REVOLVING CREDIT AND TERM LOAN AGREEMENT
BY AND AMONG
NIAGARA COLD DRAWN CORP.,
LASALLE STEEL COMPANY
AND
MANUFACTURERS AND TRADERS TRUST COMPANY,
CIBC INC.
AND
NATIONAL CITY BANK
AND
MANUFACTURERS AND TRADERS TRUST COMPANY, AS AGENT
__________________________________________
Dated as of April 18, 1997
TABLE OF CONTENTS
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . 2
1.2 UCC Definitions . . . . . . . . . . . . . . . . . 19
1.3 Other Definitional Provisions . . . . . . . . . . 19
SECTION 2 AMOUNT AND TERMS OF THE CREDIT . . . . . . . . . 19
2.1 Revolving Credit Loan . . . . . . . . . . . . . . 19
2.2 Term Loan . . . . . . . . . . . . . . . . . . . . 22
2.3 Interest and LIBOR Rate Elections . . . . . . . . 23
2.4 Prepayment . . . . . . . . . . . . . . . . . . . 25
2.5 Special Provisions Governing LIBOR Rate Loans -
Increased Costs . . . . . . . . . . . . . . . . . 26
2.6 Required Termination and Repayment of LIBOR Rate
Loans . . . . . . . . . . . . . . . . . . . . . . 26
2.7 Non-Receipt of Funds by Agent . . . . . . . . . . 28
2.8 No Liability for Good Faith Action . . . . . . . 28
2.9 Taxes . . . . . . . . . . . . . . . . . . . . . . 28
2.10 Method of Payment . . . . . . . . . . . . . . . . 30
SECTION 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . 31
3.1 Financial Condition . . . . . . . . . . . . . . . 31
3.2 No Change . . . . . . . . . . . . . . . . . . . . 32
3.3 Corporate Existence; Compliance with Law . . . . 32
3.4 Ownership of Borrower Equity Interests. . . . . . 33
3.5 Corporate Power; Authorization; Enforceable
Obligations . . . . . . . . . . . . . . . . . . . 33
3.6 No Legal Bar . . . . . . . . . . . . . . . . . . 34
3.7 No Litigation . . . . . . . . . . . . . . . . . . 34
3.8 No Default . . . . . . . . . . . . . . . . . . . 34
3.9 Ownership of Property; Liens . . . . . . . . . . 34
3.10 Solvency . . . . . . . . . . . . . . . . . . . . 35
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . 35
3.12 Federal Regulations . . . . . . . . . . . . . . . 35
3.13 Investment Company Act . . . . . . . . . . . . . 35
3.14 Environmental Matters . . . . . . . . . . . . . . 35
3.15 ERISA . . . . . . . . . . . . . . . . . . . . . . 36
3.16 Acquisition Agreement . . . . . . . . . . . . . . 37
3.17 Acquisition . . . . . . . . . . . . . . . . . . . 37
3.18 Collateral Locations . . . . . . . . . . . . . . 37
3.19 Licenses and Permits . . . . . . . . . . . . . . 37
3.20 Subordinated Debt Offering . . . . . . . . . . . 37
3.21 Employee Controversies . . . . . . . . . . . . . 37
3.22 Patents, Trademarks and Licenses . . . . . . . . 37
3.23 Full Disclosure . . . . . . . . . . . . . . . . . 38
3.24 Survival of Warranties . . . . . . . . . . . . . 38
SECTION 4 CONDITIONS PRECEDENT . . . . . . . . . . . . . . 38
4.1 Conditions to Extension of Credit . . . . . . . . 38
4.2 Conditions to Subsequent Extension of Credit . . 42
SECTION 5 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 42
5.1 Financial Statements . . . . . . . . . . . . . . 43
5.2 Certificates; Other Information . . . . . . . . . 44
5.3 Conduct of Business and Maintenance of Existence 45
5.4 Compliance . . . . . . . . . . . . . . . . . . . 45
5.5 Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . 45
5.6 Notices . . . . . . . . . . . . . . . . . . . . . 46
5.7 Motor Vehicle Titles . . . . . . . . . . . . . . 47
5.8 Corporate Standing. . . . . . . . . . . . . . . 47
5.9 Discharge of Indebtedness and Obligations; Leases. 47
5.10 Maintenance of Properties; Insurance . . . . . . 48
5.11 Fair Labor Standards Act. . . . . . . . . . . . 48
5.12 Changes in Management, Ownership and Control . . 48
5.13 Guarantees By Subsidiaries . . . . . . . . . . . 48
5.14 Use of Proceeds . . . . . . . . . . . . . . . . . 49
SECTION 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . 49
6.1 Indebtedness . . . . . . . . . . . . . . . . . . 49
6.2 Limitation on Liens . . . . . . . . . . . . . . . 50
6.3 Financial Covenants . . . . . . . . . . . . . . . 50
6.5 Payment of 12.5% Subordinated Debt Notes . . . . 51
6.6 Amendment or Modification of Subordinated Debt . 51
6.7 Limitation on Contingent Obligations . . . . . . 52
6.8 Prohibition of Fundamental Changes . . . . . . . 52
6.9 Prohibition on Sale of Assets . . . . . . . . . . 52
6.10 Loans, Advances and Investments . . . . . . . . . 53
6.11 Compliance with ERISA . . . . . . . . . . . . . . 53
6.12 Dividends . . . . . . . . . . . . . . . . . . . . 54
6.13 Subsidiaries and Affiliates . . . . . . . . . . . 54
6.14 Affiliate Transactions . . . . . . . . . . . . . 54
SECTION 7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . 54
7.1 Events of Default . . . . . . . . . . . . . . . . 54
7.2 Effect of Event of Default . . . . . . . . . . . 57
7.3 Right of Set Off . . . . . . . . . . . . . . . . 59
SECTION 8 THE AGENT . . . . . . . . . . . . . . . . . . . 59
8.1 Authorization and Action . . . . . . . . . . . . 59
8.2 Liability of Agent . . . . . . . . . . . . . . . 59
8.3 Rights of Agent as a Bank . . . . . . . . . . . . 60
8.4 Independent Credit Decisions . . . . . . . . . . 60
8.5 Indemnification . . . . . . . . . . . . . . . . . 60
8.6 Successor Agent . . . . . . . . . . . . . . . . . 61
8.7 Sharing of Payments, Etc. . . . . . . . . . . . . 61
SECTION 9 MISCELLANEOUS . . . . . . . . . . . . . . . . . 62
9.1 Increased Costs/Capital Adequacy . . . . . . . . 62
9.2 Assignments, Participation, etc . . . . . . . . . 63
9.3 Amendments, Waivers and Consents . . . . . . . . 65
9.4 Notices . . . . . . . . . . . . . . . . . . . . . 66
9.5 No Waiver; Cumulative Remedies . . . . . . . . . 67
9.6 Survival of Representations and Warranties . . . 68
9.7 Payment of Expenses and Taxes; Indemnity . . . . 68
9.8 Successors and Assigns . . . . . . . . . . . . . 69
9.9 Counterparts . . . . . . . . . . . . . . . . . . 69
9.10 Governing Law . . . . . . . . . . . . . . . . . . 69
9.11 Inconsistent Provisions . . . . . . . . . . . . . 69
9.12 Further Assurances . . . . . . . . . . . . . . . 69
9.13 Waiver of Jury Trial . . . . . . . . . . . . . . 69
9.14 Consent to Jurisdiction . . . . . . . . . . . . . 69
9.15 Headings . . . . . . . . . . . . . . . . . . . . 70
LIST OF SCHEDULES
3.4(a) Capitalization of Borrowers
3.9 Liens
3.14 Environmental Matters
3.15 ERISA
3.18 Borrowers' Facilities
3.21 Employee Controversies
4.1 Mortgaged Real Property
6.1 Indebtedness
6.7 Contingent Obligations
6.10 Investments
EXHIBITS
Exhibit A Borrowing Base Certificate
Exhibit B Notice of Borrowing
Exhibit C Notice of Continuation of Term Loan as
LIBOR Rate Loan
Exhibit D Notice of Continuation of Revolving Credit
Loan(s) as LIBOR Rate Loan(s)
Exhibit 2.9(c) Section 2.9(c)(ii) Certificate
REVOLVING CREDIT AND TERM LOAN AGREEMENT
AGREEMENT dated as of April 18, 1997 by and among NIAGARA
COLD DRAWN CORP., a Delaware corporation, having its principal
office at 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx, ("NCDC"),
LASALLE STEEL COMPANY, a Delaware corporation, having its
principal office at 0000 000xx Xxxxxx, Xxxxxxx, Xxxxxxx
("LaSalle") (NCDC and LaSalle being collectively referred to as
the "Borrowers", and individually as a "Borrower"), MANUFACTURERS
AND TRADERS TRUST COMPANY, a New York banking corporation having
its principal office at One M&T Plaza, Buffalo, New York ("M&T"),
CIBC INC., a Delaware banking corporation having its principal
office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("CIBC") and
NATIONAL CITY BANK, a Delaware corporation, having its principal
office at National City Center, 0000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxx ("National") (M&T, CIBC and National being
collectively referred to herein as the "Banks", individually as a
"Bank"), and M&T, as administrative, collateral and documentation
agent for the Banks (M&T to be referred to in such capacity as
"Agent").
WHEREAS, pursuant to a Revolving Credit Agreement and a Term
Loan Agreement, each dated as of January 31, 1996, by and between
M&T and NCDC, M&T provided certain credit facilities to NCDC
(collectively, the "1996 Credit Facilities"); and
WHEREAS, pursuant to a Stock Purchase Agreement by and among
Niagara Corporation, a Delaware corporation ("Niagara"), NCDC and
Quanex Corporation, a Delaware corporation ("Quanex"), dated as
of April 18, 1997, NCDC is acquiring all of the issued and
outstanding capital stock of LaSalle (the "Acquisition"); and
WHEREAS, in order to repay all existing indebtedness of NCDC
to M&T under the 1996 Credit Facilities, to partially fund the
Acquisition and to provide general working capital to the
Borrowers thereafter, the Borrowers have requested the Banks to
make available a term loan in the amount of FORTY MILLION DOLLARS
($40,000,000.00) and a revolving credit facility in an aggregate
amount of FIFTY MILLION DOLLARS ($50,000,000.00); and
WHEREAS, the Banks, subject to the terms and conditions of
this Agreement, are willing to make available to the Borrowers
the requested term loan and revolving credit facility.
NOW, THEREFORE, the Borrowers, jointly and severally, and
the Banks, severally, but not jointly, agree as follows:
SECTION 1 DEFINITIONS
1.1 Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, shall, except where the
context otherwise requires, have the following meanings:
"Acquisition": has the meaning set forth in the third
paragraph of this Agreement.
"Acquisition Agreement": the Stock Purchase Agreement
dated April 18, 1997 by and among NCDC, Niagara, and Quanex
providing for the Acquisition.
"Adjusted Prime Rate": means (a) with respect to any
Revolving Credit Loan, the Prime Rate plus 25 basis points, and
(b) with respect to the Term Loan, the Prime Rate plus 50 basis
points.
"Affiliate": with respect to a Person, means (a) any
Person which directly or indirectly controls, or is controlled
by, or is under common control with another Person, (b) another
Person (a "parent") that directly or indirectly beneficially owns
or holds ten percent (10%) or more of the voting stock of such
Person, or any current shareholder of such parent owning ten
percent (10%) or more of the outstanding voting stock of such
parent, or any member of such shareholder's immediate family, or
(c) any Person who is an officer or director of such Person, or
any member of the immediate family of such officer or director.
The term "control" means the possession of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract
or otherwise.
"Agent": has the meaning set forth in the first
paragraph of this Agreement.
"Agreement": this Revolving Credit and Term Loan
Agreement, as supplemented, amended or modified from time to
time.
"Assignment of Leases and Rents": the assignment
agreements described in Subsection 4.1(d).
"Authorized Officers": shall mean the Chairman of the
Board, President or Executive Vice President of NCDC, and the
Chairman of the Board, President or Executive Vice President of
LaSalle.
"Banks" and "Bank": have the meanings set forth in the
first paragraph of this Agreement.
"Borrowers" and "Borrower": have the meanings set
forth in the first paragraph of this Agreement.
"Borrowing Base": as of a particular time, the sum of
(a) eighty-five percent (85%) of Eligible Accounts, plus (b)
sixty percent (60%) of Eligible Inventory at such time.
"Borrowing Base Certificate": as of a particular time,
means a certificate in form and substance acceptable to Agent,
executed by an Authorized Officer of each Borrower, certifying as
to the amount of the Borrowing Base at such time, the form of
which is attached hereto as Exhibit A.
"Borrowing Date": as defined in Subsection 2.1(c).
"Business Day": (a) for all purposes other than as
covered by clause (b) below, any day excluding Saturday, Sunday
and any day on which Agent is authorized by law or other
governmental action to close, and (b) with respect to all notices
and determinations in connection with LIBOR, any day which is a
Business Day described in clause (a) and which is also a day for
trading by and between banks in U.S. dollar deposits in the
London interbank market.
"Capital Expenditures": of any Person, means at any
time, all expenditures for any fixed assets or improvements, or
for replacements, substitutions or additions thereto, which have
a useful life of more than one (1) year, including, but not
limited to, the direct or indirect acquisition of such assets by
way of increased product or service charges, offset items or
otherwise, and additions to assets subject to capitalized leases
recorded in accordance with GAAP, but excluding expenditures for
capital assets funded by proceeds of casualty insurance policies.
"Capitalized Lease": of any Person means any lease the
obligations under which have been, or are required to be, in
accordance with GAAP, recorded on the books of such Person as a
capital lease liability.
"Cash Interest Expense": for a Person, means, for any
period, the sum of the aggregate interest expense (excluding all
amounts attributable to non-cash items of interest expense) of
such Person for such period in respect of Indebtedness of such
Person, as determined in accordance with GAAP.
"Change in Control": means the occurrence of any one
or more of the following events or circumstances:
(a) a Tag-Along Trigger Event shall have occurred;
(b) any Person (other than (i) Niagara, (ii) any
trustee or other fiduciary holding securities under a Plan of
Niagara, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, (iv) any corporation
owned, directly or indirectly, by the stockholders of Niagara in
substantially the same proportions as their ownership of
Niagara's common stock, (v) Xxxxxxx Xxxxxx, (vi) the Xxxxxxx X.
Xxxxxx 1987 Grantor Income Trust, (vii) the Xxxxxx Family 1989
Trust, or (viii) Xxxxxxx X. Xxxxxx (each an "excluded person")),
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of securities of Niagara representing twenty
percent (20%) or more of the combined voting power of Niagara's
then outstanding voting securities;
(c) during any period of not more than twenty four
(24) consecutive calendar months, individuals who at the
beginning of such period constitute the board of directors of
Niagara, any new director (other than a director designated by a
person who has entered into an agreement with Niagara to effect a
transaction described in clause (b), (c), or (e) of this
definition) whose election by such board or nomination for
election by Niagara's stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of such period, or whose
election or nomination for election was previously so approved
(other than approval given in connection with an actual or
threatened proxy or election contest), cease for any reason to
constitute at least a majority of such board;
(d) the stockholders of Niagara approve a merger or
consolidation of Niagara with any other corporation or other
Person, other than (i) a merger or consolidation that would
result in the voting securities of Niagara outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving or parent entity) eighty percent
(80%) or more of the combined voting power of the voting
securities of Niagara or such surviving or parent entity
outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a
recapitalization of Niagara (or similar transaction) in which no
Person other than an "excluded person" (as defined in clause (b)
of this definition) acquires twenty percent (20%) or more of the
combined voting power of Niagara's then outstanding securities;
(e) the stockholders of Niagara approve a plan of
complete liquidation of Niagara or an agreement for the sale or
disposition by Niagara of all or substantially all of Niagara's
assets (or any other transaction having a similar effect); or
(f) NCDC ceases to be a wholly-owned Subsidiary of
Niagara; or
(g) Xxxxxxx X. Xxxxxx shall cease to own at least sixty
six and two thirds percent (66 2/3%) of the issued and
outstanding shares of Niagara's voting stock owned by Xxxxxxx X.
Xxxxxx at the date of this Agreement; provided, however, that for
the purposes of this Agreement, voting stock owned by the Xxxxxxx
X. Xxxxxx 1987 Grantor Income Trust and the Xxxxxx Family 1989
Trust shall be deemed to be owned by Xxxxxxx X. Xxxxxx. As of
the date of this Agreement, Xxxxxxx X. Xxxxxx owns (after taking
into effect the ownership of Niagara voting stock by such
trusts), eighteen and seventy one hundredths percent (18.71%) of
the issued and outstanding voting stock of Niagara.
"Code": the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, and any
regulations promulgated thereunder.
"Collateral: means all property which is subject to or
is to be subject to a Lien granted by the Collateral Documents.
"Collateral Documents": the collective reference to the
Security Agreements, the Guaranty Agreements, the Mortgages, the
Assignments of Leases and Rents, and the Environmental
Indemnification Agreement.
"Consolidated", "Consolidating" or "Consolidated
Basis": for any Persons, means the consolidation of the accounts
of such Persons in accordance with GAAP, including principles of
consolidation.
"Consolidated Current Assets": means Current Assets
that would be reflected on the Consolidated balance sheet of
Borrowers and their Subsidiaries in accordance with GAAP.
"Consolidated Current Liabilities": means Current
Liabilities that would be reflected on the Consolidated balance
sheet of Borrowers and their Subsidiaries in accordance with
GAAP.
"Consolidated Liabilities": means Liabilities that
would be reflected on the Consolidated balance sheet of Borrowers
and their Subsidiaries in accordance with GAAP.
"Consolidated Net Income": means Net Income that would
be reflected on the Consolidated income statement of Borrowers
and their Subsidiaries in accordance with GAAP.
"Consolidated Net Worth": means Net Worth that would
be reflected on the Consolidated balance sheet of Borrowers and
their Subsidiaries in accordance with GAAP.
"Contingent Obligation": as to any Person, means any
obligation of such Person guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary
obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary
obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure
the owner of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation
shall not include endorsements of instruments for deposit or
collection in the ordinary course of business.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which such Person is or purports to
be a party or by which it or any of its property is or purports
to be bound.
"Credit": all extensions of credit set forth in Section
2 of this Agreement.
"Current Assets": means all assets treated as current
assets in accordance with GAAP consistent with those used in the
preparation of the financial statements referred to in
Subsections 5.1(a) and 5.1(b).
"Current Liabilities": means all liabilities treated as
current in accordance with GAAP consistent with those used in the
preparation of the financial statements referred to in
Subsections 5.1(a) and 5.1(b).
"Default": any Event of Default or any condition or
event which, after notice or lapse of time, or both, would become
an Event of Default.
"Dividend": with respect to a Person means (a) any
declaration of payment, or payment, of cash, property, securities
or obligations, to any holder of an equity or capital interest in
such Person (other than a payment solely in the form of stock of
such Person), or (b) any payment on account of, or action to set
apart assets for, or action to create a sinking or other
analogous fund for, the purchase, redemption, retirement or other
acquisition of any shares of any class of stock of such Person.
"Eligible Accounts": trade accounts receivable created
or acquired by Borrowers and their Subsidiaries in the ordinary
course of business which (a) are, and at all times continue to
be, subject to a perfected Lien of Agent pursuant to the Security
Agreements, (b) are not unpaid more than ninety (90) days from
invoice date, (c) are owing from account debtors with a principal
office located in the United States or Canada, (d) are not
subject to a contra offset, and (e) are, and at all times
continue to be, otherwise acceptable to Agent.
"Eligible Assignee": (a) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least Two Hundred
Fifty Million Dollars ($250,000,000); (b) a commercial bank
organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development, or
a political subdivision of any such country, and having a
combined capital and surplus of at least Two Hundred Fifty
Million Dollars ($250,000,000); (c) any Affiliate of any Bank, or
(d) an insurance company organized under the laws of the United
States, or any state thereof, and having a combined capital and
surplus of at least Two Hundred Fifty Million Dollars
($250,000,000).
"Eligible Inventory": Borrowers' and their
Subsidiaries' inventory (a) of raw materials and saleable
finished goods manufactured or acquired by Borrowers or their
Subsidiaries in the ordinary course of business, (b) stored in a
location or locations and in a manner acceptable to the Agent,
(c) valued at the lower of cost or market value on a FIFO basis,
(d) in which inventory the Agent holds, and at all times
continues to hold, a perfected Lien pursuant to the Security
Agreements, and (e) which inventory is, and at all times
continues to be, acceptable to the Agent.
"Environmental Indemnification Agreement": means the
agreement described in Subsection 4.1(e).
"ERISA": the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in
effect from time to time. References to sections of ERISA shall
be construed to also refer to any successor sections.
"Eurocurrency Reserve Requirement": means, for any
LIBOR Rate Loan for the LIBOR Rate Period therefor, the daily
average of the stated maximum rate (expressed as a decimal) at
which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such LIBOR Rate
Period under Regulation D by a Bank against "Eurocurrency
liabilities" (as such term is used in Regulation D) but without
benefit or credit of proration, exemptions or offsets that might
otherwise be available from time to time under Regulation D.
Without limiting the effect of the foregoing, the Eurocurrency
Reserve Requirement shall reflect (a) any other reserves required
to be maintained against any category of liabilities that
includes deposits by reference to which the LIBOR for LIBOR Rate
Loans is to be determined; or (b) any category of extension of
credit or other assets that include LIBOR Rate Loans.
"Event of Default": any of the events described in
Subsection 7.1.
"Excess Cash Flow": means, with respect to the
Borrowers and their Subsidiaries calculated on a combined basis,
for any Fiscal Year, the difference between:
(a) the sum, without duplication, of (i) Consolidated Net
Income, (ii) depreciation, (iii) Cash Interest Expense, (iv)
any non-recurring items of income as determined by the
Agent, and (v) amortization expense; and
(b) the sum, without duplication, of (i) scheduled principal
payments of Indebtedness, (ii) Cash Interest Expense, (iii)
Capital Expenditures, (iv) any non-recurring expense items
as determined by the Agent, (v) all payments made in
accordance with the proviso to Subsection 6.12, and (vi)
cash payments made with respect to Taxes.
"Fiscal Year": any period of twelve (12) consecutive
calendar months ending on the last day of December, or, upon the
prior consent of the Agent, any period of twelve (12) consecutive
calendar months ending on another date.
"GAAP": the generally accepted accounting principles
applied in the preparation of the audited financial statements of
Niagara, the Borrowers, and the Subsidiaries of Borrowers as (a)
shall be consistent with the then-effective principles
promulgated or adopted by the Financial Accounting Standards
Board ("FASB") and/or the American Institute of Certified Public
Accountants ("AICPA") and any predecessors and successors
thereof, so as to properly reflect the financial condition, and
the results of operations and changes in financial position of
Niagara, and of the Borrowers and their Subsidiaries, except that
any accounting principle or practice required to be changed by
FASB or AICPA in order to continue as a generally accepted
accounting principle or practice may be so changed, and (b) shall
be concurred in by the Independent Public Accountants. In the
event of a change in GAAP, Agent and Borrowers will thereafter
negotiate in good faith to revise covenants in this Agreement
affected thereby in order to make such covenants consistent with
GAAP then in effect.
"Governmental Authority": any nation or government, any
state or other political subdivision thereof, and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled (through stock or
capital ownership or otherwise) by any of the foregoing.
"Guarantors": means, collectively, Niagara, and each
Subsidiary of the Borrowers.
"Guaranty Agreements": the Niagara Guaranty and the
unconditional continuing guaranty agreements executed by each
Subsidiary of the Borrowers pursuant to Subsection 5.13.
"Indebtedness": of any Person, at a particular time,
means all items which, in conformity with GAAP, would be
classified as liabilities on a balance sheet of such Person as at
such time and which constitute (a) indebtedness for borrowed
money or for the deferred purchase price of property or services
in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or any commitment
by which such Person assures a credit against loss, (including,
without limitation, all notes payable and drafts accepted
representing extensions of credit and all obligations evidenced
by bonds, debentures, notes or other similar instruments,
including, without limitation, the 12.5% Subordinated Notes, but
excluding trade payables incurred in the ordinary course of
business payable within ninety (90) days of the date thereof),
(b) obligations with respect to any conditional sale agreement or
title retention agreement, (c) indebtedness arising under
acceptance facilities, in connection with surety or other similar
bonds, and the outstanding amount of all letters of credit issued
for the account of such Person and, without duplication, all
drafts drawn thereunder, (d) all liabilities secured by any
security interest in any property owned by such Person even
though it has not assumed or otherwise become liable for the
payment thereof, (e) obligations under Capitalized Leases in
respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of
which obligations such Person assures a creditor against loss,
(f) obligations with respect to interest rate protection
agreements, and (g) any asserted withdrawal liability of any
Person or a commonly controlled entity under a Multiemployer
Plan.
"Initial Stockholders": means and includes:
(a) Xxxxxxx Xxxxxx, his wife, his children and
his grandchildren;
(b) the estate of, following the date of the
appointment of any of the following is effective, the
executors or administrators and any other similar
representative of the person or property of any of the
Persons named in clause (a);
(c) any trusts for the benefit of any, all or any
group of the foregoing persons;
(d) any partnerships all the partners of which,
and all corporations, limited liability companies or
similar Persons all of the equity interests in which,
are owned solely by the foregoing Persons, or any of
them or any group of them; and
(e) their respective successors and assigns.
"Independent Public Accountant": refers to BDO Xxxxxxx
LLP or any other nationally-recognized public accounting firm
selected by the Borrowers and consented to by the Agent, such
consent not to be unreasonably withheld.
"Interest Coverage Ratio": for any period with respect
to any Person, means, the ratio of:
(a) the sum for such period of: (i) Net Income, plus
(ii) the aggregate amount deducted in determining such Net
Income, representing (w) all Taxes of such Person, (x) interest
expense, (y) depreciation, and (z) amortization expense, in each
case as determined in accordance with GAAP,
to
(b) Cash Interest Expense for such period.
"Investments": investments as described in Subsection
6.10.
"Issuable Share": means and includes at any time,
(a) a share of issued and outstanding Niagara
common stock; and
(b) a Right, and (without duplication) all shares
of Niagara common stock issuable upon exercise of such
Right, in each case at such time.
For purposes of this definition, a Right to acquire one share of
Niagara common stock shall constitute one Issuable Share, and a
Person shall be deemed to own an Issuable Share if such Person
has a Right to acquire such share whether or not such Right is
exercisable at such time.
"Internal Revenue Service": the United States Internal
Revenue Service, or any successor or analogous organization.
"knowledge", "knows": with respect to any Borrower, or
any Subsidiary of a Borrower, means the actual knowledge of any
executive or managerial employee of such Borrower or Subsidiary,
or knowledge that any such persons should have known in the
proper performance of their duties.
"LaSalle": has the meaning set forth in the first
paragraph of this Agreement.
"Liabilities": of any Person, means, at any time, all
amounts which, in accordance with GAAP, would be included as
liabilities on a balance sheet of such Person at such time.
"LIBOR": for any LIBOR Rate Period, the per annum rate,
as determined by the Agent from any broker, quoting service or
commonly available source utilized by the Agent, at which United
States dollar deposits in immediately available funds are offered
in the London interbank eurodollar market at 11:00 a.m. Greenwich
Mean Time (or as soon thereafter as practicable) on the date that
is two (2) Business Days before the first day of such LIBOR Rate
Period for delivery on the first day of such LIBOR Rate Period
for a period equal to such LIBOR Rate Period.
"LIBOR Increment": with respect to (a) the Revolving
Credit Loan, 250 basis points, and (b) the Term Loan, 285 basis
points.
"LIBOR Interest Determination Date": a Business Day
which is two (2) Business Days prior to the commencement of each
LIBOR Rate Period during which the LIBOR rate will be applicable.
"LIBOR Rate Election": each election by the Borrowers
with respect to the LIBOR Rate Period for each LIBOR Rate Loan as
described in Subsection 2.3(b).
"LIBOR Rate Loan": the outstanding and unpaid
principal balance of the Term Loan, and the outstanding and
unpaid principal balance of each Revolving Credit Loan, bearing
interest at the LIBOR, plus the applicable LIBOR Increment.
"LIBOR Rate Period": the one (1) month, two (2) months,
three (3) months, or six (6) months period selected by a Borrower
pursuant to Subsection 2.3 of this Agreement on which the LIBOR
is in effect for a LIBOR Rate Loan, but in no event may a LIBOR
Rate Period extend beyond the Maturity Date of the Term Loan, or
beyond the Revolving Credit Termination Date for a Revolving
Credit Loan. If a LIBOR Rate Period would end on a day that is
not a Business Day, such LIBOR Rate Period shall be extended to
the next Business Day, unless such Business Day would fall in the
next calendar month, in which event such LIBOR Rate Period shall
end on the immediately preceding Business Day.
"License", "Licenses": means, individually and
collectively, with respect to a Person, each license, permit,
consent, certificate, certification, registration, declaration,
approval, and filing with any Governmental Authority or body, or
other person or entity, required for or in connection with such
Person's business.
"Lien": any mortgage, deed of trust, security
interest, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority
or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement
under the Uniform Commercial Code or comparable law of any
jurisdiction other than any financing statement filed in
connection with consignments or leases not intended as security).
"Loan" or "Loans": individually and collectively the
Term Loan and each Revolving Credit Loan.
"Loan Documents": the collective reference to this
Agreement, the Revolving Credit Note, the Term Loan Note, the
Collateral Documents, and all other agreements, instruments, and
documents executed by or on behalf of the Borrowers or any of the
Guarantors, and delivered to the Agent in connection with the
transactions contemplated by this Agreement.
"M&T": has the meaning set forth in the first
paragraph of this Agreement.
"Majority Banks": at any time the Banks holding at
least fifty one percent (51%) of the then aggregate Revolving
Credit Commitment and Term Loan Commitment, provided, that if the
Revolving Credit Commitment and the Term Loan Commitment shall
have been terminated in full, "Majority Banks" shall mean the
Banks holding, or holding participation interests pursuant to
Subsection 9.2(d) in, at least fifty one percent (51%) of the
aggregate of the then outstanding and unpaid principal amounts of
the Notes.
"Maturity Date": the maturity date of the Term Loan
Note as described in Subsection 2.2(b).
"Xxxxxxx & Xxxx Reports": means, collectively (a) the
Xxxxxxx & Eddy Environmental Assessment, Final Report, LaSalle
Steel Company, Fluid Power Operations, November 8, 1996, (b) the
Xxxxxxx & Xxxx Sampling Report, Final Submittal, LaSalle Steel
Company, Fluid Power Operations, November 8, 1996, and (c)
Xxxxxxx & Eddy letter dated February 27, 1997, entitled "Update
on Compliance Review for LaSalle Steel Properties."
"Mortgages": the collective reference to each
agreement described in Subsection 4.1(d).
"Multiemployer Plan": has the meaning assigned to such
term under section 3(37) of ERISA.
"1993 Warrants": means the Redeemable Common Stock
Purchase Warrants issued pursuant to the 1993 Warrant Agreement.
"1993 Warrant Agreement": means the Warrant Agreement,
made as of August 13, 1993, between Niagara (under its former
name, International Metals Acquisition Corporation) and
Continental Stock Transfer & Trust Company, as warrant agent, as
such agreement may be amended, restated or otherwise modified
from time to time.
"1993 Warrant Call Option Event": means any event or
circumstance (including, without limitation, that, as of any
date, the last sales price of the common stock of Niagara has
been at least 181.81% of the then effective exercise price of the
1993 Warrants on each of 20 consecutive trading days ending on
the third business day prior to such date) that, pursuant to the
terms of the 1993 Warrant Agreement, permits Niagara to exercise
its option under the 1993 Warrant Agreement to call all or a
portion of the 1993 Warrants for redemption.
"1993 Warrant Forced Exercise Net Proceeds Amount":
means, as of any date of determination after the occurrence of a
1993 Warrant Call Option Event, an amount equal to:
(a) the aggregate amount of the proceeds payable
to Niagara in respect of the exercise of 1993 Warrants
exercised by or on behalf of the holders of 1993
Warrants during the period commencing with the
occurrence of such 1993 Warrant Call Option Event and
ending immediately prior to such date of determination,
minus
(b) the aggregate amount of the redemption price
required by the terms of the 1993 Warrant Agreement to
be paid by Niagara in respect of any 1993 Warrants
called for redemption, and actually redeemed, by
Niagara during such period.
"1996 Credit Facilities": has the meaning set forth in
the first paragraph of this Agreement.
"NCDC": has the meaning set forth in the first
paragraph of this Agreement.
"NCDC Pledge Agreement": the agreement evidencing the
pledge of all issued and outstanding capital stock of LaSalle to
the Agent as described in Subsection 4.1(c)(iv).
"Net Income": of any Person, means, with respect to
any period, all amounts which, in conformity with GAAP, would be
included under net income on an income statement of such Person
for such period.
"Net Worth": for any Person, means, at any time, the
amounts that would, in accordance with GAAP, be shown as
shareholders' equity on a balance sheet of such Person at such
time, excluding any amount attributable to (a) any deferred
charge or prepaid expense of such Person, except for any prepaid
interests, tax or insurance premium, (b) any treasury stock of
such Person, (c) any unamortized debt discount or expense of such
Person, (d) any Investment of such Person, except for
Investments permitted by Subsection 6.10, or (e) any Investment
of such Person which is a security in a Subsidiary of such Person
in excess of the lesser of the cost or fair market value of such
security.
"Niagara": has the meaning set forth in the third
paragraph of this Agreement.
"Niagara Guaranty": the unconditional continuing
guaranty agreement of Niagara as described in Subsection 4.1(f).
"Niagara Pledge Agreement": the agreement evidencing
the pledge of all issued and outstanding capital stock of NCDC to
the Agent as described in Subsection 4.1(c)(iii).
"Note" or "Notes": individually and collectively the
Revolving Credit Note and the Term Loan Note.
"Notice of Borrowing": the notice of a proposed
borrowing delivered by a Borrower to Agent, as described in
Subsection 2.1(c).
"Obligations": the obligations described in Subsection
7.1(e)(i).
"Offering Memorandum": means Copy No. 8 of the
Confidential Information Memorandum for Niagara Cold Drawn Corp.
of $27,000,000 Senior Subordinated Notes with Common Stock
prepared by CIBC Wood Gundy Securities Corp., together with all
Exhibits thereto, as supplemented by a revised Exhibit A
(Financial Projections) thereto dated March 7, 1997.
"Patent Assignment Agreements": the agreements of the
Borrowers described in Subsection 4.1(c)(ii).
"PBGC": the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Permitted Issuable Shares Amount": means that number
of Issuable Shares (appropriately adjusted for any
reclassification (by combination, subdivision or otherwise) or
dividend payable in Niagara common stock or Rights) equal to
twenty five percent (25%) of the Issuable Shares beneficially
owned by the Initial Shareholders, taken as a group, on the date
of this Agreement.
"Person": any natural person, corporation, firm,
trust, partnership, business trust, joint venture, association,
government, governmental agency or authority, or any other
entity, whether acting in an individual, fiduciary, or other
capacity.
"Plan": a "pension plan", as such term is defined in
ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Plan) and to which the Borrower or any corporation,
trade or business that is, along with the Borrower, a member of a
controlled group of corporations or a controlled group of trades
or businesses (as described in sections 414(b) and 414(c),
respectively, of the Code or section 4001 of ERISA) may have any
liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA
at any time during the preceding five years, or by reason of
being deemed to be a contributing sponsor under section 4069 of
ERISA.
"Prime Rate": the rate of interest publicly announced
by M&T from time to time as its prime rate and as a base rate for
calculating interest on certain loans. The Prime Rate may or may
not be the most favorable rate charged by M&T to its customers
from time to time.
"Prime Rate Conversion Loan": following the absence of
the LIBOR pursuant to Subsection 2.6, the outstanding and unpaid
principal balance of the Term Loan, and the outstanding and
unpaid principal of each Revolving Credit Loan, in each such case
bearing interest at the Adjusted Prime Rate, pursuant to
Subsection 2.6(c).
"Prime Revolver Loan": the outstanding and unpaid
principal balance of each Revolving Credit Loan bearing interest
at the Adjusted Prime Rate, pursuant to Subsection 2.1(c).
"Principal Office": refers to the Agent's xxxxxx xx Xxx
X&X Xxxxx, Xxxxxxx, Xxx Xxxx 00000.
"Proportionate Revolving Credit Commitment": the
amount of each Bank's portion of the Revolving Credit Commitment
expressed as a percentage; (a) with respect to M&T, its
Proportionate Revolving Credit Commitment shall equal fifty
percent (50%); (b) with respect to CIBC, its Proportionate
Revolving Credit Commitment shall equal thirty three and thirty
three one hundredths percent (33.33%); and (c) with respect to
National, its Proportionate Revolving Credit Commitment shall
equal sixteen and sixty seven one hundredths percent (16.67%).
"Proportionate Term Loan Commitment": the amount of
each Bank's portion of the Term Loan Commitment expressed as a
percentage; (a) with respect to M&T, its Proportionate Term Loan
Commitment shall equal fifty percent (50%); (b) with respect to
CIBC, its Proportionate Term Loan Commitment shall equal thirty
three and thirty three one hundredths percent (33.33%); and (c)
with respect to National, its Proportionate Term Loan Commitment
shall equal sixteen and sixty seven one hundredths percent
(16.67%).
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Requirement of Law": with respect to any matter or
Person means any law, rule, regulation, order, decree or other
requirement having the force of law relating to such matter or
Person, and, where applicable, any interpretation thereof by any
authority having jurisdiction with respect thereto or charged
with the administration thereof.
"Revolving Credit Commitment": the commitments of the
Banks to provide the Revolving Credit Loans in an aggregate
amount not to exceed the lesser of (a) Fifty Million Dollars
($50,000,000), or (b) the Borrowing Base.
"Revolving Credit Loan", "Revolving Credit Loans":
individually and collectively the loans described in Subsection
2.1.
"Revolving Credit Note": the promissory noted
described in Subsection 2.1(b).
"Revolving Credit Termination Date": means (a) with
respect to each Prime Revolver Loan, the date that is the last
day of the thirty (30) day period commencing with such Prime
Revolver Loan's Borrowing Date, but in no event later than April
17, 2000, and (b) with respect to the Revolving Credit Commitment
and the Revolving Credit Note, April 17, 2000.
"Right": means and includes any warrant (including,
without limitation, any 1993 Warrant), option or other right, to
acquire common stock of Niagara and including, without
limitation, any right pursuant to the provisions of any security
convertible or exchangeable into common stock of Niagara.
"Security Agreements": the agreements described in
Subsection 4.1(c).
"Solvent": with respect to a Person means (a) the fair
market value of the assets of such Person is greater than the
total amount of liabilities (including contingent liabilities) of
such Person, (b) the present fair saleable value of the assets of
such Person is not less than the amount that will be required to
pay the liabilities of such Person on its existing debts as they
become absolute and matured, (c) such Person is able to realize
upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in
the normal course of business, (d) such Person does not intend
to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities
mature, and (e) such Person does not have reasonably small
capital, after giving due consideration to the prevailing
practice in the industry in which such Person is engaged.
"Stockholders' Agreement": the Stockholders Agreement
of Niagara, NCDC, Xxxxxxx Xxxxxx and the purchasers of the 12.5%
Subordinated Notes, dated as of April 18, 1997.
"Subordinated Debt": the Indebtedness of NCDC under
the separate Note and Stock Purchase Agreements dated as of April
18, 1997 by and among Niagara, NCDC, LaSalle and each of the
persons indicated therein (collectively, the "Subordinated Debt
Agreement") and under the 12.5% Subordinated Notes issued by NCDC
in connection therewith.
"Subordinated Debt Offering": the offering by NCDC of
subordinated notes bearing interest at 12.5% per annum and due on
April 18, 2005 (the "12.5% Subordinated Notes") in a principal
amount equal to Twenty Million Dollars ($20,000,000) pursuant to
the Subordinated Debt Agreement.
"Subsidiary": of any Person means any corporation,
limited liability company, partnership, joint venture or other
entity of which at least fifty percent (50%) of the voting stock
or other applicable ownership interest is owned by such Person,
directly or indirectly, including through one or more
Subsidiaries. When used in connection with the Borrowers, the
term "Subsidiary" shall not refer to NCDC as a subsidiary of
Niagara, or to LaSalle as a subsidiary of NCDC.
"Tag-Along Trigger Event": shall be deemed to have
occurred at any time when the Initial Stockholders, taken as a
group (and without giving effect to sales, transfers or other
dispositions of Issuable Shares by any Initial Stockholder to any
other Initial Stockholder), shall have sold, transferred or
otherwise disposed of a number of Issuable Shares which (after
giving effect to all prior or contemporaneous transfers,
dispositions, purchases and acquisitions) is more than the
Permitted Issuable Shares Amount in any sale, transfer or
disposal (or series of sales, transfers or disposals (whether
related or not)) after the Closing Date, provided that in
connection with any sale, transfer or other disposal if:
(a) immediately prior thereto, the aggregate
amount of Issuable Shares so sold, transferred or
otherwise disposed of by the Initial Stockholders since
the Closing Date is less than the Permitted Issuable
Shares Amount, and
(b) any of the Initial Stockholders sell Issuable
Shares in such transaction that, together with all
other Issuable Shares sold, transferred or otherwise
disposed of by the Initial Stockholders since the date
hereof equal or exceed the Permitted Issuable Shares
Amount,
then, for the purposes of this Agreement, the "Tag-Along Trigger
Event" shall be deemed to have occurred immediately prior to such
sale, transfer or other disposal.
"Taxes": any present or future tax, duty, levy,
impost, assessment or other charge of whatever nature now or
hereafter imposed by any Governmental Authority, but excluding
therefrom (a) a tax imposed on or measured by the net income
(including a franchise tax based on net income) of a Bank or its
lending offices by the United States or by the jurisdiction (or
political subdivision or taxing authority thereof or therein) in
which such Bank is incorporated or in which such Bank's principal
office or lending offices are located or are resident, (b) in the
case of any Bank organized under the laws of any jurisdiction
other than the United States or any state thereof (including the
District of Columbia), any taxes imposed by the United States by
means of withholding at the source unless such withholding
results from a change in applicable law, treaty or regulations or
the interpretation or administration thereof (including, without
limitation, any guideline or policy not having the force of law)
by any authority charged with the administration thereof
subsequent to the date such Bank becomes a Bank with respect to
the Loan or portion thereof affected by such change, (c) any
taxes to which a Bank is subject (to the extent of the tax rate
then in effect) on the date this Agreement is executed or would
be subject to such taxes on such date if a payment hereunder had
been received by such Bank on such date and with respect to any
Bank that becomes a party hereto after the date hereof, any taxes
to which such Bank is subject on the date it becomes a party
hereto (other than taxes which each of the other Banks is
entitled to reimbursements for pursuant to the terms of this
Agreement) and (d) taxes to which a Bank becomes subject
subsequent to the date referred to in clause (c) above as a
result of a change in the residence, place of incorporation, or
principal place of business of such Bank, a change in the branch
or lending office of such Bank participating in the transactions
set forth herein or other similar circumstances or as a result of
the recognition by such Bank of gain on the sale, assignment or
participation by such Bank of the participating interests in its
creditor positions hereunder.
"Term Loan": the loan described in Subsection 2.2.
"Term Loan Commitment": the commitments of the Banks
to provide the Term Loan in an aggregate amount equal to Forty
Million Dollars ($40,000,000).
"Term Loan Note": the promissory note described in
Subsection 2.2(b).
"Unused Revolving Credit Fee": the fee payable by
Borrowers as described in Subsection 2.1(f).
1.2 UCC Definitions. Unless otherwise defined in
Subsection 1.1 or elsewhere in this Agreement, capitalized words
shall have the meanings set forth in the New York Uniform
Commercial Code as in effect on the date of this Agreement.
1.3 Other Definitional Provisions. (a) All terms defined
in this Agreement shall have the meanings defined herein when
used in any Loan Document, unless otherwise specifically provided
for therein.
(b) As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not
defined in Subsection 1.1, and accounting terms partly defined in
Subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and section, subsection, and schedule
references are to this Agreement unless otherwise specified.
(d) The definitions of all terms defined in this
Agreement shall be equally applicable to both the singular and
plural forms of the terms defined.
SECTION 2 AMOUNT AND TERMS OF THE CREDIT
2.1 Revolving Credit Loan.
(a) Amounts to be Loaned. Subject to the terms and
conditions of this Agreement and relying upon the representations
and warranties herein set forth, each Bank severally agrees to
lend to the Borrowers prior to the Revolving Credit Termination
Date, such sum or sums of money (individually, a "Revolving
Credit Loan" and collectively, the "Revolving Credit Loans") as
the Borrowers may request in an aggregate principal amount at any
time outstanding not to exceed such Bank's Proportionate
Revolving Credit Commitment. Notwithstanding anything to the
contrary contained in this Agreement, or in any Loan Document, in
no event shall a Bank make any Revolving Credit Loan or Revolving
Credit Loans to Borrowers, either individually or collectively,
in an aggregate amount exceeding its Proportionate Revolving
Credit Commitment.
(b) Revolving Credit Note. All Revolving Credit Loans
made by the Banks under this Agreement shall be evidenced by, and
repaid with interest in accordance with, a single promissory note
of the Borrowers, in form and content acceptable to Agent, dated
the date of this Agreement ("Revolving Credit Note"). The Agent
shall set forth on a schedule attached to and made a part of the
Revolving Credit Note or on any separate similar schedule or on
any continuation of any such schedule (including, but not limited
to, any similar schedule maintained in computerized records)
annotations evidencing (i) the date and principal amount of each
Revolving Credit Loan, (ii) the aggregate of all principal
amounts of all Revolving Credit Loans, (iii) the amounts of any
repayments of principal of the Revolving Credit Loans, (iv) the
outstanding principal amount of the Revolving Credit Note, (v)
the applicable LIBOR Rate Period for each Revolving Credit Loan
that is a LIBOR Rate Loan, (vi) the applicable LIBOR and LIBOR
Increment for each Revolving Credit Loan that is a LIBOR Rate
Loan, (vii) the applicable Adjusted Prime Rate for each Revolving
Credit Loan that is a Prime Revolver Loan, and (viii) the
aggregate amounts of all payments under or repayments of
principal of the Revolving Credit Note. Each such annotation
shall, in the absence of manifest error, be conclusive and
binding upon the Borrowers. No failure of the Agent to make and
no error by the Agent in making any annotation on such attached
schedule or any such similar schedule shall affect the
obligations of the Borrowers to repay the principal amount of
each Revolving Credit Loan or the outstanding principal amount of
the Revolving Credit Note, the obligation of the Borrowers to pay
interest on the outstanding principal amount of each Revolving
Credit Loan or on the outstanding principal amount of the
Revolving Credit Note, or any other obligation of the Borrowers
to the Agent pursuant to this Agreement.
(c) Notice and Manner of Borrowing. Each Borrower
requesting a Revolving Credit Loan shall give the Agent notice (a
"Notice of Borrowing", in the form of Exhibit B hereto) at least
(i) three (3) Business Days prior to the date it desires any
Revolving Credit Loan to be made that will be a LIBOR Rate Loan,
and (ii) one (1) Business Day prior to the date it desires any
Revolving Credit Loan to be made that will be a Prime Revolver
Loan, specifying: (A) the date on which such Revolving Credit
Loan will be advanced (such Loan's "Borrowing Date"), (B) the
principal amount of such Revolving Credit Loan, and (C) if a
LIBOR Rate Loan, the duration of the LIBOR Rate Period elected by
such Borrower in such Notice of Borrowing. Each Notice of
Borrowing shall be irrevocable and shall be given to the Agent by
not later than 11:00 a.m. (Eastern Standard Time or Eastern
Daylight Savings Time, as the case may be) on the day which is
not less than the number of Business Days specified above for
such notice. Each Borrowing Date shall be a Business Day, and
for LIBOR Rate Loans shall be the proposed commencement date of
the applicable LIBOR Rate Period of such LIBOR Rate Loan. After
receiving a Notice of Borrowing, the Agent shall promptly notify
each Bank by telephone of such Notice of Borrowing and such
Bank's Proportionate Revolving Credit Commitment for the
principal amount of such Revolving Credit Loan. Each Bank shall,
before 11:00 a.m. (Eastern Standard Time or Eastern Daylight
Savings Time, as the case may be) on the Borrowing Date, deposit
with the Agent such Bank's Proportionate Revolving Credit
Commitment for the principal amount of such Revolving Credit Loan
in immediately available funds. Upon fulfillment of all
applicable conditions set forth herein and after receipt by the
Agent of such funds, the Agent shall pay or deliver all funds so
received to the order of the Borrower that delivered the Notice
of Borrowing at the Principal Office of the Agent. Each
Revolving Credit Loan that is a LIBOR Rate Loan which does not
utilize the Revolving Credit Commitment in full shall be in an
amount of not less than One Hundred Thousand Dollars ($100,000)
and, if in an amount greater than One Hundred Thousand Dollars
($100,000), shall be in whole multiples of Fifty Thousand Dollars
($50,000). Each Revolving Credit Loan that is a Prime Revolver
Loan which does not utilize the Revolving Credit Commitment in
full shall be in an amount of not less than Fifty Thousand
Dollars ($50,000) and, if in an amount greater than Fifty
Thousand Dollars ($50,000), shall be in whole multiples of Ten
Thousand Dollars ($10,000).
(d) Credit Termination. Within the limits of the
Revolving Credit Commitment and subject to the terms of this
Agreement (specifically including Subsection 2.1(e)), the
Borrowers may borrow, prepay the principal amount of any
Revolving Credit Loan pursuant to Subsection 2.4, and reborrow
amounts of the Revolving Credit Commitment under this Subsection
2.1 that were previously prepaid; provided, however, no further
Revolving Credit Loans shall be made on or after the Revolving
Credit Termination Date, at which date the Revolving Credit Loans
must be paid in full.
(e) Mandatory Repayment of Prime Revolver Loans.
Notwithstanding anything to the contrary in this Agreement or in
the Revolving Credit Note, the Borrowers shall repay the
outstanding and unpaid principal balance of each Prime Revolver
Loan, together with all applicable interest, to the Agent no
later than the applicable Revolving Credit Termination Date for
such Prime Revolver Loan.
(f) Unused Revolving Credit Fee. The Borrowers
agree to pay to the Agent a fee (the "Unused Revolving Credit
Fee") on the average daily unused portion of the Revolving Credit
Commitment from the date of the Revolving Credit Note until the
Revolving Credit Termination Date at the rate of three eights of
one percent (3/8%) per annum calculated on the basis of a year of
360 days, payable, in arrears, on the first day of each calendar
quarter during the term of the Revolving Credit Commitment,
commencing on the date of the Revolving Credit Note and ending on
the Revolving Credit Termination Date.
2.2 Term Loan.
(a) Amounts to be Loaned. Subject to the terms and
conditions of this Agreement, and relying upon the
representations and warranties herein set forth, each Bank
severally agrees to make a loan (the "Term Loan") to the
Borrowers on the date of this Agreement in an aggregate principal
amount not to exceed such Bank's Proportionate Term Loan
Commitment. Notwithstanding anything to the contrary contained
in this Agreement or in any Loan Document, in no event shall a
Bank lend to the Borrowers, either individually or collectively,
an amount of the Term Loan in excess of its Proportionate Term
Loan Commitment.
(b) Term Loan Note. The Term Loan shall be evidenced
by, and repaid with interest in accordance with, a single
promissory note of the Borrowers in form and content acceptable
to Agent, and dated the date of this Agreement ("Term Loan
Note"). Interest on the outstanding and unpaid principal amount
of the Term Loan Note will be payable from the date of the Term
Loan Note as hereinafter provided, and the principal amount of
the Term Loan Note shall be repaid commencing six (6) months from
the date of the Term Loan Note in seventy-eight (78) consecutive
monthly installments commencing November 1, 1997 with subsequent
installments being due on the first day of each calendar month
thereafter and one final installment due and payable on April 1,
2004 (the "Maturity Date") in the amount necessary to repay in
full the unpaid principal amount of the Term Loan Note.
The amount of each installment of principal repayment
of the Term Loan shall be as follows:
Installment Date Principal Repayment
November 1, 1997 through
and including April 1, 1998 $166,666
May 1, 1998, through
and including April 1, 1999 $333,333
May 1, 1999 through
and including April 1, 2000 $416,666
May 1, 2000 through
and including April 1, 2001 $500,000
May 1, 2001 through
and including April 1, 2002 $583,333
May 1, 2002 through
and including April 1, 2003 $666,666
May 1, 2003 through
and including March 1, 2004 $750,000
April 1, 2004 Outstanding Balance
of Term Loan
(c) Mandatory Principal Repayment from Excess Cash
Flow. Notwithstanding anything to the contrary in this Agreement
or in the Term Loan Note, in addition to any scheduled payments
of principal to be made by the Borrowers, the Borrowers shall
apply fifty percent (50%) of the amount of any Excess Cash Flow
in any Fiscal Year to repay the outstanding and unpaid principal
balance of the Term Loan Note. Excess Cash Flow shall be
determined at the end of each Fiscal Year based on the audited
consolidating financial statements of Borrowers and their
Subsidiaries to be supplied to Agent pursuant to Subsection
5.1(b), and the amount of any Excess Cash Flow shall be paid by
Borrowers to Agent within one hundred forty (140) days of the end
of such Fiscal Year. All amounts of Excess Cash Flow applied by
the Borrowers to the outstanding and unpaid principal balance of
the Term Loan Note pursuant to this Subsection shall be used to
reduce the installments of the principal amount of the Term Loan
Note pro rata.
(d) Mandatory Principal Repayment from Excess Warrant
Exercise Proceeds. Notwithstanding anything to the contrary in
this Agreement or in the Term Loan Note, in addition to any
scheduled payments of principal to be made by the Borrowers, upon
the occurrence of a 1993 Warrant Call Option Event and
corresponding payment of the 1993 Warrant Forced Exercise Net
Proceeds Amount (and any applicable prepayment compensation
pursuant to the applicable provisions of the Subordinated Debt
Agreement) (the aggregate amount of the 1993 Warrant Forced
Exercise Net Proceeds Amounts and any applicable prepayment
compensation to be referred to as the "Subordinated Debt Warrant
Prepayment") to the holders of the 12.5% Subordinated Notes, the
Borrowers shall, within three (3) Business Days of the payment in
full of the Subordinated Debt Warrant Prepayment to the holders
of the 12.5% Subordinated Notes, apply the amount of the proceeds
relating to the exercise of the 1993 Warrants in excess of the
Subordinated Debt Warrant Prepayment to repay the outstanding and
unpaid principal balance of the Term Loan Note. The amount of
the proceeds relating to the exercise of the 1993 Warrants
applied by the Borrowers to the outstanding and unpaid principal
balance of the Term Loan Note pursuant to this Subsection shall
be used to reduce the installments of the principal amount of the
Term Loan Note pro rata.
2.3 Interest and LIBOR Rate Elections.
(a) Computation and Payment of Interest.
(i) LIBOR RATE LOANS. The Borrowers shall pay
interest to the Agent on the outstanding and unpaid principal
amount of each LIBOR Rate Loan at the rate per annum equal to the
sum of (A) the LIBOR for such Loan for such Loan's LIBOR Rate
Period, plus (B) the applicable LIBOR Increment for such Loan.
Interest on each LIBOR Rate Loan shall be payable in arrears in
immediately available funds to the Agent at the Agent's Principal
Office on the first day of each month in the LIBOR Rate Period
with respect to such LIBOR Rate Loan.
(ii) PRIME REVOLVER LOANS. The Borrowers shall
pay interest to the Agent on the outstanding and unpaid principal
amount of each Prime Revolver Loan at the rate per annum equal to
the Adjusted Prime Rate. Any change in the Prime Rate shall be
effective as of the opening of business on the day on which such
change in the Prime Rate becomes effective. Interest on each
Prime Revolver Loan shall be payable in immediately available
funds to the Agent at the Agent's Principal Office (A) no later
than the last day of the thirty (30) day period commencing with
such Loan's Borrowing Date, or (B) if such Prime Revolver Loan is
prepaid pursuant to the provisions of Subsection 2.4(b), on the
date that such prepayment is made to Agent.
(iii) Interest on the Notes shall be computed on
the basis of a 360-day year for the actual number of days
elapsed.
(b) LIBOR Rate Elections. At the end of the initial
LIBOR Rate Period for each LIBOR Rate Loan, and at the end of
each subsequent LIBOR Rate Period for each LIBOR Rate Loan, the
Borrowers shall, as to each such LIBOR Rate Loan, make an
election (in the form of Exhibit C hereto with respect to the
Term Loan, and in the form of Exhibit D hereto with respect to
each Revolving Credit Loan that is a LIBOR Rate Loan) (the "LIBOR
Rate Election") at least three (3) Business Days prior to the
commencement of the LIBOR Rate Period described in such LIBOR
Rate Election, that specifies (i) the Business Day that is to be
the commencement date for the LIBOR Rate Period described in the
LIBOR Rate Election, and (ii) the duration of the LIBOR Rate
Period elected by such Borrower in such LIBOR Rate Election;
provided, however, that (A) for each Revolving Credit Loan that
is a LIBOR Rate Loan, any such LIBOR Rate Period may not extend
beyond the Revolving Credit Termination Date, (B) for the Term
Loan, the LIBOR Rate Period may not extend beyond the Maturity
Date, and (C) such LIBOR Rate Election need not be honored by
Agent if (I) any Event of Default occurs or exists before, and
remains uncured at, the time such LIBOR Rate Election is received
by the Agent, (II) for each Revolving Credit Loan that is a LIBOR
Rate Loan, [a] if the outstanding and unpaid principal balance of
such LIBOR Rate Loan is not at least One Hundred Thousand Dollars
($100,000), or [b] if such LIBOR Rate Period would overlap more
than seven (7) other LIBOR Rate Periods, or (III) with respect to
the Term Loan, if the LIBOR Rate Election does not apply to the
entire outstanding and unpaid principal balance of the Term Loan
Note. If a Borrower shall fail to make a LIBOR Rate Election
with respect to any LIBOR Rate Loan prior to the period for
providing such LIBOR Rate Election as described above, or if
Borrower's LIBOR Rate Election is not honored by Agent pursuant
to subclause (C) immediately above, such Borrower shall be deemed
to have elected a one (1) month LIBOR Rate Period for such Loan
pursuant to a properly submitted LIBOR Rate Election.
(c) Default Rate. After maturity of any Loan, whether
by acceleration or otherwise, the Borrowers shall pay interest at
a per annum rate equal to three percent (3%) above the interest
rate otherwise in effect thereon until such Loan is paid in full.
After maturity, whether by acceleration or otherwise, interest
shall be payable on demand. In no event shall the rate of
interest exceed the maximum rate permitted by applicable law. If
the Borrowers pay interest in excess of the amount permitted by
applicable law with respect to a Note, any such excess payment
received, collected or applied as interest by the Agent shall be
deemed to have been a mistake and automatically canceled and, if
received by the Agent, shall be refunded to the Borrowers.
(d) Late Charge. Upon failure to make any payment of
interest or principal on the Notes within ten (10) days of the
due date thereof, the Borrowers agree to pay to Agent, upon
demand by Agent, a late charge equal to three percent (3%) of the
amount of any such overdue amount of principal or interest. The
assessment and/or collection of late charges shall in no way
impair the right of Agent or the Banks to pursue any other
remedies hereunder.
2.4 Prepayment.
(a) LIBOR Rate Loans. The Borrowers shall have the
right to prepay without premium all or any portion of the
outstanding and unpaid principal balance of any LIBOR Rate Loan
on the expiration day of such Loan's LIBOR Rate Period. If any
LIBOR Rate Loan is prepaid at any other time, the Borrowers
shall, upon not less than ten (10) days prior written notice, pay
to Agent an amount equal to (i) the interest which would have
otherwise been payable on the amount prepaid during the remaining
term of the LIBOR Rate Period, less (ii) interest on the amount
prepaid for such term computed at an interest rate equal to the
yield-to-maturity which could be obtained on United States
Treasury Obligations, purchased in the market at the time of
prepayment, having a remaining term and coupon rate comparable to
the remaining term of the LIBOR Rate Period, and comparable to
the applicable interest rate, as determined by Agent in good
faith, and certified to the Borrower, such certificate to be
conclusive, absent manifest error. Any permitted partial
prepayment of principal of a LIBOR Rate Loan shall be in the
amount of One Hundred Thousand Dollars ($100,000.00) or a whole
multiple thereof. All payments applied by the Borrowers to the
outstanding and unpaid principal balance of the Term Loan Note
pursuant to this Subsection shall be used to reduce the
installments of the principal amount of the Term Loan Note pro
rata in the order of their maturities.
(b) Prime Revolver Loans. The Borrowers shall have
the right to prepay without premium the entire outstanding and
unpaid principal balance of each Prime Revolver Loan upon not
less than one (1) days' written notice to the Agent.
2.5 Special Provisions Governing LIBOR Rate Loans -
Increased Costs.
(a) In the event that on any LIBOR Interest
Determination Date, Agent shall have determined (which
determination shall be final, conclusive and binding) that:
(i) by reason of conditions in the London
interbank market or of conditions affecting the position of the
Banks in such market occurring after the date hereof, adequate
fair means do not exist for establishing LIBOR; or
(ii) by reason of (A) any applicable law or
governmental rule, regulation, guideline or order (or any written
interpretation thereof and including any new law or governmental
rule, regulation, guideline or order but excluding any of the
foregoing relating to taxes referred to in Subsection 2.9 of this
Agreement), or (B) other circumstances affecting the Banks or the
London interbank market or the position of the Banks in such
market (such as, but not limited to, official reserve
requirements), LIBOR does not represent the effective pricing to
the Banks for U.S. dollar deposits of comparable amounts for the
relevant period due to such increased costs;
then Agent shall give a notice by telephone, confirmed in
writing, to the Borrowers of such determination.
(b) Thereafter, the Borrowers shall pay to Agent upon
written request therefor, such additional amount as Agent in its
sole discretion, shall reasonably determine to be required to
compensate the Banks for such increased costs. A certificate as
to such additional amounts submitted to the Borrowers by Agent
shall set forth in reasonable detail the calculation of such
amounts and absent manifest error, be final, conclusive and
binding upon all parties hereto.
2.6 Required Termination and Repayment of LIBOR Rate Loans.
(a) In the event Agent shall have reasonably
determined, at any time (which determination shall be final,
conclusive and binding), that the making or continuation of any
or all of LIBOR Rate Loans by the Banks:
(i) has become unlawful by compliance by a Bank
in good faith with any applicable law, governmental rule,
regulation, guideline or order, or
(ii) would cause a Bank severe hardship as a
result of a contingency occurring after the date of this
Agreement which materially and adversely affects the London
interbank market (such as, but not limited to, disruptions
resulting from political or economic events);
then, and in either such event, Agent shall on such date (and in
any event as soon as possible after making such determination)
give telephonic notice to the Borrowers, confirmed in writing, of
such determination, identifying which of the LIBOR Rate Loans are
so affected.
(b) The Borrowers shall, upon the termination of the
then current LIBOR Rate Period applicable to each LIBOR Rate Loan
so affected or, if earlier, when required by law, repay each such
affected LIBOR Rate Loan, together with all interest accrued
thereon.
(c) In lieu of the repayment required by Subsection
2.6(b), the Borrowers may, by giving notice in writing or by
telephone to Agent, and after Borrowers' payment of any increased
costs of the Banks relating to the period for which the
outstanding Loans shall remain LIBOR Rate Loans (such increased
costs to be determined by Agent in its sole discretion pursuant
to Subsection 2.5(b)), request Agent to convert the Term Loan and
each Revolving Credit Loan that is so affected into a Prime Rate
Conversion Loan at the Adjusted Prime Rate at the end of the then
current LIBOR Rate Period (or at such earlier time as repayment
would otherwise be required to be made pursuant to Section
2.6(b)). Such notice shall pertain only to the LIBOR Rate Loan
or LIBOR Rate Loans that will be affected by the events described
in Subsection 2.6(a).
(d) In the event any LIBOR Rate Loan is converted to a
Prime Rate Conversion Loan pursuant to the provisions of
Subsection 2.6(c), interest on each such Prime Rate Conversion
Loan shall be payable by Borrowers on the outstanding and unpaid
principal balance of such Prime Rate Conversion Loan on the first
day of each month and at the maturity of such loan. Any change
in the Prime Rate shall be effective as of the opening of
business on the day on which such change in the Prime Rate
becomes effective.
(e) Following the conversion of any LIBOR Rate Loans
to Prime Rate Conversion Loans pursuant to this Subsection 2.6,
in the event the Agent, in its sole discretion, determines that
the events or circumstances described in Subsection 2.6(a) no
longer exist, (i) the Agent will so notify the Borrowers in
writing, (ii) within ten (10) days of Agent's delivery of such
notice, each Borrower shall make a LIBOR Rate Election with
respect to the outstanding and unpaid principal balance of the
Term Loan Note, and one or more LIBOR Rate Elections with respect
to the outstanding and unpaid principal balance of the Revolving
Credit Note, and (iii) each Prime Rate Conversion Loan shall
convert to a LIBOR Rate Loan pursuant to the applicable LIBOR
Rate Election on the commencement date of the LIBOR Rate Period
described in the applicable LIBOR Rate Election and shall bear
interest at LIBOR plus the applicable LIBOR Increment pursuant to
the provisions of Subsection 2.3(a)(i).
2.7 Non-Receipt of Funds by Agent. Unless the Agent shall
have received notice from a Bank prior to the Borrowing Date of
any Revolving Credit Loan that such Bank will not make available
to the Agent the amount of such Bank's Proportionate Revolving
Credit Commitment with respect to such Loan, the Agent may assume
that such Bank has made such amount available to the Agent on the
date of such Borrowing Date. If and to the extent any Bank shall
not have so made the amount of its Proportionate Revolving Credit
Commitment available to the Agent, such Bank agrees to repay to
the Agent forthwith on demand such corresponding amount together
with interest and administrative charges thereon, for each day
such amount is made available to the Borrowers until such amount
is repaid to the Agent, at the customary rates set by the Agent
for the correction of errors among banks. If such Bank shall
repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Proportionate Revolving
Credit Commitment with respect to such Loan for purposes of this
Agreement and the Revolving Credit Note. If such Bank does not
repay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrower (or
Borrowers, as the case may be), and the Borrower (or Borrowers)
shall immediately repay such corresponding amount to the Agent
with interest thereon, for each day from the date such amount is
made available to the Borrower (or Borrowers) until the date such
amount is repaid to the Agent, at the rate of interest applicable
at the time to such proposed Revolving Credit Loan. Any
repayment made pursuant to the preceding sentence shall not be
subject to the provisions set forth in the second and third
sentences of Subsection 2.4(a). Subject to the terms and
conditions herein, any such repayment by the Borrower (or
Borrowers, as the case may be) may, but need not, be made with
proceeds of another loan, not subject to this Agreement, extended
to the Borrower (or Borrowers, as the case may be) by one of the
Banks.
2.8 No Liability for Good Faith Action. Neither Agent nor
any Bank shall incur any liability to either of the Borrowers for
(a) acting upon any Notice of Borrowing, any LIBOR Rate Election
Notice, or upon any telephonic notice which Agent believes in
good faith to have been given by an Authorized Officer, or (b)
otherwise acting in good faith.
2.9 Taxes.
(a) Except as provided in Subsection 2.9(c), if any
Taxes shall be imposed by any taxing authority of or in the
United States, or any foreign country, or any political
subdivision of any thereof, in respect of any of the transactions
contemplated by this Agreement (including, but not limited to,
execution, delivery, performance, enforcement, or payment of
principal or interest of or under the Revolving Credit Note, the
Term Loan Note, or this Agreement, or the making of a Loan), the
Borrowers:
(i) will pay on written request therefor all such
Taxes, including interest and penalty, if any, to the relevant
taxing authority; and
(ii) will promptly furnish Agent with evidence of
any such payment.
(b) Subject to Subsections 9.1 and 9.2, if any Bank or
any holder of the Revolving Credit Note or the Term Loan Note is
required by law to make any payment on account of Taxes in
respect of any of the transactions contemplated by this Agreement
(including, but not limited to, execution, delivery, performance,
enforcement, or payment of principal or interest of or under the
Revolving Credit Note, the Term Loan Note, or this Agreement, or
the making of a Loan), such Bank or holder shall notify the
Borrowers and the Borrowers will promptly, following receipt of a
certificate as to the amount of any such payment of Taxes by such
Bank or such holder (showing calculations thereof in reasonable
detail), indemnify and hold each such Bank or holder harmless and
indemnified against any liability or liabilities with respect to
or in connection with any such Taxes or the payment thereof or
resulting from any delay or omission to pay such Taxes (other
than a delay or omission attributable to such Bank's or holder's
failure to timely notify the Borrowers), computed in a manner
consistent with this Subsection 2.9(b).
(c) Each Bank that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees
to deliver to the Borrowers and Agent on or prior to the date of
this Agreement, or in the case of a Bank that is an Assignee of
an interest under this Agreement pursuant to Subsection 9.2
(unless the respective Bank was already a Bank hereunder
immediately prior to such assignment), on the date of such
assignment to such Bank, (i) two accurate and complete original
signed copies of IRS Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption
from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, or (ii) if the Bank
is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either IRS Form 1001 or 4224 pursuant to
clause (i) above, (A) a certificate substantially in the form of
Exhibit 2.9(c) (any such certificate, a "Section 2.9(c)(ii)
Certificate"), and (B) two accurate and complete original signed
copies of IRS Form W-8 (or successor form) certifying to such
Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this
Agreement and under any Note. In addition, each Bank agrees that
from time to time after the date of this Agreement, when a lapse
in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it
will deliver to the Borrowers and Agent two new accurate and
complete original signed copies of IRS Form 4224 or 1001, or Form
W-8 and a Section 2.9(c)(ii) Certificate, as the case may be, and
such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption
from or reduction in United States withholding Tax with respect
to payments to be made under this Agreement and any Note, or it
shall immediately notify the Borrowers and Agent of its inability
to deliver any such form or certificate. Notwithstanding
anything to the contrary contained in Subsection 2.9(a), but
subject to Subsection 9.2, (x) each Borrower shall be entitled,
to the extent it is required to do so by law, to deduct or
withhold income or similar Taxes imposed by the United States (or
any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the
account of any Bank or any holder of the Revolving Credit Note or
the Term Loan Note which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for United
States Federal income tax purposes to the extent that such Bank
or holder has not provided to the Borrowers IRS forms that
establish a complete exemption from such deduction or
withholding, and (y) any Bank or any holder of the Revolving
Credit Note or the Term Loan Note that has not provided to the
Borrowers the IRS forms required to be provided to the Borrowers
pursuant to this Subsection 2.9(c) shall not be entitled to
indemnification under this Subsection 2.9 with respect to any
deduction or withholding which would not have been required if
such Bank or holder had provided such forms.
(d) Each Bank agrees that, as promptly as practicable
after it becomes aware of the occurrence of any event or the
existence of any condition that would cause the Borrowers to make
a payment in respect of any Taxes pursuant to Subsection 2.9(a)
or a payment in indemnification for any Taxes pursuant to
Subsection 2.9(b), it will use reasonable efforts to make, fund
or maintain the Loan (or portion thereof) of such Bank with
respect to which the aforementioned payment is or would be made
through another lending office of such Bank if as a result
thereof the additional amounts which would otherwise be required
to be paid by the Borrowers in respect of such Loans (or portions
thereof) would be materially reduced, and if, as determined by
such Bank, in its reasonable discretion, the making, funding or
maintaining of such Loans (or portions thereof) through such
other lending office would not otherwise materially adversely
affect such Loans or such Bank. The Borrowers agree to pay all
reasonable expenses incurred by any Bank in utilizing another
lending office of such Bank pursuant to this Subsection 2.9(d).
2.10 Method of Payment. Repayment of the principal amount
of each Loan, payment of all interest owing in connection with
any Loan, and payment of all other amounts owing by the Borrowers
to the Agent pursuant to this Agreement, the Revolving Credit
Note, or the Term Loan Note shall be made in lawful money of the
United States to the Agent at its Principal Office in immediately
available funds. No such repayment or payment shall be deemed to
have been received by the Agent until received by the Agent at
its Principal Office, and any such repayment or payment received
by the Agent at its Principal Office after 12:00 noon on any day
shall be deemed to have been received by the Agent at its
Principal Office on the next succeeding Business Day. Each
Borrower hereby authorizes the Agent to charge from time to time
against the operating account of such Borrower with M&T the
amount of any such repayment or payment. Whenever any repayment
or payment to be made under this Agreement or under any Note
shall be stated to be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of the payment of interest and late fees.
SECTION 3 REPRESENTATIONS AND WARRANTIES
The Borrowers hereby jointly and severally represent and warrant
to the Banks as follows:
3.1 Financial Condition.
(a) The Borrowers have heretofore delivered to Agent
the following financial statements:
(i) the audited financial statements of NCDC for
the fiscal years of NCDC ending December 31, 1994, December 31,
1995 and December 31, 1996;
(ii) the audited financial statements of LaSalle
for the fiscal years of LaSalle ending October 31, 1994, October
31, 1995 and October 31, 1996;
(iii) the unaudited financial statements of NCDC
for the fiscal quarter ended March 31, 1997; and
(iv) the unaudited financial statements of LaSalle
for the period commencing November 1, 1996 and ending January 31,
1997, the month ended February 28, 1997 and the month ended March
31, 1997.
(b) All financial statements and other financial data
which have been furnished to the Agent for the purposes of or in
connection with this Agreement or any transaction contemplated
hereby present fairly the financial condition of NCDC, and to the
best of NCDC's knowledge, LaSalle (other than with respect to the
elimination of the item described as "Receivable due from Parent"
and the corresponding reduction in "Total Shareholder Equity"
described in the audited financial statements of LaSalle for the
period ending October 31, 1996), as the case may be, as of the
dates thereof and the results of its operations for the period(s)
covered thereby. As of the date hereof, all projections which
have been furnished to the Agent for the purposes of or in
connection with this Agreement, or any transaction contemplated
hereby (including, without limitation, the projections included
as part of the Offering Memorandum), taken together, have been
the management of NCDC's best estimate of the future performance
of the Borrowers, based upon historical financial information and
reasonable assumptions of the management of NCDC.
(c) All financial statements and other financial data
which shall hereafter be furnished to the Agent for the purposes
of or in connection with this Agreement, or any transaction
contemplated hereby, will present fairly the financial condition
of the Borrowers and their Subsidiaries, as of the dates thereof
and the results of its operations for the period(s) covered
thereby. All projections which shall hereafter be furnished to
the Agent for the purposes of or in connection with this
Agreement, or any transaction contemplated hereby, will be the
management of each Borrower's best estimate of the future
performance of the Borrowers and their Subsidiaries, based upon
historical financial information and reasonable assumptions of
the management of Borrowers.
3.2 No Change. There have been no material adverse changes
in the business, operations, property or financial or other
condition of Niagara, any Borrower, or any of the Borrowers'
Subsidiaries, as applicable, since the dates of the most current
financial statements referred to in Subsection 3.1(a).
3.3 Corporate Existence; Compliance with Law. Each
Borrower and each of their Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate power,
authority and legal right to own or lease and operate its
property and to conduct the business in which it is currently
engaged, (c) is duly qualified, licensed or authorized as a
foreign corporation, and is in good standing or continues to be
authorized under the laws of each jurisdiction where the failure
to so qualify or be authorized and remain in good standing or
authorized could materially and adversely affect the ability of
such Borrower or Subsidiary to own or lease and operate its
property or to conduct the business in which it is currently
engaged or will be engaged upon closing of the Acquisition, and
(d) other than with respect to environmental matters as described
in Subsection 3.14, is in compliance with all Requirements of Law
other than any noncompliance which, individually or in the
aggregate, would not reasonably be expected to have a material
adverse effect on the business, operations, property or other
financial condition of any Borrower or Subsidiary.
3.4 Ownership of Borrower Equity Interests.
(a) Schedule 3.4(a) attached hereto contains a true,
correct and complete statement of: (i) the total number and class
of each class of stock which each Borrower and each Subsidiary of
a Borrower is authorized to issue; and (ii) the total number and
class of each class of stock of each Borrower and of each of
their Subsidiaries which is issued and outstanding together with
the identity of the record and beneficial owner (or owners) of
all the issued and outstanding stock of each Borrower and of each
Subsidiary. All of such issued and outstanding shares of stock
of each Borrower and of each such Subsidiary have been duly
authorized and validly issued.
(b) As of the date of this Agreement Niagara is the
record and beneficial owner of and has good and marketable title
to one hundred percent (100%) of the issued and outstanding
shares of capital stock of NCDC and NCDC is the record and
beneficial owner of and has good and marketable title to one
hundred percent (100%) of the issued and outstanding shares of
capital stock of LaSalle, free and clear of all Liens (other than
any Lien pursuant to the Loan Documents). Other than the equity
interests of NCDC in LaSalle as a result of the consummation of
the Acquisition, as of the date of this Agreement no Borrower has
any equity or ownership interest in any other Person.
3.5 Corporate Power; Authorization; Enforceable
Obligations. Each Borrower has the corporate power and authority
to execute and deliver this Agreement, the Revolving Credit Note,
the Term Loan Note, and each of the Collateral Documents, and to
perform its obligations hereunder and thereunder. Each Borrower
has taken all necessary corporate and shareholder action to
authorize the borrowings on the terms and conditions of this
Agreement, the Revolving Credit Note, and the Term Loan Note. No
consent of any other Person and no authorization of, notice to,
or other act by or in respect of any Governmental Authority, is
required in connection with the borrowings hereunder, except for
filings or recordings in public offices necessary in connection
with the Collateral Documents and for post-closing securities law
filings necessary in connection with the Acquisition. This
Agreement, the Revolving Credit Note, the Term Loan Note and each
of the Collateral Documents have been duly executed and delivered
on behalf of each Borrower (and with respect to the Collateral
Documents, each Subsidiary to the extent applicable) and this
Agreement, the Revolving Credit Note, the Term Loan Note, and
each of the Collateral Documents constitute legal, valid and
binding obligations of each Borrower (and with respect to the
Collateral Documents, each Subsidiary to the extent applicable)
enforceable against each Borrower (and each Subsidiary,
respectively) in accordance with their respective terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally.
3.6 No Legal Bar. The execution, delivery and performance
of this Agreement, the Revolving Credit Note, the Term Loan Note,
the Collateral Documents, the borrowings hereunder and the use of
the proceeds thereof (a) will not violate any Requirement of Law
or any Contractual Obligation of any Borrower or Subsidiary,
other than violations which, individually or in the aggregate,
would not reasonably be expected to have a material adverse
effect on the business, operations, property or financial or
other condition of any Borrower or Subsidiary, and (b) will not
result in, or require, the creation or imposition of any Lien not
permitted under Subsection 6.2 on any of the respective
properties or revenues of a Borrower or Subsidiary.
3.7 No Litigation. Other than with respect to
environmental matters as described in Subsection 3.14, no
litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending, or to the
knowledge of any Borrower, threatened, by or against any Borrower
or Subsidiary or any of their respective properties or revenues
(a) with respect to this Agreement, the Revolving Credit Note,
the Term Loan Note, the Collateral Documents or any of the
transactions contemplated hereby or thereby, or (b) which, if
adversely determined, would reasonably be expected to have a
material adverse effect on the business, operations, property or
financial or other condition of any Borrower or Subsidiary. No
judgments are outstanding against either of the Borrowers or any
Subsidiary or binding upon any of their respective assets or
properties which would, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the
business, operations, property or financial or other condition of
any Borrower or Subsidiary.
3.8 No Default. No Borrower or Subsidiary is in default
under or with regard to any Contractual Obligation in any respect
which would be materially adverse to the business, operations,
property or financial or other condition of such Borrower or
Subsidiary, or which would materially adversely affect the
ability of such Borrower or Subsidiary to perform its respective
obligations under this Agreement, the Revolving Credit Note, the
Term Loan Note, or any of the Collateral Documents. No Default
or Event of Default has occurred.
3.9 Ownership of Property; Liens. Each Borrower and each
Subsidiary has good record and marketable or insurable title in
fee simple to or valid leasehold interests in, all its real
property, and valid legal title or leasehold interests to all its
personal property, and none of such property is subject to any
Lien, except as permitted in Subsection 6.2, or as set forth on
Schedule 3.9.
3.10 Solvency. Immediately prior to the consummation of the
Acquisition and after giving effect thereto, the Borrowers, both
individually and on a Consolidated basis, shall be, and are,
Solvent.
3.11 Taxes. Each Borrower and each Subsidiary has filed or
caused to be filed all returns for Taxes required to be filed,
and has paid all Taxes shown to be due and payable on said
returns or on any assessments made against it and all other
taxes, fees or other charges imposed on it by any Governmental
Authority other than (a) tax returns and Taxes the failure to
file or pay, as applicable, which individually or in the
aggregate would not reasonably be expected to have a material
adverse effect on the business, operations, property or financial
or other condition of any Borrower or Subsidiary, and (b) the
amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books
of such Borrower or Subsidiary, respectively; and no tax liens
have been filed and no assessments are being formally asserted
with respect to any such taxes, fees or other charges, except for
statutory liens for current taxes not yet due and payable.
3.12 Federal Regulations. Neither Borrower nor any
Subsidiary is engaged, and neither Borrower nor any Subsidiary
will engage, principally or as one of its important activities,
in the business of extending credit for the purpose of
"purchasing" or "carrying" (as each such term is defined in
Regulation U) any Margin Stock. No part of the proceeds of the
Revolving Credit Loan or the Term Loan hereunder will be used for
any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of the Board of Governors of
the Federal Reserve System or of the Investment Company Act of
1940, as amended.
3.13 Investment Company Act. Neither Borrower 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.
3.14 Environmental Matters.
(a) Except as disclosed in the Xxxxxxx and Xxxx
Reports or in Schedule 3.14, to each Borrower's knowledge, each
Borrower and each Subsidiary has duly complied with, and each of
their businesses, operations, assets, equipment, property,
leaseholds, or other facilities are in compliance with, the
provisions of all federal, state and local environmental, health
and safety laws, codes and ordinances, and all rules and
regulations promulgated thereunder.
(b) Except as disclosed in the Xxxxxxx and Eddy
Reports or in Schedule 3.14, to each Borrower's knowledge, each
Borrower and Subsidiary has been issued and will maintain all
required federal, state and local permits, licenses, certificates
and approvals relating to (i) air emissions, (ii) discharges to
surface water or groundwater, (iii) noise emissions, (iv) solid
or liquid waste disposal, (v) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or
wastes (intended hereby and hereafter to include any and all such
materials listed in any federal, state, or local law, code or
ordinance, and all rules and regulations promulgated thereunder,
as hazardous or potentially hazardous), or (vi) other
environmental, health, or safety matters.
(c) Except as disclosed in the Xxxxxxx and Xxxx
Reports or in Schedule 3.14, neither Borrower nor any Subsidiary
has received any notice of, and neither Borrower knows of or
suspects, facts which might constitute any violations of any
federal, state or local environmental, health or safety laws,
codes or ordinances, and any rules or regulations promulgated
thereunder with respect to its or any Subsidiary's business,
operations, assets, equipment, property, leaseholds or other
facilities.
(d) Except as disclosed in the Xxxxxxx and Eddy
Reports or in Schedule 3.14 and except in accordance with a valid
governmental permit, license, certificate, or approval issued to
a Borrower or a Subsidiary, to the best each Borrower's
knowledge, there has been no emission, spill, release, or
discharge into or upon (i) the air, (ii) soils or any
improvements located thereon, (iii) surface water or groundwater,
or (iv) the sewer, septic system or waste treatment, storage or
disposal system servicing the premises, of any toxic or hazardous
substances or wastes at or from any premises owned or occupied by
such Borrower or Subsidiary.
(e) Except as disclosed in the Xxxxxxx and Xxxx
Reports or in Schedule 3.14, there is no complaint, order,
directive, claim, citation, or notice by any governmental
authority or any person or entity pending with respect to (i) air
emissions, (ii) spills, releases, or discharges to soils or
improvements located thereon, surface water, groundwater or the
sewer, septic system or waste treatment, storage or disposal
systems servicing the premises, (iii) noise emissions, (iv) solid
or liquid waste disposal, (v) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or
waste, or (vi) other environmental, health or safety matters
affecting either Borrower or any Subsidiary or their respective
businesses, operations, assets, equipment, property, leaseholds,
or other facilities.
3.15 ERISA. Each Borrower and each Subsidiary is in
material compliance with all applicable provisions of ERISA. No
Borrower has (a) incurred any accumulated funding deficiency
within the meaning of ERISA, (b) except as described in Schedule
3.15, incurred any material unfunded vested liability under any
Plan, (c) incurred any material liability to the PBGC in
connection with any Plan, or (d) engaged in a prohibited
transaction within the meaning of ERISA. Except for the
consummation of the Acquisition, no Reportable Event has occurred
with respect to any Plan.
3.16 Acquisition Agreement. The Borrowers have heretofore
furnished to the Agent a true, complete and correct copy of the
Acquisition Agreement, including all schedules and exhibits
thereto, and all closing documents executed and delivered under
the terms of the Acquisition Agreement.
3.17 Acquisition. As of the date of this Agreement, the
Borrowers have consummated the Acquisition in accordance with the
terms of the Acquisition Agreement, and NCDC owns all of the
issued and outstanding capital stock of LaSalle free and clear of
all Liens.
3.18 Collateral Locations. All of the Borrowers' and
Subsidiaries' assets are located only at the locations set forth
in Schedule 3.18 of this Agreement.
3.19 Licenses and Permits. Other than with respect to
environmental matters as described in Subsection 3.14, (a) to
each Borrowers' knowledge, each License of the Borrowers and of
each of their Subsidiaries is in full force and effect, and (b)
each Borrower and each of their Subsidiaries has complied with,
and the business, operations, assets, equipment, property,
leaseholds or other facilities of such Borrower or Subsidiary are
in compliance with, all Requirements of Law relating to the
maintenance of such Licenses, other than any noncompliance which,
individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the business,
operations, property or financial or other condition of any
Borrower or Subsidiary.
3.20 Subordinated Debt Offering. The Borrowers have
heretofore furnished to the Agent a true, complete and correct
copy of the Offering Memorandum, the Subordinated Debt Agreement,
the 12.5% Subordinated Notes, and all schedules and exhibits
thereto, and all closing documents executed and delivered in
connection therewith.
3.21 Employee Controversies. Except as described in
Schedule 3.21 hereto, there are no strikes, work stoppages or
material labor controversies pending or, to each of the
Borrower's knowledge, threatened, between the Borrowers or any of
their Subsidiaries and any of their employees, other than those
which would not, either individually or in the aggregate,
reasonably be expected to have a material adverse effect on the
business, operations, property or financial or other condition of
any Borrower or any of their Subsidiaries.
3.22 Patents, Trademarks and Licenses. Each of the
Borrowers and their Subsidiaries owns or possesses rights to use
all licenses, patents, patent applications, copyrights, service
marks, trademarks and tradenames required to conduct its
business, except where the failure to own or possess any such
right, either individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the
business, operations, property or financial or other condition of
the Borrower or any of their Subsidiaries. No license, patent
or trademark owned or possessed by any Borrower or Subsidiary has
been declared invalid, been limited by order of any court or by
agreement, or is the subject of any infringement, interference or
similar proceeding or challenge, other than those declarations of
invalidity, orders, agreements or proceedings, which, if
adversely concluded, would not, either individually or in the
aggregate, reasonably be expected to have a material adverse
effect on the business, operations, property or financial or
other condition of any Borrower or any of their Subsidiaries.
3.23 Full Disclosure. This Agreement, the financial
statements delivered in connection herewith, the representations
and warranties of the Borrowers herein and in any other document
delivered or to be delivered by or on behalf of the Borrowers or
any of their Subsidiaries, do not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements contained therein or herein, in
light of the circumstances under which they were made, or will be
made, not misleading. There is no material fact which the
Borrowers have not disclosed to the Banks in writing which
materially and adversely affects or, so far as the Borrowers now
foresee, will materially and adversely affect, the assets,
business, prospects, profits, or condition (financial or
otherwise) of any Borrower, any of their Subsidiaries, the rights
of the Banks or the ability of the Borrowers to perform this
Agreement.
3.24 Survival of Warranties. All representations and
warranties contained in this Agreement and the other Loan
Documents shall survive the execution and delivery of this
Agreement until all indebtedness to the Banks has been finally
and indefeasibly paid in full.
SECTION 4 CONDITIONS PRECEDENT
4.1 Conditions to Extension of Credit. The obligations of
the Banks to extend the Credit is subject to the satisfaction or
waiver prior to or concurrently therewith of the following
conditions precedent:
(a) Notes. (i) The Agent shall have received the
Revolving Credit Note conforming to the requirements hereof and
executed by an Authorized Officer of each Borrower; and (ii) the
Agent shall have received the Term Loan Note conforming to the
requirements hereof and executed by an Authorized Officer of each
Borrower.
(b) Opinions. The Agent shall have received the
opinion of legal counsel to the Borrowers and Niagara, dated the
date of this Agreement and addressed to the Banks, in form and
substance satisfactory to the Agent. Such opinion shall address,
without limitation, such matters incident to the transactions
contemplated by this Agreement, the Revolving Credit Note, the
Term Loan Note, the Collateral Documents, the Acquisition
Agreement, the Acquisition, and the Subordinated Debt Offering as
the Agent shall reasonably require.
(c) Security Agreements. (i) Each Borrower shall
have executed and delivered to the Agent a Security Agreement in
form and content acceptable to the Agent, granting to the Agent a
Lien in all of such Borrower's equipment, inventory, fixtures,
accounts, chattel paper, general intangibles, documents, and
instruments, whether now owned or hereafter acquired, including,
without limitation, pursuant to the Acquisition Agreement,
wherever located, and any and all products and proceeds thereof,
and shall secure the payment of any and all indebtedness and
liabilities, whether now existing or hereafter incurred, of such
Borrower to the Agent; and the Agent shall have received (y)
appropriate financing statements to perfect each such Lien, which
Lien shall be superior in priority to all other Liens, other than
(I) Liens described in Schedule 3.9, and (II) Liens arising after
the date of this Agreement having priority over the Liens of the
Agent by operation of applicable law, and (z) certificate(s)
evidencing all of the issued and outstanding capital stock of
LaSalle, together with duly endorsed stock power(s);
(ii) Each Borrower shall have executed and
delivered to the Agent a Collateral Assignment of Patents and
Trademarks in form and substance acceptable to the Agent (the
"Patent Assignment Agreements");
(iii) Niagara shall have executed and delivered
to the Agent a pledge security agreement (the "Niagara Pledge
Agreement") granting a Lien on and a pledge of all the issued and
outstanding shares of capital stock of NCDC to the Agent to
secure the payment and performance by Niagara of its obligations
under the Niagara Guaranty, and Niagara shall have delivered to
the Agent certificates evidencing all of the issued and
outstanding shares of capital stock of NCDC, together with
appropriate stock powers duly endorsed in blank; and
(iv) NCDC shall have executed and delivered to the
Agent a pledge security agreement (the "NCDC Pledge Agreement")
granting a Lien on and a pledge of all the issued and outstanding
shares of capital stock of LaSalle to the Agent to secure the
payment and performance by the Borrowers of their obligations
under the Loan Documents, and NCDC shall have delivered to the
Agent certificates evidencing all of the issued and outstanding
shares of capital stock of LaSalle, together with appropriate
stock powers duly endorsed in blank.
(d) Mortgages. Each Borrower shall have executed and
delivered to the Agent a mortgage, deed of trust or other
applicable document in form and content acceptable to the Agent,
in its sole discretion, to grant to the Agent a Lien on the real
property ("Mortgage") of Borrowers described in Schedule 4.1
hereof, and the Agent shall have received such other
documentation to perfect each Mortgage, and each such Mortgage
shall be superior in priority to all other Liens. Each Mortgage
shall be supported by a survey acceptable to the Agent and issued
by a licensed surveyor, and by a mortgagee title insurance policy
issued by a licensed title insurance company acceptable to the
Agent, and such policy shall be in form and content satisfactory
to the Agent, insuring the Mortgage to be a valid Lien superior
to all other Liens and encumbrances on the respective real
property, subject only to such exceptions acceptable to the
Agent. In connection with each Mortgage the Borrowers shall be
required to execute and deliver to the Agent an Assignment of
Leases and Rents relating to the subject real property, in form
and content acceptable to the Agent.
(e) Environmental. Each Borrower shall have executed
and delivered to the Agent an Environmental Indemnification
Agreement ("Environmental Indemnification Agreement") in form and
content acceptable to the Agent.
(f) Niagara Guaranty. Niagara shall have executed and
delivered to the Agent an Unconditional and Continuing Guaranty
agreement (the "Niagara Guaranty") in form and content acceptable
to Agent, guaranteeing to the Agent the payment when due of all
Indebtedness and Liabilities of each of the Borrowers to the
Agent and the Banks arising under any of the Loan Documents.
(g) Corporate Documents. The Agent shall have
received a copy (in form and substance satisfactory to the Agent)
certified by the Secretary or an Assistant Secretary of each
Borrower of the resolutions of the Board of Directors of such
Borrower authorizing the execution, delivery and performance of
this Agreement, the Revolving Credit Note, the Term Loan Note,
the Acquisition Agreement, the Subordinated Debt Offering and the
Collateral Documents. The Agent shall have received a copy (in
form and substance satisfactory to the Agent) certified by the
Secretary or Assistant Secretary of Niagara of the resolutions of
the Board of Directors of Niagara, authorizing the execution and
delivery of the Niagara Guaranty and of the Niagara Pledge
Agreement.
(h) Certificate of Incumbency. The Agent shall have
received a certificate (in form and substance satisfactory to the
Agent) of the Secretary or an Assistant Secretary of each
Borrower and of Niagara as to the incumbency and signature of the
officers of each of the Borrowers and Niagara, respectively,
authorized to sign the applicable Loan Documents to be executed
by such Person, and any certificate or other document to be
delivered pursuant to or in connection therewith.
(i) Termination of Liens. Except as permitted under
Subsection 6.2, all holders of existing Liens in assets of either
of Borrowers, shall have executed and delivered to the Agent XXX-
0 Xxxxxxxxxxx Xxxxxxxxxx in form and content acceptable to the
Agent or shall have otherwise taken action required by the Agent,
to terminate such Liens.
(j) Termination of Indebtedness. The Borrowers shall
have repaid in full the amount of any Indebtedness to the Buffalo
and Erie County Regional Development Corporation and to the
Buffalo Enterprise Development Corporation.
(k) Acquisition Agreement. NCDC shall have acquired
all the issued and outstanding capital stock of LaSalle pursuant
to the terms of the Acquisition Agreement.
(l) Subordinated Debt Offering. The Agent shall have
received true, correct and complete copies of the Offering
Memorandum and all documents executed and delivered in connection
with the Subordinated Debt Offering and evidence satisfactory to
the Agent of receipt by NCDC of cash proceeds in an amount of not
less than Twenty Million Dollars ($20,000,000) less customary
fees and expenses associated therewith, resulting from the
Subordinated Debt Offering.
(m) Certificate of Insurance. The Agent shall have
received certificates of insurance and insurance policies, in
form and content acceptable to the Agent, evidencing the
insurance required to be carried by the Borrowers pursuant to
Subsection 5.10 hereof with endorsements, satisfactory to the
Agent, designating the Agent as an additional insured, a loss
payee and mortgagee and further designating that each such
insurance policy contains a notice of cancellation provision
satisfactory to the Agent.
(n) Payment of Fees. On or before closing hereof, M&T
shall have received the full amount of all fees described in the
Commitment Fee Letter dated March 18, 1997 among the Agent, NCDC
and Niagara.
(o) General Assurances. All other documents and legal
matters in connection with the transactions contemplated by this
Agreement, the other Loan Documents, the Acquisition and the
Subordinated Debt Offering shall be satisfactory in form and
substance to the Agent. The Borrowers shall have delivered such
further documents to the Agent and taken such further action
respecting this Agreement and the other Loan Documents as the
Agent shall reasonably request.
4.2 Conditions to Subsequent Extension of Credit. The
obligation of the Banks to make each Revolving Credit Loan is
subject to the satisfaction prior to or concurrently therewith of
the following conditions precedent:
(a) Subject to any modifications subsequently
disclosed by either Borrower in writing to the Agent, the
representations and warranties made by the Borrowers herein shall
be true and correct in all material respects on and as of the
Borrowing Date for each of the Revolving Credit Loans as if made
on and as of such date (unless such representation and warranty
expressly provides that it is made as of a specific date), and
the representations and warranties made by the Borrowers which
are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith
are true and correct in all material respects on and as of the
date made.
(b) The receipt by the Agent of a Borrowing Base
Certificate certifying as to the amount of the Borrowing Base as
of the proposed Borrowing Date of such Revolving Credit Loan
together with such other information as Agent may reasonably
request.
(c) No Default or Event of Default shall have occurred
and be continuing on such proposed Borrowing Date or after giving
effect to the Revolving Credit Loan to be made on such Borrowing
Date.
(d) Guaranties. Each Borrower shall have furnished to
Agent the written unlimited continuing guaranties of each
Subsidiary of a Borrower which may be established after the date
of this Agreement, guarantying payment of any and all
Indebtedness of each Borrower and each other Subsidiary, and of
the Borrowers and their Subsidiaries collectively, to Agent.
Each borrowing by a Borrower hereunder shall constitute a
representation and warranty by the Borrowers as of the date of
each such borrowing that the conditions in this Subsection have
been satisfied.
SECTION 5 AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as any Revolving
Credit Loan or the Term Loan remains outstanding and unpaid or
any other amount is owing to the Agent or any Bank hereunder or
under any Loan Document, the Borrowers shall, and shall cause
each of their Subsidiaries, to do the following:
5.1 Financial Statements. Furnish or cause to be furnished
to the Agent:
(a) as soon as available, but in any event within one
hundred twenty (120) days after the end of each Fiscal Year of
Niagara and the Borrowers, a copy of the audited Consolidated
financial statements of Niagara, the Borrowers and Borrowers'
Subsidiaries, at and as of the end of such Fiscal Year, certified
without qualification or exception by the Independent Public
Accountants; and
(b) as soon as available, but in any event within one
hundred twenty (120) days after the end of each Fiscal Year of
the Borrowers, a copy of the audited Consolidated financial
statements of the Borrowers and Borrowers' Subsidiaries at and as
of the end of such Fiscal Year, certified without qualification
or exception by the Independent Public Accountants; and
(c) as soon as available, but in any event within
fifty (50) days after the end of each calendar quarter, a copy of
Form 10-Q (with all attachments) filed by Niagara with the
Securities and Exchange Commission with respect to such calendar
quarter; and
(d) as soon as available, but in any event not later
than thirty (30) days after the end of each calendar month, a
copy of the unaudited Consolidating balance sheet of the
Borrowers and their Subsidiaries as of the end of such calendar
month and the related Consolidating unaudited statements of
income and retained earnings and cash flow for the period
beginning with the first day of the Borrowers' current Fiscal
Year and ending on the last day of such calendar month, setting
forth in each case in comparative form the figures for the same
period in the previous Fiscal Year; and
(e) as soon as available, but in any event not later
than sixty (60) days after the date of this Agreement, the
audited financial statements of LaSalle at and as of the end of
the five (5) month period commencing November 1, 1996 and ending
on March 31, 1997; and
(f) as soon as available, but in any event not later
than sixty (60) days after the date of this Agreement, a
Consolidating pro forma balance sheet of the Borrowers dated as
of the closing date of this Agreement which reflects (i) cash
proceeds from the Subordinated Debt Offering, and (ii) the assets
and liabilities of the Borrowers after the closing of the
Acquisition pursuant to the Acquisition Agreement.
All such financial statements shall be true, complete and
correct in all material respects and be prepared in reasonable
detail and in accordance with GAAP, including principles of
consolidation, applied consistently throughout the periods
reflected therein (except as approved by such accountants or
officer, as the case may be, and disclosed therein and that the
monthly financial statements shall be prepared without footnotes
in accordance with GAAP).
5.2 Certificates; Other Information. Furnish to the Agent:
(a) upon the request of the Agent, concurrently with
the delivery of any of the financial statements referred to in
Subsections 5.1(a) and 5.1(b), a certificate of the Independent
Public Accountants certifying such financial statements stating
that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in Subsections 5.1(a) and 5.1(b), a
certificate of an Authorized Officer of each Borrower (i) stating
that, to the best of his or her knowledge, such Borrower and such
Borrower's Subsidiaries during such period has observed or
performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement, the
Revolving Credit Note, Term Loan Note and all other Loan
Documents to be observed, performed or satisfied by it, and that
such Authorized Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate, and
(ii) showing in detail the calculations supporting such statement
in respect of the financial covenants contained in Subsection 6.3
of this Agreement.
(c) as soon as available, but in any event not later
than thirty (30) days after the end of each calendar month, a
Borrowing Base Certificate as of the end of such month, together
with a certificate of an Authorized Officer of each Borrower
containing a current accounts receivable aging of each Borrower
and its Subsidiaries and a monthly inventory report showing
categories and costs of inventory of each Borrower and its
Subsidiaries, and such other information as Agent may reasonably
request.
(d) within sixty (60) days after the end of each
Fiscal Year of the Borrowers, a copy of the projections by each
Borrower's management of the operating budget and cash flow of
such Borrower and its Subsidiaries for the then current Fiscal
Year, such projections to be accompanied by a certificate of an
Authorized Officer of such Borrower to the effect that such
projections have been prepared on the basis of reasonable
assumptions and that such Authorized Officer on the date he or
she renders such certificate has no reason to believe that such
assumptions are unreasonable or misleading in any material
respect.
(e) Promptly upon their becoming available, one copy
of (i) each financial statement, report (including, without
limitation, Niagara's annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Securities Exchange Act
of 1934, as amended), notice or proxy statement sent by Niagara
to public securities holders generally, and (ii) each regular or
periodic report, each registration statement and each prospectus
and all amendments thereto filed by Niagara with the Securities
and Exchange Commission or any successor thereto and of all press
releases and other statements made available generally by Niagara
to the public concerning developments that are material.
5.3 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by each Borrower, and preserve, renew and keep in full
force and effect each Borrower's corporate existence and take all
reasonable action to maintain all rights, privileges, Licenses,
and franchises necessary or desirable in the normal conduct of
each Borrower's business.
5.4 Compliance. Other than with respect to the
environmental matters as disclosed in the Xxxxxxx and Xxxx
Reports or in Schedule 3.14, (a) at all times conduct its and
each of its Subsidiaries' business and operations, and own and
use its and each of its Subsidiaries' assets, in compliance in
all material respects with each Requirement of Law, (b) at all
times, obtain, make, give or do, and maintain in full force and
effect, each authorization, approval, permit, consent, franchise
and license from, each registration and filing with each
declaration, report and notice to, and each other act by or
relating to, any Person necessary for the conduct of its and each
of its Subsidiaries' business or operations or the ownership or
use of any of its assets, (c) at all times remain in compliance
in all material respects with each such authorization, approval,
permit, consent, franchise and license, with its and each of its
Subsidiaries', respectively, certificate of incorporation, by-
laws or other organizational document, and with each contract
with respect to it and each of Subsidiaries, respectively, and
(d) immediately upon acquiring knowledge of any claim by any
Person that such Borrower or Subsidiary has not met any of the
requirements specified in clauses (a) through (c) of this
Subsection 5.4, provide to the Bank a certificate executed by an
Authorized Officer of such Borrower and specifying the nature of
such event and what action such Borrower or Subsidiary has taken,
is taking or proposes to take with respect thereto. With respect
to the environmental matters as disclosed in the Xxxxxxx and Eddy
Reports or in Schedule 3.14, the Borrowers shall address such
matters to the reasonable satisfaction of the Agent.
5.5 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to
each Borrower's and Subsidiary's business and activities; and
permit representatives of the Agent and/or the Banks, at any
reasonable time and as often as may reasonably be desired, to (a)
visit and inspect any of the Borrowers' or Subsidiaries'
properties, (b) examine and make abstracts from any of the
Borrowers' books and records, including, without limitation an
annual field examination conducted by representatives of the
Agent and/or the Banks, and (c) to discuss the business,
operations, properties and financial and other condition of the
Borrowers with officers and employees of the Borrowers and with
the Independent Public Accountants.
5.6 Notices. Give notice to the Agent of each of the
following promptly after a Borrower knows or reasonably should
know thereof:
(a) the occurrence of any Default or Event of Default,
or the occurrence of any default or event of default under the
terms of the Subordinated Debt Agreement or any Subordinated Debt
Note;
(b) any (i) default or event of default under any
Indebtedness, Contractual Obligation or License of a Borrower or
any of its Subsidiaries which would reasonably be expected to
have a material adverse effect on the business, operations,
property or financial or other condition of a Borrower or such
Subsidiary, or (ii) litigation, investigation or proceeding which
may exist at any time between a Borrower or any of its
Subsidiaries and any Person or any Governmental Authority
involving a claim against a Borrower or such Subsidiary in an
amount in excess of Three Hundred Thousand Dollars ($300,000),
or, which, if adversely determined, would reasonably be expected
to have a material adverse effect on the business, operations,
property or financial or other condition of a Borrower or such
Subsidiary;
(c) the following events, as soon as possible and in
any event within thirty (30) days after a Borrower knows or has
reason to know thereof: (i) the occurrence or expected occurrence
of any Reportable Event with respect to any Plan, or (ii) the
institution of proceedings or the taking or expected taking of
any other action by PBGC or a Borrower to terminate or withdraw
from any Plan, and in addition to such notice, deliver to the
Agent whichever of the following may be applicable: (A) a
certificate of the chief financial officer of such Borrower
setting forth details as to such Reportable Event and the action
that such Borrower proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that
may be required to be filed with PBGC, or (B) any notice
delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be;
(d) any proposed withdrawal by a Borrower from any
Multiemployer Plan;
(e) any materially adverse change in the business,
operations, property or financial or other condition of a
Borrower;
(f) any material notice, notice of noncompliance, or
notice of default or event of default, delivered to, or received
from, any holder of a 12.5% Subordinated Note or delivered or
received in connection with the Subordinated Debt Agreement;
(g) any representation or warranty contained in this
Agreement or any Loan Document which was or has proven to be
incorrect in any material respect on or as of the date made or
deemed made.
Each notice pursuant to this Subsection shall be accompanied by a
statement of an Authorized Officer of the Borrower providing such
notice, setting forth details of the occurrence referred to
therein and stating what action such Borrower proposes to take
with respect thereto.
5.7 Motor Vehicle Titles. Upon request of the Agent, make
available all title certificates for motor vehicles owned by the
Borrowers and their Subsidiaries and cooperate with the Agent in
recording notice of the Lien of the Agent granted pursuant to the
Security Agreements.
5.8 Corporate Standing. Maintain each Borrower's and each
Subsidiary's existence in good standing, and remain or become
duly licensed or qualified and authorized or in good standing in
each jurisdiction in which the failure so to qualify and remain
authorized or in good standing could materially and adversely
affect the ability of such Borrower or Subsidiary to own or lease
and operate its property or to conduct its business.
5.9 Discharge of Indebtedness and Obligations; Leases.
(a) Cause to be paid and discharged all Indebtedness
and obligations when due and all lawful Taxes, assessments and
governmental charges or levies imposed upon a Borrower, or any
Subsidiary of a Borrower, or upon any property, real, personal or
mixed, belonging to a Borrower or such Subsidiary or upon any
part thereof, before the same shall become in default, as well as
all lawful claims for labor, materials and supplies, which if
unpaid become a lien or charge upon the property or any part of
it; and
(b) Cause to be paid and discharged all amounts due
and owing under operating leases, equipment leases and other
leases of real and personal property, other than any operating
leases, equipment leases or such other leases the nonpayment of
such amounts which, either individually or in the aggregate,
would not reasonably be expected to have a material adverse
effect on the business, operations, property or other financial
condition of any Borrower or Subsidiary.
Notwithstanding the previous Subsections 5.9(a) and 5.9(b), no
Borrower or Subsidiary shall be required to cause to be paid and
discharged any obligation, tax, assessment, charge, levy or claim
so long as its validity is contested in the normal course of
business and in good faith by appropriate and timely proceedings,
and such Borrower or Subsidiary, respectively, sets aside on its
books adequate reserves with respect to each tax, obligation,
assessment, charge, levy or claim so contested.
5.10 Maintenance of Properties; Insurance. (a) Keep and
maintain all property useful and necessary in each of the
Borrowers' and their respective Subsidiaries' businesses in good
repair, working order and condition (other than ordinary wear and
tear) so that the business carried on by such Borrower or
Subsidiary may be properly conducted; (b) keep all of each
Borrower's and each Subsidiary's property so insurable insured at
all times with responsible insurance carriers satisfactory to the
Agent against fire, theft and other risks in coverage, form and
amount satisfactory to the Agent; (c) keep adequately insured at
all times in reasonable amounts with responsible insurance
carriers against liability on account of damage to persons or
property and under all applicable worker's compensation laws;
(d) promptly deliver to the Agent certificates of insurance or
any of those insurance policies required to be carried pursuant
hereto, with appropriate endorsements designating the Agent as a
named insured, loss payee and mortgagee, as reasonably requested
by the Agent; and (e) cause each such insurance policy to contain
a thirty (30) day notice of cancellation or material change in
coverage provision satisfactory to the Agent.
5.11 Fair Labor Standards Act. Comply in all material
respects with the provisions of the Fair Labor Standards Act of
1938, as amended.
5.12 Changes in Management, Ownership and Control.
Immediately upon any change in the employment status, duties or
responsibilities of Xxxxxxx X. Xxxxxx, Xxxxxxx Xxxxxxxx or Xxxxx
Xxxxxx with respect to their employment with Niagara and/or
either of the Borrowers, as applicable, the Borrowers shall
provide to the Agent a certificate executed by an Authorized
Officer of such Borrower specifying such changes.
5.13 Guarantees By Subsidiaries. If a Borrower forms a
Subsidiary with the Agent's prior written consent in accordance
with the provisions of Subsection 6.13, cause such Subsidiary to
execute and deliver to the Agent, within thirty (30) days of its
organization, a Guaranty Agreement, a General Security Agreement,
and such other agreements, documents and instruments as the Agent
may reasonably request in connection with such Guaranty and
Security Agreement, in form and content acceptable to the Agent.
5.14 Use of Proceeds. The Borrowers represent to and
covenant with the Banks that the proceeds of the Term Loan and
the Revolving Credit Loan will be used to (a) finance the
Acquisition (including the payment of fees and expenses of
Borrowers with respect thereto), and (b) repay in full all
existing Indebtedness of NCDC to M&T arising under the 1996
Credit Facilities. Additionally, the Borrowers represent and
covenant that the proceeds of the Revolving Credit Loan not used
pursuant to the preceding sentence shall be used to fund the
general working capital purposes of the Borrowers and their
Subsidiaries.
SECTION 6 NEGATIVE COVENANTS
The Borrowers hereby agree that, so long as the Revolving
Credit Note or the Term Loan Note remains outstanding and unpaid
or any other amount is owing to the Agent or any Bank hereunder
or under any other Loan Document, the Borrowers, jointly or
severally, shall not directly or indirectly:
6.1 Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness without the prior written consent of the Agent
except:
(a) Indebtedness to the Agent or the Banks;
(b) Indebtedness of NCDC to M&T in the principal
amount of One Million Five Hundred Thousand Dollars ($1,500,000)
in connection with the financing of the acquisition and
construction of a manufacturing facility in Chattanooga,
Tennessee;
(c) Indebtedness of NCDC arising under the 12.5%
Subordinated Notes, or refinancings thereof if the Agent
determines, in its sole discretion, that the terms and provisions
of any such refinancing do not impair the rights of the Agent or
any Bank under any Loan Document;
(d) Indebtedness (i) of one Borrower to the other
Borrower, (ii) of a Borrower to a Subsidiary of a Borrower, (iii)
of a Subsidiary of a Borrower to a Borrower, or (iv) of a
Subsidiary of a Borrower to a Subsidiary of a Borrower;
(e) Indebtedness of the Borrowers and their
Subsidiaries under all Capitalized Leases and payments under
operating leases, equipment leases or other leases of real or
personal property; provided that the aggregate amount of all
payments under all such Capitalized Leases and leases in any
Fiscal Year does not exceed eight hundred thousand dollars
($800,000); and
(f) Indebtedness described in Schedule 6.1 hereto.
6.2 Limitation on Liens. Create, incur, assume or suffer
to exist, any Lien upon any of the Collateral, whether now owned
or hereafter acquired, except:
(a) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto in accordance with GAAP
are maintained on the books of the Borrower contesting such
taxes;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business in connection with payments which are
not overdue for a period of more than thirty (30) days or which
are being contested in good faith and by appropriate proceedings;
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) Liens arising from judgments described under
Subsection 7.1(j) that do not constitute an Event of Default;
(f) Liens arising under the terms and provisions
(other than any terms or provisions relating to non-performance
or default by such Borrower or Subsidiary) of any contract with a
Governmental Authority (to the extent applicable);
(g) Liens created or permitted under the terms of any
of the Loan Documents;
(h) Liens securing Indebtedness described in
Subsections 6.1(b) or 6.1(e); and
(i) Liens described in Schedule 3.9 hereto.
6.3 Financial Covenants.
(a) Permit the Consolidated Net Worth of the
Borrowers, as of (i) December 31, 1997 to be less than Thirteen
Million Three Hundred Thousand Dollars ($13,300,000), (ii)
January 31, 1998 and as of the last day of any calendar month
thereafter, to be less than the sum of the following: (A)
Thirteen Million Three Hundred Thousand Dollars ($13,300,000),
plus (B) fifty percent (50%) of the positive Consolidated Net
Income of the Borrowers from the date of this Agreement through
the then concluded calendar month, plus (C) all of the cumulative
net proceeds realized by Borrowers from the issuance or sale of
any capital stock or other equity interests in the Borrowers from
the date of this Agreement (exclusive of the net proceeds
realized by NCDC from the Subordinated Debt Offering) through the
then concluded calendar month; and
(b) Permit, as of the last day of any calendar
quarter, the ratio of Consolidated Current Assets to Consolidated
Current Liabilities of the Borrowers to be less than 1.7 to 1.0;
and
(c) Permit, (i) as of the last day of any calendar
quarter ending during the period commencing with the date of this
Agreement and ending December 31, 1998, the Consolidated Interest
Coverage Ratio of the Borrowers measured for the four (4)
consecutive calendar quarters (or for the number of consecutive
calendar quarters following the date of this Agreement to the
date of such determination, if during the period commencing with
the date of this Agreement and ending on the one (1) year
anniversary thereof) ending on the last day of such calendar
quarter to be less than 1.7 to 1, or (ii) as of the last day of
any calendar quarter commencing after December 31, 1998, the
Consolidated Interest Coverage Ratio of the Borrowers measured
for the four (4) consecutive calendar quarters ending on the last
day of such calendar quarter to be less than 2.1 to 1.
6.4 Capital Expenditures. Make or incur any obligation to
make Capital Expenditures exceeding Six Million Dollars
($6,000,000) in the aggregate for the Borrowers and their
Subsidiaries during any Fiscal Year.
6.5 Payment of 12.5% Subordinated Debt Notes. (a) At any
time make any direct or indirect payment or distribution (whether
in cash, securities or other property) with respect to the 12.5%
Subordinated Notes in the event, and during the period, that any
such payments are prohibited to be made to the holders of the
12.5% Subordinated Notes pursuant to Section 11.3 of the
Subordinated Debt Agreement; and (b) at any time make any payment
of principal of, interest on, or premium or fees with respect to,
any 12.5% Subordinated Note prior to the scheduled payment date
for such payment under the terms of the Subordinated Debt
Agreement or any 12.5% Subordinated Note, whether by prepayment,
acceleration or otherwise; provided, however, that
notwithstanding the provisions of this Subsection 6.5(b), (i) the
Borrowers may make all payments to the holders of the 12.5%
Subordinated Notes pursuant to Section 4.4 of the Subordinated
Debt Agreement, and (ii) subject to the rights of the Agent and
the Banks pursuant to the provisions of Subsection 7.2(a), make
payments to the holders of the 12.5% Subordinated Notes pursuant
to Section 4.6 of the Subordinated Debt Agreement.
6.6 Amendment or Modification of Subordinated Debt. Permit
the Subordinated Debt Agreement, or the 12.5% Subordinated Notes,
to be amended, modified or altered in any respect without the
prior written consent of the Majority Banks.
6.7 Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligations, except (a)
existing Contingent Obligations as set forth on Schedule 6.7
hereto, (b) any renewal or refinancing thereof provided the
aggregate monetary liability of the Borrowers, either
individually or in the aggregate, for any such renewed or
refinanced Contingent Obligations does not exceed the applicable
aggregate monetary liability for such Contingent Obligation set
forth in Schedule 6.7, (c) guarantees of Indebtedness permitted
under Subsection 6.1.
6.8 Prohibition of Fundamental Changes. Make or permit to
be made any material change in the character or conduct of either
of Borrower's or any of their Subsidiaries' business or
operations (including any merger or consolidation or
amalgamation), or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series
of transactions, all or substantially all of either of the
Borrower's or any of their Subsidiaries' business or assets or
acquire by purchase or otherwise all or substantially all the
business or assets of, or capital stock or other evidences of
beneficial ownership of, any Person, or make any material change
in either of the Borrower's or any of their Subsidiaries' present
method of conducting business; provided, however, (a) a Borrower
may merge or consolidate with any other Person (other than
another Borrower or a Subsidiary of either of Borrowers), or
acquire the assets or capital stock of any other Person (other
than another Borrower or a Subsidiary of either of Borrowers)
provided the Majority Banks have given their prior written
consent to the terms of such merger, consolidation or acquisition
and such merger, consolidation or acquisition would not otherwise
result in the occurrence of a Default or Event of Default, and
(b) without the prior written consent of the Majority Banks (i) a
Borrower may merge or consolidate with or otherwise acquire the
assets or capital stock of another Borrower or a Subsidiary of
either of the Borrowers, and (ii) any Subsidiary of either of
Borrowers may merge or consolidate with or otherwise acquire the
assets or capital stock of any other Subsidiary or any parent of
such Subsidiary (including a Borrower); provided, however, that
in the event of any such merger, consolidation, acquisition or
other reorganization described in clauses (b)(i) or (ii)
immediately above a Borrower is the surviving entity of such
merger, consolidation, acquisition or reorganization.
6.9 Prohibition on Sale of Assets. Sell, lease, assign,
transfer or otherwise dispose of any of such Borrower's assets,
excluding (a) obsolete, worn out or surplus property, (b)
equipment replaced in the ordinary course of business, and (c)
inventory disposed of in the ordinary course of business.
6.10 Loans, Advances and Investments. Make or commit to
make, any advance, loan, extension of credit or capital
contribution to, or purchase of, any stock, bonds, notes,
debentures or other securities of, or make any other investment
in (by way of transfers of property, acquisitions of evidences of
indebtedness or otherwise), any Person (all such transactions
being herein called "Investments"), except:
(a) advance payments or deposits against purchases
made in the ordinary course of a Borrower's business;
(b) (i) direct obligations of the United States or any
agency thereof with maturities of one year or less from the date
of acquisition, (ii) commercial paper of a domestic issuer rated
at least "A-1" by Standard & Poor's Corporation or "P-1" by
Xxxxx'x Investors Services, Inc., (iii) time deposits and
certificates of deposit with maturities of one (1) year or less
from the date of acquisition issued by a Bank or any commercial
bank having capital and surplus in excess of Two Hundred Fifty
Million Dollars ($250,000,000), and (iv) repurchase obligations
within a term of not more than thirty (30) days for underlying
securities of the types described in clauses (i), (ii) and (iii),
above and entered into with any commercial bank meeting the
qualifications specified in clause (iii) above;
(c) existing Investments as set forth in Schedule
6.10;
(d) advances to employees which do not exceed at any
time, in the aggregate, three hundred fifty thousand dollars
($350,000);
(e) advances by a Borrower or a Subsidiary of a
Borrower to another Borrower or Subsidiary;
(f) trade receivables owing to the Borrowers or their
Subsidiaries or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade
terms; and
(g) investments received or arising in connection with
the bankruptcy or reorganization of any supplier or customer of a
Borrower or any Subsidiary in settlement of any obligations to a
Borrower or Subsidiary.
6.11 Compliance with ERISA. (a) Terminate any Plan so as to
result in any material liability to PBGC, (b) engage in any
"prohibited transaction" (as defined in Section 4975 of the
Internal Revenue Code of 1986, as amended) involving any Plan
which would result in a material liability for an excise tax or
civil penalty in connection therewith, (c) incur or suffer to
exist any material "accumulated funding deficiency" (as defined
in Section 302 of ERISA), whether or not waived, involving any
Plan, or (d) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability
to PBGC by reason of termination of any such Plan.
6.12 Dividends. Declare or pay, or permit any of the
Subsidiaries of the Borrowers to declare or pay, Dividends to any
Person that is not a Borrower or a Subsidiary of a Borrower;
provided, however, that nothing in this Subsection 6.12 shall be
deemed to prohibit the Borrowers and their Subsidiaries from
making any payment (in the form of a Dividend or otherwise) in
respect of operating charges or management fees assessed by
Niagara to the extent the aggregate amount of all such payments
for operating charges and/or management fees does not exceed, in
any Fiscal Year, One Million Three Hundred Fifty Thousand Dollars
($1,350,000).
6.13 Subsidiaries and Affiliates. Without the prior written
consent of the Agent (a) organize, cause to organize, or acquire
any Subsidiary, or (b) organize, cause to organize, acquire or
invest in any Affiliate.
6.14 Affiliate Transactions. Directly or indirectly, or
permit a Subsidiary to directly or indirectly, enter into, renew
or extend any transaction (including, without limitation, the
purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any Affiliate (other than wholly
owned Subsidiaries consented to by the Agent pursuant to Section
6.13), except upon fair and reasonable terms no less favorable to
such Borrower or such Subsidiary than could be obtained, at the
time of such transaction or, if such transaction is pursuant to a
written agreement, at the time of the execution of the agreement
providing therefor, in a comparable arms' length transaction with
a Person that is not an Affiliate.
SECTION 7 EVENTS OF DEFAULT
7.1 Events of Default. The following shall be Events of
Default under this Agreement:
(a) Nonpayment. A Borrower shall fail to pay any
principal of, or interest on, the Revolving Credit Note or the
Term Loan Note within ten (10) days of any applicable due date in
accordance with the terms thereof; or shall fail to pay, within
twenty (20) days after written notice thereof from the Agent, any
other amount payable hereunder in accordance with the terms
hereof or with the terms of any Loan Document; or
(b) Representations. Any representation or warranty
made or deemed made by the Borrowers (individually or
collectively) herein, or in any Loan Document, or which is
contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement or the Loan Documents shall prove to have been
incorrect in any material respect on or as of the date made or
deemed made; or
(c) Negative Covenants. A Borrower or any of their
Subsidiaries shall default in the observance or performance of
any covenant or agreement contained in Section 6 of this
Agreement; or
(d) Other Covenants. A Borrower or any Subsidiary of
a Borrower shall default in the observance or performance of any
covenant or agreement contained in this Agreement or in any Loan
Document (and not constituting an Event of Default under any of
the other provisions of this Section 7) and shall fail to fully
cure such default within twenty (20) days after written notice
thereof from the Agent; or
(e) Other Indebtedness. A Borrower, Guarantor, or
Subsidiary of a Borrower or Guarantor, shall (i) default in the
payment of principal of or interest on any Indebtedness in excess
of Three Hundred Thousand Dollars ($300,000) (other than with
respect to the Revolving Credit Note or the Term Loan Note) or on
any Contingent Obligations relating to such Indebtedness (such
Indebtedness and Contingent Obligations being herein called the
"Obligations") beyond the period of grace, if any, provided in
the instrument or agreement under which the Obligations were
created; or (ii) default beyond any applicable period of grace,
in the observance or performance of any other agreement contained
in any such Obligation, or in any instrument or agreement
evidencing, securing or relating thereto, or any other event
shall occur, the effect of which default or other event is to
cause, or permit the holder or holders of such Obligation (or a
trustee or agent on behalf of such holder or holders) to cause,
such Obligation to become due prior to its stated maturity;
provided, however, such default described in clause (i) or (ii)
above shall not constitute an Event of Default so long as the
Borrower, Guarantor or Subsidiary subject to such Obligation, in
good faith, is contesting the collection or enforcement of such
Obligation by appropriate legal proceedings diligently pursued;
or
(f) Change in Control. The occurrence of a Change in
Control; or
(g) Change in Management. Xxxxxxx X. Xxxxxx shall
cease to be designated as Chief Executive Officer, or act as or
perform the duties of the Chief Executive Officer, of Niagara; or
(h) Insolvency Proceedings. (i) A Borrower,
Guarantor, or any Subsidiary of a Borrower or Guarantor, shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with
respect to its debts, or (B) seeking appointment of a receiver,
trustee, custodian or other similar official for such Borrower,
Guarantor or Subsidiary, or for all or any substantial part of
its assets, or (ii) a Borrower, Guarantor, or Subsidiary of a
Borrower or Guarantor, shall make a general assignment for the
benefit of its creditors; or (iii) there shall be commenced
against a Borrower, Guarantor, or any Subsidiary of a Borrower or
Guarantor, any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of
an order for relief or any such adjudication or appointment, or
(B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; or (iv) there shall be commenced against a
Borrower, Guarantor, or any Subsidiary of a Borrower or
Guarantor, any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of such Borrower's,
Guarantor's or Subsidiary's assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60)
days from the entry thereof; or (v) a Borrower, Guarantor, or any
Subsidiary of a Borrower or Guarantor, shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii),
(iii) (iv) or (v) above; or (vi) a Borrower, Guarantor, or any
Subsidiary of a Borrower or Guarantor, shall generally not, or
shall be unable to, or shall admit in writing its inability to,
pay its debts as they become due; or
(i) Pension Default. (i) Any Person shall engage in
any "prohibited transaction" (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any
Plan, which Reportable Event or institution of proceedings is, in
the reasonable opinion of the Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and,
in the case of a Reportable Event, the continuance of such
Reportable Event unremedied for ten (10) days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of
ERISA is given or the continuance of such proceedings for ten
(10) days after commencement thereof, as the case may be, (iv)
any Plan shall terminate for purposes of Title IV of ERISA, or
(v) any other event or condition shall occur or exist which,
together with all other events or conditions in clauses (i)
through (iv) above, if any, would subject the Borrower to any
tax, penalty or other liabilities under ERISA in the aggregate
material in relation to the business, operations, property or
financial or other condition of the Borrower taken as a whole.
(j) Judgments. One or more judgments or decrees shall
be entered against a Borrower or Subsidiary involving in the
aggregate, at any one time, a liability (not paid or fully
covered by insurance) of Three Hundred Thousand Dollars
($300,000) or more and all such judgments or decrees shall not
have been vacated, discharged, or stayed pending appeal within
sixty (60) days from the entry thereof; or
(k) Notes; Collateral Documents. (i) Any of the Notes
or the Collateral Documents shall cease to be in full force and
effect at any time, or (ii) the occurrence of any default or
event of default under any of the Collateral Documents, or (iii)
a breach of any term, condition or provision of any of the
Collateral Documents (A) beyond any applicable period of grace
contained in such Collateral Document, or (B) if no such period
of grace exists, beyond twenty (20) days after written notice
thereof from the Agent.
7.2 Effect of Event of Default.
(a) Upon the occurrence and during the continuance, of
any Event of Default specified in Subsection 7.1, the Agent shall
at the request of, or may with the consent of, the Majority
Banks, (i) declare all obligations of the Banks under this
Agreement to be immediately terminated, and (ii) declare all
Indebtedness evidenced by the Revolving Credit Note, the Term
Loan Note and any other Indebtedness of the Borrowers, or any
Subsidiary of the Borrowers, to the Agent or the Banks under this
Agreement or any Loan Document, to be immediately due and
payable, whereupon the Revolving Credit Note, the Term Loan Note
and all such Indebtedness shall become and be forthwith due and
payable, without presentment, demand, protest and all benefits of
valuation and appraisement laws, or other notice of any kind, all
of which are hereby expressly waived by the Borrowers; provided,
however, that if any Event of Default specified in Subsection
7.1(h) shall occur, all Indebtedness evidenced by the Revolving
Credit Note, the Term Loan Note and any other Indebtedness of the
Borrowers, or any Subsidiary or Affiliate of the Borrowers, to
the Agent or the Banks under this Agreement or any Loan Document
shall thereupon become due and payable concurrently therewith,
and the Banks' obligations to lend shall immediately terminate,
without any further action by the Agent or any Bank and without
presentment, demand, protest and all benefits of valuation and
appraisement laws or other notice of any kind, all of which are
hereby expressly waived by the Borrowers.
(b) In addition to (and not in substitution for or
limitation of) the remedies available to the Agent and the Banks
described in Subsection 7.2(a), in the event that the Borrowers
fail to achieve the applicable Consolidated Interest Coverage
Ratio as of any measurement date therefor as described in
Subsection 6.3(c), and fail to achieve the applicable
Consolidated Interest Coverage Ratio as of the next succeeding
measurement date therefor as described in Subsection 6.3(c), the
Agent may cause any or all of the LIBOR Rate Loans then
outstanding to be immediately converted to Loans bearing interest
at the Adjusted Prime Rate applicable to each such Loan. If the
Agent converts any LIBOR Rate Loan to a Loan bearing interest at
the Adjusted Prime Rate pursuant to this Subsection 7.2(b) prior
to the end of the LIBOR Rate Period for such Loan, the Borrowers
shall, upon not less than ten (10) days prior written notice
after the end of the LIBOR Rate Period applicable to such Loan
prior to its conversion, pay to the Agent an amount equal to the
excess of (i) the interest which would have otherwise been
payable on the outstanding and unpaid principal amount of such
Loan during the remaining term of the LIBOR Rate Period, less
(ii) interest on the amount prepaid for such term computed at an
interest rate equal to the yield-to-maturity which could be
obtained on United States Treasury Obligations, purchased in the
market at the time of prepayment, having a remaining term and
coupon rate comparable to the remaining term of the LIBOR Rate
Period, and comparable to the applicable interest rate, as
determined by Agent in good faith, and certified to the Borrower,
such certificate to be conclusive, absent manifest error. In no
event shall the amount determined by subtracting the amount
described in clause (ii), above, from the amount described in
clause (i), above, result in a negative number.
(c) Upon the occurrence and during the continuance of
any other Event of Default, the Agent may, by notice of default
to the Borrowers, declare all amounts owing under or evidenced by
this Agreement, the Revolving Credit Note, the Term Loan Note, or
any Loan Document to be due and payable forthwith, whereupon the
same shall immediately become due and payable. Further, upon the
occurrence of an Event of Default, the Borrowers agree to furnish
promptly to the Agent on behalf of the Banks such security as the
Majority Banks may reasonably request and to execute such
agreements or documents deemed reasonably necessary by Agent and
the Banks to accomplish same. Any acceleration of payment
pursuant to this Subsection 7.2 shall be without presentment,
demand, protest and all benefits of valuation and appraisement
laws or other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Revolving
Credit Note, the Term Loan Note or any Loan Document to the
contrary notwithstanding. The Borrowers agree that the foregoing
rights and remedies herein expressly specified are cumulative and
not exclusive of any rights or remedies which the Agent and the
Banks may or would otherwise have at law or by any instrument
evidencing terms of deposit of any funds or by an assignment or
transfer of collateral or by any other instrument signed or
assented to by the Borrowers (individually or collectively).
7.3 Right of Set Off. In addition to any rights and
remedies of the Banks provided by law, each Bank shall have the
right, without prior notice to the Borrowers, any such notice
being expressly waived by the Borrowers to the extent permitted
by applicable law, upon the occurrence of any Event of Default,
to set-off and apply against any Indebtedness, whether matured or
unmatured, of the Borrowers under this Agreement, the Revolving
Credit Note or the Term Loan Note, any amount owing from such
Bank to the Borrowers, at or any time after, the happening of
such Event of Default.
SECTION 8 THE AGENT
8.1 Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as
are delegated to the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. The duties of
the Agent shall be mechanical and administrative in nature and
the Agent shall not by reason of this Agreement be a trustee or
fiduciary for any Bank. The Agent shall have no duties or
responsibilities except those expressly set forth herein. As to
any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the
Revolving Credit Note or the Term Loan Note), the Agent shall not
be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be
fully protected in so acting or so refraining from acting) upon
the instructions of the Majority Banks, and such instructions
shall be binding upon all Banks and all holders of the Revolving
Credit Note and the Term Loan Note; provided, however, that the
Agent shall not be required to take any action which exposes the
Agent to personal liability or which is contrary to this
Agreement or applicable law.
8.2 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any
action taken or omitted to be taken by it or them under or in
connection with this Agreement in the absence of its or their own
gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Agent: (a) may treat the
payee of the Revolving Credit Note or the Term Loan Note as a
holder thereof until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) consult with legal counsel
(including counsel for the Borrowers, independent public
accountants, and other experts selected by it) and shall not be
liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants
or experts; (c) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements,
warranties or representations made in or in connection with this
Agreement; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the
Borrowers or to inspect the property (including the books and
records) of the Borrowers; (e) shall not be responsible to any
Bank for the due execution, legality, validity, enforceability,
genuineness, perfection, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant thereto;
and (f) shall incur no liability under or in respect to this
Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be sent by telegram,
telex, or facsimile transmission) believed by it to be genuine
and to be signed by the proper party or parties.
8.3 Rights of Agent as a Bank. With respect to its
Proportionate Revolving Credit Commitment, its Proportionate Term
Loan Commitment, the Revolving Credit Loans and any portion of
the Term Loan made by it, and the Revolving Credit Note and Term
Loan Note issued to it, the Agent shall have the same rights and
powers under this Agreement as any other Bank and may exercise
the same as though it were not the Agent, and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include the
Agent in its capacity as a Bank. The Agent and its affiliates
may accept deposits from, lend money to, act as trustee under
indentures of and generally engage in any kind of business with
the Borrowers and any person who may do business with or own
securities of the Borrowers, all as if the Agent were not the
Agent without any duty to account therefor to the Banks.
8.4 Independent Credit Decisions. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the Agent or any
other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement. The Agent shall have no duty or responsibility to
provide any Bank with any credit or other information concerning
the affairs, financial condition or business of the Borrowers
which may come into the possession of the Agent or any of its
Affiliates.
8.5 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Borrowers) ratably
according to the respective amounts of their Proportionate
Revolving Credit Loan Commitments and Proportionate Term Loan
Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way related to or arising out of this
Agreement or any action taken or omitted by the Agent under this
Agreement, provided that no Bank shall be liable for any portion
of any of the foregoing resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent (to the extent
not reimbursed by the Borrowers) promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel
fees) incurred by the Agent in connection with the preparation,
administration or enforcement of, or legal advice in respect of
rights or responsibilities under this Agreement.
8.6 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrowers.
Upon any such resignation, the Majority Banks shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Banks and shall have
accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the Agent
may, on behalf of the Banks appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United
States of America or any state thereof and having a combined
capital and surplus of at least Two Hundred Fifty Million Dollars
($250,000,000,000). Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed thereto and become vested with all the rights,
powers, privileges, and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's
resignation hereunder as Agent the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
8.7 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise) with respect to the Revolving
Credit Loans or the Term Loan in excess of its pro rata share of
such payments shared by all Banks, such Bank shall forthwith
purchase from the other Banks such participation in the Revolving
Credit Loans or the portion of the Term Loan made by them as
shall be necessary to cause such purchasing Bank to share the
excess payment ratably with each of them; provided, however, if
all or any portion of such excess payment is hereafter recovered
from such purchasing Bank, such purchase from the other Banks
shall be rescinded and each other Bank shall repay to the
purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share
(according to the proportion of (a) the amount of such Bank's
required prepayment, to (b) the total amount so recovered from
the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount
recovered. The Borrowers agree that any Bank purchasing a
participation from another Bank pursuant to this Subsection 8.7
may, to the fullest extent permitted by law, exercise all of its
rights of payment (including the right of set-off) with respect
to such participation as fully as if such Bank were the direct
creditor of the Borrowers in the amount of such participation.
SECTION 9 MISCELLANEOUS
9.1 Increased Costs/Capital Adequacy. Subject to the
provisions of Subsection 2.9, in the event that at any time or
from time to time any Requirement of Law, or any interpretation
or application thereof, or compliance by a Bank with any request
or directive (whether or not having the force of law) from any
central bank or monetary authority or other governmental
authority:
(a) does or shall subject such Bank to any Tax of any
kind whatsoever, or increase in the amount thereof, with respect
to this Agreement, the Revolving Credit Note or the Term Loan
Note, or change the basis of taxation of payments to such Bank of
principal, interest or any other amount payable hereunder, under
the Revolving Credit Note or the Term Loan Note (except for
changes in the rate of tax on the overall net income of such
Bank); or
(b) does or shall impose, modify or hold applicable or
change any reserve (including, without limitation, basic,
supplemental, marginal and emergency reserves), special deposit,
compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances
or loans by, or other credit extended by, or any other
acquisition of funds or capital adequacy or maintenance
requirement by such Bank; or
(c) does or shall impose on such Bank any other
material condition or change;
and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any of the Loans or to reduce
any amount receivable thereunder, then, in any such case, the
Borrowers shall promptly pay the Agent, upon its demand, such
additional amount which will compensate such Bank for such
additional cost or reduced amount receivable. A certificate
showing in reasonable detail any additional amounts determined by
the Agent to be payable pursuant to this Subsection shall be
submitted by the Agent to the Borrowers and, absent manifest
error, shall be conclusive and binding on the parties hereto.
In the event any Borrower makes any payment to a Bank
pursuant to this Subsection, the Borrowers may replace such Bank
(a "Replaced Bank") by designating another commercial bank which
is an Eligible Assignee and reasonably acceptable to the Agent
(such bank to be referred to as a "Replacement Bank") to which
such Replaced Bank shall assign, in accordance with Subsection
9.2 and without recourse or warranty by, or expense to, such
Replaced Bank, the rights and obligations or such Replaced Bank
hereunder (except for such rights as survive the repayment of the
Loans), and, upon such assignment, such Replaced Bank shall no
longer be a party hereto or ave any rights hereunder and shall be
relieved from all obligations to the Borrowers hereunder, and the
Replacement Bank shall succeed to the rights and obligations of
such Replaced Bank hereunder. Any such assignment shall be
accompanied by payment of amounts that would be payable to the
Agent hereunder if such assignment were a prepayment of all
outstanding Loans of the Replaced Bank.
9.2 Assignments, Participation, etc.
(a) Any Bank may, with the written consent of the
Borrowers and the Agent, which consent shall not be unreasonably
withheld or delayed, at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the
Borrowers or the Agent shall be required in connection with any
assignment and delegation by a Bank to an Affiliate of such Bank,
unless the Borrowers would otherwise be required to make any
payment or payments pursuant to Subsections 2.9 or 9.1 hereof
after the date of any such assignment which payment or payments
the Borrowers would not have been required to make but for such
assignment, in which case such assignment may not be made without
the prior written consent of the Borrowers, which consent shall
not be unreasonably withheld or delayed) (each an "Assignee")
all, or any ratable part of all, of the Loans, its Proportionate
Revolving Credit Commitment and/or Proportionate Term Loan
Commitment (collectively such Bank's "Proportionate Commitments")
and the other rights and obligations of such Bank hereunder;
provided, however, that any such assignment shall be in a minimum
amount equal to the lesser of Five Million Dollars ($5,000,000)
or the full amount of the assignor Bank's Proportionate
Commitments; and provided, further, that the Borrowers may
withhold consent to any such assignment and delegation of less
than all of a Bank's Proportionate Commitments if, after giving
effect to such assignment and delegation, the assignor Bank's
Proportionate Commitments would be less than Ten Million Dollars
($10,000,000), and provided, still further, that the Borrowers,
any Subsidiary thereof and the Agent may continue to deal solely
and directly with such Bank in connection with the interest so
assigned to an Assignee until (i) written notice of such
assignment in form and substance satisfactory to the Borrowers
and the Agent, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been
given to the Borrowers and the Agent by such Bank and the
Assignee; (ii) such Bank and its Assignee shall have delivered to
the Borrowers and the Agent an Assignment and Acceptance in form
and content acceptable to Agent and Borrowers ("Assignment and
Acceptance"); and (iii) such Bank or its Assignee shall have paid
a processing fee of Three Thousand Five Hundred Dollars ($3,500)
to the Agent; and provided, further, that any assignment
hereunder must include an equal percentage of the assignor Bank's
Proportionate Revolving Credit Commitment and Revolving Credit
Loans. At the time of each assignment pursuant to this Section
9.2 to a Person which is not already a Bank hereunder and which
is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for United States Federal income tax
purposes, the respective Assignee shall provide to the Borrowers
and Agent the appropriate IRS forms (and, if applicable, a
Section 2.9(c)(ii) Certificate) described in Section 2.9(c).
(b) From and after the date that the Agent notifies
the assignor Bank that the requirements of subsection 9.2(a) have
been satisfied, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank under
the Loan Documents, and (ii) the assignor Bank shall, to the
extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its additional obligations under the
Loan Documents. Anything herein to the contrary notwithstanding,
any Bank assigning all of its Loans, Proportionate Commitments
and other rights and obligations hereunder to an Assignee shall
continue to have the benefit of all indemnities hereunder
following such assignment.
(c) Immediately upon each Assignee's making its
payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the
resulting adjustment of the Proportionate Commitment arising
therefrom. The Proportionate Commitment allocated to each
Assignee shall reduce the Proportionate Commitments of the
assignor Bank pro tanto.
(d) Any Bank may at any time sell to one or more banks
or other institutions (a "Participant") participating interests
in any Loans or Proportionate Commitment of that Bank and the
other interests of that Bank (the "Originating Bank") hereunder
and under the other Loan Documents; provided, however, that (i)
the Originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the Originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the
Borrowers, each Bank and the Agent shall continue to deal solely
and directly with the Originating Bank in connection with the
Originating Bank's rights and obligations under this Agreement
and the other Loan Documents, and (iv) no Bank shall transfer or
grant any participating interest under which the Participant
shall have rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan
Document, provided that such Participant shall have the right to
approve any amendment, consent or waiver that would (A) postpone
or delay any date fixed for any payment of principal, interest or
fees due hereunder or under any other Loan Document, (B) extend
the maturity of any Loan, (C) reduce the principal of, or the
rate of interest specified herein on, any Loan, or (D) reduce any
fees or other amounts payable hereunder or under any other Loan
Document, and provided, still further, that the sale of any
participating interest hereunder must include an equal percentage
of the Originating Bank's Revolving Credit Commitment and
Revolving Loans. In the case of any such participation, the
Participant shall not have any rights under this Agreement, or
any of the other Loan Documents, and all amounts payable by the
Borrowers hereunder shall be determined as if such Bank had not
sold such participation; except that, (I) if amounts outstanding
under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall be deemed to have
the right of set-off in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as
a Bank under this Agreement, and (II) each Participant shall be
deemed to have the rights and benefits under Section 2 in respect
of its participating interest in any Loan or the Originating
Bank's Proportionate Revolving Credit Commitment or Proportionate
Term Loan Commitment to the same extent as if its participating
interest were held by a Bank under this Agreement; provided, that
no Participant shall be entitled to receive any greater amount
pursuant to such Section than the transferor Bank would have been
entitled to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant had no
such transfer occurred.
(e) Notwithstanding any other provision contained in
this Agreement or any other Loan Document to the contrary, any
Bank may assign all or any portion of the Loans held by it to any
Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Federal Reserve Board
and any Operating Circular issued by such Federal Reserve Bank,
provided, that any payment in respect of such assigned Loans made
by a Borrower to or for the account of the assigning Bank in
accordance with the terms of this Agreement shall satisfy such
Borrower's obligations hereunder in respect to such assigned
Loans to the extent of such payment. No such assignment shall
release the assigning Bank from its obligations hereunder.
9.3 Amendments, Waivers and Consents. No amendment or
waiver of any provision of this Agreement, the Revolving Credit
Note, the Term Loan Note or any other Loan Document, nor consent
to any departure by a Borrower, Guarantor, or Subsidiary of a
Borrower or Guarantor, therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Agent, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
9.4 Notices. All notices, requests and demands required to
be given hereunder, or under any other Loan Document, to or upon
the respective parties hereto or thereto to be effective shall,
unless otherwise expressly provided herein or in such Loan
Document, be in writing or by telegraph and shall be deemed to
have been duly given or made, unless otherwise expressly provided
herein: (a) three (3) days after deposited in the mail
(certified or registered mail return receipt requested, the
failure to receive such return receipt having no effect); or (b)
when received, if an express mail or courier service is used;
addressed as follows or to such address or other address as may
be hereafter designated in writing by the respective parties
hereto and any future holder of the Revolving Credit Note or the
Term Loan Note:
NCDC: Niagara Cold Drawn Corp.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
and
Niagara Cold Drawn Corp.
000 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxx Xxxx 00000
Attn: President
With a Copy to: Xxxxxx Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
LASALLE: LaSalle Steel Company
c/o Niagara Cold Drawn Corp.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
and
LaSalle Steel Company
0000 000xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President
and
LaSalle Steel Company
c/o Niagara Cold Drawn Corp.
000 Xxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxx Xxxx 00000
Attn: President
With a Copy to: Xxxxxx Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
M&T: Manufacturers and Traders Trust Company
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx
Vice President
With a Copy to: Xxxxxxx X. Xxxxxxx XX, Esq.
Lippes, Xxxxxxxxxxx, Xxxxxxx & Xxxxxx LLP
700 Guaranty Building
00 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
CIBC: CIBC Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx Xxxxxx
NATIONAL: National City Bank
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx
Attn: Xx. Xxxxx X. Xxxxxx
THE AGENT: Manufacturers and Traders Trust Company
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxx
Vice President
With a Copy to: Xxxxxxx X. Xxxxxxx XX, Esq.
Lippes, Xxxxxxxxxxx, Xxxxxxx & Xxxxxx LLP
700 Guaranty Building
00 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
9.5 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Agent or any Bank,
any right, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided
by law.
9.6 Survival of Representations and Warranties. All
representations and warranties made hereunder or in any Loan
Document shall survive the execution and delivery of this
Agreement, the Revolving Credit Note, the Term Loan Note and any
Loan Document.
9.7 Payment of Expenses and Taxes; Indemnity. The
Borrowers agree (a) to pay or reimburse the Agent and the Banks
on demand for all their out-of-pocket costs and expenses incurred
in connection with the preparation and execution of, and any
amendment, waiver, consent, supplement or modification to, this
Agreement, the Revolving Credit Note, the Term Loan Note, and any
other Loan Document, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of legal counsel to the
Agent and the Banks, (b) to pay or reimburse the Agent and the
Banks on demand for all their costs and expenses incurred in
connection with the enforcement or preservation of any rights
under this Agreement, the Revolving Credit Note, the Term Loan
Note, and any other Loan Document, including, without limitation,
fees and disbursements of legal counsel to the Agent and the
Banks and fees and expenses incurred in connection with annual
field audits, (c) without limitation of the provision of clause
(a) of this Subsection, to pay, indemnify, and to hold the Agent
and the Banks harmless from, any and all recording and filing
fees, intangibles taxes, UCC and other title or lien searches,
stamp and other taxes, if any, which may be payable or determined
to be payable in connection with the execution and delivery of,
or consummation of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the Revolving
Credit Note, the Term Loan Note, and any other Loan Document, and
(d) subject to the provisions of Subsection 2.9, to pay,
indemnify, and hold the Agent and the Banks harmless from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including,
without limitation, counsel fees and disbursements in connection
with any litigation, investigation, hearing or other proceeding)
with respect or in any way related to the existence, execution,
delivery, enforcement, performance of this Agreement, the
Revolving Credit Note, the Term Loan Note and the Loan Documents
(all of the foregoing, collectively, the "Indemnified
Liabilities"), provided, that the Borrowers shall not have any
obligation hereunder with respect to Indemnified Liabilities
arising directly from the gross negligence or willful misconduct
of the Agent and/or a Bank.
9.8 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrowers, the
Agent, the Banks and their respective successors and assigns,
except that the Borrowers may not assign or transfer any of their
rights under this Agreement without the prior written consent of
the Agent.
9.9 Counterparts. This Agreement may be executed by one or
more the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
9.10 Governing Law. This Agreement, the Revolving Credit
Note, the Term Loan Note, and the other Loan Documents, and the
rights and obligations of the parties under this Agreement, the
Revolving Credit Note, the Term Loan Note and the other Loan
Documents shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York without regard
to principles of conflicts of laws, unless expressly provided for
otherwise in any such document.
9.11 Inconsistent Provisions. The terms of this Agreement,
the Revolving Credit Note, the Term Loan Note and other Loan
Documents shall be cumulative except to the extent they are
specifically inconsistent with each other, in which case the
terms of this Agreement shall prevail.
9.12 Further Assurances. The Borrowers hereby agree that
they will, from time to time at their own expense, promptly
execute and deliver all further instruments, and take all further
action, that may be necessary or appropriate or that the Agent
may reasonably request, in order to enable the Agent or the Banks
to exercise and enforce their rights or the rights of the Banks
under this Agreement, the Revolving Credit Note, the Term Loan
Note and the Collateral Documents and otherwise to carry out the
intent of this Agreement and the Collateral Documents.
9.13 Waiver of Jury Trial. THE AGENT, THE BANKS AND THE
BORROWERS HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE REVOLVING CREDIT NOTE, THE
TERM LOAN NOTE OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE AGENT, THE BANKS OR THE BORROWERS.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANKS TO ENTER
INTO THIS AGREEMENT.
9.14 Consent to Jurisdiction. THE BORROWERS, THE AGENT AND
THE BANKS AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS AGREEMENT, THE REVOLVING CREDIT NOTE, OR THE
TERM LOAN NOTE OR ANY OTHER LOAN DOCUMENT MAY BE COMMENCED IN THE
SUPREME COURT OF NEW YORK IN ERIE COUNTY, OR IN XXX XXXXXXXX
XXXXX XX XXX XXXXXX XXXXXX IN THE WESTERN DISTRICT OF NEW YORK,
AND THE BORROWERS, THE AGENT AND THE BANKS WAIVE PERSONAL SERVICE
OF PROCESS AND AGREE THAT A SUMMONS AND COMPLAINT COMMENCING AN
ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY SERVED
AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED OR
CERTIFIED MAIL TO THE BORROWERS, THE AGENT OR THE BANKS, OR AS
OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF NEW YORK OR THE
UNITED STATES.
9.15 Headings. Headings to the sections of this Agreement
are solely for the convenience of the parties and are not an aid
in the interpretation of this Agreement or any part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
NIAGARA COLD DRAWN CORP.
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
LASALLE STEEL COMPANY
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
Proportionate Revolving MANUFACTURERS AND TRADERS TRUST COMPANY
Credit Commitment:
$25,000,000
Proportionate Term By: /s/ Xxxxxx X. Xxxx, Vice President
Loan Commitment: Name: Xxxxxx X. Xxxx
$20,000,000 Title: Vice President
Proportionate Revolving CIBC INC.
Credit Commitment:
$16,665,000
Proportionate Term By: /s/ Xxxxxxxxx X. Xxxxxxx
Loan Commitment Name: Xxxxxxxxx X. Xxxxxxx
$13,335,000 Title: Authorized Signatory
Proportionate Revolving NATIONAL CITY BANK
Credit Commitment:
$8,335,000
Proportionate Term By: /s/ Xxxxx X. Xxxxxx
Loan Commitment Name: Xxxxx X. Xxxxxx
$6,665,000 Title: Vice President
MANUFACTURERS AND TRADERS TRUST COMPANY,
AS AGENT
By: /s/ Xxxxxx X. Xxxx, Vice President
Name: Xxxxxx X. Xxxx
Title: Vice President
