Chs90835.REV EXHIBIT 4(b)
4/26/02
AMENDED AND RESTATED
C R E D I T A G R E E M E N T
between
SIFCO INDUSTRIES, INC.
and
NATIONAL CITY BANK
April 30, 2002
$10,000,000 of Revolving Credits
Table of Contents
1A. CROSS-REFERENCE.................................................................................1
1B. SUMMARY.........................................................................................1
2A. SUBJECT COMMITMENT..............................................................................1
2A.01 AMOUNT...............................................................................1
2A.02 TERM.................................................................................1
2A.03 OPTIONAL REDUCTIONS..................................................................1
2A.04 COMMITMENT FEE.......................................................................1
2A.05 EXTENSION OF SUBJECT COMMITMENT......................................................2
2B. SUBJECT LOANS...................................................................................2
2B.01 SUBJECT NOTE.........................................................................2
2B.02 CREDIT REQUESTS......................................................................2
2B.03 CONDITION: NO DEFAULT...............................................................3
2B.04 CONDITION: PURPOSE..................................................................3
2B.05 LOAN MIX.............................................................................3
2B.06 AMOUNT...............................................................................4
2B.07 CONTRACT PERIODS.....................................................................4
2B.08 MATURITIES...........................................................................4
2B.09 ROLLOVER.............................................................................4
2B.10 INTEREST: PRIME RATE LOANS..........................................................5
2B.11 INTEREST: FIXED-RATE LOANS...........................................................5
2B.12 DISBURSEMENT.........................................................................6
2B.13 PREPAYMENTS..........................................................................6
2B.14 FIXED-RATE LOANS: UNAVAILABILITY.....................................................6
2B.15 FIXED-RATE LOANS: ILLEGALITY.........................................................7
3A. INFORMATION.....................................................................................7
3A.01 FINANCIAL STATEMENTS.................................................................7
3A.02 NOTICE...............................................................................8
3B. GENERAL FINANCIAL STANDARDS.....................................................................9
3B.01 REIMBURSEMENT AGREEMENT..............................................................9
3C. AFFIRMATIVE COVENANTS..................................................................9
3C.01 TAXES................................................................................9
3C.02 FINANCIAL RECORDS....................................................................10
3C.03 VISITATION...........................................................................10
3C.04 INSURANCE............................................................................10
3C.05 CORPORATE EXISTENCE..................................................................10
3C.06 COMPLIANCE WITH LAW..................................................................10
3C.07 PROPERTIES...........................................................................11
3D. NEGATIVE COVENANTS..............................................................................11
3D.01 EQUITY TRANSACTIONS..................................................................11
3D.02 BORROWINGS...........................................................................12
3D.03 LIENS, LEASES........................................................................12
3D.04 NEGATIVE PLEDGE......................................................................14
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Table of Contents
4A. CLOSING.........................................................................................14
4A.01 SUBJECT NOTE.........................................................................14
4A.02 RESOLUTIONS/INCUMBENCY...............................................................14
4A.03 LEGAL OPINION........................................................................14
4B. WARRANTIES......................................................................................14
4B.01 EXISTENCE............................................................................14
4B.02 GOVERNMENTAL RESTRICTIONS............................................................14
4B.03 CORPORATE AUTHORITY..................................................................15
4B.04 LITIGATION...........................................................................15
4B.05 TAXES................................................................................15
4B.06 TITLE................................................................................15
4B.07 LAWFUL OPERATIONS....................................................................15
4B.08 INSURANCE............................................................................16
4B.09 FINANCIAL STATEMENTS.................................................................16
4B.10 DEFAULTS.............................................................................16
5A. EVENTS OF DEFAULT...............................................................................16
5A.0l PAYMENTS.............................................................................16
5A.02 WARRANTIES...........................................................................16
5A.03 COVENANTS WITHOUT GRACE..............................................................16
5A.04 COVENANTS WITH GRACE.................................................................16
5A.05 CROSS-DEFAULT........................................................................17
5A.06 BORROWER'S SOLVENCY..................................................................17
5B. EFFECTS OF DEFAULT..............................................................................17
5B.01 OPTIONAL DEFAULTS....................................................................17
5B.02 AUTOMATIC DEFAULTS...................................................................18
5B.03 OFFSETS..............................................................................18
6A. INDEMNITY: STAMP TAXES..........................................................................18
6B. INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS..................................................18
6C. INDEMNITY: FUNDING COSTS........................................................................19
6D. CREDIT REQUESTS.................................................................................19
6E. INDEMNITY: UNFRIENDLY TAKEOVERS.................................................................19
6F. INDEMNITY: CAPITAL REQUIREMENTS.................................................................19
6G. INDEMNITY: COLLECTION COSTS.....................................................................20
6H. CERTIFICATE FOR INDEMNIFICATION.................................................................20
7. BANK'S PURPOSE...................................................................................20
8. INTERPRETATION...................................................................................20
8.01 WAIVERS...............................................................................20
8.02 CUMULATIVE PROVISIONS.................................................................20
8.03 BINDING EFFECT........................................................................21
8.04 SURVIVAL OF PROVISIONS................................................................21
8.05 IMMEDIATE U.S. FUNDS..................................................................21
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Table of Contents
8.06 CAPTIONS..............................................................................21
8.07 SUBSECTIONS...........................................................................21
8.08 ILLEGALITY............................................................................21
8.09 OHIO LAW..............................................................................21
8.10 INTEREST/FEE COMPUTATIONS.............................................................21
8.11 NOTICE................................................................................21
8.12 ACCOUNTING TERMS......................................................................22
8.13 ENTIRE AGREEMENT......................................................................22
8.14 SHARING OF INFORMATION................................................................22
9. DEFINITIONS......................................................................................22
ACCOUNT OFFICER.............................................................................22
ACCUMULATED FUNDING DEFICIENCY..............................................................22
AGREEMENT...................................................................................23
BANK........................................................................................23
BANKING DAY.................................................................................23
BORROWER....................................................................................23
COMPANY.....................................................................................23
COMPENSATION................................................................................23
CONTRACT PERIOD.............................................................................23
CREDIT REQUEST..............................................................................23
CURRENT ASSETS..............................................................................23
CURRENT LIABILITIES.........................................................................23
DEBT........................................................................................23
DEFAULT UNDER ERISA.........................................................................23
DEFAULT UNDER THIS AGREEMENT................................................................24
ENVIRONMENTAL LAW...........................................................................24
ERISA.......................................................................................24
ERISA REGULATOR.............................................................................24
EVENT OF DEFAULT............................................................................24
EXPIRATION DATE.............................................................................24
FEDERAL FUNDS RATE..........................................................................24
FIXED-RATE LOAN.............................................................................25
FUNDED INDEBTEDNESS.........................................................................25
GAAP........................................................................................25
INSOLVENCY ACTION...........................................................................25
LIBO PRE-MARGIN RATE........................................................................25
LIBOR LOAN..................................................................................26
MATERIAL....................................................................................26
MOST RECENT FINANCIAL STATEMENTS............................................................26
NET INCOME..................................................................................26
NET WORTH...................................................................................26
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Table of Contents
PENSION PLAN................................................................................26
PRIME RATE..................................................................................26
RECEIVABLE..................................................................................26
RELATED WRITING.............................................................................26
REPORTABLE EVENT............................................................................27
PRIME RATE LOAN.............................................................................27
SUBJECT COMMITMENT..........................................................................27
SUBJECT INDEBTEDNESS........................................................................27
SUBJECT LOAN................................................................................27
SUBJECT NOTE................................................................................27
SUBORDINATED................................................................................27
SUBSIDIARY..................................................................................27
SUPPLEMENTAL SCHEDULE.......................................................................27
TOTAL LIABILITIES...........................................................................27
WHOLLY-OWNED................................................................................28
plurals.....................................................................................28
Signatures and Address...............................................................................28
EXHIBIT A: Supplemental Schedule (4B)
EXHIBIT B: Subject Note (2B.01; 4A.01)
EXHIBIT C: Extension Agreement (2A.05)
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AMENDED AND RESTATED CREDIT AGREEMENT
Agreement made as of April 30, 2002 by and between SIFCO INDUSTRIES, INC.
(BORROWER) and NATIONAL CITY BANK (Bank):
1A. CROSS-REFERENCE -- Certain terms are defined in section 9.
1B. SUMMARY -- This Agreement sets forth the terms and conditions upon which
the Borrower may obtain Subject Loans on a revolving basis until the Expiration
Date. This Agreement also sets forth covenants and warranties made by the
parties to induce each other to enter into this Agreement and contains other
Material provisions.
2A. SUBJECT COMMITMENT -- The basic terms of the Subject Commitment and the
compensation therefor are as follows:
2A.01 AMOUNT -- The amount of the Subject Commitment is ten million dollars
($10,000,000), but that amount may be reduced from time to time pursuant to
subsection 2A.03 and the Subject Commitment may be terminated pursuant to
section 5B.
2A.02 TERM -- The Subject Commitment shall commence as of the date of this
Agreement and shall remain in effect on a revolving basis until MARCH 31,
2004 (the EXPIRATION DATE) EXCEPT that a later Expiration Date may be
established from time to time pursuant to subsection 2A.05 and EXCEPT that
the Subject Commitment shall end in any event upon any earlier reduction
thereof to zero pursuant to subsection 2A.03 or any earlier termination
pursuant to section 5B.
2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at all times
and without the payment of any premium, to permanently reduce the amount of
the Subject Commitment by giving Bank one Banking Day's prior written
notice of the amount of each such reduction and the effective date thereof
subject, however, to the following:
(a) No such reduction shall reduce the Subject Commitment to a lesser
aggregate amount than the sum of the aggregate unpaid principal
balance of the Fixed-Rate Loans then outstanding plus the aggregate
unpaid principal balance of any Fixed-Rate Loans to be obtained
pursuant to any unfulfilled Credit Request under subsection 2B.02 plus
the aggregate unpaid principal balance of the prior loans, if any,
then outstanding.
(b) Concurrently with each reduction Borrower shall prepay such part,
if any, of the principal of the Subject Loans then outstanding as may
be in excess of the amount of the Subject Commitment as so reduced.
Subsection 2B.13 and section 6C shall apply to each such prepayment.
2A.04 COMMITMENT FEE -- Xxxxxxxx agrees to pay Bank a commitment fee
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(a) based on the average daily difference between the amount of the
Subject Commitment from time to time in effect and the aggregate
unpaid principal balance of the Subject Loans then outstanding,
(b) computed at the rate of one-quarter of one percent (1/4%) per
annum so long as the Subject Commitment remains in effect and
(c) payable in arrears on MAY 1, 2002 and quarter-annually thereafter
and at the end of the Subject Commitment.
2A.05 EXTENSION OF SUBJECT COMMITMENT -- Whenever Borrower furnishes its
audited financial statements to Bank pursuant to clause (b) of subsection
3A.01, commencing with the year ending September 30, 2002, Borrower may
request that the Subject Commitment be extended one year to the May 1 next
following the Expiration Date then in effect. Bank agrees to give
consideration to each such request; but in no event shall Bank be committed
to extend the Subject Commitment, nor shall the Subject Commitment be so
extended, unless and until both Borrower and Bank shall have executed and
delivered an extension agreement substantially in the form of Exhibit C
with the blanks appropriately filled.
2B. SUBJECT LOANS -- Bank agrees that so long as the Subject Commitment remains
in effect Bank will, subject to the conditions of this Agreement, grant Borrower
such Subject Loans as Borrower may from time to time request.
2B.01 SUBJECT NOTE -- The Subject Loans shall be evidenced at all times by
a Subject Note executed and delivered by Xxxxxxxx, payable to the order of
Bank in a principal amount equal to the dollar amount of the Subject
Commitment as in effect at the execution and delivery of the Subject Note
and being in the form and substance of Exhibit B with the blanks
appropriately filled.
(a) Whenever Borrower shall obtain a Subject Loan, Bank shall endorse
an appropriate entry on the Subject Note or make an appropriate entry
in a loan account in Bank's books and records, or both. Each entry
shall be prima facie evidence of the data entered; but such entries
shall not be a condition to Borrower's obligation to pay.
(b) No holder of any Subject Note shall transfer a Subject Note, or
seek a judgment or file a proof of claim based on a Subject Note,
without in each case first endorsing the Subject Note to reflect the
true amount owing thereon.
2B.02 CREDIT REQUESTS -- Whenever Borrower desires to borrow pursuant to
this Agreement, Borrower shall give Bank an appropriate notice (a CREDIT
REQUEST) with such
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information as Bank may reasonably request. The Credit Request shall be
irrevocable and shall (EXCEPT in the case of any obtained at the execution
and delivery of this Agreement) be given to Bank not later than 12:00 noon
Cleveland time
(a) on the Banking Day the proceeds of any requested PRIME RATE LOAN
is to be disbursed to Borrower and
(b) on the third (3d) Banking Day prior to the Banking Day on which
the proceeds of any requested LIBOR Loan are to be disbursed to
Borrower.
Each Credit Request shall be made either in writing or by telephone,
PROVIDED that any telephone request shall be promptly confirmed in writing
and Borrower shall assume the risk of misunderstanding.
2B.03 CONDITION: NO DEFAULT -- Borrower shall not be entitled to obtain any
Subject Loan if
(a) any Default Under This Agreement shall then exist or would
thereupon begin to exist or
(b) any representation or warranty made in subsections 4B.01 through
4B.08 (both inclusive) shall have ceased to be true and complete in
any Material respect or
(c) there shall have occurred any Material adverse change in
Borrower's financial condition, properties or business since the date
of Borrower's Most Recent Financial Statements or in its then most
recent financial statements, if any, furnished to Bank pursuant to
subsection 3A.01.
Each Credit Request, both when made and when honored, shall of itself
constitute a continuing representation and warranty by Borrower that
Borrower is entitled to obtain, and Bank is obligated to make, the
requested Subject Loan.
2B.04 CONDITION: PURPOSE -- Borrower shall not use the proceeds of any
Subject Loan in any manner that would violate or be inconsistent with
Regulation U or X of the Board of Governors of the Federal Reserve System;
nor will it use any such proceeds for the purpose of financing the
acquisition of any corporation or other business entity if the acquisition
is publicly opposed by the latter's management and if Bank deems that its
participation in the financing would involve it in a conflict of interest.
2B.05 LOAN MIX -- The Subject Loans at any one time outstanding may consist
of PRIME RATE LOANs or LIBOR Loans or any combination thereof as Borrower
may from time to time duly elect.
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2B.06 AMOUNT -- No Subject Loan shall be made if, after giving effect
thereto, the aggregate unpaid principal balance of the Subject Loans would
exceed the amount of the Subject Commitment then in effect. Each Fixed-Rate
Loan shall be in the principal sum of one million dollars ($1,000,000) or
any greater amount (subject to the aforesaid limitations) that is a
multiple of one hundred thousand dollars ($100,000).
2B.07 CONTRACT PERIODS -- Each Fixed-Rate Loan shall have applicable
thereto a Contract Period to be duly elected by Borrower in the Credit
Request therefor. Each Contract Period shall begin on the date the loan
proceeds are to be disbursed and shall end on such date, not later than the
Expiration Date, as Borrower may select subject, however, to the following:
(a) The Contract Period for each LIBOR Loan shall end one month or two
or three or six months after the date of borrowing; PROVIDED, that
(1) if any such Contract Period otherwise would end on a day that
is not a Banking Day, it shall end instead on the next following
Banking Day unless that day falls in another calendar month, in
which latter case the Contract Period shall end instead on the
last Banking Day of the next preceding calendar month, and
(2) if the Contract Period commences on a day for which there is
no numerical equivalent in the calendar month in which the
Contract Period is to end, it shall end on the last Banking Day
of that calendar month.
2B.08 MATURITIES -- The stated maturity of each PRIME RATE LOAN shall be
the Expiration Date. The stated maturity of each Fixed-Rate Loan shall be
the last day of the Contract Period applicable thereto. In no event,
however, shall the stated maturity of any Subject Loan be later than the
Expiration Date.
2B.09 ROLLOVER -- If
(a) prior to the Expiration Date any Fixed-Rate Loan shall not be paid
in full at the stated maturity thereof and
(b) Borrower shall have failed to duly give Bank a timely Credit
Request in respect thereof,
Borrower shall be deemed to have duly given Bank a timely Credit Request to
obtain (and Bank shall accordingly make) a PRIME RATE LOAN in a principal
amount equal to the unpaid principal of the Fixed-Rate Loan then due, the
proceeds of which PRIME RATE LOAN shall be applied to the payment in full
of the Fixed-Rate Loan then due;
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PROVIDED that no such PRIME RATE LOAN shall of itself constitute a waiver
of any then-existing Default Under This Agreement.
2B.10 INTEREST: Prime Rate LOANS -- The principal of and overdue interest
on any Prime Rate Loans shall bear interest payable in arrears on the first
day of each February, May, August and November and at maturity and computed
(in accordance with subsection 8.10)
(a) prior to maturity, at a fluctuating rate equal to the Prime Rate
from time to time in effect and
(b) after maturity (whether occurring by lapse of time or by
acceleration), at a fluctuating rate equal to the Prime Rate from time
to time in effect plus two percent (2%) per annum,
with each change in the Prime Rate automatically and immediately changing
the rate thereafter applicable to the Prime Rate Loans; PROVIDED, that in
no event shall the rate applicable to the Prime Rate Loans after the
maturity thereof be less than the rate applicable thereto immediately
before maturity.
2B.11 INTEREST: FIXED-RATE LOANS -- The principal of and overdue interest
on each Fixed-Rate Loan shall bear interest computed (in accordance with
subsection 8.10) and payable as follows:
(a) Prior to maturity each LIBOR Loan shall bear interest at a rate
equal to
the LIBOR pre-margin rate in effect at the start of the
applicable Contract Period plus
the applicable LIBOR MARGIN, namely, one and one half percent
(1.50%) per annum; provided, however, the LIBOR margin shall be
adjusted ANNUALLY upon receipt and based upon the Borrower's year
end financial statements as follows:
PRETAX INTEREST COVERAGE LIBOR MARGIN
10x> 1.25%
7.5x - 10x 1.50%
5x - 7.5x 1.75%
2.5x - 5x 2.00%
(b) After maturity (whether occurring by lapse of time or by
acceleration), each Fixed-Rate Loan shall bear interest computed and
payable in the same manner as
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in the case of Prime Rate Loans EXCEPT that in no event shall any
Fixed-Rate Loan bear interest after maturity at a lesser rate than
that applicable thereto immediately after maturity.
(c) Interest on each Fixed-Rate Loan shall be payable in arrears on
the last day of the Contract Period applicable thereto and at maturity
and, in the case of any Contract Period having a longer term than
ninety (90) days, shall also be payable every ninety (90) days or
every three (3) months (in the case of LIBOR Loans) after the first
day of the Contract Period.
2B.12 DISBURSEMENT -- Bank shall disburse the proceeds of each Subject Loan
to Xxxxxxxx's general checking account with Bank in the absence of written
instructions from Borrower to the contrary.
2B.13 PREPAYMENTS -- Borrower may from time to time prepay the principal of
the Prime Rate Loans in whole or in part and may from time to time prepay
the principal of any given series of Fixed-Rate Loans in whole or in part,
subject to the following:
(a) Each prepayment of Fixed-Rate Loans shall be applied solely to a
single Fixed-Rate Loan, shall aggregate one million dollars
($1,000,000) or any multiple thereof or an amount equal to the then
aggregate unpaid principal balance thereof.
(b) Each prepayment of the Prime Rate Loans may be made without
penalty or premium. Any prepayment of any Fixed-Rate Loans (regardless
of the reason for the prepayment) shall be subject to the payment of
any indemnity required by section 6C.
(c) No prepayment shall of itself reduce the Subject Commitment.
(d) Concurrently with each prepayment, Borrower shall prepay the
interest accrued on the prepaid principal.
2B.14 FIXED-RATE LOANS: UNAVAILABILITY -- If at any time
(a) Bank shall determine that dollar deposits of the relevant amount
for the relevant Contract Period are not available in the London
interbank eurodollar market (in the case of a LIBOR Loan) for the
purpose of funding the Fixed-Rate Loan in question, or
(b) Bank shall determine that circumstances affecting that market make
it impracticable for Bank to ascertain the rate or rates applicable to
such Fixed-Rate Loans,
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then and in each such case Bank shall, by written notice to Xxxxxxxx,
suspend Xxxxxxxx's right thereafter to obtain Fixed-Rate Loans of the kind
in question, which suspension shall remain in effect until such time, if
any, as Bank may give written notice to Borrower that the condition giving
rise to the suspension no longer prevails.
2B.15 FIXED-RATE LOANS: ILLEGALITY -- If any governmental authority shall
assert that it is unlawful for Bank to fund, make or maintain any
Fixed-Rate Loans,
(a) Bank shall give Borrower prompt written notice thereof and
(b) Borrower shall promptly pay in full the principal of and interest
on the Fixed-Rate Loan in question and make the reimbursement, if any,
required by section 6C.
3A. INFORMATION -- Xxxxxxxx agrees that so long as the Subject Commitment
remains in effect and thereafter until the Subject Indebtedness shall have been
paid in full, Borrower will perform and observe each of the following:
3A.01 FINANCIAL STATEMENTS -- Borrower will furnish to Bank
(a) within forty-five (45) days after the end of each of the first
three quarter-annual periods of each of Borrower's fiscal years,
Xxxxxxxx's balance sheet as at the end of the period and its
statements of cash flow, income and surplus reconciliation for
Xxxxxxxx's current fiscal year to date, all prepared (but unaudited)
on a comparative basis with the prior year, in accordance with GAAP
(EXCEPT as disclosed therein) and in form and detail satisfactory to
Bank,
(b) as soon as available (and in any event within ninety (90) days
after the end of each of Borrower's fiscal years), a complete copy of
an annual audit report (including, without limitation, all financial
statements therein and notes thereto) of Borrower for that year which
shall be
(1) prepared on a comparative basis with the prior year, in
accordance with GAAP (EXCEPT as disclosed therein) and in form
and detail satisfactory to Bank, and
(2) certified (without qualification as to GAAP) by independent
public accountants selected by Xxxxxxxx and satisfactory to Bank.
(c) concurrently with the delivery of any financial statement to Bank
pursuant to clause (a) or (b), a certificate by Xxxxxxxx's chief
financial officer
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(1) certifying that to the best of the officer's knowledge and
belief, (A) those financial statements fairly present in all
Material respects Borrower's financial condition and the results
of its operations in accordance with GAAP subject, in the case of
interim financial statements, to routine year-end audit
adjustments and (B) no Default Under This Agreement then exists
or if any does, a brief description of the default and Xxxxxxxx's
intentions in respect thereof, and
(2) setting forth calculations indicating whether or not Borrower
is in compliance with the general financial standards of section
3B,
(d) promptly when filed (in final form) or sent, a copy of
(1) each registration statement, Form 10-K annual report, Form
10-Q quarterly report, Form 8-K current report or similar
document filed by Borrower with the Securities and Exchange
Commission (or any similar federal agency having regulatory
jurisdiction over Borrower's securities) and
(2) each proxy statement, annual report, certificate, notice or
other document sent by Borrower to the holders of any of its
securities (or any trustee under any indenture which secures any
of its securities or pursuant to which such securities are
issued) and
(e) forthwith upon Bank's written request, such other information in
writing about Xxxxxxxx's financial condition, properties and
operations and about Borrower's employee benefit plans, if any, as
Bank may from time to time reasonably request.
3A.02 NOTICE -- Borrower will cause its chief financial officer, or in his
absence another officer designated by Xxxxxxxx, to give Bank prompt written
notice whenever any officer of Borrower
(a) reasonably believes (or receives notice from any governmental
agency alleging) that any Reportable Event has occurred in respect of
any Pension Plan or that Borrower has become in Material
non-compliance with any law or governmental order referred to in
subsection 3C.06 if non-compliance therewith would materially and
adversely affect Borrower's financial condition or its properties,
(b) receives from the Internal Revenue Service or any other federal,
state or local taxing authority any allegation of any default by
Borrower in the payment of any tax that is Material in amount or
notice of any assessment in respect thereof,
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(c) learns there has been brought against Borrower before any court,
administrative agency or arbitrator any litigation or proceeding
which, if successful, might have a Material, adverse effect on
Borrower,
(d) reasonably believes that any representation or warranty made in
subsections 4B.01 through 4B.08 (both inclusive) shall have ceased in
any Material respect to be true and complete or that any Default Under
This Agreement shall have occurred or
(e) reasonably believes that there has occurred or begun to exist any
other event, condition or thing that likely may have a Material,
adverse effect on Borrower's financial condition, operations or
properties.
3B. GENERAL FINANCIAL STANDARDS -- Borrower agrees that so long as the Subject
Commitment remains in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will observe each of the following:
3B.01 REIMBURSEMENT AGREEMENT - Borrower and Bank have entered into or
will enter into an Amended and Restated Reimbursement Agreement dated
as of April 30, 2002 (the "Reimbursement Agreement"), which
Reimbursement Agreement contains certain financial covenants to be
complied with by the Borrower. The Borrower shall comply with the
financial covenants set forth in Section 7 of the Reimbursement
Agreement, as such Reimbursement Agreement may be amended and/or
supplemented from time to time, as though such covenants were set
forth herein. If the Reimbursement Agreement shall expire or terminate
for any reason and this Agreement shall remain outstanding, the
Borrower shall contunue to comply wich such financial covenants until
such time as covenants may be negotiated and inserted into this
Agreement.
3C. AFFIRMATIVE COVENANTS-- Borrower agrees that so long as the Subject
Commitment remains in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will perform and observe each of the following:
3C.01 TAXES -- Borrower will pay in full
(a) prior in each case to the date when penalties for the
nonpayment thereof would attach, all taxes, assessments and
governmental charges and levies for which it may be or become
subject and
(b) prior in each case to the date the claim would become
delinquent for non-payment, all other lawful claims (whatever
their kind or nature) which, if unpaid, might become a lien or
charge upon its property;
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PROVIDED, that no item need be paid so long as and to the extent that it is
contested in good faith and by timely and appropriate proceedings which are
effective to stay enforcement thereof.
3C.02 FINANCIAL RECORDS -- Borrower will at all times keep true and
complete financial records in accordance with GAAP and, without limiting
the generality of the foregoing, make appropriate accruals to reserves for
estimated and contingent losses and liabilities.
3C.03 VISITATION -- Borrower will, to the extent not prohibited by law or
government regulation or contract, permit Bank or Bank's agent(s) at all
reasonable times and upon seven (7) days prior notice:
(a) to visit and inspect Borrower's properties and examine its records
at Bank's expense and to make copies of and extracts from such records
and
(b) to consult with Xxxxxxxx's directors, officers, employees,
accountants, actuaries, trustees and plan administrators in respect of
its financial condition, properties and operations and the financial
condition of its employee benefit plans, each of which parties is
hereby authorized to make such information available to Bank to the
same extent that it would be to Borrower.
3C.04 INSURANCE -- Borrower will
(a) keep itself and all of its insurable properties insured at all
times to such extent, with such deductibles, by such insurers and
against such hazards and liabilities as is generally and prudently
done by like businesses, EXCEPT that if a more specific standard is
provided in any Related Writing, the more specific standard shall
prevail and
(b) forthwith upon Bank's written request, furnish to Bank such
information about Xxxxxxxx's insurance as Bank may from time to time
reasonably request, which information shall be prepared in form and
detail reasonably satisfactory to Bank and certified by an officer of
Borrower.
3C.05 CORPORATE EXISTENCE -- Borrower will at all times maintain its
corporate existence, rights and franchises.
3C.06 COMPLIANCE WITH LAW -- Borrower will comply with all laws (whether
federal, state or local and whether statutory, administrative or judicial
or other) and with every lawful governmental order (whether administrative
or judicial) and will, without limiting the generality of the foregoing,
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(a) use and operate all of its facilities and properties in Material
compliance with all Environmental Laws and handle all hazardous
materials in Material compliance therewith; keep in full effect each
permit, approval, certification, license or other authorization
required by any enviromnmental law for the conduct of any Material
portion of its business; and comply in all other Material respects
with all Environmental Laws;
(b) make a full and timely payment of premiums required by ERISA and
perform and observe all such further and other requirements of ERISA
such that no Default under ERISA shall occur or begin to exist and
(c) comply with all Material requirements of all occupational health
and safety laws;
PROVIDED, that this subsection shall not apply to any of the foregoing
(i) if and to the extent that the same shall be contested in good
faith by timely and appropriate proceedings which are effective to
stay enforcement thereof and against which appropriate reserves shall
have been established or
(ii) in any other case so long as no Default Under This Agreement
would occur or begin to exist if the maximum liability of all such
items (including, without limitation, those referred to in clause (i))
were reflected in Borrower's balance sheet as a current liability.
3C.07 PROPERTIES -- Borrower will maintain all fixed assets necessary to
its continuing operations in good working order and condition, ordinary
wear and tear excepted.
3D. NEGATIVE COVENANTS -- Borrower agrees that so long as the Subject
Commitments remain in effect and thereafter until the Subject Indebtedness shall
have been paid in full, Borrower will observe, and will cause each Subsidiary to
observe, such of the following provisions as are on their respective parts to be
complied with, namely:
3D.01 EQUITY TRANSACTIONS -- Borrower will not, witout the prior written
consent of the Bank:
(a) be a party to any merger or consolidation,
(b) acquire all or substantially all of the assets and business of
another corporation or other business enterprise, whether by purchase
or otherwise,
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(c) lease as lessor, sell, sell-leaseback or otherwise transfer
(whether in one transaction or a series of transactions) all or any
substantial part of its fixed assets EXCEPT chattels that shall have
become obsolete or no longer useful in its present business;
PROVIDED, that if no Default Under This Agreement shall then exist and if
none would thereupon begin to exist, this subsection shall not apply to any
transaction referred to in clause (a) or (b) if (1) after giving effect
thereto, the nature of Borrower's business shall not be materially
different from that at the date of this Agreement and (2) there shall have
been executed and delivered to Bank an assumption agreement (to be in form
and substance satisfactory to Bank) by the surviving corporation (if not
Borrower) in the case of any merger, by the resulting corporation in the
case of any consolidation and by the transferee (if not Borrower) in any
transfer of any kind of assets.
3D.02 BORROWINGS -- Borrower will not create, assume or have outstanding at
any time any indebtedness for borrowed money or any Funded Indebtedness of
any kind; PROVIDED, that this subsection shall not apply to
(i) the Subject Indebtedness or any other Debt owing to Bank,
(ii) any Subordinated indebtedness,
(iii) any existing or future indebtedness secured by a purchase money
security interest permitted by subsection 3D.04 or incurred under a
lease permitted by subsection 3D.04 or
(iv) any existing indebtedness fully disclosed in Borrower's Most
Recent 4A.04 Financial Statements or in the Supplemental Schedule or
any renewal or extension thereof in whole or in part.
3D.03 LIENS, LEASES -- Borrower will not
(a) lease any property as lessee or acquire or hold any property
subject to any land contract, inventory consignment or other title
retention contract,
(b) sell or otherwise transfer any Receivables, whether with or
without recourse or
(c) suffer or permit any property now owned or hereafter acquired by
it to be or become encumbered by any mortgage, security interest, lien
or financing statement;
PROVIDED, that this subsection shall not apply to
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(i) any tax lien, or any lien securing workers' compensation or
unemployment insurance obligations, or any mechanic's, carrier's or
landlord's lien, or any lien arising under ERISA, or any security
interest arising under article four (bank deposits and collections) or
five (letters of credit) of the Uniform Commercial Code, or any
similar security interest or other lien, EXCEPT that this clause (i)
shall apply only to security interests and other liens arising by
operation of law (whether statutory or common law) and in the ordinary
course of business and shall not apply to any security interest or
other lien that secures any indebtedness for borrowed money or any
Guaranty thereof or any obligation that is in Material default in any
manner (other than any default contested in good faith by timely and
appropriate proceedings effective to stay enforcement of the security
interest or other lien in question),
(ii) zoning or deed restrictions, public utility easements, minor
title irregularities and similar matters having no adverse effect as a
practical matter on the ownership or use of any of the property in
question,
(iii) any lien securing or given in lieu of surety, stay, appeal or
performance bonds, or securing performance of contracts or bids (other
than contracts for the payment of money borrowed), or deposits
required by law or governmental regulations or by any court order,
decree, judgment or rule or as a condition to the transaction of
business or the exercise of any right, privilege or license, EXCEPT
that this clause (iii) shall not apply to any lien or deposit securing
an obligation that is in Material default in any manner (other than
any default contested in good faith by timely and appropriate
proceedings effective to stay enforcement of the security interest or
other lien in question),
(iv) any mortgage, security interest or other lien securing only
Xxxxxxxx's Debt to Bank,
(v) any mortgage, security interest or other lien (each, a "purchase
money security interest") which is created or assumed in purchasing,
constructing or improving any real property or equipment or to which
any such property is subject when purchased, PROVIDED, that (A) the
purchase money security interest shall be confined to the aforesaid
property, (B) the indebtedness secured thereby does not exceed the
total cost of the purchase, construction or improvement and (C) any
such indebtedness, if repaid in whole or in part, cannot be
reborrowed,
(vi) any lease other than any capitalized lease (it being agreed that
a capitalized lease is a lien rather than a lease for the purposes of
this Agreement) so long as the aggregate annual rentals of all such
leases do not exceed six hundred thousand dollars ($600,000),
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(vii) any mortgage, security interest or other lien which (together
with the indebtedness secured thereby) is fully disclosed in
Borrower's Most Recent 4A.04 Financial Statements or in the
Supplemental Schedule or
(viii) any financing statement perfecting a security interest that
would be permissible under this subsection.
3D.04 NEGATIVE PLEDGE - Xxxxxxxx agrees not to pledge, sell, encumber,
transfer or otherwise dispose of any assets owned by it other than in the
ordinary course of business without the prior written consent of the Bank.
4A. CLOSING -- Borrower has complied with each of the following:
4A.01 SUBJECT NOTE -- Borrower shall have executed and delivered a Subject
Note to Bank in accordance with subsection 2B.01.
4A.02 RESOLUTIONS/INCUMBENCY -- Borrower's secretary or assistant secretary
shall have certified to Bank (a) a copy of resolutions duly adopted by
Xxxxxxxx's board of directors in respect of this Agreement and (b) the
names and true signatures of officers authorized to execute and deliver
this Agreement and Related Writings on behalf of Xxxxxxxx.
4A.03 LEGAL OPINION -- Xxxxxxxx's counsel shall have rendered to Bank their
written opinion in respect of the matters referred to in subsections 4B.01,
4B.02, 4B.03 and 4B.04 and in respect of the perfection of each mortgage,
security interest or other lien referred to in this section 4A, which
opinion shall be in such form and substance (and may be subject only to
such qualifications and exceptions, if any) as shall be satisfactory to
Bank.
4B. WARRANTIES -- Subject only to such additions and exceptions, if any, as
may be set forth in the Supplemental Schedule or in Borrower's Most Recent
Financial Statements, Borrower represents and warrants as follows:
4B.01 EXISTENCE -- Borrower is a duly organized and validly existing Ohio
corporation in good standing. Borrower is duly qualified to transact
business in each state or other jurisdiction in which it owns or leases any
real property or in which the nature of the business conducted makes such
qualification necessary or, if not so qualified, such failure to qualify
will have no Material adverse effect upon Borrower's financial condition
and its ability to transact business. Borrower has no Subsidiaries.
4B.02 GOVERNMENTAL RESTRICTIONS -- No registration with or approval of any
governmental agency of any kind is required on the part of Borrower for the
due
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execution and delivery or for the enforceability of this Agreement or any
Related Writing other than the filing or recording of documents with public
officials, the noting of title certificates and similar acts and things
related to the perfection of the mortgages, security interests and other
liens referred to in section 4A.
4B.03 CORPORATE AUTHORITY -- Borrower has requisite corporate power and
authority to enter into this Agreement and to obtain and secure the Subject
Loan in accordance with this Agreement. The officer executing and
delivering this Agreement on behalf of Xxxxxxxx has been duly authorized to
do so and to execute and deliver a Subject Note and other Related Writings
in accordance with section 4A. Neither the execution and delivery of this
Agreement or any Related Writing by Borrower nor its performance and
observance of the respective provisions thereof will violate any existing
provision in its articles of incorporation, regulations or by-laws or any
applicable law or violate or otherwise constitute a default under any
contract or other obligation now existing and binding upon it. Upon the
execution and delivery thereof, this Agreement and the aforesaid Related
Writings will each become a valid and binding obligation enforceable
against Borrower according to their respective tenors subject, however, to
any applicable insolvency or bankruptcy law of general applicability and
general principles of equity.
4B.04 LITIGATION -- No litigation or proceeding is pending against Borrower
before any court, administrative agency or arbitrator which might, if
successful, have a Material adverse effect on Borrower.
4B.05 TAXES -- Borrower has filed all federal, state and local tax returns
which are required to be filed by it and paid all taxes due as shown
thereon (EXCEPT to the extent, if any, permitted by subsection 3C.01). The
Internal Revenue Service has not alleged any Material default by Borrower
in the payment of any tax Material in amount or threatened to make any
assessment in respect thereof which has not been reflected in Borrower's
Most Recent 4A.04 Financial Statements.
4B.06 TITLE -- Borrower has good and marketable title to all assets
reflected in its Most Recent 4A.04 Financial Statements EXCEPT for changes
resulting from transactions in the ordinary course of business. All such
assets are clear of any mortgage, security interest or other lien of any
kind other than any permitted by subsection 3D.04.
4B.07 LAWFUL OPERATIONS -- Borrower's operations have at all relevant times
been and continue to be in Material compliance with all requirements
imposed by law, whether federal, state or local, whether statutory,
regulatory or other, including (without limitation) ERISA, all
Environmental Laws, and occupational safety and health laws and all zoning
ordinances. Borrower has received no notice from any governmental agency,
court or authority that it is a potentially responsible party for the
clean-up of any environmental waste site, is in violation of any
environmental permit or law or has been placed on any registry of solid or
hazardous waste disposal site.
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4B.08 INSURANCE -- Borrower's insurance coverage complies with the
standards set forth in subsection 3C.04 and those set forth in the Related
Writings referred to in subsections 4A.05 and 4A.06.
4B.09 FINANCIAL STATEMENTS -- Each of the financial statements referred to
in subsection 4A.04 has been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with those used by
Borrower during its then next preceding full fiscal year EXCEPT to the
extent, if any, specifically noted therein and fairly presents in all
Material respects (subject to routine year-end audit adjustments in the
case of the unaudited financial statements) it's financial condition as of
the date thereof (including a full disclosure of Material contingent
liabilities, if any) and the results of its operations, if any, for the
fiscal period then ending. There has been no Material adverse change in
Borrower's financial condition, properties or business since the date of
Borrower's Most Recent 4A.04 Financial Statements nor any change in its
accounting procedures since the end of Borrower's latest full fiscal year
covered by those statements.
4B.10 DEFAULTS -- No Default Under This Agreement exists, nor will any
exist immediately after the execution and delivery of this Agreement.
5A. EVENTS OF DEFAULT -- Each of the following shall constitute an Event of
Default hereunder:
5A.01 PAYMENTS -- If any principal included in the Subject Indebtedness
shall not be paid in full promptly when the same becomes payable; or if any
Subject Indebtedness (EXCEPT principal) or any of Borrower's other Debt to
Bank (EXCEPT any payable on demand) shall not be paid in full promptly when
the same becomes payable and shall remain unpaid for ten (10) consecutive
days thereafter; or if such of Borrower's Debt, if any, to Bank, as may be
payable on demand shall not be paid in full within ten (10) days after any
actual demand for payment.
5A.02 WARRANTIES -- If any representation, warranty or statement made in
this Agreement or in any Related Writing referred to in section 4A shall be
false or erroneous in any respect; or if any representation, warranty or
statement hereafter made by or on behalf of Borrower in any Related Writing
not referred to in section 4A shall be false or erroneous in any Material
respect.
5A.03 COVENANTS WITHOUT GRACE -- If Borrower shall fail or omit to perform
or observe any provisions in subsections 3A.02.
5A.04 COVENANTS WITH GRACE -- If anyone (other than Bank and its agents)
shall fail or omit to perform and observe any agreement (other than those
referred to in
-16-
subsections 5A.01 or 5A.03) contained in this Agreement or any Related
Writing that is on its part to be complied with, and that failure or
omission shall not have been fully corrected within thirty (30) days after
the giving of written notice to Borrower by Bank that it is to be remedied.
5A.05 CROSS-DEFAULT -- If any of Borrower's indebtedness for borrowed money
(regardless of maturity) or any of its Funded Indebtedness shall be or
become "in default" (as defined below). In this subsection, IN DEFAULT
means that (a) there shall have occurred (or shall exist) in respect of the
indebtedness in question (either as in effect at the date of this Agreement
or as in effect at the time in question) any event, condition or other
thing which constitutes, or which with the giving of notice or the lapse of
any applicable grace period or both would constitute, a default which
accelerates (or permits any creditor or creditors or representative or
creditors to accelerate) the maturity of any such indebtedness; or (b) any
such indebtedness (other than any payable on demand) shall not have been
paid in full at its stated maturity; or (c) any such indebtedness payable
on demand shall not have been paid in full within ten (10) Banking Days
after any actual demand for payment.
5A.06 BORROWER'S SOLVENCY -- If (a) Borrower shall discontinue operations,
or (b) Borrower shall commence any Insolvency Action of any kind or admit
(by answer, default or otherwise) the Material allegations of, or consent
to any relief requested in, any Insolvency Action of any kind commenced
against Borrower by its creditors or any thereof, or (c) any creditor or
creditors shall commence against Borrower any Insolvency Action of any kind
which shall remain in effect (neither dismissed nor stayed) for thirty (30)
consecutive days.
5B. EFFECTS OF DEFAULT -- Notwithstanding any contrary provision or inference
in this Agreement or in any Related Writing:
5B.01 OPTIONAL DEFAULTS -- If any Event of Default referred to in
subsection 5A.01 through 5A.05, both inclusive, shall occur and be
continuing, Bank shall have the right in its discretion, by giving written
notice to Xxxxxxxx,
(a) to terminate the Subject Commitment (if not already expired or
reduced to zero pursuant to section 2A or terminated pursuant to this
section) and Bank shall have no obligation thereafter to grant any
Subject Loan to Borrower, and
(b) to accelerate the maturity of all of Borrower's Debt to Bank
(other than Debt, if any, already due and payable), and all such Debt
shall thereupon become and thereafter be immediately due and payable
in full without any presentment or demand and without any further or
other notice of any kind, all of which are hereby waived by Borrower.
-17-
5B.02 AUTOMATIC DEFAULTS -- If any Event of Default referred to in
subsection 5A.06 shall occur,
(a) the Subject Commitment shall automatically and immediately
terminate (if not already expired or reduced to zero pursuant to
section 2A or terminated pursuant to this section) and Bank shall have
no obligation thereafter to grant any Subject Loan to Borrower, and
(b) all of Borrower's Debt to Bank (other than Debt, if any, already
due and payable) shall thereupon become and thereafter be immediately
due and payable in full, all without any presentment, demand or notice
of any kind, which are hereby waived by Borrower.
5B.03 OFFSETS -- If there shall occur or exist any Default Under This
Agreement referred to in subsection 5A.07, then, so long as that Default
Under This Agreement exists, Bank shall have the right at any time to set
off against and to appropriate and apply toward the payment of the Subject
Indebtedness then owing to it, whether or not the same shall then have
matured, any and all deposit balances then owing by Bank to or for the
credit or account of Borrower, all without notice to or demand upon
Borrower, all such notices and demands being hereby expressly waived.
6A. INDEMNITY: STAMP TAXES -- Borrower will pay all stamp taxes and similar
taxes, if any, including interest and penalties, if any, payable in respect of
the issuance of the Subject Indebtedness.
6B. INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS -- If
(a) there shall be introduced or changed any treaty, statute,
regulation or other law, or there shall be made any change in the
interpretation or administration thereof, or there shall be made any
request from any central bank or other lawful governmental authority,
the effect of any of which events shall be to (1) impose, modify or
deem applicable any reserve or special deposit requirements against
assets held by or deposits in or loans by any national banking
association (whether or not applicable to Bank) or by Bank or (2)
subject Bank to any tax, duty, fee, deduction or withholding or (3)
change the basis of taxation of payments due to Bank from Borrower
(otherwise than by a change in taxation of Bank's overall net income)
or (4) impose on Bank any penalty in respect of any Fixed-Rate Loans
and
(b) in Bank's sole opinion any such event (1) increases (or, if the
event were applicable to Bank, would increase) the cost of making,
funding or maintaining any Fixed-Rate Loan or (2) reduces the amount
of any payment to be made to Bank in respect of the principal or
interest on any Fixed-Rate Loan or other payment under this Agreement,
-18-
then, upon Bank's demand, Borrower shall from time to time pay Bank an amount
equal to each such cost increase or reduced payment, as the case may be.
6C. INDEMNITY: FUNDING COSTS -- Borrower agrees to indemnify Bank against any
loss relating in any way to its funding of any Fixed-Rate Loan paid before its
stated maturity (whether a prepayment or a payment following any acceleration of
maturity) and to pay Bank, as liquidated damages for any such loss, an amount
(discounted to the present value in accordance with standard financial practice
at a rate equal to the treasury yield) equal to interest computed on the
principal payment from the payment date to the respective stated maturities
thereof at a rate equal to the difference of the contract rate less the treasury
yield, all as determined by Bank in its reasonable discretion. TREASURY YIELD
means the annual yield on direct obligations of the United States having a
principal amount and maturity similar to that of the principal being paid.
6D. CREDIT REQUESTS -- Whenever Borrower shall revoke any Credit Request for a
Fixed-Rate Loan, or shall for any other reason fail to borrow pursuant thereto
or otherwise comply therewith, or shall fail to honor any prepayment notice,
then, in each case on any bank's demand, Borrower shall pay each bank such
amount as will compensate it for any loss, cost or expense incurred by it by
reason of its liquidation or reemployment of deposits or other funds.
6E. INDEMNITY: UNFRIENDLY TAKEOVERS -- Borrower agrees to indemnify Bank and
hold Bank harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including, without limitation, the reasonable
fees and disbursements of counsel in connection with any investigative,
administrative or judicial proceeding, whether or not Bank shall be designated a
party thereto) which may be incurred by Bank relating to or arising out of any
actual or proposed use of proceeds of the Subject Loans in connection with the
financing of an acquisition of any corporation or other business entity,
PROVIDED that Bank shall have no right to be indemnified hereunder for its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.
6F. INDEMNITY: CAPITAL REQUIREMENTS -- If
(a) at any time any governmental authority shall require National City
Corporation or Bank, whether or not the requirement has the force of
law, to maintain, as support for the Subject Commitment, capital in a
specified minimum amount that either is not required or is greater
than that required at the date of this Agreement, whether the
requirement is implemented pursuant to the "risk-based capital
guidelines" (published at 12 CFR 3 in respect of "national banking
associations", 12 CFR 208 in respect of "state member banks" and 12
CFR 225 in respect of "bank holding companies") or otherwise, and
(b) as a result thereof the rate of return on capital of National City
Corporation or Bank or both (taking into account their then policies
as to capital adequacy and assuming full utilization of their capital)
shall be directly or indirectly reduced by reason of any new or added
capital thereby allocable to the Subject Commitment,
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then and in each such case Borrower shall, on Bank's demand, pay Bank as an
additional fee such amounts as will in Bank's reasonable opinion reimburse
National City Corporation and Bank for any such reduced rate of return.
6G. INDEMNITY: COLLECTION COSTS -- If any Event of Default shall occur and
shall be continuing, Borrower will pay Bank such further amounts, to the extent
permitted by law, as shall cover Bank's costs and expenses (including, without
limitation, the reasonable fees, interdepartmental charges and disbursements of
its counsel) incurred in collecting the Subject Indebtedness or in otherwise
enforcing its rights and remedies in respect thereof.
6H. CERTIFICATE FOR INDEMNIFICATION -- Each demand by Bank for payment
pursuant to section 6A, 6B, 6C, 6D, 6E, 6F or 6G shall be accompanied by a
certificate setting forth the reason for the payment, the amount to be paid, and
the computations and assumptions in determining the amount, which certificate
shall be presumed to be correct in the absence of manifest error. In determining
the amount of any such payment, Bank may use reasonable averaging and
attribution methods.
7. BANK'S PURPOSE -- Bank represents and warrants to Borrower that Bank is
familiar with the Securities Act of 1933 as amended and the rules and
regulations thereunder and is not entering into this Agreement with any
intention of violating that Act or any rule or regulation thereunder, it being
understood, however, that Bank shall at all times retain full control of the
disposition of its assets.
8. INTERPRETATION -- This Agreement and the Related Writings shall be governed
by the following provisions:
8.01 WAIVERS -- Bank may from time to time in its discretion grant Borrower
waivers and consents in respect of this Agreement or any Related Writing or
assent to amendments thereof, but no such waiver or consent shall be
binding upon Bank unless specifically granted by Bank in writing, which
writing shall be strictly construed. Without limiting the generality of the
foregoing, Xxxxxxxx agrees that no course of dealing in respect of, nor any
omission or delay in the exercise of, any right, power or privilege by Bank
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any further or other exercise thereof or of any other, as
each such right, power or privilege may be exercised either independently
or concurrently with others and as often and in such order as Bank may deem
expedient.
8.02 CUMULATIVE PROVISIONS -- Each right, power or privilege specified or
referred to in this Agreement or any Related Writing is in addition to and
not in limitation of any other rights, powers and privileges that Bank may
otherwise have or acquire by operation of law, by other contract or
otherwise.
-20-
8.03 BINDING EFFECT -- The provisions of this Agreement and the Related
Writings shall bind and benefit Borrower and Bank and their respective
successors and assigns, including each subsequent holder, if any, of the
Subject Notes or any thereof; PROVIDED, that no person or entity other than
Borrower may obtain Subject Loans; and PROVIDED, further, that neither any
holder of any Subject Note or assignee of any Subject Loan, whether in
whole or in part, shall thereby become obligated thereafter to grant
Borrower any Subject Loan.
8.04 SURVIVAL OF PROVISIONS -- All representations and warranties made in
or pursuant to this Agreement or any Related Writing shall survive the
execution and delivery of this Agreement and the Subject Notes. The
provisions of sections 6A, 6B, 6C and 6D shall survive the payment of the
Subject Indebtedness.
8.05 IMMEDIATE U.S. FUNDS -- Any reference to money is a reference to
lawful money of the United States of America which, if in the form of
credits, shall be in immediately available funds.
8.06 CAPTIONS -- The several captions to different sections and subsections
of this Agreement are inserted for convenience only and shall be ignored in
interpreting the provisions thereof.
8.07 SUBSECTIONS -- Each reference to a section includes a reference to all
subsections thereof (i.e., those having the same character or characters to
the left of the decimal point) EXCEPT where the context clearly does not so
permit.
8.08 ILLEGALITY -- If any provision in this Agreement or any Related
Writing shall for any reason be or become illegal, void or unenforceable,
that illegality, voidness or unenforceability shall not affect any other
provision.
8.09 OHIO LAW -- This Agreement and the Related Writings and the respective
rights and obligations of the parties hereto shall be construed in
accordance with and governed by internal Ohio law.
8.10 INTEREST/FEE COMPUTATIONS -- All interest and all fees for any given
period shall accrue on the first day thereof but not on the last day
thereof and in each case shall be computed on the basis of a 360-day year
and the actual number of days elapsed. In no event shall interest accrue at
a higher rate than the maximum rate, if any, permitted by law.
8.11 NOTICE -- A notice to or request of Borrower shall be deemed to have
been given or made under this Agreement or any Related Writing either upon
the delivery of a writing to that effect (either in person or by
transmission of a telecopy) to an officer of Borrower or five (5) days
after a writing to that effect shall have been deposited in the
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United States mail and sent, with postage prepaid, by registered or
certified mail, properly addressed to Borrower (Attention: chief financial
officer). No other method of actually giving actual notice to or making a
request of Borrower is hereby precluded. Every notice required to be given
to Bank pursuant to this Agreement or any Related Writing shall be
delivered (either in person or by transmission of a telecopy) to an Account
Officer of Bank. A notice or request by mail is properly addressed to a
party when addressed to it at the address set forth opposite its signature
below or at such other address as that party may furnish to each of the
others in writing for that purpose. A telecopy is transmitted to a party
when transmitted to the telecopy number set forth opposite that party's
signature below (or at such other telecopy number as that party may furnish
to the other in writing for that purpose).
8.12 ACCOUNTING TERMS -- Any accounting term used in this Agreement shall
have the meaning ascribed thereto by GAAP subject, however, to such
modification, if any, as may be provided by section 9 or elsewhere in this
Agreement.
8.13 ENTIRE AGREEMENT -- This Agreement and the Related Writings referred
to in or otherwise contemplated by this Agreement set forth the entire
agreement of the parties as to the transactions contemplated by this
Agreement.
8.14 SHARING OF INFORMATION -- Bank shall have the right to furnish to its
Affiliates, and to such other persons or entities as Bank shall deem
advisable for the conduct of its business, information concerning the
business, financial condition, and property of Borrower, the amount of the
Debt of Borrower, and the terms, conditions, and other provisions
applicable to the respective parts thereof.
9. DEFINITIONS -- As used in this Agreement and in the Related Writings,
EXCEPT where the context clearly requires otherwise,
ACCOUNT OFFICER means that officer who at the time in question is
designated by Bank as the officer having primary responsibility for giving
consideration to Xxxxxxxx's requests for credit or, in that officer's
absence, that officer's immediate superior or any other officer who reports
directly to that superior officer;
ACCUMULATED FUNDING DEFICIENCY shall have the meaning ascribed thereto in
section 302(a)(2) of ERISA;
AFFILIATE means, when used with reference to any person or entity (the
SUBJECT), a person or entity that is in control of, under the control of,
or under common control with, the subject, the term CONTROL meaning the
possession, directly or indirectly, of the power to direct the management
or policies of a person or entity, whether through the ownership of voting
securities, by contract, or otherwise;
-22-
AGREEMENT means this Agreement and includes each amendment, if any, to this
Agreement;
BANK means National City Bank, a national banking association headquartered
in Cleveland, Ohio;
BANKING DAY means (a) in the case of a LIBOR Loan, a day on which banks in
the London Interbank Market deal in United States dollar deposits and on
which banking institutions are generally open for domestic and
international business in Cleveland, Ohio and in New York City and (b) in
any other case, any day other than a Saturday or a Sunday or a public
holiday or other day on which banking institutions in Cleveland, Ohio, are
generally closed and do not conduct a general banking business;
BORROWER means Sifco Industries, Inc., an Ohio corporation;
COMPANY refers to Borrower or to a Subsidiary of Borrower, as the case may
be;
COMPENSATION includes all considerations (including without limitation,
deferred compensation and disbursements to trusts), whatever the form or
kind, for services rendered;
CONTRACT PERIOD is defined in subsection 2B.07;
CREDIT REQUEST means a request made pursuant to subsection 2B.02;
CURRENT ASSETS means the net book value of all such assets (after deducting
applicable reserves, if any, and without consideration to any reappraisal
or write-up of assets) as determined in accordance with GAAP;
CURRENT LIABILITIES means all such liabilities as determined in accordance
with GAAP and includes (without limitation) all accrued taxes and all
principal of any Funded Indebtedness maturing within twelve months of the
date of determination;
DEBT means, collectively, all liabilities of the party or parties in
question to Bank, whether owing by one such party alone or with one or more
others in a joint, several, or joint and several capacity, whether now
owing or hereafter arising, whether owing absolutely or contingently,
whether created by loan, overdraft, Guaranty of payment or other contract
or by quasi-contract or tort, statute or other operation of law or other,
and whether participated to or from Bank in whole or in part; and in the
case of Borrower includes, without limitation, the Subject Indebtedness;
DEFAULT UNDER ERISA means (a) the occurrence or existence of a Material
Accumulated Funding Deficiency in respect of any of the Companies'
respective Pension Plans, (b)
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any failure by the Companies to make a full and timely payment of premiums
required by ERISA for insurance against any employer's liability in respect
of any such plan, (c) any Material breach of a fiduciary duty by any
Company or trustee in respect of any such plan or (d) the existence of any
action for the forceable termination of any such plan;
DEFAULT UNDER THIS AGREEMENT means an event, condition or thing which
constitutes (or which with the lapse of any applicable grace period or the
giving of notice or both would constitute) an Event of Default referred to
in section 5A and which has not been appropriately waived in writing in
accordance with this Agreement or corrected to Bank's full satisfaction;
ENVIRONMENTAL LAW means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 USC 9601 et seq.), the Hazardous
Material Transportation Act (49 USC 1801 et seq.), the Resource
Conservation and Recovery Act (42 USC 6901 et seq.), the Federal Water
Pollution Control Act (33 USC 1251 et seq.), the Toxic Substances Control
Act (15 USC 2601 et seq.) and the Occupational Safety and Health Act (29
USC 651 et seq.), as such laws have been or hereafter may be amended, and
any and all analogous future federal, or present or future state or local,
statutes and the regulations promulgated pursuant thereto;
ERISA means the Employee Retirement Income Security Act of 1974 (P.L.
93-406) as amended from time to time and in the event of any amendment
affecting any section thereof referred to in this Agreement, that reference
shall be a reference to that section as amended, supplemented, replaced or
otherwise modified;
ERISA REGULATOR means any governmental agency (such as the Department of
Labor, the Internal Revenue Service and the Pension Benefit Guaranty
Corporation) having any regulatory authority over any of the Companies'
Pension Plans;
EVENT OF DEFAULT is defined in section 5A;
EXPIRATION DATE means the date referred to as such in subsection 2A.02,
EXCEPT that in the event of any extension pursuant to subsection 2A.05,
EXPIRATION DATE shall mean the latest date to which the Subject Commitment
shall have been so extended;
FDIC ASSESSMENT RATE means the gross annual assessment rate (rounded
upwards, if necessary, to the next higher 1/16 of 1%) actually incurred to
the Federal Deposit Insurance Corporation (or any successor) by Bank for
insurance on deposits in United States dollars at Bank's main office;
FEDERAL FUNDS RATE means a fluctuating interest rate per annum, as in
effect at the time in question, that is the rate determined by NCB to be
the opening Federal Funds Rate per
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annum paid or payable by it on the day in question in its regional federal
funds market for overnight borrowings from other banking institutions;
FIXED-RATE LOAN means a Subject Loan that is not a Prime Rate Loan;
FUNDED INDEBTEDNESS means indebtedness of the person or entity in question
which matures or which (including each renewal or extension, if any, in
whole or in part) remains unpaid for more than twelve months after the date
originally incurred and includes, without limitation (a) any indebtedness
(regardless of its maturity) if it is renewable or refundable in whole or
in part solely at the option of that person or entity (in the absence of
default) to a date more than one year after the date of determination, (b)
any capitalized lease, (c) any Guaranty of Funded Indebtedness owing by
another person or entity and (d) any Funded Indebtedness secured by a
security interest, mortgage or other lien encumbering any property owned or
being acquired by the person or entity in question even if the full faith
and credit of that person or entity is not pledged to the payment thereof;
PROVIDED, that in the case of any indebtedness payable in installments or
evidenced by serial notes or calling for sinking fund payments, those
payments maturing within twelve months after the date of determination
shall be considered current indebtedness rather than Funded Indebtedness
for the purposes of section 3B but shall be considered Funded Indebtedness
for all other purposes;
GAAP means generally accepted accounting principles applied in a manner
consistent with those used in Borrower's latest fiscal year-end financial
statements referred to in subsection 4A.04;
INSOLVENCY ACTION means either (a) a pleading of any kind filed by the
person, corporation or entity (an "insolvent") in question to seek relief
from the insolvent's creditors, or filed by the insolvent's creditors or
any thereof to seek relief of any kind against that insolvent, in any court
or other tribunal pursuant to any law (whether federal, state or other)
relating generally to the rights of creditors or the relief of debtors or
both, or (b) any other action of any kind commenced by an insolvent or the
insolvent's creditors or any thereof for the purpose of marshalling the
insolvent's assets and liabilities for the benefit of the insolvent's
creditors; and INSOLVENCY ACTION includes (without limitation) a petition
commencing a case pursuant to any chapter of the federal bankruptcy code,
any application for the appointment of a receiver, trustee, liquidator or
custodian for the insolvent or any substantial part of the insolvent's
assets, and any assignment by an insolvent for the general benefit of the
insolvent's creditors;
LIBO PRE-MARGIN RATE means the rate per annum (rounded upwards, if
necessary, to the next higher 1/16 of 1%), as determined by Bank which
equals the average rate per annum at which deposits in United States
dollars are offered for deposits of the maturity and amount in question, at
11:00 A.M. London time (or as soon thereafter as practicable) two
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Banking Days prior to the first day of the Contract Period in question, to
Bank by prime banking institutions in any Eurodollar market reasonably
selected by Bank;
LIBOR LOAN means a Subject Loan having a Contract Period described in
clause (b) of subsection 2B.07 and bearing interest in accordance with
clause (b) of subsection 2B.11;
MATERIAL means Material as determined by Bank in the reasonable exercise of
its discretion;
MOST RECENT 4A.04 FINANCIAL STATEMENTS means Xxxxxxxx's most recent
financial statements that are referred to in subsection 4A.04;
NET INCOME means Net Income as determined in accordance with GAAP, after
taxes and after extraordinary items, but without giving effect to any gain
resulting from any reappraisal or write-up of any asset;
NET WORTH means the excess (as determined on a consolidated basis and in
accordance with GAAP) of the net book value (after deducting all applicable
valuation reserves and without consideration to any reappraisal or write-up
of assets) of the tangible assets (i.e., all assets other than intangibles
such as patents, costs of businesses over net assets acquired, good will
and treasury stock) of the corporation or corporations in question over
their Total Liabilities;
PENSION PLAN means a defined benefit plan (as defined in section 3(35) of
ERISA) of the Companies or any thereof and includes, without limitation,
any such plan that is a multi-employer plan (as defined in section 3(37) of
ERISA) applicable to any of the Companies' employees;
PRIME RATE means the fluctuating rate of interest which is publicly
announced from time to time by Bank at its principal place of business as
being its "prime rate" or "base rate" thereafter in effect, with each
change in the Prime Rate automatically, immediately and without notice
changing the fluctuating interest rate thereafter applicable hereunder, it
being agreed that the Prime Rate is not necessarily the lowest rate of
interest then available from Bank on fluctuating rate loans;
RECEIVABLE means a claim for money due or to become due, whether classified
as an account, instrument, chattel paper, general intangible, incorporeal
hereditament or otherwise, and any proceeds of the foregoing;
RELATED WRITING means any note, mortgage, security agreement, other lien
instrument, financial statement, audit report, notice, legal opinion,
Credit Request, officer's certificate or other writing of any kind which is
delivered to the Bank and which is relevant in any
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manner to this Agreement or any Related Writing and includes, without
limitation, the Subject Notes and the other writings referred to in
sections 3A and 4A;
REPORTABLE EVENT has the meaning ascribed thereto by XXXXX;
PRIME RATE LOAN means a Subject Loan maturing in the manner described in
the first sentence of subsection 2B.08 and bearing interest in accordance
with subsection 2B.11;
SUBJECT COMMITMENT means Bank's commitment to extend credit to Borrower
pursuant to sections 2A and 2B of this Agreement and upon the terms,
subject to the conditions of this Agreement and in accordance with the
other provisions of this Agreement;
SUBJECT INDEBTEDNESS means, collectively, the principal of and interest on
the Subject Loans and all fees and other liabilities, if any, incurred by
Borrower to Bank pursuant to this Agreement or any Related Writing;
SUBJECT LOAN means a loan obtained by Borrower pursuant to this Agreement;
SUBJECT NOTE means a note executed and delivered by Xxxxxxxx and being in
the form and substance of Exhibit B with the blanks appropriately filled;
SUBORDINATED, as applied to any liability of Borrower, means a liability
which at the time in question is subordinated (by written instrument in
form and substance satisfactory to Bank) in favor of the prior payment in
full of Borrower's Debt to Bank;
SUBSIDIARY means a corporation or other business entity if shares
constituting a majority of its outstanding capital stock (or other form of
ownership) or constituting a majority of the voting power in any election
of directors (or shares constituting both majorities) are (or upon the
exercise of any outstanding warrants, options or other rights would be)
owned directly or indirectly at the time in question by the corporation in
question or another SUBSIDIARY of that corporation or any combination of
the foregoing;
SUPPLEMENTAL SCHEDULE means the schedule incorporated into this Agreement
as Exhibit A;
TOTAL LIABILITIES means the aggregate (without duplication) of all
liabilities of the corporation or corporations in question and includes,
without limitation, (a) any indebtedness which is secured by any mortgage,
security interest or other lien on any of their property even if the full
faith and credit of none of them is pledged to the payment thereof, (b) any
indebtedness for borrowed money or Funded Indebtedness of any kind if any
such corporation or corporations is a Guarantor thereof and (c) any
Subordinated indebtedness; PROVIDED, that there shall be excluded any
liability under a
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reimbursement agreement relating to a letter of credit issued to finance
the importation or exportation of goods;
WHOLLY-OWNED, as applied to a Subsidiary, means that all of the outstanding
shares of stock and all of the outstanding warrants, options and other
rights to purchase stock, other than directors' qualifying shares, are held
of record and beneficially owned by Xxxxxxxx;
the foregoing definitions shall be applicable to the respective plurals of
the foregoing defined terms.
Address: SIFCO INDUSTRIES, INC.
000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy: By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President-Finance & CFO
Address: NATIONAL CITY BANK
0000 Xxxx Xxxxx Xxxxxx
Attn: Corporate Banking Division
Cleveland, Ohio 44114-3484 By: /s/ Xxxxx Xxxxxxx
Telecopy: 216/222-9396 ------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
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SUPPLEMENTAL SCHEDULE
There is no item which Borrower must disclose in this Supplemental Schedule in
order to be in full compliance with subsections 3D.01, 3D.02, 3D.03 and 3D.04,
nor is there any addition or exception to the representations and warranties in
section 4B.
EXHIBIT A
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NOTE
$10,000,000 Cleveland, Ohio, April 30, 2002
FOR VALUE RECEIVED, the undersigned, SIFCO INDUSTRIES, INC. (BORROWER), an Ohio
corporation, promises to pay to the order of NATIONAL CITY BANK, at the payee's
main office in Cleveland, Ohio, the principal sum of
TEN MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side), together with interest computed thereon in accordance with
the Credit Agreement referred to below, which principal and interest is payable
in accordance with the provisions in the Credit Agreement.
This note is issued pursuant to a certain Amended and Restated Credit Agreement
(the "Credit Agreement") made as of April 30, 2002 by and between the payee and
Borrower. The Credit Agreement contains definitions applicable to this note,
provisions governing the making of loans, the acceleration of the maturity
thereof, rights of prepayment and other provisions applicable to this note. Each
endorsement, if any, on the reverse side of this note (or any allonge thereto)
shall be prima facie evidence of the data so endorsed.
Xxxxxxxx hereby authorizes any attorney at law at any time or times to appear in
any state or federal court of record in the United States of America after the
indebtedness represented by this note shall have become due, whether by lapse of
time or by acceleration of maturity, to waive the issuance and service of
process, to present this note (together with any endorsement or endorsements
thereon) to the court, to admit the maturity thereof and the nonpayment thereof
when due, to confess judgment against Xxxxxxxx in favor of the holder of this
note for the full amount then appearing due, together with interest and costs of
suit, and thereupon to release all errors and waive all rights of appeal and
stay of execution. The foregoing warrant of attorney shall survive any judgment,
it being understood that should any judgment against Borrower be vacated for any
reason, the holder of this note may nevertheless utilize the foregoing warrant
of attorney in thereafter obtaining additional judgment or judgments against
Xxxxxxxx.
Address: SIFCO INDUSTRIES, INC.
000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
By:
-------------------------------------
Name:
Title:
WARNING BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR
PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECTFROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY
OTHER CAUSE.
EXHIBIT B
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EXTENSION AGREEMENT
This extension agreement made as of ___________________, 20___ by and between
Sifco Industries, Inc. (BORROWER) and National City Bank (BANK):
The parties have executed and delivered a certain amended and restated credit
agreement dated April 30, 2002 which provides for, among other things, a Subject
Commitment aggregating $10,000,000 and available to Borrower, upon certain terms
and conditions until March 31, 2004 (the EXPIRATION DATE now in effect) subject
to any earlier reduction or termination pursuant to the credit agreement.
In consideration of our mutual agreements and for other valuable considerations,
the parties agree that subsection 2A.02 of the credit agreement (captioned
"TERM") is hereby amended by deleting the date ______________, 20____ and by
substituting therefor the date "______________, 20____", which latter date shall
be the EXPIRATION DATE hereafter in effect.
In all other respects the credit agreement shall remain in full effect.
SIFCO INDUSTRIES, INC.
By
--------------------------------------
NATIONAL CITY BANK
By
--------------------------------------
EXHIBIT C
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