Section may not be reinstated.
Section 3.4. Extensions of the Revolving Credit Commitment. The
Termination Date (as the same may have been extended pursuant to this Section
3.4) shall be extended for additional one year periods (but not beyond August 1,
1999) unless either party hereto notifies the other in writing no later than
June 30th preceding the Termination Date then in effect of its intention not to
extend the Revolving Credit Commitment. It is specifically understood that the
Bank may, in its sole discretion, choose not to extend the Termination Date. If
the Termination Date is extended pursuant to this Section 3.4, the Company and
the Bank shall enter into such documents as the Bank may reasonably deem
necessary or appropriate to reflect such extension, all reasonable costs and
expenses incurred by the Bank in connection therewith to be paid by the Company.
Section 3.5. Place and Application of Payments. All payments of
principal, interest, fees and all other Obligations payable hereunder and under
the other Loan Documents shall be made to the Bank at its office at 111 West
Monroe Street, Chicago, Illinois (or at such other place as the Bank may
specify) no later than 11:00 a.m. (Chicago time) on the date any such payment
is due and payable. Payments received by the Bank after 11:00 a.m. (Chicago
time) shall be deemed received as of the opening of business on the next
Business Day. All such payments shall be made in lawful money of the United
States of America, in immediately available funds at the place of payment,
without setoff or counterclaim and without reduction for, any and all present
or future taxes, levies, imposts, duties, fees, charges, deductions,
withholdings, restrictions and conditions of any nature imposed by any
government or any political subdivision or taxing authority thereof (but
excluding any taxes imposed on or measured by the net income or gross receipts
of the Bank). Unless the Company otherwise directs, principal payments shall be
first applied to the Term Note until payment in full thereof, then to the
Domestic Rate Portion of the Revolving Credit Note until payment in full
thereof, with any balance applied to the LIBOR Portions of the Revolving Credit
Note in the order in which their Interest Periods expire.
Section 3.6. Notations. All Loans made against the Notes, the status
of all amounts evidenced by the Revolving Credit Note as constituting part of
the Domestic Rate Portion or a LIBOR Portion and the rates of interest and
Interest Periods applicable thereto shall be recorded by the Bank on its books
and records or, at its option in any instance, endorsed on a schedule to the
Notes and the unpaid principal balance and status, rates and Interest Periods so
recorded or endorsed by the Bank shall be evidence in any court or other
proceeding brought to enforce the Notes of the principal amount remaining unpaid
thereon, the status of the Loans evidenced thereby and the interest rates and
Interest Periods applicable thereto; provided that the failure of the Bank to
record any of the foregoing shall not limit or otherwise affect the obligation
of the Company to repay the principal amount of such Note
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together with accrued interest thereon. Prior to any negotiation of the
Revolving Credit Note, the Bank shall record on a schedule thereto the status of
all amounts evidenced thereby as constituting part of the Domestic Rate Portion
or a LIBOR Portion and the rates of interest and the Interest Periods applicable
thereto.
Section 3.7. Change in Capital Adequacy Requirements. If the Bank
shall determine that the adoption after the date hereof of any applicable law,
rule or regulation regarding capital adequacy of banks generally, or any change
in any existing law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Bank (or any of its branches) with any request or directive regarding
capital adequacy of banks generally (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Revolving Credit or on the Bank's
capital as a consequence of its obligations hereunder with respect to the
Revolving Credit to a level below that which the Bank could have achieved but
for such adoption, change or compliance (taking into consideration the Bank's
policies with respect to liquidity and capital adequacy) by an amount deemed by
the Bank to be material, then from time to time, within fifteen (15) days after
demand by the Bank, the Company shall pay to the Bank such additional amount or
amounts reasonably determined by the Bank as will compensate the Bank for such
reduction.
SECTION 4. DEFINITIONS, INTERPRETATION.
Section 4.1. Definitions. The following terms when used herein shall
have the following meanings:
"Adjusted LIBOR" means a rate per annum determined by the Bank in
accordance with the following formula:
Adjusted LIBOR = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" means, for the purpose of computing Adjusted LIBOR,
the maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this
definition, LIBOR Portions shall be deemed to be Eurocurrency liabilities as
defined in Regulation D without benefit of or credit for prorations, exemptions
or offsets under Regulation D. "LIBOR" means, for each Interest Period, (a) the
LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if
the LIBOR Index Rate cannot be determined, the arithmetic average of the rate of
interest per annum (rounded upward, if necessary, to the nearest 1/100th of
1%) at which
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deposits in U.S. Dollars in immediately available funds are
offered to the Bank at 11:00 a.m. (London, England time) two Business
Days before the beginning of such Interest Period by major banks in the
interbank eurodollar market for a period equal to such Interest Period and in
an amount equal or comparable to the applicable LIBOR Portion scheduled to be
outstanding from the Bank during such Interest Period. "LIBOR Index Rate"
means, for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the Telerate Page 3750 as of 11:00 (London, England time) on the day
two Business Days before the commencement of such Interest Period. "Telerate
Page 3750" means the display designated as "Page 3750" on the Telerate Service
(or such other page as may replace Page 3750 on that service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits). Each determination of
LIBOR made by the Bank shall be conclusive and binding absent manifest error.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Acquisition" means (i) the acquisition of all or any substantial part
of the assets, property or business of any other person, firm or corporation or
(ii) any acquisition of a majority of the common stock or other equity
securities of any firm or corporation.
"Authorized Representative" means those persons identified as either a
Class A Authorized Representative or a Class B Authorized Representative.
"Bank" is defined in the introductory paragraph hereof.
"Business Day" means any day other than a Saturday or Sunday on which
the Bank is not authorized or required to close in Chicago, Illinois and, when
used with respect to LIBOR Portions, a day on which the Bank is also dealing in
United States Dollar deposits in London, England and Nassau, Bahamas.
"Capital Lease" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown
on the balance sheet of any Person in respect of a Capital Lease as determined
in accordance with GAAP.
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"Class A Authorized Representative" means those persons shown on the
list of officers provided by the Company pursuant to Section 6.2(a) hereof and
so designated on such list, or on any update of any such list provided by the
Company to the Bank, or any further or different officer of the Company so named
and designated by any Class A Authorized Representative of the Company in a
written notice to the Bank.
"Class B Authorized Representative" means those persons shown on the
list of officers provided by the Company pursuant to Section 6.2(a) hereof and
so designated on such list, or on any update of any such list provided by the
Company to the Bank, or any further or different officer of the Company so named
and designated by any Class A or Class B Authorized Representative of the
Company in a written notice to the Bank.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Company" is defined in the introductory paragraph hereof.
"Controlled Group" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated) under
common control which, together with the Company or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Domestic Rate" means, for any day, the greater of (i) the rate of
interest announced by the Bank from time to time as its prime commercial rate,
as in effect on such day; and (ii) the sum of (x) the rate determined by the
Bank to be the average (rounded upwards, if necessary, to the next higher 1/100
of 1%) of the rates per annum quoted to the Bank at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Bank for the sale to the Bank
at face value of Federal funds in an amount equal or comparable to the principal
amount owed to the Bank for which such rate is being determined, plus (y) 1/2 of
1% (0.50%).
"Domestic Rate Portion" is defined in Section 2.1(a) hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Event of Default" means any event or condition identified as such in
Section 8.1 hereof.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Subsidiaries on a basis
consistent with the preparation
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of the Company's most recent financial statements furnished to the Bank
pursuant to Section 5.5 hereof.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business which are not more than 120 days past due), (iii) all indebtedness
secured by any Lien upon Property of such Person, whether or not such Person has
assumed or become liable for the payment of such indebtedness, (iv) all
Capitalized Lease Obligations of such Person and (v) all obligations of such
Person on or with respect to letters of credit, bankers' acceptances and other
extensions of credit whether or not representing obligations for borrowed money.
"Interest Period" means, with respect to any LIBOR Portion, the period
commencing on, as the case may be, the creation, continuation or conversion
date with respect to such LIBOR Portion and ending one (1), two (2), three (3)
or six (6) months thereafter as selected by the Company in its notice as
provided herein; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
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 Business Day;
(ii) no Interest Period may extend beyond the final maturity date
of the Revolving Credit Note;
(iii) the interest rate to be applicable to each Portion for each
Interest Period shall apply from and including the first day of such
Interest Period to but excluding the last day thereof; and
(iv) no Interest Period may be selected if after giving effect
thereto the Company will be unable to make a principal payment scheduled to
be made during such Interest Period without paying part of a LIBOR
Portion on a date other than the last day of the Interest Period applicable
thereto.
For purposes of determining an Interest Period, a month means a period
starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month, provided, however, if an Interest
Period begins on the last day of a month or if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"LIBOR Portions" is defined in Section 2.1(a) hereof.
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"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means a Revolving Credit Loan or the Term Loan, unless the
context in which such term is used shall otherwise require.
"Loan Documents" means this Agreement and the Notes.
"Material Plan" is defined in Section 8.1(g) hereof.
"Net Income" means, with reference to any period, the net income (or net
loss) of the Company and its Subsidiaries for such period as computed on a
consolidated basis in accordance with GAAP, and, without limiting the foregoing,
after deduction from gross income of all expenses and reserves, including
reserves for all taxes on or measured by income, but excluding any extraordinary
profits and also excluding any taxes on such profits.
"Note" means the Revolving Credit Note or the Term Note, unless the
context in which such term is used shall otherwise require.
"Obligations" means all obligations of the Company to pay principal and
interest on the Loans, all fees and charges payable hereunder, and all other
payment obligations of the Company arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (i) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Portion" is defined in Section 2.1(a) hereof.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
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"Revolving Credit" is defined in Section 1.1 hereof.
"Revolving Credit Commitment" is defined in Section 1.1 hereof.
"Revolving Credit Note" is defined in Section 1.1 hereof.
"Subsidiary" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Company, by one or more of its
Subsidiaries, or by the Company and one or more of its Subsidiaries.
"Tangible Net Worth" means, as of any time the same is to be determined,
the total shareholders' equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock) which
would appear on the balance sheet of the Company and its Subsidiaries determined
on a consolidated basis in accordance with GAAP, less the sum of (i) all notes
receivable in excess of $1,000,000 from officers and employees of the Company
and its Subsidiaries, (ii) the aggregate book value of all assets which would be
classified as intangible assets under GAAP, including, without limitation,
goodwill, patents, trademarks, trade names, copyrights, franchises and deferred
charges (including, without limitation, unamortized debt discount and expense,
organization costs and deferred research and development expense) and similar
assets and (iii) the write-up of assets above cost.
"Term Loan" is defined in Section 1.2 hereof.
"Term Note" is defined in Section 1.2 hereof.
"Termination Date" means August 1, 1997, or such earlier date on which
the Revolving Credit Commitment is terminated in whole pursuant to Section 3.3,
8.2 or 8.3 hereof or such later date to which the Revolving Credit Commitment is
extended pursuant to Section 3.4 hereof.
"Total Liabilities" means, as of any time the same is to be determined,
the aggregate of all indebtedness, obligations, liabilities, reserves and any
other items which would be listed as a liability on a balance sheet of the
Company and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, and in any event including all indebtedness and liabilities of any
other Person which the Company or any Subsidiary may guarantee or otherwise be
responsible or liable for (other than any liability arising out of the
endorsement of commercial paper for deposit or collection received in the
ordinary course of business), all indebtedness and liabilities secured by any
Lien on any Property of the Company or any Subsidiary, whether or not the same
would be classified as a liability on a balance sheet, the liability of the
Company or any Subsidiary in respect of banker's acceptances and letters of
credit, and the aggregate amount of rentals or other consideration payable by
the Company or any Subsidiary in accordance with GAAP over the remaining
unexpired term of all Capital Leases, but excluding all general contingency
reserves and reserves for deferred income taxes and investment credit.
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"Unfunded Vested Liabilities" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Voting Stock" of any Person means the capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person,
other than stock or other equity interests having such power only by reason of
the happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Company and/or
one or more Wholly-Owned Subsidiaries within the meaning of this definition.
Section 4.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The
words "hereof", "herein", and "hereunder" and words of like import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All references to time of day herein
are references to Chicago, Illinois time unless otherwise specifically
provided. Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such
principles are inconsistent with the specific provisions of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Bank as follows:
Section 5.1. Organization and Qualification. The Company is duly
organized, validly existing and in good standing as a corporation under the laws
of the State of Delaware, has full and adequate corporate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not have a material adverse effect on the financial
condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole.
Section 5.2. Subsidiaries. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as
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now conducted, and is duly licensed or qualified and in good standing in
each jurisdiction in which the nature of the business conducted by it or the
nature of the Property owned or leased by it requires such licensing or
qualifying, except where the failure to be so licensed or qualified would not
have a material adverse effect on the financial condition, Properties, business
or operations of the Company and its Subsidiaries, taken as a whole. Schedule
5.2 hereto identifies each Subsidiary, the jurisdiction of its incorporation or
organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Company and the Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 5.2 as owned by the Company or a
Subsidiary are owned, beneficially and of record, by the Company or such
Subsidiary free and clear of all Liens. There are no outstanding commitments or
other obligations of any Subsidiary to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of any Subsidiary.
Section 5.3. Corporate Authority and Validity of Obligations. The
Company has full right and authority to enter into this Agreement and the other
Loan Documents, to make the borrowings herein provided for, to issue its Note in
evidence thereof, and to perform all of its obligations hereunder and under the
other Loan Documents. The Loan Documents delivered by the Company have been
duly authorized, executed and delivered by the Company and constitute valid and
binding obligations of the Company enforceable in accordance with their terms
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law); and this Agreement and the
other Loan Documents do not, nor does the performance or observance by the
Company of any of the matters and things herein or therein provided for,
contravene or constitute a default under any provision of law or any judgment,
injunction, order or decree binding upon the Company or any provision of the
charter, articles of incorporation or by-laws of the Company or any covenant,
indenture or agreement of or affecting the Company or any of its Properties, or
result in the creation or imposition of any Lien on any Property of the Company.
Section 5.4. Use of Proceeds; Margin Stock. The Company shall use
the proceeds of the Loans solely for general corporate purposes and for such
other legal and proper purposes as are consistent with all applicable laws.
Neither the Company nor any Subsidiary is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of any Loan will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
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Section 5.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at July 31, 1993 and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of Blackman,
Kallick & Bartelstein, independent public accountants, and the unaudited interim
consolidated balance sheet of the Company and its Subsidiaries as at April 30,
1994 and the related consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries for the nine (9) months then
ended, heretofore furnished to the Bank, fairly present the consolidated
financial condition of the Company and its Subsidiaries as at said dates and the
consolidated results of their operations and cash flows for the periods then
ended in conformity with generally accepted accounting principles applied on a
consistent basis; subject, in the case of an unaudited interim consolidated
balance sheet, to year-end adjustments, and provided that such unaudited interim
consolidated balance sheet was prepared without footnotes.
Section 5.6. No Material Adverse Change. Since April 30, 1994, there
has been no change in the condition (financial or otherwise) or business
prospects of the Company or any Subsidiary except those occurring in the
ordinary course of business, none of which individually or in the aggregate have
been materially adverse to the Company and its Subsidiaries, taken as a whole.
Section 5.7. Full Disclosure. The statements and information furnished
to the Bank in connection with the negotiation of this Agreement and the other
Loan Documents and the commitment by the Bank to provide all or part of the
financing contemplated hereby do not contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading, the Bank acknowledging that as to any
projections furnished to the Bank, the Company only represents that the same
were prepared on the basis of information and estimates the Company believed to
be reasonable.
Section 5.8. Good Title. The Company and its Subsidiaries each have
good and defensible title to their assets as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries furnished to the
Bank (except for sales of assets by the Company and its Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 7.9 hereof.
Section 5.9. Litigation and Other Controversies. There is no
litigation or governmental proceeding or labor controversy pending, nor to the
knowledge of the Company threatened, against the Company or any Subsidiary which
if adversely determined would (a) impair the validity or enforceability of, or
impair the ability of the Company to perform its obligations under, this
Agreement or any other Loan Document or (b) result in any material adverse
change in the financial condition, Properties, business or operations of the
Company and its Subsidiaries, taken as a whole.
Section 5.10. Taxes;. All tax returns required to be filed by the
Company or any Subsidiary in any jurisdiction have, in fact, been filed, except
where the failure to file such tax returns would not have a material adverse
effect on the financial condition, Properties,
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business or operations of the Company and its Subsidiaries, taken as a
whole, and all taxes, assessments, fees and other governmental charges upon the
Company or any Subsidiary or upon any of their respective Properties, income or
franchises, which are shown to be due and payable in such returns, have been
paid. The Company does not know of any proposed additional tax assessment
against it or its Subsidiaries for which adequate provision in accordance with
GAAP has not been made on its accounts. Adequate provisions in accordance with
GAAP for taxes on the books of the Company and each Subsidiary have been made
for all open years, and for its current fiscal period.
Section 5.11. Approvals;. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of the Company or any other Person, is or will be necessary to the
valid execution, delivery or performance by the Company of this Agreement or any
other Loan Document.
Section 5.12. Affiliate Transactions. Neither the Company nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-Owned Subsidiaries) on terms and conditions which are
less favorable to the Company or such Subsidiary than would be usual and
customary in similar contracts or agreements between Persons not affiliated with
each other.
Section 5.13. Investment Company; Public Utility Holding Company.
Neither the Company nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 5.14. ERISA. The Company and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither the Company nor any Subsidiary has
any contingent liabilities with respect to any post-retirement benefits under a
Welfare Plan, other than liability for continuation coverage described in
article 6 of Title I of ERISA.
Section 5.15. Compliance with Laws. The Company and its Subsidiaries
each are in compliance with the requirements of all federal, state and local
laws, rules and regulations applicable to or pertaining to their Properties or
business operations (including, without limitation, the Occupational Safety and
Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), non-compliance with which could have
a material adverse effect on the financial condition, Properties, business or
operations of the Company or any Subsidiary. Neither the Company nor any
Subsidiary has received notice to the effect that its operations are not in
compliance with any of the requirements of applicable federal, state or local
environmental, health and safety statutes and regulations or
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any are the subject of governmental investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action
could have a material adverse effect on the financial condition, Properties,
business or operations of the Company and its Subsidiaries, taken as a whole.
Section 5.16. Other Agreements. Neither the Company nor any
Subsidiary is in default under the terms of any covenant, indenture or agreement
of or affecting the Company, any Subsidiary or any of their Properties, which
default if uncured would have a material adverse effect on the financial
condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole.
Section 5.17. No Default. No Default or Event of Default has occurred
and is continuing.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of the Bank to make any Loan under this Agreement is
subject to the following conditions precedent:
Section 6.1. All Advances. As of the time of the making of each Loan
(including the initial Loan) hereunder:
(a) each of the representations and warranties set forth in
Section 5 hereof and in the other Loan Documents shall be true and correct
as of such time, except to the extent the same expressly relate to an
earlier date;
(b) the Company shall be in full compliance with all of the
terms and conditions of this Agreement and of the other Loan Documents, and
no Default or Event of Default shall have occurred and be continuing
or would occur as a result of making such Loan; and
(c) such Loan shall not violate any order, judgment or decree of any
court or other authority or any provision of law or regulation applicable
to the Bank (including, without limitation, Regulation U of the Board of
Governors of the Federal Reserve System) as then in effect.
The Company's request for any Loan shall constitute its warranty as to the
foregoing effects.
Section 6.2. Initial Advance. At or prior to the making of the initial
Loan hereunder, the following conditions precedent shall also have been
satisfied:
(a) the Bank shall have received the following (each to be
properly executed and completed) and the same shall have been approved as
to form and substance by the Bank:
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(i) the Notes;
(ii) copies (executed or certified, as may be appropriate) of all
legal documents or proceedings taken in connection with the execution
and delivery of this Agreement and the other Loan Documents to the
extent the Bank or its counsel may reasonably request;
(iii) an incumbency certificate containing the name, title and
genuine signatures of each of the Company's Authorized Representatives;
(iv) evidence of insurance required by Section 7.4 hereof; and
(b) the Bank shall have received the initial fees called for
hereby;
(c) the Bank shall have received such valuations and certifications as
it may require in order to satisfy itself as to the financial condition of the
Company and its Subsidiaries, and the lack of material contingent liabilities of
the Company and its Subsidiaries;
(d) legal matters incident to the execution and delivery of this
Agreement and the other Loan Documents and to the transactions contemplated
hereby shall be satisfactory to the Bank and its counsel; and the Bank shall
have received the favorable written opinion of counsel for the Company in form
and substance satisfactory to the Bank and its counsel;
(e) the Bank shall have received a good standing certificate for the
Company (dated as of the date no earlier than September 6, 1994) from the office
of the secretary of state of the state of its incorporation; and
(f) such other agreements, instruments, documents, certificates and
opinions as the Bank may reasonably request.
SECTION 7. COVENANTS.
The Company agrees that, so long as any credit is available to or in use
by the Company hereunder, except to the extent compliance in any case or cases
is waived in writing by the Bank:
Section 7.1. Maintenance of Business. The Company shall, and shall
cause each Subsidiary to, preserve and maintain its existence. The Company
shall, and shall cause each Subsidiary to, preserve and keep in force and effect
all licenses, permits and franchises necessary to the proper conduct of its
business. The foregoing to the contrary notwithstanding, this Section 7.1 shall
not operate to prevent any merger or consolidation otherwise permitted by
Section 7.11 hereof.
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Section 7.2. Maintenance of Properties. The Company shall maintain,
preserve and keep its property, plant and equipment in good repair, working
order and condition (ordinary wear and tear excepted) and shall from time to
time make all needful and proper repairs, renewals, replacements, additions and
betterments thereto so that at all times the efficiency thereof shall be fully
preserved and maintained (ordinary wear and tear excepted), and shall cause each
Subsidiary to do so in respect of Property owned or used by it.
Section 7.3. Taxes and Assessments. The Company shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against it or its
Properties, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith and by appropriate proceedings which prevent enforcement of the
matter under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Company shall insure and keep insured,
and shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Company shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including employers' and public liability
risks) with good and responsible insurance companies as and to the extent
usually insured by Persons similarly situated and conducting similar
businesses. The Company shall upon request furnish to the Bank a certificate
setting forth in summary form the nature and extent of the insurance maintained
pursuant to this Section.
Section 7.5. Financial Reports. The Company shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP and shall furnish to the Bank and its duly authorized representatives such
information respecting the business and financial condition of the Company and
its Subsidiaries as the Bank may reasonably request; and without any request,
shall furnish to the Bank:
(a) as soon as available, and in any event within sixty (60) days
after the close of each quarterly accounting period of the Company, a copy
of the consolidated balance sheet of the Company and its Subsidiaries as of
the close of such period and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for such period,
each in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by the
Company in accordance with GAAP (subject to year-end adjustment and provided
that such balance sheet was prepared without footnotes) and certified to by
the chief financial officer of the Company;
(b) as soon as available, and in any event within one hundred
twenty (120) days after the close of each annual accounting period of the
Company, a copy of the consolidated balance sheet of the Company and its
Subsidiaries as of the close of
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such period and the consolidated statements of income, retained earnings
and cash flows of the Company and its Subsidiaries for such period, and
accompanying notes thereto, each in reasonable detail showing in comparative
form the figures for the previous fiscal year, accompanied by an opinion
thereon of Blackman Kallick & Bartelstein or another firm of independent
public accountants of recognized standing, selected by the Company and
satisfactory to the Bank, to the effect that the consolidated financial
statements have been prepared in accordance with GAAP and present fairly in
accordance with GAAP the consolidated financial condition of the Company and
its Subsidiaries as of the close of such fiscal year and the results of their
operations and cash flows for the fiscal year then ended and that an
examination of such accounts in connection with such financial statements has
been made in accordance with generally accepted auditing standards and,
accordingly, such examination included such tests of the accounting records
and such other auditing procedures as were considered necessary in the
circumstances;
(c) within the period provided in subsection (b) above, the written
statement of the accountants who certified the audit report thereby required
that in the course of their audit they have obtained no knowledge of any
Default or Event of Default, or, if such accountants have obtained knowledge
of any such Default or Event of Default, they shall disclose in such
statement the nature and period of the existence thereof;
(d) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Company sends to its
shareholders, and copies of all other regular, periodic and special reports
and all registration statements which the Company files with the Securities
and Exchange Commission of the United States or any successor thereto, or
with any national securities exchange; and
(e) promptly after knowledge thereof shall have come to the attention
of any responsible officer of the Company, written notice of any threatened
or pending litigation or governmental proceeding or labor controversy against
the Company or any Subsidiary which, if adversely determined, would adversely
effect the financial condition, Properties, business or operations of the
Company and its Subsidiaries, taken as a whole, or of the occurrence of any
Default or Event of Default hereunder.
Each of the financial statements furnished to the Bank pursuant to
subsections (b) and (c) of this Section shall be accompanied by a written
certificate in the form attached hereto as Exhibit C signed by the chief
financial officer of the Company to the effect that to the best of the chief
financial officer's knowledge and belief no Default or Event of Default has
occurred during the period covered by such statements or, if any such Default
or Event of Default has occurred during such period, setting forth a
description of such Default or Event of Default and specifying the action, if
any, taken by the Company to remedy the same. Such certificate shall also set
forth the calculations supporting such statements in respect of Sections 7.7
and 7.8 of this Agreement.
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Section 7.6. Inspection. The Company shall, and shall cause each
Subsidiary to, permit the Bank and its duly authorized representatives and
agents, at the Bank's expense, to visit and inspect any of the Properties,
corporate books and financial records of the Company and each Subsidiary, to
examine and make copies of the books of accounts and other financial records of
the Company and each Subsidiary, and to discuss the affairs, finances and
accounts of the Company and each Subsidiary with, and to be advised as to the
same by, its officers and independent public accountants (and by this provision
the Company hereby authorizes such accountants to discuss with the Bank the
finances and affairs of the Company and of each Subsidiary) at such reasonable
times and reasonable intervals as the Bank may designate; provided, however,
that in the absence of any Default or Event of Default, there shall be no more
than one such inspection per calendar year.
Section 7.7. Tangible Net Worth. The Company will at all times
maintain Tangible Net Worth at not less than the Minimum Required Amount. For
purposes of this Section 7.7, the term "Minimum Required Amount" shall mean
$50,000,000 for the period from the date hereof through and including July 30,
1995 and shall increase as of July 31, 1995 and as of the last day of each July
occurring thereafter by an amount equal to 25% of Net Income (but only if
positive) for the fiscal year then ended.
Section 7.8. Leverage Ratio. The Company will at all times maintain a
ratio of Total Liabilities to Tangible Net Worth of not more than 1.0 to 1.0.
Section 7.9. Liens. The Company shall not, nor shall it permit any
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by the Company or any Subsidiary; provided, however, that this
Section shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges, good
faith cash deposits in connection with tenders, contracts or leases to which
the Company or any Subsidiary is a party or other cash deposits required to
be made in the ordinary course of business, provided in each case that the
obligation is not for borrowed money and that the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and
adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers', or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good
faith by appropriate proceedings which prevent enforcement of the matter
under contest;
(c) the pledge of assets for the purpose of securing an appeal, stay or
discharge in the course of any legal proceeding, provided that the aggregate
amount of liabilities of the Company and its Subsidiaries secured by a
pledge of assets permitted
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under this subsection, including interest and penalties thereon, if any,
shall not be in excess of $5,000,000 at any one time outstanding;
(d) Liens on property of the Company or any of its Subsidiaries created
solely for the purpose of securing purchase money, indebtedness and
Capitalized Lease Obligations, representing or incurred to finance,
refinance or refund the purchase price of Property, provided that no such
Lien shall extend to or cover other Property of the Company or such
Subsidiary other than the respective Property so acquired, and the principal
amount of indebtedness secured by any such Lien shall at no time exceed the
original purchase price of such Property; and
(e) Liens on property of the Company securing currently outstanding
obligations of the Company in respect of those certain Town of Blue
Mountain, Mississippi Variable/Fixed Rate $2,500,000 Industrial Development
Revenue Bonds dated October 1, 1988.
Section 7.10. Investments, Loans, Advances and Guaranties;. The
Company shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances and other similar cash advances made to employees in
the ordinary course of business) to, any other Person, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing provisions shall not apply to nor
operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper rated at least P-1 by Moody's
Investors Services, Inc. and at least A-1 by Standard & Poor's Corporation
maturing within 270 days of the date of issuance thereof;
(c) investments in certificates of deposit issued by any United States
commercial bank having capital and surplus of not less than $100,000,000
which have a maturity of one year or less;
(d) endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;
(e) equity investments in Subsidiaries; and
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(f) investments, loans, advances and guaranties not otherwise permitted
by this Section 7.10, provided that the aggregate amount of all such
investments, loans, advances and guaranties permitted by this Section
7.10(f) does not at any time exceed an amount equal to 15% of tangible Net
Worth as then determined and computed.
In determining the amount of investments, acquisitions, loans, advances
and guarantees permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 7.11. Mergers, Consolidations and Sales. The Company shall
not, nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any
substantial part of its Property (excluding any disposition of Property as part
of a sale and leaseback transaction) or in any event sell or discount (with or
without recourse) any of its notes or accounts receivable; provided, however,
that this Section shall not apply to nor prohibit:
(a) the merger or consolidation of any Subsidiary with or into the
Company or any other Subsidiary (including any corporation which, after
giving effect to such transaction, will become a Subsidiary) so long as in
any merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation and in any merger or consolidation not
involving the Company, a Subsidiary shall be the surviving or continuing
corporation;
(b) the merger or consolidation of the Company with or into any other
corporation if the Company shall be the surviving or continuing corporation
and at the time of such consolidation or merger and after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing; and
(c) the sale, lease or other disposition by any Subsidiary of all or
any substantial part of its assets to the Company or any other Subsidiary.
The term "substantial" as used herein shall mean the sale, transfer,
lease or other disposition of 20% of the total assets of the Company.
Section 7.12. Maintenance of Subsidiaries. The Company shall not
assign, sell or transfer, or permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock of a Subsidiary; provided that the
foregoing shall not operate to prevent the issuance, sale and transfer to any
person of any shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person as a
director of such Subsidiary; further, provided, however, that this Section 7.12
shall not operate to prevent any transaction otherwise permitted by Section 7.11
hereof.
Section 7.13. ERISA. The Company shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character
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which if unpaid or unperformed might result in the imposition of a Lien
against any of its Properties. The Company shall, and shall cause each
Subsidiary to, promptly notify the Bank of (i) the occurrence of any reportable
event (as defined in ERISA) with respect to a Plan, (ii) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or appointment of
a trustee therefor, (iii) its intention to terminate or withdraw from any Plan,
and (iv) the occurrence of any event with respect to any Plan which would result
in the incurrence by the Company or any Subsidiary of any material liability,
fine or penalty, or any material increase in the contingent liability of the
Company or any Subsidiary with respect to any post-retirement Welfare Plan
benefit.
Section 7.14. Compliance with Laws. The Company shall, and shall
cause each Subsidiary to, comply in all respects with the requirements of all
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to their Properties or business operations,
non-compliance with which could have a material adverse effect on the financial
condition, Properties, business or operations of the Company and its
Subsidiaries, taken as a whole, or could result in a Lien upon any of their
Property, which Lien is not otherwise permitted by Section 7.9 hereof.
Section 7.15. Burdensome Contracts With Affiliates. The Company shall
not, nor shall it permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (other than with Wholly-Owned
Subsidiaries) on terms and conditions which are less favorable to the Company or
such Subsidiary than would be usual and customary in similar contracts,
agreements or business arrangements between Persons not affiliated with each
other.
Section 7.16. Change in the Nature of Business. The Company shall
not, and shall not permit any Subsidiary to, engage in any business or activity
if, as a result, the general nature of the business of the Company and its
Subsidiaries, taken as a whole, would be changed in any material respect from
the general nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement. While the Company (and its Board of
Directors) cannot assure continued voting control of the Company by Richard M.
Jaffee and Robert D. Jaffee and their families, the Company recognizes the
Bank's strong preference that they and their families retain such voting
control. The Bank acknowledges that a change in voting control of the Company
shall not constitute a default under this Section 7.16.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default for a period of five days in the payment when due of all or
any part of the principal of or interest on any Note (whether at the stated
maturity thereof or at any other time provided for in this Agreement) or of
any fee or other Obligation payable by the Company hereunder; or
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(b) default in the observance or performance of any covenant set forth
in Sections 7.6, 7.7, 7.8, 7.10, 7.11 or 7.12 hereof which is not remedied
within five days after the earlier of (i) the date on which such failure
shall first become known to any officer of the Company or (ii) written
notice thereof is given to the Company by the Bank; or
(c) default in the observance or performance of any other provision
hereof which is not remedied within thirty (30) days after the earlier of
(i) the date on which such failure shall first become known to any officer
of the Company or (ii) written notice thereof is given to the Company by the
Bank; or
(d) any representation or warranty made by the Company herein or in any
statement or certificate furnished by it pursuant hereto, or in connection
with any Loan made hereunder, proves untrue in any material respect as of
the date of the issuance or making thereof; or
(e) default shall occur under any evidence of Indebtedness for Borrowed
Money issued, assumed or guaranteed by the Company or any Subsidiary
aggregating in excess of $1,000,000 or under any indenture, agreement or
other instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated) or any such Indebtedness for Borrowed Money
shall not be paid when due (whether by lapse of time, acceleration or
otherwise); or
(f) any judgment or judgments, writ or writs, or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in
excess of $1,000,000 shall be entered or filed against the Company or any
Subsidiary or against any of their Property and which remains unvacated,
unbonded, unstayed or unsatisfied for a period of thirty (30) days; or
(g) the Company or any member of its Controlled Group shall fail to pay
when due an amount or amounts aggregating in excess $5,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
unfunded Vested Liabilities in excess of $5,000,000 (collectively, a
"Material Plan") shall be filed under Title IV of ERISA by the Company or
any other member of its Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against the Company or any member of its
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within thirty (30) days thereafter;
or a condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any Material Plan must be terminated; or
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(h) dissolution or termination of the existence of (i) the Company or
(ii) to the extent not otherwise permitted by Section 7.11 hereof, any
Subsidiary; or
(i) the Company or any Subsidiary shall (i) have entered involuntarily
against it an order for relief under the United States Bankruptcy Code, as
amended, (ii) not pay, or admit in writing its inability to pay, its debts
generally as they become due, (iii) make an assignment for the benefit of
creditors, (iv) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any substantial part of its Property, (v)
institute any proceeding seeking to have entered against it an order for
relief under the United States Bankruptcy Code, as amended, to adjudicate it
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors or
fail to file an answer or other pleading denying the material allegations of
any such proceeding filed against it, or (vi) fail to contest in good faith
any appointment or proceeding described in Section 8.1(j) hereof; or
(j) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or any Subsidiary or any
substantial part of any of their Property, or a proceeding described in
Section 8.1(i)(v) shall be instituted against the Company or any Subsidiary,
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of sixty (60) days.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default
described in subsection (a) through (h), both inclusive, of Section 8.1 has
occurred and is continuing, the Bank may, by notice to the Company, take one or
more of the following actions:
(a) terminate the obligation of the Bank to extend any further credit
hereunder on the date (which may be the date thereof) stated in such notice;
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both
principal and interest and all fees, charges and other Obligations payable
hereunder, shall be and become immediately due and payable without further
demand, presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it under the
Loan Documents or applicable law.
Section 8.3. Bankruptcy Defaults. When any Event of Default described
in subsection (i) or (j) of Section 8.1 has occurred and is continuing, then the
Notes, including both principal and interest, and all fees, charges and other
Obligations payable hereunder, shall immediately become due and payable without
presentment, demand, protest or notice of any kind, and the obligation of the
Bank to extend further credit pursuant to any of the terms hereof shall
immediately terminate. In addition, the Bank may exercise any and all remedies
available to it under the Loan Documents or applicable law.
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SECTION 9. MISCELLANEOUS.
Section 9.1. Holidays. If any payment hereunder becomes due and
payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such
payment shall be due and payable. In the case of any payment of principal
falling due on a day which is not a Business Day, interest on such principal
amount shall continue to accrue during such extension at the rate per annum then
in effect, which accrued amount shall be due and payable on the next scheduled
date for the payment of interest.
Section 9.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Bank or on the part of the holder of the Obligations in the
exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Bank and of
the holder of the Obligations are cumulative to, and not exclusive of, any
rights or remedies which any of them would otherwise have.
Section 9.3. Amendments, Etc. No amendment, modification, termination
or waiver of any provision of this Agreement or of any other Loan Document, nor
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Bank. No notice
to or demand on the Company in any case shall entitle the Company to any other
or further notice or demand in similar or other circumstances.
Section 9.4. Costs and Expenses. The Company agrees to pay on demand
the costs and expenses of the Bank in connection with the negotiation,
preparation, execution and delivery of this Agreement, the other Loan Documents
and the other instruments and documents to be delivered hereunder or thereunder,
and in connection with the transactions contemplated hereby or thereby, and in
connection with any consents hereunder or waivers or amendments hereto or
thereto, including the reasonable fees and expenses of Messrs. Chapman and
Cutler, counsel for the Bank, with respect to all of the foregoing (whether or
not the transactions contemplated hereby are consummated). In addition, at the
time of requesting any amendment hereof or consent or waiver hereunder, the
Company must negotiate with the Bank a fee to the Bank for engaging in and
documenting any such action. The Company further agrees to pay to the Bank or
any other holder of the Obligations all costs and expenses (including court
costs and reasonable attorneys' fees), if any, incurred or paid by the Bank or
any other holder of the Obligations in connection with any Default or Event of
Default or in connection with the enforcement of this Agreement or any of the
other Loan Documents or any other instrument or document delivered hereunder or
thereunder. The obligations of the Company under this Section shall survive the
termination of this Agreement.
Section 9.5. Documentary Taxes. The Company agrees to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed,
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irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
Section 9.6. Survival of Representations. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
Section 9.7. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Bank of amounts sufficient to
protect the yield of the Bank with respect to the Loans, including, but not
limited to, Sections 2.6 and 2.7 hereof, shall survive the termination of this
Agreement and the payment of the Notes.
Section 9.8. Notices. Except as otherwise specified herein, all
notices hereunder shall be in writing (including cable, telecopy or telex) and
shall be given to the relevant party at its address, telecopier number or telex
number set forth below, or such other address, telecopier number or telex number
as such party may hereafter specify by notice to the other given by United
States certified or registered mail, by telecopy or by other telecommunication
device capable of creating a written record of such notice and its receipt.
Notices hereunder shall be addressed:
to the Company at:
Oil-Dri Corporation of America
410 North Michigan Avenue
Suite 400
Chicago, Illinois 60611
Attention: Treasurer
Telephone: (312) 321-1515
Telecopy: (312) 321-1271
with a copy to:
Sonnenschien, Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Paul J. Miller, Esq.
Telephone: (312) 876-8064
Telecopy: (312) 876-7934
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to the Bank at:
Harris Trust and Savings Bank
P.O. Box 755
111 West Monroe Street
Chicago, Illinois 60690
Attention: Division E, Mr. Daniel J. Gresla
Telephone: (312) 461-2735
Telecopy: (312) 461-2591
Telex: 254157
Each such notice, request or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by telex, when such telex is transmitted to the
telex number specified in this Section and the answer back is received by
sender, (iii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given
pursuant to Section 1 or Section 2 hereof shall be effective only upon receipt.
SECTION 9.9. PERSONAL JURISDICTION.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION
(B), THE COMPANY AND THE BANK AGREE THAT ALL DISPUTES BETWEEN THEM
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY
STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS,BUT EACH OF THE
COMPANY AND THE BANK ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE
TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. THE
COMPANY AND THE BANK EACH WAIVE IN ALL DISPUTES ANY OBJECTION THAT EACH MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE COMPANY AGREES THAT THE BANK SHALL
HAVE THE RIGHT TO PROCEED AGAINST THE COMPANY OR ITS PROPERTY IN A COURT
IN ANY LOCATION TO ENABLE THE BANK TO REALIZE ON SUCH PROPERTY, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE BANK. THE
COMPANY AGREES THAT IT SHALL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN
ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE BANK
TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE BANK. THE COMPANY WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH THE BANK HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS SUBSECTION.
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SECTION 9.10. WAIVER OF JURY TRIAL. THE COMPANY AND THE BANK EACH
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE BANK AND THE COMPANY
ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH
OR THE TRANSACTIONS RELATED THERETO. THE COMPANY AND THE BANK EACH HEREBY AGREE
AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OF THEM MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 9.11. Construction. The parties hereto acknowledge and agree
that this Agreement and the other Loan Documents shall not be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of this Agreement and the other Loan Documents.
Section 9.12. Headings. Section headings used in this Agreement are
for convenience of reference only and are not a part of this Agreement for any
other purpose.
Section 9.13. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 9.14. Counterparts;. This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 9.15. Binding Nature, Governing Law, Etc; This Agreement shall
be binding upon the Company and its permitted successors and assigns, and shall
inure to the benefit of the Bank and the benefit of its permitted successors and
assigns, including any subsequent holder of the Obligations. THIS AGREEMENT AND
THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and any
prior agreements, whether written or oral, with respect thereto are superseded
hereby. Neither the Company nor the Bank may assign its rights hereunder
without the written consent of the other party.
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37
Upon your acceptance hereof in the manner hereinafter set forth,
this Agreement shall constitute a contract between us for the uses and
purposes hereinabove set forth.
Dated as of this 21st day of September, 1994.
OIL-DRI CORPORATION OF AMERICA
By /s/ Daniel S. Jaffee
Daniel S. Jaffee
Its Group Vice President
Accepted and agreed to at Chicago, Illinois as of the day and
year last above written.
HARRIS TRUST AND SAVINGS BANK
By /s/ David J. Gil
Its Vice President
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EXHIBIT A
OIL-DRI CORPORATION OF AMERICA
REVOLVING CREDIT NOTE
Chicago, Illinois
$5,000,000 September 21, 1994
On the Termination Date, for value received, the undersigned, Oil- Dri
Corporation of America, a Delaware corporation (the "Company"), hereby promises
to pay to the order of Harris Trust and Savings Bank (the "Bank") at its office
at 111 West Monroe Street, Chicago, Illinois, the principal sum of Five Million
and no/100 Dollars ($5,000,000), or (ii) such lesser amount as may at the time
of the maturity hereof, whether by acceleration or otherwise, be the aggregate
unpaid principal amount of all Loans owing from the Company to the Bank under
the Revolving Credit provided for in the Credit Agreement hereinafter mentioned.
This Note evidences Loans made or to be made to the Company by the Bank
under the Revolving Credit provided for under that certain Credit Agreement
dated as of September 21, 1994 between the Company and the Bank (said Credit
Agreement, as the same may be amended, modified or restated from time to time,
being referred to herein as the "Credit Agreement") and the Company hereby
promises to pay interest at the office described above on such Loans evidenced
hereby at the rates and at the times and in the manner specified therefor in the
Credit Agreement.
Each Loan made under the Revolving Credit against this Note, any
repayment of principal hereon, the status of each such Loan from time to time as
part of the Domestic Rate Portion or a LIBOR Portion and, in the case of a LIBOR
Portion, the interest rate and Interest Period applicable thereto shall be
endorsed by the holder hereof on a schedule to this Note or recorded on the
books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Company agrees that in any action or proceeding instituted to collect or enforce
collection of this Note, the entries endorsed on a schedule to this Note or
recorded on the books and records of the holder hereof shall be prima facie
evidence of the unpaid principal balance of this Note, the status of each such
Loan from time to time as part of the Domestic Rate Portion or a LIBOR Portion
and, in the case of any LIBOR Portion, the interest rate and Interest Period
applicable thereto.
This Note is issued by the Company under the terms and provisions of the
Credit Agreement, and this Note and the holder hereof are entitled to all of the
benefits provided for thereby or referred to therein, to which reference is
hereby made for a statement thereof. This Note may be declared to be, or be and
become, due prior to its expressed maturity and voluntary prepayments may be
made hereon, all in the events, on the terms and with the effects provided in
the Credit Agreement. All capitalized terms used herein without
39
definition shall have the same meanings herein as such terms are defined
in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS.
The Company hereby promises to pay all costs and expenses (including
reasonable attorneys' fees) suffered or incurred by the holder hereof in
collecting this Note or enforcing any rights in any collateral therefor. The
Company hereby waives presentment for payment and demand.
OIL-DRI CORPORATION OF AMERICA
By
Daniel S. Jaffee
Its Group Vice President
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EXHIBIT B
OIL-DRI CORPORATION OF AMERICA
TERM LOAN NOTE
Chicago, Illinois
$5,000,000 September 21, 1994
FOR VALUE RECEIVED, Oil-Dri Corporation of America, a Delaware
corporation (the "Company"), promises to pay to the order of Harris Trust and
Savings Bank (the "Bank"), at its office at 111 West Monroe Street, Chicago,
Illinois, the principal sum of Five Million Dollars ($5,000,000), in six
installments due on the following dates in the amounts set forth below:
INSTALLMENT IS IN THE
DUE ON AMOUNT OF
------------- ------------
June 20, 1996 $ 500,000
June 21, 1999 $ 1,950,000
June 20, 2000 $ 900,000
June 20, 2001 $ 650,000
June 20, 2002 $ 650,000
June 20, 2003 $ 350,000
The Company promises to pay interest (computed on the basis of a year of
360 days for the actual number of days elapsed) at said office on the balance of
principal remaining from time to time unpaid hereon at the rate per annum equal
to 7.78% on the last day of each March, June, September and December in each
year (commencing September 30, 1994) and on the final maturity date of this
Note. On demand, the Company promises to pay interest on any overdue principal
hereof (whether by lapse of time, acceleration or otherwise) until paid at the
rate per annum equal to 10.78%.
This Note is issued under the terms and provisions of that certain
Credit Agreement dated as of even date herewith by and between the Company and
the Bank (the "Credit Agreement"), and this Note and the holder hereof are
entitled to all of the benefits provided for by the Credit Agreement or referred
to therein, to which Credit Agreement reference is hereby made for a statement
thereof. The principal installments and interest hereon may be declared due
prior to their expressed maturities and voluntary prepayments may be made hereon
by the Company, all as specified in the Credit Agreement.
If the Company prepays any principal amount of this Note before its
scheduled due date (whether as the result of an acceleration, voluntary
prepayment, or otherwise), the Company shall pay to the Bank a funding indemnity
equal to the cost to the Bank of then acquiring an interest rate swap agreement
(or an equivalent instrument or instruments) with another interest rate swap
dealer of the highest credit standing in a notional principal amount equal to
the amount of such prepayment (including any scheduled amortization of such
41
amount) to the scheduled due date of such prepaid principal amount under
which the Bank would pay quarter-annually a floating rate of interest based
upon three month LIBOR (i.e., the London interbank offered rate) and such other
dealer would pay to the Bank on the regularly scheduled interest payment dates
for this Note a fixed rate of interest equal to the interest rate on this Note.
This Note is issued in substitution and replacement for, and evidences
the indebtedness previously evidenced by, that certain Promissory Note of the
Company dated April 20, 1994 payable to the order of the Bank in the face
principal amount of $5,000,000 (the "Present Note"). Upon the execution and
delivery to the Bank of this Note, the Present Note shall be deemed cancelled
without further action by the Company or the Bank.
This Note shall be governed by, and construed in accordance with, the
laws of the State of Illinois. The Company promises to pay all costs and
expenses (including reasonable attorneys' fees) suffered or incurred by the
holder hereof in collecting this Note or enforcing any rights in any collateral
therefor. The Company hereby waives presentment for payment and demand.
OIL-DRI CORPORATION OF AMERICA
By
Daniel S. Jaffee
Its Group Vice President
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Exhibit C
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to Harris Trust and Savings
Bank (the "Bank") pursuant to that certain Credit Agreement dated as of
September 21, 1994, by and between Oil-Dri Corporation of America (the
"Company") and the Bank (the "Credit Agreement"). Unless otherwise defined
herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ___________________________________
of the Company;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of the Company and its
Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition or
the occurrence of any event which constitutes a Default or Event of
Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate,
except as set forth below;
4. The financial statements required by Section 7.5 of the
Credit Agreement and being furnished to you concurrently with this
certificate are, to the best of my knowledge, true, correct and
complete as of the dates and for the periods covered thereby; and
5. The Attachment hereto sets forth financial data and
computations evidencing the Company's compliance with certain covenants
of the Credit Agreement, all of which data and computations are, to the
best of my knowledge, true, complete and correct and have been made in
accordance with the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
_________________________________________________________________
_________________________________________________________________
43
_________________________________________________________________
_________________________________________________________________
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 19___.
__________________________________________
_______________________, ______________
(Type or Print Name) (Title)
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44
ATTACHMENT TO COMPLIANCE CERTIFICATE
OIL-DRI CORPORATION OF AMERICA
Compliance Calculations for Credit Agreement
Dated as of September 21, 1994
Calculations as of__________, 19___
A. TANGIBLE NET WORTH (SECTION 7.7)
1. Total shareholder's equity Less
-----------
(a) Notes receivable in excess
of $1,000,000 from
officers and employees
-----------
(b) Intangible assets
-----------
(c) Write-up of assets above cost
-----------
2. Line 1 minus Lines (a), (b) and (c)
("Tangible Net Worth")
-----------
3. As listed in Section 7.7, for the
date of this Certificate, Tangible
Net Worth must not be less than $
-----------
4. Company is in compliance? (Circle yes or no) Yes/No
===========
B. LEVERAGE RATIO (SECTION 7.8)
1. Total Liabilities as defined
-----------
2. Tangible Net Worth
(from Line A2 above)
-----------
3. Ratio of Total Liabilities (Line 1)
to Tangible Net Worth (Line 2)
("Leverage Ratio") :1
===========
4. As listed in Section 7.8, for the
date of this Certificate, the Leverage
Ratio shall not be greater than 1.0:1
===========
5. Company is in compliance?
(Circle yes or no)
Yes/No
===========
45
SCHEDULE 5.2
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP
Oil-Dri Corporation Georgia 100%
of Georgia
Oil-Dri Production Mississippi 100%
Company
Oil-Dri Transportation Delaware 100%
Co.
Oil-Dri (U.K.) Limited United Kingdom 100%
Oil-Dri S.A. Switzerland 100%
Favorite Products Canada 100%
Company, Ltd.
Blue Mountain Mississippi 100%
Production Company (by Favorite Products)
Ochlocknee Holding Spain 100%
Co., S.A.
Ochlocknee Mining Spain 100%
Co., S.A.