$140,000,000
CREDIT AGREEMENT
dated as of September 23, 1990
(as amended and restated as of February 7, 1997)
among
ESCO Electronics Corporation
Defense Holding Corp.,
The Banks Listed Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
THIS CREDIT AGREEMENT CONTEMPLATES FUTURE ADVANCES
AND IS SECURED BY, AMONG OTHER THINGS, A MISSOURI
DEED OF TRUST DATED AS OF SEPTEMBER 24, 1990
[CS&M Ref. No. 1385-252]
TABLE OF CONTENTS */
Page
ARTICLE I
DEFINITIONS
SECTION 1.01
Definitions
3
1.02
Accounting Terms and Determinations
35
1.03
Types of Borrowings and Classes of
Letters of Credit
36
ARTICLE II
THE CREDITS
SECTION 2.01
Commitments to Lend
37
2.02
Method of Borrowing
37
2.03
Notes
39
2.04
Interest Rate Elections
40
2.05
Interest Rates
43
2.06
Fees
47
2.07
Termination or Reduction of
Commitments
47
2.08
Mandatory Repayments and
Prepayments
48
2.09
Optional Prepayments
49
2.10
General Provisions as to Payments
49
2.11
Funding Losses
50
2.12
Computation of Interest and Fees
51
2.13
Withholding Tax Exemption
51
2.14
Letters of Credit
52
2.15
Taxes
61
2.16
Extension of Working Capital
Availability Period
63
ARTICLE III
CONDITIONS
SECTION 3.01
Effectiveness
64
3.02
Each Credit Event
69
3.03
Amendment and Restatement
69
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01
Corporate Existence and Power
72
4.02
Corporate and Governmental
Authorization; No Contravention
72
4.03
Binding Effect
73
4.04
Financial Information
73
4.05
Litigation
74
4.06
Compliance with ERISA
74
4.07
Taxes
74
4.08
Subsidiaries
74
4.09
Not an Investment Company
75
4.10
Compliance with Laws
75
4.11
Agreements
75
4.12
Federal Reserve Regulations
75
4.13
Disclosure
75
4.14
Solvency
76
4.15
Governmental Approvals
76
4.16
Security Interests
76
4.17
Employment and Management
Agreements
77
4.18
Capitalization
77
4.19
Environmental Matters
78
ARTICLE V
COVENANTS
SECTION 5.01
Information
78
5.02
Payment of Obligations
82
5.03
Maintenance of Property; Insurance
82
5.04
Conduct of Business and Maintenance
of Existence
83
5.05
Compliance with Laws
83
5.06
Inspection of Property, Books and
Records
84
5.07
Fiscal Year
84
5.08
Further Assurances
84
5.09
Subsidiaries; Partnerships
86
5.10
Amendment of Certain Documents
87
5.11
Debt; Preferred Stock; Letters of
Credit
87
5.12
Restricted Payments
89
5.13
Mergers, Consolidations,
Acquisitions and Sales of Assets
89
5.14
Transactions with Affiliates
91
5.15
Sale and Lease-Back Transactions
91
5.16
Investments
91
5.17
Negative Pledge
96
5.18
Use of Proceeds and Letters of
Credit
98
5.19
Grants of Negative Pledges or
Dividend Restrictions
98
5.20
Certain Contract Payments
98
5.21
Coverage Ratio
99
5.22
Minimum Consolidated Adjusted
Tangible Net Worth
99
5.23
Leverage Ratio
100
ARTICLE VI
DEFAULTS
SECTION 6.01
Events of Default
100
6.02
Notice of Default
103
ARTICLE VII
THE AGENT, SECURITY AGENT AND ISSUING BANKS
SECTION 7.01
Appointment and Authorization
103
7.02
Agent and Affiliates
103
7.03
Action by Agent
104
7.04
Consultation with Experts
104
7.05
Liability of Agent
104
7.06
Indemnification
104
7.07
Credit Decision
105
7.08
Successor Agent
105
7.09
Agents Fees
105
7.10
Sub-Agents
106
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01
Basis for Determining Interest Rate
Inadequate or Unfair
106
8.02
Illegality
106
8.03
Increased Cost and Reduced Return
107
8.04
Base Rate Loans Substituted for
Affected Fixed Rate Loans
110
8.05
HLT Classification
110
ARTICLE IX
MISCELLANEOUS
SECTION 9.01
Notices
111
9.02
No Waivers
112
9.03
Expenses; Documentary Taxes;
Indemnification
112
9.04
Sharing of Set-Offs
113
9.05
Amendments and Waivers
114
9.06
Successors and Assigns
114
9.07
Collateral
116
9.08
Waiver of Trial by Jury
117
9.09
New York Law
117
9.10
Counterparts; Integration
117
9.11
Confidentiality
117
9.12
Conflicts
117
9.13
Rates and Fees Unaffected Prior to
Amendment and Restatement
Effective Date
118
9.14
Survival of Agreement
118
9.15
Severability
118
9.16
Currencies
118
Exhibit A-1 - Working Capital Note
Exhibit A-2 - Term Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Guarantee Agreement
Exhibit D - Pledge Agreement
Exhibit E - Security Agreement
Exhibit F - Subordination Agreement
Exhibit G - Form of Opinion of Borrower's Counsel
Exhibit H - Form of Perfection Certificate
Exhibit I - Form of 1992 Perfection Certificate
Exhibit J - Form of TFS Notes
Schedule 1 - Commitments
Schedule 1.01A - Existing Letters of Credit
Schedule 1.01B - Scheduled Properties
Schedule 3.01(j) - Mortgaged Properties
Schedule 4.05 - Litigation
Schedule 4.17 - Employment and Management
Agreements
Schedule 5.11 - Outstanding Debt
THIS CREDIT AGREEMENT CONTEMPLATES FUTURE ADVANCES
AND IS SECURED BY, AMONG OTHER THINGS, A MISSOURI
DEED OF TRUST DATED AS OF SEPTEMBER 24, 1990.
CREDIT AGREEMENT
AGREEMENT dated as of
September 23, 1990 (as amended
and restated as of February 7,
1997), among ESCO ELECTRONICS
CORPORATION, DEFENSE HOLDING
CORP., the BANKS listed on the
signature pages hereof, and
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent.
ESCO and the Borrower (such terms, and
all other capitalized terms in this preliminary
statement, being used as hereinafter defined)
entered into the Distribution Agreement consistent
with which (a) Xxxxxxx has transferred to ESCO all
the outstanding capital stock of the Borrower and
has transferred to the Borrower all the outstanding
capital stock of the Specified Subsidiaries, as
well as certain additional assets, (b) the Borrower
paid a dividend to ESCO, which in turn paid a
dividend to Xxxxxxx, on the Effective Date in the
aggregate amount of $20,000,000 and (c) Xxxxxxx
transferred all the common stock of ESCO to a trust
and distributed common stock trust receipts
representing such common stock to the holders of
Xxxxxxx'x common stock. In connection therewith,
the Borrower requested that the Banks, subject to
the terms and conditions of the Original Credit
Agreement, extend credit to the Borrower, in the
aggregate principal amount of up to $95,000,000, in
the form of (i) Term Loans in an aggregate
principal amount of $20,000,000, (ii) Working
Capital Loans in an aggregate principal amount at
any time outstanding not in excess of $75,000,000
(subject to certain limitations) to finance the
working capital requirements of the Borrower and
its Subsidiaries, and (iii) letters of credit
and/or letters of guaranty in an aggregate amount
at any time outstanding not in excess of
$50,000,000 (subject to certain limitations) to be
issued only for general corporate purposes in the
ordinary course of business of the Borrower and its
Subsidiaries. The proceeds of the Terms Loans were
used by the Borrower to finance payment of the
dividend referred to above. Subsequent thereto,
the Borrower and the Banks amended and restated the
Original Credit Agreement, as of June 12, 1992,
and, in connection therewith, the Borrower prepaid
the Terms Loans then outstanding and the Banks
agreed to extend credit to the Borrower, in the
aggregate principal amount of up to $100,000,000,
in the form of (i) Working Capital Loans to be made
by the Banks from time to time in an aggregate
principal amount at any time outstanding not in
excess of $75,000,000 (subject to certain
limitations), (ii) letters of credit and/or letters
of guaranty to be issued by the Issuing Bank from
time to time in an aggregate amount at any time
outstanding not in excess of $65,000,000 (subject
to certain limitations), and (iii) additional
letters of credit to be issued by the Issuing Bank
from time to time in an aggregate amount at any
time outstanding not in excess of $25,000,000
(subject to certain limitations). Subsequent
thereto, the Borrower and the Banks amended and
restated the Original Credit Agreement, as
previously amended and restated, as of May 27,
1994, and in connection therewith, the Borrower
prepaid the Loans then outstanding and the Banks
agreed to extend credit to the Borrower, in the
aggregate principal amount of up to $100,000,000,
in the form of (i) Term Loans to be made by the
Banks in an aggregate principal amount of
$20,000,000, (ii) Working Capital Loans to be made
by the Banks from time to time in an aggregate
principal amount at any time outstanding not in
excess of $80,000,000 (subject to certain
limitations), and (iii) letters of credit and/or
letters of guaranty to be issued by the Issuing
Banks from time to time in an aggregate amount at
any time outstanding not in excess of $65,000,000
(subject to certain limitations). Subsequent
thereto, the Borrower and the Banks amended and
restated the Original Credit Agreement, as
previously amended and restated, as of
September 29, 1995. ESCO and the Borrower have
requested that the Original Credit Agreement, as
previously amended and restated, be amended and
restated in the form hereof in order to provide for
certain changes hereto, including to increase the
amount of Term Loans to an aggregate principal
amount of $60,000,000 and to reduce the aggregate
amount of letters of credit and/or letters of
guaranty to be issued by the Issuing Banks from
time to time to an aggregate amount at any time
outstanding not in excess of $40,000,000 (subject
to certain limitations). The proceeds of the Loans
shall be used by the Borrower to finance the
working capital requirements of the Borrower and
its Subsidiaries and permitted acquisitions, and
Letters of Credit shall be issued only for general
corporate purposes in the ordinary course of
business of the Borrower and its Subsidiaries and,
subject to certain limitations specified herein,
for the purpose of providing credit support for
certain obligations of ESCO to Xxxxxxx.
Accordingly, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The
following terms, as used herein, have the following
meanings:
"Account Debtor" means any Person who is
or who may become obligated to the Borrower or one
of the Subsidiaries under, with respect to, or on
account of, an Account.
"Accounts" means any and all rights of
the Borrower and the Subsidiaries (other than
Restricted Subsidiaries) to payment for goods and
services sold or leased, including any such right
evidenced by chattel paper, whether due or to
become due, whether or not it has been earned by
performance, and whether now or hereafter acquired
or arising in the future, including accounts
receivable from Affiliates.
"Adjusted CD Rate" has the meaning set
forth in Section 2.05(b).
"Adjusted London Interbank Offered Rate"
has the meaning set forth in Section 2.05(c).
"Administrative Questionnaire" means,
with respect to each Bank, the administrative
questionnaire in the form submitted to such Bank by
the Agent and submitted to the Agent (with a copy
to the Borrower) duly completed by such Bank.
"Affiliate" means any Person (other than
a Subsidiary) directly or indirectly controlling,
controlled by or under common control with the
Borrower or ESCO. As used in this definition, the
term "control" means the possession, directly or
indirectly, 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. For purposes
of this Agreement, any Person that directly or
indirectly owns 10% or more of the regularly voting
common equity securities of ESCO shall be deemed to
be an Affiliate of the Borrower and ESCO, and, for
purposes of Section 5.14, Xxxxxxx shall be deemed
to be an Affiliate of the Borrower and ESCO.
"Agent" means Xxxxxx Guaranty Trust
Company of New York in its capacity as agent for
the Banks hereunder, and its successors in such
capacity.
"Alternative Currency Equivalent" shall
mean, with respect to an amount of Dollars on any
date in relation to any specified Alternative
Letter of Credit Currency, the amount of such
specified Alternative Letter of Credit Currency
that may be purchased with such amount of Dollars
at the Spot Exchange Rate with respect to Dollars
on such date.
"Alternative Letter of Credit Currency"
means any Permitted Letter of Credit Currency other
than Dollars.
"Amendment and Restatement Effective
Date" has the meaning set forth in Section 3.03.
"Applicable Lending Office" means, with
respect to any Bank, (i) in the case of its
Domestic Loans, its Domestic Lending Office and
(ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
"Applicable Percentage" of any Bank means
the percentage of the aggregate Commitments
represented by such Bank's Commitment.
"Assessment Rate" has the meaning set
forth in Section 2.05(b).
"Assignee" has the meaning set forth in
Section 9.06(c).
"Assignment of Claims Act" means the
Assignment of Claims Act of 1940, as amended, 31
U.S.C. Section 3727 and 41 U.S.C. Section 15.
"Back-up LOC" means any letter of credit
issued by a Bank to the Issuing Bank in accordance
with Section 2.14(d).
"Bank" means each bank or lender listed
on the signature pages hereof, each Assignee which
becomes a Bank pursuant to Section 9.06(c), and
their respective successors.
"Base Rate" means, for any day, a rate
per annum equal to the higher of (i) the Prime Rate
for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means at any time a loan
outstanding hereunder which bears interest at such
time at a rate based on the Base Rate pursuant to a
Notice of Borrowing or Notice of Interest Rate
Election or pursuant to Article VIII.
"Base Rate Margin" has the meaning set
forth in Section 2.05(a).
"Billed Receivable" means, as at any date
of determination thereof, any Receivable or portion
thereof for which an invoice has been issued to the
Account Debtor.
"Borrower" means Defense Holding Corp.,
formerly Xxxxxxx Defense Holding Corp., a Delaware
corporation, and its successors.
"Borrowing" has the meaning set forth in
Section 1.03.
"Borrowing Base" means, at any date of
determination thereof, the sum of:
(i) an amount equal to the sum of (a) 90%
of the aggregate amount at such date of all
Eligible Billed Government Receivables, plus
(b) 85% of the aggregate amount at such date
of all Eligible Billed Commercial Receivables,
plus (c) 70% of the aggregate amount at such
date of all Eligible Foreign Receivables, plus
(d) 60% of the aggregate amount at such date
of all Eligible Unbilled Receivables; plus
(ii) an amount equal to 35% of the
aggregate amount at such date of Eligible Net
Inventories; plus
(iii) an amount equal to the amount of
cash collateral held by the Security Agent at
such date in accordance with Section 2.14(j);
provided, however, that not more than 40% of the
Borrowing Base at any time shall consist of the
amount specified in clause (ii) above. The portion
of the Borrowing Base at any time represented by
the sum of the amounts referred to in clauses (i)
and (ii) above shall be determined by reference to
the most recent Borrowing Base Certificate
delivered to the Agent, absent any error in such
Borrowing Base Certificate.
"Borrowing Base Certificate" means a
certificate in the form of Exhibit B hereto, duly
completed and executed by the chief financial
officer, chief accounting officer or treasurer of
ESCO.
"Business Acquisition" means any
acquisition by the Borrower or any Subsidiary of
another business enterprise, whether consummated
through the acquisition of capital stock or other
ownership interests in another entity or through
the acquisition of assets, and regardless of
whether (i) such business is similar or dissimilar
to any business conducted by the Borrower and its
Subsidiaries or (ii) such acquisition is permitted
by the terms hereof or is permitted pursuant to any
waiver granted hereunder.
"Capital Expenditures" means, with
respect to any fiscal period of any Person, the
additions to property, plant and equipment and
other capital expenditures of such Person for such
fiscal period, as the same are (or would be) set
forth, in accordance with generally accepted
accounting principles, in the statement of cash
flow of such Person for such fiscal period.
"Cash Available For Cash Charges" means,
for any period, the excess of (a) the sum (without
duplication) of (i) Consolidated Net Income for
such period (excluding any extraordinary item of
gain or loss), plus (ii) depreciation, amortization
and other non-cash items deducted in determining
such Consolidated Net Income, plus (iii) interest
expense and lease expense deducted in determining
such Consolidated Net Income, plus (iv) the
Guarantee Fees paid during such period, plus
(v) any loss deducted in determining such
Consolidated Net Income resulting from any
Specified Event, plus (vi) any decrease in Net
Working Investment during such period, over (b) the
sum (without duplication) of (i) any non-cash gains
included in determining such Consolidated Net
Income, plus (ii) any gains included in determining
such Consolidated Net Income resulting from any
Specified Event, plus (iii) the aggregate amount of
refunds and payments made and Letters of Credit
issued during such period for the purposes
described in Section 5.20, to the extent not
deducted in determining such Consolidated Net
Income, plus (iv) any increase in Net Working
Investment during such period.
"Cash Charges" means, for any period, the
sum (without duplication) of (i) interest expense
and lease expense deducted in determining
Consolidated Net Income for such period, plus
(ii) the Guarantee Fees paid during such period,
plus (iii) Capital Expenditures of ESCO and its
Consolidated Subsidiaries for such period, plus
(iv) Restricted Payments made during such period as
permitted by clauses (ii) and (iii) of
Section 5.12, plus (v) any mandatory repayments of
principal of Debt of ESCO and its Consolidated
Subsidiaries during such period, except repayments
of Loans and Letter of Credit Disbursements (it
being understood that payments under any Rate
Protection Agreement permitted by clause (iv) of
Section 5.11(a) shall not be considered repayments
of principal of Debt for purposes of this
clause (v)).
"CD Base Rate" has the meaning set forth
in Section 2.05(b).
"CD Loan" means at any time a loan
outstanding hereunder which bears interest at such
time at a rate based on the Adjusted CD Rate
pursuant to a Notice of Borrowing or Notice of
Interest Rate Election or pursuant to Article VIII.
"CD Margin" has the meaning set forth in
Section 2.05(b).
"CD Reference Banks" means The Bank of
New York, Morgan Guaranty Trust Company of New York
and The Boatmen's National Bank of St. Louis.
A "Change of Control" shall be deemed to
have occurred if (i) any person or group (within
the meaning of Rule 13d-5 of the Securities and
Exchange Commission as in effect on the Effective
Date) other than Xxxxxxx shall become the
beneficial owner (within the meaning of Rule 13d-3
of such Commission as in effect on the Effective
Date) of voting securities (including any options,
rights or warrants to purchase, and any securities
convertible into or exchangeable for, voting
securities) of ESCO representing 20% or more of the
voting power represented by all outstanding
securities of ESCO; (ii) a majority of the seats
(other than vacant seats) on the board of directors
of ESCO shall at any time have been occupied by
persons who were neither (a) nominated by Xxxxxxx
or the management of ESCO, nor (b) appointed by
directors so nominated; (iii) any person or group
other than Xxxxxxx shall otherwise directly or
indirectly control ESCO; or (iv) the Borrower shall
cease to be a Wholly Owned Consolidated Subsidiary
of ESCO, directly controlled by ESCO.
"Class" has the meaning set forth in
Section 1.03.
"Commitment" means, with respect to each
Bank, its Term Commitment or Working Capital
Commitment or both, as the context may require.
"Commitment Fee Rate" has the meaning set
forth in Section 2.06(b).
"Comtrak" means Comtrak International
Services, Inc., a Missouri corporation, and its
successors.
"Consolidated Adjusted Debt" means, at
any date, (a) the Debt of ESCO and its Consolidated
Subsidiaries at such date, as the same would be
reflected on a consolidated balance sheet prepared
as of such date in accordance with generally
accepted accounting principles, plus (without
duplication) the Letter of Credit Exposure at such
date plus the aggregate undrawn amount at such date
of all letters of credit (other than the Existing
LOCs) issued for the account of ESCO or any of its
Consolidated Subsidiaries (to the extent not
collateralized by Letters of Credit) less (b) the
excess of (i) cash and cash equivalents of ESCO and
its Consolidated Subsidiaries at such date, as the
same would be reflected on such balance sheet, over
(ii) the aggregate principal amount of outstanding
Working Capital Loans at such date; provided,
however, that for purposes of calculating the
excess in clause (b), no credit will be given with
respect to the cash and cash equivalents set forth
in sub-clause (i) thereof in excess of $2,000,000,
unless such cash and cash equivalents are
maintained with a Bank.
"Consolidated Adjusted EBIT" means, with
respect to ESCO and its Consolidated Subsidiaries
for any period, the sum (without duplication) of
(a) Consolidated Adjusted Net Income for such
period (excluding any non-cash extraordinary item
of gain or loss), (b) interest expense deducted in
determining Consolidated Adjusted Net Income for
such period, (c) all fees payable in connection
with the issuance of letters of credit and letters
of guarantee deducted in determining Consolidated
Adjusted Net Income for such period, (d) Federal,
state and local income taxes deducted in
determining Consolidated Adjusted Net Income for
such period, (e) depreciation and amortization in
respect of consolidated Intangible Assets that were
reflected on the balance sheet of ESCO dated
December 31, 1991, made available to the Banks
pursuant to Section 5.01, to the extent such
depreciation and amortization were deducted in
determining such Consolidated Adjusted Net Income
and (f) the Xxxxxxx Guarantee Charge, Inventory
Charge and Relocation Expenses, to the extent
deducted in determining such Consolidated Adjusted
Net Income.
"Consolidated Adjusted Interest Expense"
means with respect to ESCO and its Consolidated
Subsidiaries for any period, the sum (without
duplication) of (i) interest expense deducted in
determining Consolidated Adjusted Net Income for
such period and (ii) the amortization of all fees
payable in connection with the issuance of letters
of credit and letters of guarantee deducted in
determining Consolidated Adjusted Net Income for
such period.
"Consolidated Adjusted Net Income" means,
for any period, the Consolidated Net Income for
such period (excluding charges, not in excess of
$25,000,000, related to the adoption of Statement
of Financial Accounting Standards ("SFAS") 106
(Employers' Accounting for Post-retirement Benefits
Other Than Pensions) which are noncash in nature).
"Consolidated Adjusted Operating Cash
Flow" means, for any period, the sum of the
Consolidated Net Income for such period (A) plus
depreciation, amortization and other similar
non-cash charges, to the extent deducted in
determining such Consolidated Net Income and
(B) plus the amount by which the deferred taxes
increased (or minus the amount by which the
deferred taxes decreased) from the respective
amounts as of the end of the previous fiscal
period.
"Consolidated Adjusted Tangible Net
Worth" means at any date the stockholders' equity
of ESCO less its consolidated Intangible Assets,
all determined as of such date; provided that
solely for the purpose of computations in
connection with Section 5.23, such stockholders'
equity shall be adjusted to exclude the after-tax
impact on such stockholders' equity of the Xxxxxxx
Guarantee Charge, Inventory Charge and Relocation
Expenses, to the extent that such Xxxxxxx Guarantee
Charge, Inventory Charge and Relocation Expenses
were deducted in any determination of Consolidated
Net Income for any period ending on or prior to
such date.
"Consolidated Net Income" means, for any
period, the consolidated net income (or loss) of
ESCO and its Consolidated Subsidiaries for such
period.
"Consolidated Subsidiary" means at any
date any Subsidiary or other entity the accounts of
which would be consolidated with those of the
Borrower or ESCO, as applicable, in its
consolidated financial statements if such
statements were prepared as of such date.
"DCS" means Distribution Control Systems
Inc., formerly TWACS Corp., a Missouri corporation,
and its successors.
"Debt" of any Person means at any date,
without duplication, (i) all obligations of such
Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price
of property or services, except trade accounts
payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee which
are capitalized in accordance with generally
accepted accounting principles, (v) all obligations
of such Person under any Rate Protection
Agreements, (vi) all Debt of others secured by a
Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, and (vii) all
Debt of others Guaranteed by such Person.
"Default" means any condition or event
which constitutes an Event of Default or which with
the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of
Default.
"Deposit Agreement" means the Deposit and
Trust Agreement dated as of September 24, 1990,
among ESCO, Emerson, Boatmen's Trust Company, as
depositary and trustee, and the holders of Common
Stock Trust Receipts issued thereunder, as amended
and supplemented from time to time.
"Designated Letter of Credit" means a
certain letter of credit issued by Barclays Bank,
PLC New York for the account of the Borrower in the
initial amount of $33,000 and not at any time
exceeding $36,000 and issued in favor of Standard
Chartered Bank, Jalan Ampang Branch, Kuala Lumpur,
Malaysia, which letter of credit is issued as an
inducement for Standard Chartered Bank to issue a
bank guarantee in Malaysian Ringgits (MYR 83,400)
in favor of the Government of Malaysia, which
guarantee serves as a performance guarantee against
a certain contract between E&S and the Government
of Malaysia.
"Designated Payment Office" means, with
respect to any Alternative Letter of Credit
Currency, the office designated by the Agent, by
notice to the Borrower and the Banks, for payments
to be made in such currency.
"Distribution Agreement" means the
Distribution Agreement dated as of September 24,
1990, among Emerson, ESCO, the Borrower and the
other entities listed on the signature pages
thereof, as amended and supplemented from time to
time.
"Dollar Equivalent" shall mean, with
respect to an amount of any Alternative Letter of
Credit Currency on any date, the amount of Dollars
that may be purchased with such amount of such
Alternative Letter of Credit Currency at the Spot
Exchange Rate with respect to such Alternative
Letter of Credit Currency on such date.
"Dollar Reimbursement Amount" means, in
respect of any Letter of Credit Disbursement in an
Alternative Letter of Credit Currency, the Dollar
Equivalent of the amount of such Letter of Credit
Disbursement based upon the Spot Exchange Rate on
the date of the issuance of the applicable Letter
of Credit plus any reasonable costs or expenses the
applicable Issuing Bank incurs in purchasing such
Alternative Letter of Credit Currency in order to
pay such Letter of Credit Disbursement as
reasonably determined by such Issuing Bank minus
the amount realized, if any, by such Issuing Bank
pursuant to the Rate Protection Agreement entered
into by the Borrower in connection with such Letter
of Credit.
"Dollars", "dollars" or "$" means lawful
money of the United States of America.
"Domestic Business Day" means any day
except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or
required by law to close.
"Domestic Lending Office" means, as to
each Bank, its office located at its address set
forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as
its Domestic Lending Office) or such other office
as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower
and the Agent; provided that any Bank may so
designate separate Domestic Lending Offices for its
Base Rate Loans, on the one hand, and its CD Loans,
on the other hand, in which case all references
herein to the Domestic Lending Office of such Bank
shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base
Rate Loans or both.
"Domestic Reserve Percentage" has the
meaning set forth in Section 2.05(b).
"Effective Date" means the date the
Original Credit Agreement became effective in
accordance with Section 3.01.
"Eligible Account Debtor" means, as at
any date of determination thereof, the Government
and any other Account Debtor in respect of
Receivables other than:
(a) any Account Debtor as to which on
such date Billed Receivables representing more
than 20% of the aggregate amount of all
Receivables of such Account Debtor have
remained unpaid for more than 60 days
(measured from the original due date specified
at the time of the original issuance of the
invoice therefor);
(b) any Account Debtor that is not
current on obligations (other than trade
accounts payable) to the Borrower and its
Subsidiaries;
(c) any Account Debtor in respect of
which a credit loss has been recognized or
reserved by the Borrower or any of its
Subsidiaries;
(d) any Account Debtor in respect of
which terms of payment for any Billed
Receivable have been extended or rewritten in
a manner more favorable to such Account Debtor
after the time of the original issuance of the
invoice therefor;
(e) any Account Debtor that the Security
Agent, at the request of the Required Banks,
shall have notified the Borrower does not have
a satisfactory credit standing (any such
notice being effective immediately for
purposes of determining the Borrowing Base for
additional Borrowings or the issuance of
additional Letters of Credit and effective at
the time of delivery of the next Borrowing
Base Certificate for purposes of
Section 2.08(c)); and
(f) any Account Debtor that is the
subject of a case or proceeding, or has taken
an action, of the type described in clause (h)
or (i) of Section 6.01.
"Eligible Billed Commercial Receivable"
means, as at any date of determination thereof, any
Eligible Receivable that is a Billed Receivable for
which the Account Debtor is not the Government or a
Foreign Account Debtor.
"Eligible Billed Government Receivable"
means, as at any date of determination thereof, any
Eligible Government Receivable that is a Billed
Receivable.
"Eligible Foreign Receivable" means, as
at any date of determination thereof, any Eligible
Receivable that is a Billed Receivable and for
which the Account Debtor is a Foreign Account
Debtor; provided that such Receivable is invoiced
to and paid from a business office of such Foreign
Account Debtor located within the United States of
America.
"Eligible Government Receivable" means,
as at any date of determination thereof, any
Eligible Receivable for which the Account Debtor is
the Government; provided that, on and after
December 31, 1990, such Receivable shall not
constitute an Eligible Government Receivable unless
(a) the contract under which such Receivable arose
includes a provision, substantially to the effect
of Federal Acquisition Regulation 52.232-23,
permitting assignment of amounts due under such
contract in accordance with the Assignment of
Claims Act, (b) Receivables due or to become due
under such contract have been assigned to the
Security Agent and the Security Agent has received
appropriate documentation in order to enable the
Security Agent to comply with the Assignment of
Claims Act, as contemplated by the form of
Borrowing Base Certificate, and (c) such contract
has not been designated by notice (any such notice
being effective immediately for purposes of
determining the Borrowing Base for additional
Borrowings and the issuance of additional Letters
of Credit and effective at the time of delivery of
the next Borrowing Base Certificate for purposes of
Section 2.08(c)) to the Borrower from the Security
Agent at the request of the Required Banks (which
designation by the Required Banks shall be made in
good faith) as an unacceptable Government contract
for purposes of this Agreement (it being understood
that the failure to obtain an acknowledgement from
the Government of notice of assignment under the
Assignment of Claims Act after reasonable efforts
shall constitute adequate grounds for such
designation).
"Eligible Net Inventories" means, at any
date of determination thereof, the value
(determined at cost on a basis consistent with that
used in the preparation of the financial statements
referred to in Section 4.04(a) of the Original
Credit Agreement) at such date of all Inventories
owned by the Borrower or any of its Subsidiaries,
and in the possession of the Borrower or any of its
Subsidiaries and located in any jurisdiction in the
United States of America as to which appropriate
Uniform Commercial Code financing statements have
been filed naming the Borrower or such Subsidiary
(as applicable) as "debtor" and the Security Agent
as "secured party" (excluding, however, (i) any
such Inventory which has been shipped to a
customer, even if on a consignment or "sale or
return" basis; (ii) any Inventory subject to a Lien
(other than Liens permitted under the Loan
Documents); (iii) any supply, scrap, obsolete or
slow moving Inventory; and (iv) any Inventory
(other than Inventory acquired or manufactured by
the Borrower or any Subsidiary within six months
prior to such date and specifically reserved for
sale to customers that require delivery of such
Inventory promptly after placing any order
therefor) that is not associated with or committed
to a valid contract or purchase order for which, in
the case of a contract with or purchase order from
the Government, there is an authorized
procurement), all net of (x) any amounts payable by
the Borrower or such Subsidiary in respect of
commissions, processing fees or other charges,
(y) any advance payments and unliquidated progress
xxxxxxxx in respect of such Inventory and
(z) without duplication, any amount of such
Inventory that constitutes an Unbilled Receivable
at such time. Notwithstanding the foregoing, the
Security Agent may at the request of the Required
Banks by notice to the Borrower at any time exclude
from Eligible Net Inventory any type of Inventory
which the Required Banks in the good faith exercise
of their discretion determine to be unmarketable.
"Eligible Receivables" means, at any date
of determination thereof, the aggregate of all
Receivables at such date due to the Borrower or one
of its Subsidiaries other than the following
(determined without duplication):
(a) any Receivable due from an Account
Debtor that is not an Eligible Account Debtor;
(b) any Receivable that does not comply
with all applicable legal requirements,
including, without limitation, all laws,
rules, regulations and orders of any
governmental or judicial authority;
(c) any Receivable in respect of which
there is any unresolved dispute with the
Account Debtor (including any claim or
threatened claim for offset or counterclaim by
the Account Debtor in respect of such
Receivable), but only to the extent of such
dispute;
(d) any Receivable that is not
denominated and payable in U.S. dollars;
(e) any Billed Receivable payable more
than 120 days after the date of the issuance
of the original invoice therefor;
(f) any Billed Receivable that remains
unpaid for more than 120 days after the date
of the issuance of the original invoice
therefor;
(g) any Billed Receivable that remains
unpaid for more than 90 days from the original
due date specified at the time of the original
issuance of the invoice therefor;
(h) Receivables of any Account Debtor
(other than the Government, XxXxxxxxx Xxxxxxx
Corporation, Delco Electronics Corporation and
International Business Machines Corporation)
to the extent the aggregate amount of all
Receivables of such Account Debtor at such
date exceeds 5% of the aggregate amount of all
Receivables at such date;
(i) any Receivable due from an Account
Debtor that is ESCO, the Borrower, a
Subsidiary or an Affiliate, unless (i) the
Required Banks consent to the inclusion of
Receivables of such Person as Eligible
Receivables and (ii) such Receivables arose
from a sale in the ordinary course of business
on terms as advantageous to such Person as
could be obtained in a comparable arm's-length
transaction with a Person that is not an
Affiliate;
(j) any Receivable that is not subject to
a valid, perfected security interest created
under a Security Document, prior to any other
Liens (except Liens permitted under the Loan
Documents);
(k) any Receivable evidenced by an
"instrument" (as defined in the Uniform
Commercial Code) not in the possession of the
Security Agent; and
(l) any Receivable due from a Foreign
Account Debtor, unless such Receivable is
invoiced to and paid from (or, in the case of
an Unbilled Receivable, is to be invoiced to
and paid from) a business office of such
Foreign Person located within the United
States of America.
"Eligible Unbilled Receivable" means, as
at any date of determination thereof, any Unbilled
Receivable that is an Eligible Government
Receivable or is an Eligible Receivable for which
the Account Debtor is not the Government.
"EMCO" means Electro-Mechanics Company,
Inc., a Texas corporation.
"EMCO Acquisition" means the acquisition
of EMCO and Xxxx pursuant to (a) the acquisition by
the Borrower of all the outstanding capital stock
of EMCO and/or Xxxx and/or (b) a merger of a
wholly-owned subsidiary of the Borrower into EMCO
and/or Xxxx, in any event followed by the
liquidation of EMCO into Xxxx or the merger of EMCO
into Xxxx, with such actions resulting in Xxxx
being the sole surviving corporation and a direct
wholly-owned subsidiary of the Borrower, which
shall change its corporate name to Electro-
Mechanics Company, Inc. and use the trade name
"EMCO".
"EMC Test Systems" means a limited
partnership organized under the laws of the State
of Texas of which Rantec Commercial is sole general
partner and Rantec Holdings is sole limited partner
organized for the purpose of the EMC Test Systems
Reorganization.
"EMC Test Systems Reorganization" means
the series of substantially contemporaneous
transactions pursuant to which (a) the Borrower
forms Rantec Holding and transfers all of the
issued and outstanding shares of the capital stock
of each of Rantec and EMCO to Rantec Holding in
exchange for all of the issued and outstanding
capital stock of Rantec Holding, (b) Rantec forms
Rantec Commercial and transfers certain assets and
operations to it in exchange for all of its issued
and outstanding capital stock, (c) Rantec
Commercial, as sole general partner (with a 1%
partnership interest), and EMCO, as sole limited
partner (with a 99% partnership interest), form EMC
Tests Systems and contribute all of their
respective assets to EMC Test Systems, (d) EMCO
liquidates into Rantec Holding, and (e) the
Borrower (i) causes each of Rantec Holding, Rantec
Commercial and EMC Test Systems to (A) become a
party to the Guarantee Agreement and the Security
Agreement and, if applicable, the Pledge Agreement
and (B) perfect all resulting security interests,
and (ii) pledges (or causes to be pledged) all the
issued and outstanding capital stock of Rantec
Holding and Rantec Commercial and all the existing
limited and general partnership interests in EMC
Test Systems to secure the Obligations, pursuant to
documentation satisfactory to the Agent.
"Xxxxxxx" means Xxxxxxx Electric Co., a
Missouri corporation, and its successors.
"Emerson Debt" means any and all Debt of
ESCO, the Borrower or any Specified Subsidiary
owing to Emerson or any of its subsidiaries,
including any such Debt reflected in the account
referred to as "long-term debt, Emerson" in the
financial statements referred to in Section 4.04;
provided, that the "Emerson Debt" shall not include
the Emerson Fee Debt.
"Emerson Fee Debt" means Debt of the
Borrower to Emerson in an aggregate principal
amount equal to the fees paid on the Effective Date
pursuant to clause (v) of Section 3.01, which Debt
shall be due and payable on or prior to October 1,
1990 and may bear interest at a rate not exceeding
9.5% per annum.
"Emerson Guarantee Charge" means the
noncash charge associated with the write-off of
unamortized Guarantee Fees of approximately
$10,600,000 as of September 30, 1995.
"Emerson Lease" means the Lease Agreement
dated as of September 24, 1990, between E&S, as
tenant, and Emerson, as landlord, as amended and
supplemented from time to time.
"ERISA" means the Employee Retirement
Income Security Act of 1974, as amended.
"ERISA Group" means all members of a
controlled group of corporations and all trades or
businesses (whether or not incorporated) under
common control which, together with the Borrower,
are treated as a single employer under Section 414
of the Internal Revenue Code.
"E&S" means Electronics & Space Corp., a
Missouri corporation, and its successors.
"ESCO" means ESCO Electronics
Corporation, a Missouri corporation, and its
successors.
"Euro-Dollar Business Day" means any
Domestic Business Day on which commercial banks are
open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located
at its address set forth in its Administrative
Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or
such other office, branch or affiliate of such Bank
as it may hereafter designate as its Euro-Dollar
Lending Office by notice to the Borrower and the
Agent.
"Euro-Dollar Loan" means at any time a
loan outstanding hereunder which bears interest at
such time at a rate based on the Adjusted London
Interbank Offered Rate pursuant to a Notice of
Borrowing or Notice of Interest Rate Election.
"Euro-Dollar Margin" has the meaning set
forth in Section 2.05(c).
"Euro-Dollar Reference Banks" means the
principal London offices of The Bank of New York,
Morgan Guaranty Trust Company of New York and The
Boatmen's National Bank of St. Louis.
"Euro-Dollar Reserve Percentage" has the
meaning set forth in Section 2.05(c).
"Event of Default" has the meaning set
forth in Section 6.01.
"Excluded Items" means (i) an after-tax,
non-recurring charge attributable to cost growth in
System & Electronics, Inc.'s 60K Loader contract,
not to exceed $18,800,000, (ii) an after-tax, non-
recurring, non-cash charge attributable to the
write-off of certain of the Borrower's and its
Subsidiaries' inventory, not to exceed $14,300,000,
(iii) an after-tax, non-recurring charge
attributable to the reduction of the anticipated
claim receivable of System and Electronics, Inc.
against the United States government under the
M1000 program, not to exceed $8,500,000, and (iv)
the after-tax, non-recurring gain attributable to
the Xxxxxxxxx Transaction; provided that Excluded
Items shall not include any charge taken after
September 30, 1996.
"Existing LOCs" means letters of credit
issued prior to the Amendment and Restatement
Effective Date for the account of one or more of
ESCO and its Consolidated Subsidiaries in the
ordinary course of their business, not exceeding
$10,000,000.00 in aggregate undrawn amount,
identified on Schedule 1.01A.
"Exposed Government Contracts" means
contracts, subcontracts and agreements which, if
terminated, could result in a liability of ESCO,
the Borrower or a Subsidiary for a refund of
progress payments received, directly or indirectly,
from any federal governmental agency, authority,
instrumentality, department, administrative agency,
regulatory body or other governmental entity.
"FBV" means Filtertek B.V., a Netherlands
B.V.
"FDPR" means Filtertek de Puerto Rico,
Inc., a Delaware corporation.
"Federal Funds Rate" means, for any day,
the rate per annum (rounded upwards, if necessary,
to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds
transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of
New York on the Domestic Business Day next
succeeding such day, provided that (i) if such day
is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such
transactions on the next preceding Domestic
Business Day as so published on the next succeeding
Domestic Business Day, and (ii) if no such rate is
so published on such next succeeding Domestic
Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to Xxxxxx Guaranty
Trust Company of New York on such day on such
transactions as determined by the Agent.
"FGMBH" means Filterk GmbH, a German
GmbH.
"Filtertek Acquisition" means the
acquisition by ESCO of the plastic group business
of Schawk, Inc. pursuant to the Filtertek
Acquisition Documents.
"Filtertek Acquisition Documents" means
the Acquisition Agreement dated December 18, 1996
by and between ESCO and Schawk, Inc., and each
other document or agreement executed by ESCO, the
Borrower or any Subsidiary pursuant thereto.
"Filtertek" means Filtertek Inc., a
Delaware corporation.
"Filtrotec" means Filtrotec, Inc., a
Puerto Rico corporation.
"Financing Transactions" means the
transactions contemplated by the Loan Documents,
including the borrowing of the Loans, the issuance
of the Letters of Credit and the grant of security
interests under the Security Documents.
"Fixed Rate Loans" means CD Loans or
Euro-Dollar Loans or any combination thereof.
"Foreign Account Debtor" means any
Account Debtor that is a Person domiciled in, or
organized under the laws of, a jurisdiction outside
the United States of America, or whose principal
place of business is located outside of the United
States of America.
"FSA" means Filtertek SA, a Netherlands
company.
"FSI" means ESCO Foreign Sales, Inc., a
corporation organized and existing under the laws
of the U.S. Virgin Islands. FSI is a Restricted
Subsidiary.
"Government" means the Federal government
of the United States of America or any agency
thereof.
"Governmental Authority" means any
federal, state, local or foreign court or
governmental agency, authority, instrumentality or
regulatory body.
"Governmental Reviews" means any formal
or informal reviews, investigations or proceedings
by any federal governmental agency, authority,
instrumentality, department, administrative agency,
regulatory body or other entity of or with respect
to the responsibility or fitness of ESCO, the
Borrower or any Subsidiary thereof as a government
contractor that contemplate any temporary or
permanent debarring or suspension of the Borrower
or any Subsidiary from bidding for or being awarded
government contracts or government-approved
subcontracts (either generally or for any
particular governmental entity).
"Guarantee" by any Person means any
obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without
limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to
maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or
to protect such obligee against loss in respect
thereof (in whole or in part), provided that the
term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has
a corresponding meaning.
"Guarantee Agreement" means the Guarantee
Agreement among ESCO, certain of its Subsidiaries
and the Agent, substantially in the form of
Exhibit C hereto, as the same may be amended from
time to time.
"Guarantee Fees" means the fees payable
by ESCO to Emerson pursuant to Section 6.01 of the
Distribution Agreement.
"Guarantor" means each Person that is or
becomes party to the Guarantee Agreement as a
Guarantor, and the permitted successors and assigns
of such Person.
"Xxxx" means Xxxx Properties, Inc., a
Texas corporation and, immediately prior to
consummation of the EMCO Acquisition, the owner of
a majority of the outstanding capital stock of
EMCO.
"Xxxxxxxxx" means Xxxxxxxxx Corporation,
a Delaware corporation, and its successors.
"Xxxxxxxxx Closing Date" means the date
of consummation of the Xxxxxxxxx Transaction.
"Xxxxxxxxx Letters of Credit" means
Letters of Credit that will remain outstanding
after consummation of the Xxxxxxxxx Transaction and
that are issued to support an obligation of
Xxxxxxxxx or for the account of Xxxxxxxxx.
"Xxxxxxxxx Transaction" means the sale of
all the outstanding capital stock or all or
substantially all the assets of Xxxxxxxxx (and, in
the case of an asset sale, the liquidation of
Xxxxxxxxx).
"Information Statement" means the
Information Statement of ESCO contained in
Amendment No. 1 to the Borrower's Form 10
Registration Statement as filed with the Securities
and Exchange Commission on September 19, 1990.
"Intangible Assets" means the amount (to
the extent reflected in determining ESCO's
stockholders' equity) of (i) all write-ups (other
than write-ups of assets of a going concern
business made within twelve months after the
acquisition of such business) subsequent to the
Effective Date in the book value of any asset owned
by ESCO or a Consolidated Subsidiary, (ii) all
Investments in unconsolidated Subsidiaries and all
equity investments in Persons which are not
Subsidiaries, and (iii) all unamortized debt
discount and expense, unamortized deferred charges,
goodwill, purchase price premium, patents,
trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other
intangible assets.
"Interest Period" means: (1) With
respect to each Euro-Dollar Loan Borrowing, the
period commencing on the date of such Borrowing and
ending one, two, three or six months thereafter, as
the Borrower may elect in the applicable Notice of
Borrowing or Notice of Interest Rate Election;
provided that:
(a) any Interest Period which would
otherwise end on a day which is not a Euro-
Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in
another calendar month, in which case such
Interest Period shall end on the next
preceding Euro-Dollar Business Day; and
(b) any Interest Period which begins on
the last Euro-Dollar Business Day of a
calendar month (or on a day for which there is
no numerically corresponding day in the
calendar month at the end of such Interest
Period) shall end on the last Euro-Dollar
Business Day of a calendar month.
(2) With respect to each CD Loan
Borrowing, the period commencing on the date of
such Borrowing and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the
applicable Notice of Borrowing or Notice of
Interest Rate Election; provided that any Interest
Period which would otherwise end on a day which is
not a Euro-Dollar Business Day shall be extended to
the next succeeding Euro-Dollar Business Day.
(3) With respect to each Base Rate
Borrowing, the period commencing on the date of
such Borrowing and ending 30 days thereafter;
provided that any Interest Period which would
otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next
succeeding Euro-Dollar Business Day.
Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled
to request any Borrowing if the Interest Period
requested with respect thereto would end after the
Termination Date.
"Internal Revenue Code" means the
Internal Revenue Code of 1986, as amended, or any
successor statute.
"Inventory" means inventory (as defined
in Article 9 of the Uniform Commercial Code) to the
extent comprised of readily marketable materials of
a type manufactured, consumed or held for resale by
the Borrower or any of its Subsidiaries (other than
Restricted Subsidiaries) in the ordinary course of
its business as presently conducted.
"Inventory Charge" means the noncash
charge of approximately $7,900,000 (pre-tax)
associated with the write-off of slow-moving
inventory at March 31, 1995.
"Investment" means any investment in any
Person, whether by means of share purchase, capital
contribution, loan, time deposit or otherwise.
"Issuing Bank" means, with respect to any
Letter of Credit, either Xxxxxx Guaranty Trust
Company of New York, The Bank of Nova Scotia or The
Bank of New York, as the context shall require with
respect to Letters of Credit issued by such
institution in accordance with the terms and
conditions of Section 2.14; provided that (i) with
respect to any Letters of Credit issued prior to
June 12, 1992, "Issuing Bank" shall have the
meaning assigned to it in the Original Credit
Agreement and (ii) with respect to any other
Letters of Credit issued prior to the Amendment and
Restatement Effective Date, "Issuing Bank" shall
mean the bank that issued such Letter of Credit.
"Letter of Credit" means any Traditional
LOC or Letter of Guaranty and, as used in the
Security Documents and the Guaranty Agreement,
shall also include any Back-up LOC.
"Letter of Credit Disbursement" means a
payment or disbursement made by an Issuing Bank
pursuant to a Letter of Credit or by a Bank
pursuant to a Back-up LOC.
"Letter of Credit Exposure" means at any
time the sum of (i) the aggregate undrawn amount of
all outstanding Traditional LOCs, (ii) the
aggregate unfunded amount of the obligations,
contingent or otherwise, under all outstanding
Letters of Guaranty and (iii) the aggregate amount
of all Letter of Credit Disbursements not yet
reimbursed by the Borrower as provided in
Section 2.14, but the "Letter of Credit Exposure"
shall not include any drawn or undrawn amounts
under the Xxxxxxxxx Letters of Credit if and when
the Xxxxxxxxx Letters of Credit cease to constitute
Letters of Credit as provided in Section 2.14(n).
The Letter of Credit Exposure of any Bank at any
time shall mean its Applicable Percentage of the
aggregate Letter of Credit Exposure at such time.
For purposes of determining the Letter of Credit
Exposure attributable to Letters of Credit
denominated in an Alternative Letter of Credit
Currency, such Letter of Credit Exposure shall be
valued in Dollars as provided in Section 2.14(m).
"Letter of Guaranty" means any letter
issued by an Issuing Bank pursuant to Section 2.14
(other than a Back-up LOC or a Traditional LOC)
(a) that is issued (i) for the benefit of any
Person in connection with an obligation incurred by
ESCO, the Borrower or any Specified Subsidiary, as
the case may be, in the ordinary course of its
business, to furnish products or services to such
Person and (ii) for the account of ESCO, the
Borrower or such Specified Subsidiary, as the case
may be, and (b) pursuant to which such Issuing Bank
may be required to make a cash payment to such
Person, up to a specified maximum dollar amount, in
the event of a breach of such obligation.
"Level I Pricing Period" means any period
during which (based on the most recent financial
statements referred to in Section 4.04(b) or
delivered pursuant to Section 5.01(a) or (b)) the
ratio of Consolidated Adjusted Operating Cash Flow
(for the period of four consecutive fiscal quarters
ended as of the last day of the fiscal period
covered by such financial statements) to
Consolidated Adjusted Debt (as of the last day of
the fiscal period covered by such financial
statements) is greater than or equal to 0.50 to
1.00. Any such period shall commence on (and
include) the date of delivery to the Agent of
financial statements demonstrating that such period
has commenced and shall terminate on (and exclude)
the date of delivery to the Agent of financial
statements demonstrating that such period has
terminated.
"Level II Pricing Period" means any
period during which (based on the most recent
financial statements referred to in Section 4.04(b)
or delivered pursuant to Section 5.01(a) or (b))
the ratio of Consolidated Adjusted Operating Cash
Flow (for the period of four consecutive fiscal
quarters ended as of the last day of the fiscal
period covered by such financial statements) to
Consolidated Adjusted Debt (as of the last day of
the fiscal period covered by such financial
statements) is less than 0.50 to 1.00 but greater
than or equal to 0.20 to 1.00. Any such period
shall commence on (and include) the date of
delivery to the Agent of financial statements
demonstrating that such period has commenced and
shall terminate on (and exclude) the date of
delivery to the Agent of financial statements
demonstrating that such period has terminated.
"Level III Pricing Period" means any
period that is not a Level I Pricing Period or a
Level II Pricing Period.
"Leverage Ratio" means, at any date, the
ratio of (i) Consolidated Adjusted Debt at such
date to (ii) Consolidated Adjusted Tangible Net
Worth at such date.
"Lien" means, with respect to any asset,
any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement,
ESCO, the Borrower or any Subsidiary shall be
deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale
agreement, capital lease or other title retention
agreement relating to such asset.
"Loan" means a Domestic Loan or a Euro-
Dollar Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or any combination of the
foregoing.
"Loan Documents" means this Agreement,
the Notes, the Letters of Credit, the Back-up LOCs,
the Guarantee Agreement, the Subordination
Agreement and the Security Documents.
"London Interbank Offered Rate" has the
meaning set forth in Section 2.05(c).
"LRA" means Xxx Xxxx and Associates, St.
Louis, Inc.
"LRA Acquisition" means the acquisition
by E&S of shares of LRA preferred stock, for
consideration in an aggregate amount not to exceed
$500,000.
"Margin Stock" has the meaning given such
term under Regulation U.
"Material Adverse Effect" means (i) a
materially adverse effect on the business, assets,
operations, prospects or condition, financial or
otherwise, of ESCO and its Consolidated
Subsidiaries taken as a whole, (ii) material
impairment of the ability of ESCO, the Borrower or
any Subsidiary to perform any of its obligations
under any Loan Document to which it is or will be a
party, or (iii) material impairment of the rights
of or benefits available to the Agent, the Security
Agent, the Issuing Banks or the Banks under any
Loan Document.
"Material Debt" means Debt, or any
obligation to reimburse an issuing bank or surety
with respect to any draw upon a letter of credit or
payment with respect to a performance bond or
similar obligation, of ESCO, the Borrower and/or
one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, in an
aggregate principal amount exceeding $5,000,000.
"MD&M" means Microwave Design and
Manufacturing, Inc., a California corporation.
"MD&M Acquisition" means the acquisition
by Rantec of all the assets of and existing
contracts for sales by MD&M.
"Mortgages" means the mortgages, deeds of
trust assignments of leases and other instruments
and documents executed and delivered pursuant to
paragraph (j) of Section 3.01.
"Net Cash Proceeds" means, with respect
to any Prepayment Event, an amount equal to the
cash proceeds received by ESCO, the Borrower or a
Subsidiary, as applicable, from or in respect of
such Prepayment Event less any expenses reasonably
incurred by ESCO, the Borrower or a Subsidiary, as
applicable, in respect of such Prepayment Event,
including, but not limited to, reasonable
professional fees paid by ESCO, the Borrower or a
Subsidiary, as applicable, and if applicable,
printing costs.
"Net Working Investment" means, at any
date (i) the consolidated current assets of ESCO
and its Consolidated Subsidiaries (excluding cash
and Temporary Cash Investments) minus (ii) the
consolidated current liabilities of ESCO and its
Consolidated Subsidiaries (excluding Debt), all
determined as of such date. Net Working Investment
at any date may be a positive or negative number.
Net Working Investment increases when it becomes
more positive or less negative and decreases when
it become less positive or more negative.
"Note" means a promissory note of the
Borrower payable to a Bank, substantially in the
forms of Exhibit A-1 and Exhibit A-2 hereto for the
applicable Class, evidencing the obligation of the
Borrower to repay the Loans made by such Bank, and
"Notes" means any of or all such promissory notes
issued hereunder.
"Notice of Borrowing" has the meaning set
forth in Section 2.02.
"Notice of Interest Rate Election" has
the meaning set forth in Section 2.04.
"Obligations" means (i) the due and
punctual payment by the Borrower of (a) the
principal of and interest on the Loans, when and as
due, whether at maturity, by acceleration, upon one
or more dates set for prepayment or otherwise,
(b) each payment required to be made by the
Borrower under Section 2.14 in respect of any
Letter of Credit Disbursement, when and as due,
including interest thereon, if any, and (c) all
other monetary obligations of the Borrower to the
Agent, the Security Agent, the Issuing Banks and
the Banks under this Agreement and the other Loan
Documents to which the Borrower is or is to be a
party, (ii) the due and punctual performance of all
other obligations of the Borrower under this
Agreement and the other Loan Documents and
(iii) the due and punctual payment and performance
of all obligations of ESCO under this Agreement and
of ESCO and each Subsidiary under the Loan
Documents to which it is or is to be a party.
"Original Credit Agreement" shall mean
this Agreement as in effect on September 23, 1990,
prior to any amendment hereto.
"Parent" means, with respect to any Bank,
any Person controlling such Bank.
"Participant" has the meaning set forth
in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all
of its functions under ERISA.
"Performance Letter of Credit Fee Rate"
shall have the meaning set forth in Section
2.14(f).
"Permitted Joint Venture" means any joint
venture into which ESCO, the Borrower or any of
their Subsidiaries shall enter in the ordinary
course of their business and (i) which shall not
require from ESCO, the Borrower or any of their
Subsidiaries, and to which none of them shall make,
any capital contribution, (ii) which shall provide
for such indemnities to ESCO, the Borrower or any
of their Subsidiaries, as appropriate, in respect
of liabilities, including any contingent
liabilities, as shall be satisfactory to the
Required Banks and (iii) over which ESCO and the
Borrower shall have sufficient control in order to
assure compliance by such joint venture with the
provisions of this Agreement applicable thereto.
"Permitted Letter of Credit Currency"
means any of (i) Dollars, (ii) French Francs,
Deutsche Marks, Yen, Pounds Sterling, Swedish
Krona, Australian Dollars, Malaysian Ringgits,
Canadian Dollars and Singapore Dollars, and (iii)
any other currency approved by the applicable
Issuing Bank and each Bank.
"Person" means an individual, a
corporation, a partnership, an association, a trust
or any other entity or organization, including a
government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee
pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue
Code and is either (i) maintained by a member of
the ERISA Group for employees of a member of the
ERISA Group or (ii) maintained pursuant to a
collective bargaining agreement or any other
arrangement under which more than one employer
makes contributions and to which a member of the
ERISA Group is then making or accruing an
obligation to make contributions or has within the
preceding five plan years made contributions.
"Pledge Agreement" means the Pledge
Agreement among ESCO, the Borrower, certain
Subsidiaries and the Security Agent, substantially
in the form of Exhibit D hereto, as the same may be
amended from time to time.
"PPD" means Process Plant Design, Ltd., a
corporation incorporated under the laws of England,
which is based in Yorkshire, England, and is a
wholly-owned subsidiary of SFL.
"PPD Debt" means (i) the PPD Overdraft
Facility and (ii) the VAT Guarantee.
"PPD Overdraft Facility" means an
overdraft or working capital facility maintained by
PPD in an aggregate amount not to exceed U.K.
30,000.
"Prepayment Event" shall mean (a) the
issuance or incurrence by ESCO of any convertible
preferred stock or unsecured Debt that is
convertible into shares of common stock of ESCO, as
permitted under clause (x) of Section 5.11(a) or
clause (ii) of Section 5.11(b) or (b) any sale or
other disposition by the Borrower or any Subsidiary
(other than to the Borrower or another Subsidiary)
of all or any portion of its ownership interest in
the Tek Packaging Business or all or any
substantial portion of its the assets comprising
the Tek Packaging Business.
"Prime Rate" means the rate of interest
publicly announced by Xxxxxx Guaranty Trust Company
of New York in New York City from time to time as
its Prime Rate.
"PTI" means PTI Technologies Inc., a
Delaware corporation (formerly known as Textron
Filtration Systems).
"PTI Acquisition" means the acquisition
by the Borrower of all the outstanding capital
stock of PTI.
"PTI Note" means a promissory note or
notes of ESCO issued as partial consideration in
connection with the PTI Acquisition; provided that
(i) such notes shall not represent Debt in an
aggregate principal amount exceeding $8,000,000 and
(ii) such note or notes shall be issued in the form
of Exhibit J hereto.
"Rantec" means Rantec Microwave &
Electronics, Inc., a Delaware corporation, and its
successors.
"Rantec Commercial" means a corporation
organized under the laws of the State of California
and a wholly-owned subsidiary of Rantec organized
for the purpose of the EMC Test Systems
Reorganization.
"Rantec Holding" means a corporation
organized under the laws of the State of Missouri
and a Wholly-Owned Consolidated Subsidiary of the
Borrower organized for the purpose of the EMC Tests
Systems Reorganization.
"Rantec S.A." means RANTEC EUROPE
Microwave Electronics & Space S.A., a corporation
incorporated in Lyon, France, and its successors.
"Rate Protection Agreements" means
interest rate protection agreements, foreign
currency exchange agreements and other interest or
exchange rate hedging, cap, collar or swap
arrangements.
"Receivable" means, as at any date of
determination thereof, the unpaid portion of an
Account, in respect of Inventory sold or services
rendered in the ordinary course, which amount
(i) has been earned by performance under the terms
of the related contract and invoiced to the Account
Debtor or (ii) has been recognized as revenue on
the books of the Borrower or a Subsidiary, in each
case net of (a) any credits, rebates or offsets
owed to the Account Debtor and also net of any
commissions payable to Persons other than employees
or Affiliates of the Borrower or a Subsidiary,
(b) without duplication, the aggregate amount of
accounts payable of the Borrower and its
Subsidiaries owed to the Account Debtor at such
date and (c) in the case of a Receivable described
in clause (ii), any advance payments and
unliquidated progress xxxxxxxx in respect of such
Receivable.
"Reference Banks" means the CD Reference
Banks or the Euro-Dollar Reference Banks, as the
context may require, and "Reference Bank" means any
one of such Reference Banks.
"Regulation U" means Regulation U of the
Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Relocation Expenses" means all
nonrecurring expenses incurred by ESCO and its
Consolidated Subsidiaries in connection with
vacating its facilities at 0000 X. Xxxxxxxxxx Xxx.,
Xx. Xxxxx, Xxxxxxxx 00000, and transferring
personnel and relocating equipment to other
facilities, including any recognition of prepaid
rent expense in connection therewith.
"Reportable Event" means any reportable
event as defined in Section 4043 of ERISA, or the
regulations issued thereunder, with respect to a
Plan.
"Required Banks" means at any time Banks
with Loans, Letter of Credit Exposure and unused
Commitments representing at least 66-2/3% of the
sum of the aggregate principal amount of Loans
outstanding and the aggregate amount of the Letter
of Credit Exposure and unused Commitments at such
time; provided that for purposes of Sections 3.01
and 3.03 only, "Required Banks" means Banks with
Commitments that would, immediately after the
satisfaction (or waiver) of the conditions set
forth in Section 3.01 or 3.03 (as relevant),
represent more than 50% of the Commitments.
"Restricted Payment" means (i) any
dividend or other distribution on any shares of the
Borrower's or ESCO's capital stock (except
dividends payable solely in shares of its common
stock), (ii) any payment on account of the
purchase, redemption, retirement or acquisition of
(a) any shares of the Borrower's or ESCO's capital
stock or (b) any option, warrant or other right to
acquire shares of the Borrower's or ESCO's capital
stock, (iii) any payment or prepayment of principal
of or premium (if any) or interest on or any other
amount in respect of any Subordinated Obligation,
(iv) any payment on account of the purchase,
redemption, retirement, defeasance, acquisition,
termination, cancellation or compromise of any
Subordinated Obligation or (v) any optional payment
on account of the prepayment, purchase, retirement,
defeasance, acquisition, termination, cancellation
or compromise of any Debt of ESCO, the Borrower or
any Subsidiary, except prepayments of the Loans and
prepayments of Debt described in clause (iii) of
Section 5.11(a).
"Restricted Payment Amount" means an
amount equal to the net cash proceeds of the
Xxxxxxxxx Transaction received by the Borrower less
the sum of the amounts applied to prepay Term Loans
and the PTI Note in connection with the Xxxxxxxxx
Transaction, which prepayment occurred upon the
closing of the Xxxxxxxxx Transaction in July 1996;
provided that the Restricted Payment Amount shall
not exceed $50,000,000.
"Restricted Subsidiary" means any
Consolidated Subsidiary that shall not engage in
any business activity whatsoever, including the
incurrence of any Debt or the acquisition or
ownership of any asset or property.
"Rights Agreement" means the Rights
Agreement dated as of September 24, 1990, between
ESCO and Boatmen's Trust Company, as Rights Agent,
as amended and supplemented from time to time.
"Scheduled Properties" means the
properties identified in Schedule 1.01B hereto.
"Security Agent" means Xxxxxx Guaranty
Trust Company of New York, Delaware Branch
(formerly named X.X. Xxxxxx Delaware) in its
capacity as security agent under the Security
Documents, and its successors in such capacity.
"Security Agreement" means the Security
Agreement among ESCO, the Borrower, certain of its
Subsidiaries and the Security Agent, substantially
in the form of Exhibit E hereto, as the same may be
amended from time to time.
"Security Documents" means the Mortgages,
the Pledge Agreement, the Security Agreement and
all other security agreements, mortgages, deeds of
trust and other documents and instruments executed
and delivered pursuant to Section 5.08(a) in order
to secure any Obligations.
"Services Agreement" means the Services
Sharing Agreement dated as of September 24, 1990,
among Emerson, ESCO, the Borrower and the Specified
Subsidiaries, as amended and supplemented from time
to time.
"SEI" means Systems and Electronics,
Inc., a Delaware corporation and successor by
merger to E&S and Southwest.
"SFL" means PTI Technologies, Ltd.
(formerly known as Xxxxxxxxxx Filter, Ltd.), a
corporation incorporated under the laws of England,
which is based in Sheffield, England.
"SFL Acquisition" means the acquisition
of SFL and PPD pursuant to the acquisition by the
Borrower of all the outstanding capital stock of
SFL, resulting in SFL becoming a direct
wholly-owned subsidiary of the Borrower and PPD
becoming an indirect wholly-owned subsidiary of the
Borrower.
"SFL Debt" means (i) two U.K. 80,000
non-interest bearing notes in existence prior to
the SFL Acquisition, each payable by SFL to Xxxxxx
Xxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxx Xxxxxx Xxxxxx and
Xxxx Xxxxxx, on May 1, 1994, and May 1, 1995, and
the related guarantee by Midland Bank and
counter-indemnity by SFL, (ii) the U.K. 1,665,000
interest bearing note in existence prior to the SFL
Acquisition payable by SFL to Commerzbank AG of
Heidelberg, Germany on December 28, 1993, the
related guarantee by Kraftenlagen AG and not more
than 150,000 in accrued interest payable to
Kraftenlagen AG not later than October 31, 1994,
(iii) the SFL Overdraft Facility and (iv) the VAT
Guarantee.
"SFL Overdraft Facility" means an
overdraft or working capital facility maintained by
SFL in an aggregate amount not to exceed U.K.
250,000.
"Southwest" means Southwest Mobile
Systems Corporation, a Delaware corporation, and
its successors.
"Specified Event" shall mean (i) any
sale, assignment, transfer or other disposition of,
or casualty with respect to, any assets or other
properties of ESCO, the Borrower or any Subsidiary
(other than sales of inventory in the ordinary
course of business) or (ii) the issuance or
incurrence by ESCO, the Borrower or any Subsidiary
of any Debt (other than the Loans), to the extent
such Debt is subject to amortization or mandatory
repayment or prepayment (directly or indirectly,
including put rights, sinking fund obligations,
redemption provisions or otherwise and whether or
not subject to any contingency) on or prior to
September 30, 1998.
"Specified Subsidiaries" means (a) (i)
PTI, Rantec S.A. and any Subsidiary resulting from
an Investment made in accordance with clause (f) of
Section 5.16 and (ii) Rantec Holding, Rantec
Commercial and EMC Test Systems, in each case after
the completion of the EMC Test Systems
Reorganization (but, in each of the foregoing cases
in clauses (i) and (ii), solely for the purpose of
the definitions of the terms "Letter of Guaranty"
and "Subsidiary" and for purposes of Sections 2.14,
3.03, 4.02, 4.03, 4.04, 4.08, 4.14, 4.17, 5.01,
5.04, 5.09, 5.14 and 5.16(f)), and (b) Comtrak
International Service, Inc., DCS, SEI, Rantec,
Vacco, Filtertek, Filtrotec, FBV, FSA, FGMBH and
FDPR.
"Spot Exchange Rate" shall mean, on any
day, (a) with respect to any Alternative Letter of
Credit Currency, the spot rate at which Dollars are
offered on such day by Xxxxxx Guaranty Trust
Company of New York in London for such Alternative
Letter of Credit Currency at approximately 11:00
a.m. (London time), and (b) with respect to Dollars
in relation to any specified Alternative Letter of
Credit Currency, the spot rate at which such
specified Alternative Letter of Credit Currency is
offered on such day by Xxxxxx Guaranty Trust
Company of New York in London for Dollars at
approximately 11:00 a.m. (London time).
"Standby Letter of Credit Fee Rate" has
the meaning set forth in Section 2.14(f).
"Subordination Agreement" means the
Subordination Agreement among Emerson, ESCO, the
Borrower and the Agent, substantially in the form
of Exhibit F hereto, as the same may be amended
from time to time.
"Subordinated Obligations" has the
meaning set forth in the Subordination Agreement.
"Subsidiary" means any corporation or
other entity of which securities or other ownership
interests having ordinary voting power to elect a
majority of the board of directors or other persons
performing similar functions are at the time
directly or indirectly owned by ESCO or the
Borrower, as applicable. The Borrower shall be
deemed to have been a Subsidiary of ESCO, and the
Specified Subsidiaries shall be deemed to have been
Subsidiaries of the Borrower, prior to the
Effective Date for the purposes of the
representations made in Article III. For purposes
of Sections 4.19, 5.05, 5.09, 5.11 through 5.15,
5.20 and 6.01(h), (i) and (k) only, each Permitted
Joint Venture shall be deemed to be a Subsidiary.
"Tax Agreement" means the Tax Agreement
dated as of September 24, 1990, among Emerson,
ESCO, the Borrower and the Specified Subsidiaries,
as amended and supplemented from time to time.
"Tek Packaging Business" means the
business conducted by Tek Packaging, Inc. (formerly
known as Fuzere Manufacturing Co, Inc.) immediately
prior to the Filtertek Acquisition, the assets of
which were purchased by ESCO pursuant to the
Filtertek Acquisition Documents.
"Temporary Cash Investment" means any
Investment in (i) direct obligations of the United
States or any agency thereof, or obligations
guaranteed by the United States or any agency
thereof, (ii) commercial paper rated in the highest
grade by a nationally recognized credit rating
agency, (iii) time deposits with, including
certificates of deposit issued by, (A) any Bank
that is an original party to this Agreement or
(B) any office located in the United States of any
bank or trust company which is organized under the
laws of the United States or any state thereof and
has capital, surplus and undivided profits
aggregating at least $500,000,000 or
(iv) repurchase agreements with respect to
securities described in clause (i) above entered
into with an office of a bank or trust company
meeting the criteria specified in clause (iii)(B)
above, provided in each case that such Investment
matures within one year from the date of
acquisition thereof by the Borrower or a Subsidiary
or, in the case of Section 2.14(j), the Security
Agent.
"Term Commitment" means, as to any Bank,
the obligation of such Bank to make Term Loans to
the Borrower in an aggregate principal amount not
exceeding the amount set forth opposite such Bank's
name in Schedule 1 hereto under the caption "Term
Commitment".
"Term Loan" means a loan made by a Bank
pursuant to Section 2.01(a).
"Termination Date" means (i) with respect
to the Working Capital Loans, the last day of the
Working Capital Availability Period, and (ii) with
respect to the Term Loans, September 30, 2000, or
in each case such earlier date as the Commitments
of the relevant Class shall have expired or been
terminated and all Loans of the relevant Class have
been repaid in full and, in the case of the Working
Capital Loans, all Letter of Credit Disbursements
shall have been repaid in full and all Letters of
Credit shall have expired or been canceled.
"Traditional LOC" shall mean any letter
of credit issued by an Issuing Bank pursuant to
Section 2.14 (other than any Letter of Guaranty or
Back-up LOC).
"Transaction Documents" means (i) the
Distribution Agreement, the Tax Agreement, the
Xxxxxxx Lease, the Rights Agreement, the Services
Agreement and the Deposit Agreement and (ii) all
contracts and agreements between ESCO, the Borrower
or any Subsidiary, on the one hand, and Xxxxxxx or
any subsidiary thereof, on the other hand, in
effect on the Effective Date (other than contracts
and agreements relating solely to the purchase or
sale of inventory or services in the ordinary
course of business).
"Transactions" means the Financing
Transactions and the other transactions
contemplated by the Transaction Documents.
"Type" has the meaning set forth in
Section 1.03.
"Unfunded Vested Liabilities" means, with
respect to any Plan at any time, the amount (if
any) by which (i) the present value of all benefits
under such Plan exceeds (ii) the fair market value
of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation
date for such Plan, but only to the extent that
such excess represents a potential liability of a
member of the ERISA Group to the PBGC or such Plan
under Title IV of ERISA.
"Unbilled Receivable" means, as at any
date of determination thereof, any Receivable or
portion thereof described in clause (ii) of the
definition of the term "Receivable".
"Uniexcel" means PTI-Uniexcel Private
Limited, a private limited company established
under the Indian Companies Act of 1956.
"Uniexcel Investment" means the
investment by SFL in Uniexcel pursuant to the
acquisition of 51% of the capital stock of Uniexcel
for approximately $65,280.
"Vacco" means Vacco Industries, a
California corporation, and its successors.
"VAT Guarantee" means reimbursement
obligations under a guarantee by Midland Bank or
other financial institution with respect to
deferred payment by SFL or PPD of value added taxes
to U.K. Customs and Excise as required in the
ordinary course of business.
"Wholly-Owned Consolidated Subsidiary"
means any Consolidated Subsidiary all of the shares
of capital stock or other ownership interests of
which (except directors' qualifying shares and the
FDPR management shares) are at the time directly or
indirectly owned by ESCO or the Borrower, as the
case may be.
"Working Capital Availability Period"
means the period from and including the latest of
the Effective Date, September 28, 1990, and the
date one Domestic Business Day after the Security
Agent shall have received the initial Borrowing
Base Certificate (as of August 31, 1990), to but
excluding September 30, 2000 (or such later date to
which such period shall have been extended in
accordance with Section 2.16), or such earlier date
as the Working Capital Commitments shall have
expired or been terminated.
"Working Capital Commitment" means, as to
any Bank, the obligation of such Bank to make
Working Capital Loans to the Borrower and to
acquire participations in, or to issue Back-up LOCs
in respect of, Letters of Credit in an aggregate
principal amount at any one time outstanding not
exceeding the amount set forth opposite such Bank's
name in Schedule 1 hereto under the caption
"Working Capital Commitment", as the same may be
reduced from time to time pursuant to Section 2.07
and subject to the limitations of Sections 2.01(b)
and 2.14.
"Working Capital Loan" means a Loan made
by a Bank pursuant to Section 2.01(b).
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be
interpreted, all accounting determinations
hereunder shall be made, and all financial
statements required to be delivered hereunder shall
be prepared, in accordance with generally accepted
accounting principles as in effect from time to
time, applied on a basis consistent (except for
changes concurred in by the Borrower's independent
public accountants) with the audited consolidated
financial statements of the Borrower and its
Consolidated Subsidiaries referred to in
Section 4.04; provided that, if the Borrower
notifies the Agent that the Borrower wishes to
amend the definition of the term "Level I Pricing
Period" or "Level II Pricing Period" or any
covenant contained in Article V to eliminate the
effect of any change in generally accepted
accounting principles on such definition or on the
operation of such covenant or such determination
(or if the Agent notifies the Borrower that the
Required Banks wish to amend any such definition or
covenant or such determination for such purpose),
then such definitions and the Borrower's compliance
with such covenant, as applicable, shall be
determined on the basis of generally accepted
accounting principles in effect immediately before
the relevant change in generally accepted
accounting principles became effective, until
either such notice is withdrawn or such amendment
becomes effective in accordance with this
Agreement.
SECTION 1.03. Types of Borrowings and
Classes of Letters of Credit. The term "Borrowing"
refers to the portion of the aggregate principal
amount of Loans of any Class outstanding hereunder
which bears interest of a specific Type and for a
specific Interest Period pursuant to a Notice of
Borrowing or Notice of Interest Rate Election.
Each Bank's ratable share of each Borrowing is
referred to herein as a separate "Loan".
Borrowings and Loans hereunder are distinguished by
"Class" and by "Type". The "Class" of a Loan (or
of a Commitment to make such a Loan or of a
Borrowing comprising such Loans) refers to whether
such Loan is a Term Loan or a Working Capital Loan,
each of which constitutes a Class. The Type of a
Loan refers to whether such Loan is a Base Rate
Loan, a CD Loan or a Euro-Dollar Loan. Borrowings
and Loans may be identified by both Class and Type
(e.g., a "Term Euro-Dollar Loan" is a Loan which is
both a Term Loan and a Euro-Dollar Loan).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to
Lend. (a) Term Loans. Each Bank severally
agrees, on the terms and conditions set forth in
this Agreement, to make a loan to the Borrower on
the Amendment and Restatement Effective Date in an
aggregate principal amount not exceeding its Term
Commitment. Each Bank with Term Loans outstanding
immediately prior to the Amendment and Restatement
Effective Date shall be deemed to have made its
Term Loans hereunder on the Amendment and
Restatement Effective Date to the extent of the
amount of such Term Loans already outstanding and
shall fund the excess of the amount of its Term
Commitment over the principal amount of such Term
Loans already outstanding.
(b) Working Capital Loans. Each Bank
severally agrees, on the terms and conditions set
forth in this Agreement, to make loans to the
Borrower from time to time during the Working
Capital Availability Period; provided that the
aggregate principal amount of such Bank's loans at
any one time outstanding under this subsection (b)
shall not exceed the lesser of (i) the excess of
(A) its Working Capital Commitment at such time
over (B) its Letter of Credit Exposure at such time
and (ii) the excess of (A) its Applicable
Percentage of the Borrowing Base at such time over
(B) its Letter of Credit Exposure at such time.
Within the foregoing limit, the Borrower may borrow
under this subsection (b), repay or (to the extent
permitted by Section 2.09) prepay loans made under
this subsection (b) and reborrow at any time during
the Working Capital Availability Period under this
subsection (b).
(c) Borrowings Ratable. Each Borrowing
under subsection (a) or (b) of this Section 2.01
shall be made from the Banks ratably in proportion
to their respective Commitments of the relevant
Class.
SECTION 2.02. Method of Borrowing.
(a) The Borrower shall give the Agent notice (a
"Notice of Borrowing") not later than 10:00 A.M.
(New York City time) on the date of any Base Rate
Borrowing and not later than 10:00 A.M. (New York
City time) at least two Domestic Business Days
before each CD Loan Borrowing and at least three
Euro-Dollar Business Days before each Euro-Dollar
Loan Borrowing, specifying:
(i) the date of such Borrowing, which
shall be a Domestic Business Day in the case
of a Domestic Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar
Borrowing,
(ii) the aggregate amount of such
Borrowing, which shall be $2,500,000 or a
larger multiple of $500,000 (except that any
Borrowing may be in the aggregate amount of
the unused Commitment of the applicable
Class),
(iii) whether the Loans comprising such
Borrowing are to be Base Rate Loans, CD Loans
or Euro-Dollar Loans, and
(iv) in the case of a CD Loan Borrowing
or Euro-Dollar Loan Borrowing, the duration of
the initial Interest Period applicable
thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of
Borrowing, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's
share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the
Borrower.
(c) Not later than 12:00 noon (New York
City time) on the date of each Borrowing, each Bank
shall (except as provided in subsection (d) of this
Section) make available its share of such
Borrowing, in Federal or other funds immediately
available in New York City, to the Agent at its
address specified in or pursuant to Section 9.01.
Unless the Agent determines that any applicable
condition specified in Article III has not been
satisfied, the Agent will make the funds so
received from the Banks available to the Borrower
at the Agent's aforesaid address.
(d) If any Bank makes a new Loan
hereunder on a day on which the Borrower is to
repay all or any part of an outstanding Loan from
such Bank, such Bank shall apply the proceeds of
its new Loan to make such repayment and only an
amount equal to the difference (if any) between the
amount being borrowed and the amount being repaid
shall be made available by such Bank to the Agent
as provided in subsection (b), or remitted by the
Borrower to the Agent as provided in Section 2.10,
as the case may be.
(e) If the Agent has not received from
the Borrower the payment required by
Section 2.14(g) by 12:00 noon (New York City time)
on the date on which the Borrower is required to
make such payment, as provided in Section 2.14(g),
the Agent will promptly notify the applicable
Issuing Bank and each Bank of the Letter of Credit
Disbursement and, in the case of each Bank, its
Applicable Percentage of such Letter of Credit
Disbursement. If such Letter of Credit
Disbursement shall be in respect of a Letter of
Guaranty, then such notice shall be deemed to
constitute a request for a drawing under any Back-
up LOC issued in connection with such Letter of
Guaranty. Not later than 2:00 P.M. (New York City
time) on such date, each Bank shall, in fulfillment
of its obligations under Section 2.14(d), make
available such Bank's Applicable Percentage of such
Letter of Credit Disbursement, in Federal or other
funds immediately available in New York City (or,
in the case of a Letter of Credit Disbursement in
an Alternative Letter of Credit Currency, such
Bank's Applicable Percentage of the Dollar
Reimbursement Amount in respect of such Letter of
Credit Disbursement), to the Agent at its address
specified in or pursuant to Section 9.01, and the
Agent will promptly make such funds available to
the applicable Issuing Bank. The Agent will
promptly remit to each Bank its Applicable
Percentage of any amounts subsequently received by
the Agent from the Borrower in respect of such
Letter of Credit Disbursement.
(f) Unless the Agent shall have received
notice from a Bank prior to the date of any
Borrowing, or prior to the time of any required
payment by such Bank in respect of a Letter of
Credit Disbursement, that such Bank will not make
available to the Agent such Bank's share of such
Borrowing or payment, the Agent may assume that
such Bank has made such share available to the
Agent on the date of such Borrowing or payment in
accordance with subsections (c) and (d) or (e), as
applicable, of this Section 2.02 and the Agent may,
in reliance upon such assumption, make available to
the Borrower or the applicable Issuing Bank, as
applicable, on such date a corresponding amount.
If and to the extent that such Bank shall not have
so made such share available to the Agent, such
Bank and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day
from the date such amount is made available to the
Borrower or the applicable Issuing Bank until the
date such amount is repaid to the Agent, at (i) in
the case of the Borrower, a rate per annum equal to
the higher of the Federal Funds Rate and the
interest rate applicable thereto pursuant to
Section 2.05 and (ii) in the case of such Bank, the
Federal Funds Rate. If such Bank shall repay to
the Agent such corresponding amount in respect of a
Borrowing, such amount so repaid shall constitute
such Bank's Loan included in such Borrowing for
purposes of this Agreement.
SECTION 2.03. Notes. (a) Each Bank's
Loans of each Class shall be evidenced by a single
Note (in the form applicable to such Class) payable
to the order of such Bank for the account of its
Applicable Lending Office in an amount equal to the
aggregate Commitment of such Bank of such Class.
(b) Each Bank may, by notice to the
Borrower and the Agent, request that its Loans of a
particular Type and Class be evidenced by a
separate Note in an amount equal to the aggregate
Commitment (or in the case of a Note evidencing
Term Loans, the aggregate Term Loans) of such Bank
of such Class. Each such Note shall be in
substantially the form of Exhibit A-1 or Xxxxxxx X-
0 hereto applicable to the relevant Class with
appropriate modifications to reflect the fact that
it evidences solely Loans of the relevant Type.
Each reference in this Agreement to the "Note" of
such Bank shall be deemed to refer to and include
any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Notes
pursuant to Section 3.03(k), the Agent shall
forward such Notes to such Bank. Each Bank shall
record the date and amount of each Loan made by it
and the date and amount of each payment of
principal made by the Borrower with respect
thereto, and prior to any transfer of its Note
shall endorse on the schedule forming a part
thereof appropriate notations to evidence the
foregoing information with respect to each such
Loan then outstanding; provided that the failure of
any Bank to make any such recordation or
endorsement or any error in such recordation or
endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Bank
is hereby irrevocably authorized by the Borrower so
to endorse its Note and to attach to and make a
part of its Note a continuation of any such
schedule as and when required.
SECTION 2.04. Interest Rate Elections.
(a) The initial Type of Loans comprising each
Borrowing, and the duration of the initial Interest
Period applicable thereto if they are initially CD
Loans or Euro-Dollar Loans, shall be as specified
in the applicable Notice of Borrowing. Thereafter,
the Borrower may from time to time elect to change
or continue the Type of, or the duration of the
Interest Period applicable to, the Loans included
in any Borrowing (excluding overdue Loans and
subject in each case to the provisions of the
definition of Interest Period and Article VIII), as
follows:
(i) if such Loans are Base Rate Loans,
the Borrower may elect to designate such Loans
as CD Loans or Euro-Dollar Loans, may elect to
continue such Loans as Base Rate Loans for an
additional Interest Period, or may elect to
designate such Loans as any combination of
Base Rate Loans, CD Loans and Euro-Dollar
Loans;
(ii) if such Loans are CD Loans, the
Borrower may elect to designate such Loans as
Base Rate Loans or Euro-Dollar Loans, may
elect to continue such Loans as CD Loans for
an additional Interest Period, or may elect to
designate such Loans as any combination of
Base Rate Loans, CD Loans and Euro-Dollar
Loans; and
(iii) if such Loans are Euro-Dollar Loans,
the Borrower may elect to designate such Loans
as Base Rate Loans or CD Loans, may elect to
continue such Loans as Euro-Dollar Loans for
an additional Interest Period, or may elect to
designate such Loans as any combination of
Base Rate Loans, CD Loans and Euro-Dollar
Loans.
Notwithstanding the foregoing, the Borrower may not
elect an Interest Period for CD Loans or Euro-
Dollar Loans unless the aggregate outstanding
principal amount of such CD Loans or Euro-Dollar
Loans (including any such CD Loans or Euro-Dollar
Loans made pursuant to Section 2.01 on the date
that such Interest Period is to begin) to which
such Interest Period will apply is at least
$2,500,000.
(b) Any election permitted by
subsection (a) of this Section may become effective
on any Euro-Dollar Business Day specified by the
Borrower (the "Election Date"). Each such election
shall be made by the Borrower by delivering a
notice (a "Notice of Interest Rate Election") to
the Agent not later than 10:00 A.M. (New York City
time) at least one Domestic Business Day before the
Election Date, if all the resulting Loans will be
Base Rate Loans, at least two Domestic Business
Days before the Election Date, if the resulting
Loans will include CD Loans but not Euro-Dollar
Loans, and at least three Euro-Dollar Business Days
before the Election Date, if the resulting Loans
will include Euro-Dollar Loans; provided that, if a
Notice of Interest Rate Election provides for an
Election Date with respect to an outstanding Fixed
Rate Loan that is not the last day of the Interest
Period therefor, such Notice of Interest Rate
Election shall be delivered not later than
10:00 A.M. (New York City time) at least three
Euro-Dollar Business Days before the Election Date.
Each Notice of Interest Rate Election shall
specify with respect to the outstanding Loans to
which such notice applies:
(i) the Election Date;
(ii) if the Type of Loan is to be
changed, the new Type of Loan and, if such new
Type is a CD Loan or Euro-Dollar Loan, the
duration of the first Interest Period
applicable thereto;
(iii) if such Loans are CD Loans or Euro-
Dollar Loans and the Type of such Loans is to
be continued for an additional or different
Interest Period, the duration of such
additional or different Interest Period; and
(iv) if such Loans are to be designated
as a combination of Base Rate Loans, CD Loans
or Euro-Dollar Loans, the information
specified in clauses (i) through (iii) above
as to each resulting Borrowing and the
aggregate amount of each such Borrowing.
Each Interest Period specified in a Notice of
Interest Rate Election shall comply with the
provisions of the definition of Interest Period and
the last sentence of subsection (a) of this
Section.
(c) Upon receipt of a Notice of Interest
Rate Election, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's
share of such Borrowing and such notice shall not
thereafter be revocable by the Borrower.
(d) If the Borrower (i) fails to deliver
a timely Notice of Interest Rate Election to the
Agent electing to continue or change the Type of,
or the duration of the Interest Period applicable
to, the Loans included in any Borrowing as provided
in this Section and (ii) has not theretofore
delivered a notice of prepayment relating to such
Loans, then the Borrower shall be deemed to have
given the Agent a Notice of Interest Rate Election
electing to change the Type of such Loans to (or
continue the Type thereof as) Base Rate Loans, with
an Interest Period commencing on the last day of
the then current Interest Period.
(e) Notwithstanding the foregoing, the
Borrower shall not be entitled to specify or elect
in any Notice of Borrowing or Notice of Interest
Rate Election that any Loans shall be or become
Fixed Rate Loans if an Event of Default shall have
occurred and be continuing and the Required Banks
shall have notified the Agent that additional Fixed
Rate Loans shall not be made available while such
Event of Default is continuing. If the Agent shall
receive such notice from the Required Banks, then
the Agent shall notify the Borrower thereof and,
thereafter, until all Events of Default have been
cured or waived (or such notice has been
rescinded), each outstanding Loan shall be changed
to or continued as a Base Rate Loan on the last day
of its Interest Period and any additional Loans
shall be made as Base Rate Loans.
SECTION 2.05. Interest Rates. (a) Each
Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day
from the date such Loan is made until it becomes
due, at a rate per annum equal to the sum of the
applicable Base Rate Margin plus the Base Rate for
such day. Such interest shall be payable for each
Interest Period on the last day thereof. Any
overdue principal of and, to the extent permitted
by law, overdue interest on any Base Rate Loan
shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to such
Base Rate Loan for such day.
"Base Rate Margin" applicable to any Base
Rate Loan outstanding on any day means (i) if such
day falls within a Level I Pricing Period, 0.125%;
(ii) if such day falls within a Level II Pricing
Period, 0.250%; and (iii) if such day falls within
a Level III Pricing Period, 0.500%.
(b) Each CD Loan shall bear interest on
the outstanding principal amount thereof, for the
Interest Period applicable thereto, at a rate per
annum equal to the sum of the applicable CD Margin
plus the applicable Adjusted CD Rate. Such
interest shall be payable for each Interest Period
on the last day thereof and, if such Interest
Period is longer than 90 days, at intervals of
90 days after the first day thereof. Any overdue
principal of and, to the extent permitted by law,
overdue interest on any CD Loan shall bear
interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2%
plus the higher of (i) the sum of the applicable CD
Margin plus the Adjusted CD Rate applicable to such
Loan and (ii) the rate applicable to Base Rate
Loans for such day.
"CD Margin" applicable to any CD Loan
outstanding on any day means (i) if such day falls
within a Level I Pricing Period, 1.250%; (ii) if
such day falls within a Level II Pricing Period,
1.375%; and (iii) if such day falls within a
Level III Pricing Period, 1.625%.
The "Adjusted CD Rate" applicable to any
Interest Period means a rate per annum determined
pursuant to the following formula:
CDBR ]*
ACDR = ---------- ] + AR
1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
____________________
* The amount in brackets being rounded
upwards, if necessary, to the next higher 1/100 of
1%.
The "CD Base Rate" applicable to any
Interest Period is the rate of interest determined
by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1%) of the
prevailing rates per annum bid at 10:00 A.M. (New
York City time) (or as soon thereafter as
practicable) on the first day of such Interest
Period by two or more New York certificate of
deposit dealers of recognized standing for the
purchase at face value from each CD Reference Bank
of its certificates of deposit in an amount
comparable to the unpaid principal amount of the CD
Loan of such CD Reference Bank to which such
Interest Period applies and having a maturity
comparable to such Interest Period.
"Domestic Reserve Percentage" means for
any day that percentage (expressed as a decimal)
which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve
System (or any successor) for determining the
maximum reserve requirement (including without
limitation any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve
System in New York City with deposits exceeding
five billion dollars in respect of new non-personal
time deposits in dollars in New York City having a
maturity comparable to the related Interest Period
and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as
of the effective date of any change in the Domestic
Reserve Percentage.
"Assessment Rate" means for any day the
annual assessment rate in effect on such day which
is payable by a member of the Bank Insurance Fund
classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor
assessment risk classification) within the meaning
of 12 C.F.R. 327.3(d) (or any successor
provision) to the Federal Deposit Insurance
Corporation (or any successor) for such
Corporation's (or such successor's) insuring time
deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be
adjusted automatically on and as of the effective
date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear
interest on the outstanding principal amount
thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of
the applicable Euro-Dollar Margin plus the
applicable Adjusted London Interbank Offered Rate.
Such interest shall be payable for each Interest
Period on the last day thereof and, if such
Interest Period is longer than three months, at
intervals of three months after the first day
thereof.
"Euro-Dollar Margin" applicable to any
Euro-Dollar Loan outstanding on any day means
(i) if such day falls within a Level I Pricing
Period, 1.125%; (ii) if such day falls within a
Level II Pricing Period, 1.250%; and (iii) if such
day falls within a Level III Pricing Period,
1.500%.
The "Adjusted London Interbank Offered
Rate" applicable to any Interest Period means a
rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the next higher
1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-
Dollar Reserve Percentage.
The "London Interbank Offered Rate"
applicable to any Interest Period means the average
(rounded upwards, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at
which deposits in dollars are offered to each of
the Euro-Dollar Reference Banks in the London
interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before
the first day of such Interest Period in an amount
approximately equal to the principal amount of the
Euro-Dollar Loan of such Euro-Dollar Reference Bank
to which such Interest Period is to apply and for a
period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means
for any day that percentage (expressed as a
decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect
of "Eurocurrency liabilities" (or in respect of any
other category of liabilities which includes
deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes
loans by a non-United States office of any Bank to
United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of
any change in the Euro-Dollar Reserve Percentage.
(d) Any overdue principal of and, to the
extent permitted by law, overdue interest on any
Euro-Dollar Loan shall bear interest, payable on
demand, for each day from and including the date
payment thereof was due to but excluding the date
of actual payment, at a rate per annum equal to the
sum of 2% plus the higher of (i) the sum of the
Euro-Dollar Margin plus the Adjusted London
Interbank Offered Rate applicable to such Loan and
(ii) the Euro-Dollar Margin plus the quotient
obtained (rounded upwards, if necessary, to the
next higher 1/100 of 1%) by dividing (x) the
average (rounded upwards, if necessary, to the next
higher 1/16 of 1%) of the respective rates per
annum at which one-day (or, if such amount due
remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer
than three months as the Agent may select) deposits
in dollars in an amount approximately equal to such
overdue payment due to each of the Euro-Dollar
Reference Banks are offered to such Euro-Dollar
Reference Bank in the London interbank market for
the applicable period determined as provided above
by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in
clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate
applicable to Base Rate Loans for such day).
(e) The Agent shall determine each
interest rate applicable to the Loans hereunder.
The Agent shall give prompt notice to the Borrower
and the participating Banks by telex or cable of
each rate of interest so determined, and its
determination thereof shall be conclusive in the
absence of manifest error.
(f) Each Reference Bank agrees to use
its best efforts to furnish quotations to the Agent
as contemplated by this Section. If any Reference
Bank does not furnish a timely quotation, the Agent
shall determine the relevant interest rate on the
basis of the quotation or quotations furnished by
the remaining Reference Bank or, if none of such
quotations is available on a timely basis, the
provisions of Section 8.01 shall apply.
SECTION 2.06. Fees. (a) During the
period from and including the Amendment and
Restatement Effective Date to but excluding the
last day of the Working Capital Availability
Period, the Borrower shall pay to the Agent for the
account of the Banks ratably in proportion to their
Working Capital Commitments a commitment fee at the
applicable per annum Commitment Fee Rate,
determined for each day during such period on the
amount by which the aggregate amount of the Working
Capital Commitments exceeds the sum of the Letter
of Credit Exposure and the aggregate outstanding
principal amount of the Working Capital Loans.
Such commitment fee shall accrue from and including
the Amendment and Restatement Effective Date to but
excluding the last day of the Working Capital
Availability Period. Accrued commitment fees under
this Section shall be payable quarterly on the last
day of March, June, September and December in each
year, commencing on the first such date following
the Amendment and Restatement Effective Date, and
upon the date of termination of the Working Capital
Commitments in their entirety.
(b) "Commitment Fee Rate" applicable to
any day means: (i) if such day falls within a
Level I Pricing Period, 0.3125%; (ii) if such day
falls within a Level II Pricing Period, 0.3750%;
and (iii) if such day falls within a Level III
Pricing Period, 0.4375%.
(c) On the Amendment and Restatement
Effective Date, the Borrower shall pay to the Agent
for the account of each Bank, a participation fee
equal to 0.250% of the total Commitment of such
Bank, as set forth in Schedule 1 hereto.
SECTION 2.07. Termination or Reduction
of Commitments. (a) During the Working Capital
Availability Period, the Borrower may, upon at
least three Domestic Business Days' notice to the
Agent (upon receipt of such notice, the Agent shall
promptly notify the Banks of such notice),
(i) terminate the Working Capital Commitments at
any time, if there is no Letter of Credit Exposure
at such time and if no Working Capital Loans are
outstanding at such time, or (ii) ratably reduce
from time to time by an aggregate amount of
$5,000,000 or any larger multiple of $1,000,000 the
aggregate amount of the Working Capital Commitments
in excess of the sum of the Letter of Credit
Exposure and the aggregate outstanding principal
amount of the Working Capital Loans. Subject to
extension pursuant to Section 2.16, the Working
Capital Commitments shall terminate on the last day
of the Working Capital Availability Period.
(b) The Term Commitments shall
automatically terminate at the close of business on
the Amendment and Restatement Effective Date.
SECTION 2.08. Mandatory Repayments and
Prepayments. (a) Subject to adjustment as
provided in subsection (g) of this Section, the
Borrower shall repay Term Loans in an aggregate
principal amount equal to (i) $1,000,000 on
March 31, June 30, September 30 and December 31 of
each year, commencing March 31, 1997, to but
excluding March 31, 1998, and (ii) $2,000,000 on
March 31, June 30, September 30 and December 31 of
each year, commencing March 31, 1998, to but
excluding the Termination Date. Any Term Loans
outstanding on the Termination Date shall be due
and payable on such date, together with accrued
interest thereon.
(b) Each Working Capital Loan
outstanding on the Termination Date shall be due
and payable on such date, together with accrued
interest thereon.
(c) In the event and on each occasion
that the sum of the Letter of Credit Exposure plus
the aggregate outstanding principal amount of the
Working Capital Loans exceeds the Borrowing Base,
the Borrower shall forthwith prepay Working Capital
Loans (or, if no Working Capital Loans are
outstanding, provide cash collateral in respect of
the Letter of Credit Exposure pursuant to
Section 2.14(j) and thereupon such cash shall be
deemed to be part of the Borrowing Base) in an
amount equal to such excess.
(d) In the event and on each occasion
after the Amendment and Restatement Effective Date
that a Prepayment Event occurs, the Borrower shall
promptly following (and in any event not later than
the Domestic Business Day next following) the
receipt of Net Cash Proceeds in respect of such
Prepayment Event, prepay Term Loans (i) in the case
of a Prepayment Event described in clause (a) of
the definition thereof, in an aggregate principal
amount equal to 50% of the aggregate principal
amount of any Working Capital Loans borrowed in
connection with any Business Acquisition
consummated during the period from and including
the Amendment and Restatement Date to and including
the date of such Prepayment Event and (ii) in the
case of a Prepayment Event described in clause (b)
of the definition thereof, in an aggregate
principal amount equal to the Net Cash Proceeds in
respect of such Prepayment Event. No prepayments
of Working Capital Loans shall be required pursuant
to this Section 2.08(d).
(e) On the date of each repayment or
prepayment of Loans pursuant to this Section, the
Borrower shall pay interest accrued on the
principal amount repaid or prepaid to the day of
repayment or prepayment.
(f) Prior to the date of each mandatory
repayment or prepayment pursuant to this Section,
the Borrower shall, by notice to the Agent given
not later than 11:00 A.M. (New York City time) on
(i) the Domestic Business Day prior to the date of
repayment or prepayment of any Base Rate Borrowing,
and (ii) the third Euro-Dollar Business Day prior
to the date of repayment or prepayment of any Fixed
Rate Borrowing, select which outstanding Borrowings
of the applicable Class are to be prepaid; provided
that the Borrower shall not elect to prepay any CD
Borrowing or Euro-Dollar Borrowing to the extent
that a Base Rate Borrowing of the applicable Class
is outstanding. Upon receipt of such notice, the
Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share
of such prepayment, and such notice shall not
thereafter be revocable by the Borrower. Each such
repayment or prepayment shall be applied to repay
or prepay ratably the respective Loans included in
the Borrowings so selected.
(g) Any optional or mandatory prepayment
of the Term Loans shall be applied to reduce the
subsequent scheduled repayments of the Term Loans
pursuant to subsection (a) of this Section in the
inverse order of maturity.
SECTION 2.09. Optional Prepayments. (a)
Subject to subsection (b) below, the Borrower may,
upon notice to the Agent by 10:30 a.m. on the day
of prepayment, in the case of Base Rate Borrowings,
or three Euro-Dollar Business Days' notice to the
Agent, in the case of CD Borrowings or Euro-Dollar
Borrowings, prepay any Borrowing in whole at any
time, or from time to time in part in amounts
aggregating $2,500,000 or any larger multiple of
$500,000, by paying the principal amount to be
prepaid together with accrued interest thereon to
the date of prepayment. Each such notice of
prepayment shall specify which outstanding
Borrowing is to be prepaid in connection therewith.
Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks
included in such Borrowing.
(b) Upon receipt of a notice of
prepayment pursuant to this Section, the Agent
shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such
prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.10. General Provisions as to
Payments. (a) The Borrower shall make each
payment of principal of, and interest on, the Loans
and of reimbursement of Letter of Credit
Disbursements and fees hereunder, not later than
12:00 Noon (New York City time) on the date when
due (or, in the case of the reimbursement of Letter
of Credit Disbursements in an Alternative Letter of
Credit Currency, not later than 4:00 p.m., local
time at the location of the applicable Designated
Payment Office on the date when due), in Federal or
other funds immediately available in New York City
(or, in the case of a Letter of Credit Disbursement
in an Alternative Letter of Credit Currency,
subject to the second sentence of Section 2.14(g),
funds in such currency immediately available at the
applicable Designated Payment Office), to the Agent
at its address referred to in Section 9.01. The
Agent will promptly distribute to each Bank its
ratable share of each such payment received by the
Agent for the account of the Banks (which
distribution shall be made on the date of receipt
by the Agent, if timely received). Whenever any
payment of principal of, or interest on, the
Domestic Loans or of fees shall be due on a day
which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any
payment of principal of, or interest on, the Euro-
Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in
which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. If
the date for any payment of principal is extended
by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received
notice from the Borrower prior to the date on which
any payment is due to the Banks hereunder that the
Borrower will not make such payment in full, the
Agent may assume that the Borrower has made such
payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause
to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If
and to the extent that the Borrower shall not have
so made such payment, each Bank shall repay to the
Agent forthwith on demand such amount distributed
to such Bank together with interest thereon, for
each day from the date such amount is distributed
to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.11. Funding Losses. If the
Borrower makes any payment of principal with
respect to any Fixed Rate Loan (pursuant to
Article II, VI or VIII or otherwise), or makes any
election under Section 2.04 with respect to any
Fixed Rate Loan with an Election Date, on any day
other than the last day of the Interest Period
applicable thereto, or the end of an applicable
period fixed pursuant to Section 2.04(d), or if the
Borrower fails to borrow or prepay or to continue
or convert into any Fixed Rate Loans after notice
has been given to any Bank in accordance with
Section 2.02, 2.04 or 2.08(f), the Borrower shall
reimburse each Bank within 15 days after demand for
any resulting loss or expense incurred by it (or by
an existing or prospective Participant in the
related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or
employing deposits from third parties, but
excluding loss of margin for the period after any
such payment or failure to borrow, convert,
continue or prepay provided that such Bank shall
have delivered to the Borrower a certificate as to
the amount of such loss or expense, which
certificate shall be conclusive in the absence of
manifest error.
SECTION 2.12. Computation of Interest
and Fees. Interest based on the Prime Rate
hereunder shall be computed on the basis of a year
of 365 days (or 366 days in a leap year) and paid
for the actual number of days elapsed (including
the first day but excluding the last day). All
fees and other interest shall be computed on the
basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but
excluding the last day).
SECTION 2.13. Withholding Tax
Exemption. At least five Domestic Business Days
prior to the first date on which interest or fees
are payable hereunder for the account of any Bank,
each Bank that is not incorporated under the laws
of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower
and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Bank is
entitled to receive payments under this Agreement
and the Notes without deduction or withholding of
any United States federal income taxes. Each Bank
which so delivers a Form 1001 or 4224 further
undertakes to deliver to each of the Borrower and
the Agent two additional copies of such form (or a
successor form) on or before the date that such
form expires or becomes obsolete or after the
occurrence of any event requiring a change in the
most recent form so delivered by it, and such
amendments thereto or extensions or renewals
thereof as may be reasonably requested by the
Borrower or the Agent, in each case certifying that
such Bank is entitled to receive payments under
this Agreement and the Notes without deduction or
withholding of any United States federal income
taxes, unless an event (including without
limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such
delivery would otherwise be required which renders
all such forms inapplicable or which would prevent
such Bank from duly completing and delivering any
such form with respect to it and such Bank advises
the Borrower and the Agent that it is not capable
of receiving payments without any deduction or
withholding of United States federal income tax.
SECTION 2.14. Letters of Credit.
(a) The Borrower may request the issuance of
Letters of Credit, in a form reasonably acceptable
to the applicable Issuing Bank (which shall be
either Xxxxxx Guaranty Trust Company of New York,
The Bank of Nova Scotia or The Bank of New York;
provided that The Bank of New York shall not be
required to issue any Letter of Guaranty, and
Xxxxxx Guaranty Trust Company of New York shall not
be required to issue any Letter of Credit that is
not a standby Letter of Credit and The Bank of Nova
Scotia shall not be required to issue any Letter of
Credit in respect of military weaponry or any
Letter of Guaranty), appropriately completed, for
the account of the Borrower (although a Letter of
Credit may state that it is for the account of ESCO
or any Specified Subsidiary, in which case such
Letter of Credit shall be deemed to be issued
jointly for the accounts of ESCO or such Specified
Subsidiary and the Borrower), at any time and from
time to time during the Working Capital
Availability Period; provided that:
(i) any Letter of Credit shall be issued
only if, and each request by the Borrower for
the issuance of any Letter of Credit shall be
deemed a representation and warranty of the
Borrower that, immediately following the
issuance of any such Letter of Credit, (A) the
Letter of Credit Exposure shall not exceed
$40,000,000, (B) the sum of the Letter of
Credit Exposure and the aggregate principal
amount of outstanding Working Capital Loans
shall not exceed the then current Borrowing
Base and (C) the sum of the Letter of Credit
Exposure and the aggregate principal amount of
outstanding Working Capital Loans shall not
exceed the aggregate Working Capital
Commitments at the time;
(ii) Letters of Credit issued to provide
Adequate Collateral (as defined in the
Distribution Agreement) pursuant to the
Distribution Agreement shall be subject to
further limitations as provided in
Section 5.20; and
(iii) any Letter of Credit to be
denominated in an Alternative Letter of Credit
Currency shall be issued only if, and each
request by the Borrower for the issuance of
any such Letter of Credit shall be deemed to
be a representation and warranty by the
Borrower that, (A) the Borrower has entered
into a Rate Protection Agreement with the
applicable Issuing Bank and satisfactory to
such Issuing Bank providing for the purchase
by the Borrower of an amount of such
Alternative Letter of Credit Currency equal to
the amount of the requested Letter of Credit,
for a purchase price payable in Dollars, at
the end of the term of such Letter of Credit
and (B) the Borrower has assigned its rights
under such Rate Protection Agreement to such
Issuing Bank for the benefit of the Banks
holding participations in such Letter of
Credit.
(b) Each Letter of Credit shall expire
at the close of business on the Domestic Business
Day that is three Domestic Business Days prior to
the last day of the Working Capital Availability
Period (determined as of the date of issuance of
such Letter of Credit), unless such Letter of
Credit expires by its terms on an earlier date.
Each Letter of Credit shall provide for payments of
drawings in a Permitted Letter of Credit Currency.
(c) Each issuance of any Letter of
Credit shall be made on at least three Domestic
Business Days' prior written or telex notice from
the Borrower to the applicable Issuing Bank (which
shall give prompt notice thereof to the Agent which
shall give prompt notice thereof to each Bank)
specifying the date of issuance, the date on which
such Letter of Credit is to expire (which shall not
be later than the earlier of (i) at least three
Domestic Business Days prior to the last day of the
Working Capital Availability Period (determined as
of the date of issuance of such Letter of Credit),
and (ii) subject to extension, the date that is two
years after the date of such Letter of Credit or,
if such Letter of Credit permits acceleration of
the expiration date thereof by the applicable
Issuing Bank upon the occurrence of an Event of
Default described in clause (h) or (i) of
Section 6.01, a later date), the amount and
currency of such Letter of Credit, the name and
address of the beneficiary of such Letter of Credit
(and, if such currency is an Alternative Letter of
Credit Currency, a description of the Rate
Protection Agreement entered into by the Borrower
as required by clause (iii) of subsection
(a) above) and such other information as may be
necessary or desirable to complete such Letter of
Credit. The Banks will consider in good faith any
request by the Borrower for a Letter of Credit
expiring after the last day of the Working Capital
Availability Period, but no such Letter of Credit
shall be issued without the prior written consent
of all the Banks and agreement upon appropriate
amendments to the Loan Documents.
(d) By the issuance of a Letter of
Credit and without any further action on the part
of the applicable Issuing Bank or the Banks in
respect thereof, the applicable Issuing Bank hereby
grants to each Bank, and each Bank hereby agrees to
acquire from such Issuing Bank, a participation in
such Letter of Credit equal to such Bank's
Applicable Percentage of the face amount of such
Letter of Credit, effective upon the issuance of
such Letter of Credit; provided, however, that, if
such Letter of Credit is issued in the form of a
Letter of Guaranty and any Bank notifies the Agent,
the applicable Issuing Bank and the Borrower that
such Bank either cannot or, as a matter of policy,
will not acquire participations in credit
commitments in the nature of Letters of Guaranty,
then such Bank, in lieu of acquiring such
participation, hereby absolutely and
unconditionally agrees to issue a Back-up LOC for
the benefit of such Issuing Bank and the account of
the Borrower in a face amount equal to such Bank's
Applicable Percentage of the face amount of such
Letter of Guaranty (or, in the case of a Letter of
Guaranty denominated in an Alternative Letter of
Credit Currency, a Back-up LOC denominated in
Dollars and in a face amount equal to such Bank's
Applicable Percentage of the Dollar Equivalent of
such Letter of Guaranty as of the date of
issuance), which Back-up LOC may be drawn upon in
the event of any Letter of Credit Disbursement in
respect of such Letter of Guaranty. Any Back-up
LOC issued by a Bank for the benefit of an Issuing
Bank pursuant to the immediately preceding sentence
shall be issued on the date of issuance of, and
shall expire concurrently with, the related Letter
of Guaranty. In consideration and in furtherance
of the foregoing, each Bank hereby absolutely and
unconditionally agrees to pay to the Agent, on
behalf of the applicable Issuing Bank, in
accordance with Section 2.02(e), such Bank's
Applicable Percentage of each Letter of Credit
Disbursement made by such Issuing Bank (or, in the
case of a Letter of Credit Disbursement in an
Alternative Letter of Credit Currency, such Bank's
Applicable Percentage of the Dollar Reimbursement
Amount in respect of such Letter of Credit
Disbursement); provided that (i) the Banks shall
not be obligated to make any such payment to an
Issuing Bank with respect to any wrongful payment
or disbursement made by such Issuing Bank under any
Letter of Credit as a result of the gross
negligence or wilful misconduct of such Issuing
Bank and (ii) in the case of any Letter of Credit
Disbursement in respect of a Letter of Guaranty,
any Bank that issued (or was required to issue) a
Back-up LOC in lieu of acquiring a participation in
such Letter of Guaranty, hereby absolutely and
unconditionally agrees, in lieu of making payment
as aforesaid (but subject to the condition
specified in clause (i) above), to pay any draft
presented to it by such Issuing Bank in connection
with such Letter of Credit Disbursement not
exceeding its Applicable Percentage of such Letter
of Credit Disbursement, it being understood that
such drafts shall be deemed presented as
contemplated by Section 2.02(e) and shall be paid
as contemplated thereby. If a Letter of Guaranty
denominated in an Alternative Letter of Credit
Currency is issued, a Bank issues a Back-up LOC in
respect thereof and a Letter of Credit Disbursement
is made in respect of such Letter of Guaranty, and
if such Bank's Applicable Percentage of the Dollar
Reimbursement Amount exceeds the amount available
to be drawn under such Back-up LOC, then such Bank
absolutely and unconditionally agrees to pay to the
Agent, on behalf of the applicable Issuing Bank, in
accordance with Section 2.02(e), an amount in
Dollars equal to such excess as a separate
obligation and such payment shall be included for
the purpose of determining the
Borrower's reimbursement obligation pursuant to Section 2.14(g).
(e) Each Bank acknowledges and agrees that its
obligation to acquire participations pursuant to
paragraph (d) in respect of Letters of Credit (or, if
applicable, to issue a Back-up LOC in respect of a Letter of
Guaranty in lieu of acquiring a participation therein) is
absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and
continuance of a Default, and that each payment to be made
by such Bank pursuant to paragraph (d) shall be made without
any offset, abatement, withholding or reduction whatsoever
(subject only to clause (i) of the proviso to the second
sentence of paragraph (d)).
(f) During the Working Capital Availability Period,
the Borrower shall pay to the Agent (i) for the account of
the Banks ratably in proportion to their Applicable
Percentages (A) a fee at the applicable per annum Standby
Letter of Credit Fee Rate (determined as of the Domestic
Business Day immediately preceding the date payment of such
fee is due) on the daily average aggregate undrawn amount of
outstanding Letters of Credit that are in the nature of
standby Letters of Credit and (B) a fee at the applicable
per annum Performance Letter of Credit Fee Rate (determined
as of the Domestic Business Day immediately preceding the
date that payment of such fee is due) on the daily average
aggregate undrawn amount of all other outstanding Letters of
Credit and (ii) for the account of each Issuing Bank a fee
at the rate of 0.2500% per annum on the daily average
aggregate undrawn amount of the outstanding Letters of
Credit issued by such Issuing Bank. Such fees shall accrue
from and including the Amendment and Restatement Effective
Date to but excluding the Termination Date. Accrued fees
under this paragraph shall be payable quarterly on the last
day of March, June, September and December of each year,
commencing on the first such date following the Amendment
and Restatement Effective Date, and on the Termination Date.
In addition to the fees payable pursuant to clause (ii)
above, the Borrower shall pay to each Issuing Bank, for its
own account, such other fees and charges in connection with
the issuance or administration of each Letter of Credit as
the Borrower and such Issuing Bank shall, if at all, agree.
All such fees shall be payable in Dollars, notwithstanding
that Letters of Credit may be denominated in one or more
Alternative Letter of Credit Currencies, and for purposes of
determining such fees, the undrawn amount of Letters of
Credit denominated in an Alternative Letter of Credit
Currency shall be valued in Dollars as provided in
subsection (m) of this Section.
"Standby Letter of Credit Fee Rate" as of any day
means (i) if such day falls within a Level I Pricing Period,
1.1250%; (ii) if such day falls within a Level II Pricing
Period, 1.2500%; and (iii) if such day falls within a Level
III Pricing Period, 1.5000%.
"Performance Letter of Credit Fee Rate" as of any day
means (i) if such day falls within a Level I Pricing Period,
1.0000%; (ii) if such day falls within a Level II Pricing
Period, 1.1250%; and (iii) if such day falls within a Level
III Pricing Period, 1.3750%.
(g) If any Issuing Bank shall pay any draft
presented under a Letter of Credit, the Borrower shall pay
to the Agent, on behalf of such Issuing Bank (or, if such
Issuing Bank shall have received payment from any Bank or
Banks in respect of its Letter of Credit Disbursement
pursuant to the Banks' participation therein or a drawing
under a Back-up LOC, then on behalf of such Issuing Bank and
such Banks), an amount equal to the amount of such draft
before (i) 12:00 Noon (New York City time), on the day on
which such Issuing Bank shall have notified the Borrower
that payment of such draft will be made or (ii) if the
Issuing Bank shall have notified the Borrower of such
payment later than 9:45 A.M. (New York City time) on the day
on which the payment of such draft will be made, 12:00 Noon
(New York City time) on the next Domestic Business Day;
provided that with respect to any draft paid in an
Alternative Letter of Credit Currency, the payment due from
the Borrower pursuant to this sentence shall not be due
prior to the day that is (x) two Euro-Dollar Business Days
after the day on which such Issuing Bank shall have notified
the Borrower of such payment if such notice shall have been
given on such day no later than 4:00 p.m., local time at the
location of the applicable Designated Payment Office or
(y) three Euro-Dollar Business Days after the day on which
such Issuing Bank shall have notified the Borrower of such
payment, if such notice shall have been given on such day no
later than 4:00 p.m., local time at the location of the
applicable Designated Payment Office. Notwithstanding the
foregoing, to the extent such Issuing Bank shall have
received payment from any Bank or Banks in respect of a
Letter of Credit Disbursement made in an Alternative Letter
of Credit Currency pursuant to the Banks' participation
therein or a drawing under a Back-up LOC, then the amount to
be paid by the Borrower pursuant to the first sentence of
this Section 2.14(g) shall be converted to the Dollar
Reimbursement Amount so paid by such Bank or Banks, for
their account. The Agent will promptly pay any such amounts
received by it to the applicable Issuing Bank or the
applicable Banks, as their interests may appear. If the
Borrower shall fail to pay any amount required to be paid by
it under clause (i) of the first sentence of this paragraph
when due, or if the Borrower shall fail to pay an amount
equal to the amount of any draft under a Letter of Credit on
the same day that payment of such draft is made by reason of
clause (ii) of the first sentence of this paragraph, or then
such unpaid amount shall bear interest, for each day from
and including the due date or the date of payment of such
draft, as the case may be, to but excluding the date of
payment, at a rate per annum equal to the sum of the Base
Rate for such day plus the applicable Base Rate Margin
plus 2%.
(h) The Borrower's obligation to repay each Issuing
Bank or each Bank for payments and disbursements made by
such Issuing Bank or Bank under any Letter of Credit or
Back-up LOC shall be absolute, unconditional and irrevocable
under any and all circumstances and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or Back-up LOC; provided that the
disregard by such Issuing Bank of such lack of validity
or enforceability shall not have constituted gross
negligence or wilful misconduct of such Issuing Bank;
(ii) the existence of any claim, setoff, defense or
other right which ESCO, the Borrower, any Subsidiary or
any other Person may at any time have against the
beneficiary under any Letter of Credit or Back-up LOC,
such Issuing Bank, the Agent or any Bank (other than
the defense of payment in accordance with the terms of
this Agreement or a defense based on the gross
negligence or wilful misconduct of such Issuing Bank)
or any other Person in connection with this Agreement
or any other agreement or transaction;
(iii) any draft or other document presented under a
Letter of Credit or Back-up LOC proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect; provided that payment by such Issuing Bank
under such Letter of Credit against presentation of
such draft or document shall not have constituted gross
negligence or wilful misconduct of such Issuing Bank;
(iv) payment by such Issuing Bank or Bank under a
Letter of Credit or Back-up LOC against presentation of
a draft or other document which does not comply with
the terms of such Letter of Credit or Back-up LOC;
provided that such payment shall not have constituted
gross negligence or wilful misconduct of such Issuing
Bank;
(v) any statement in any Letter of Credit to the
effect that such Letter of Credit is for the account of
ESCO or any Specified Subsidiary; and
(vi) any other circumstance or event whatsoever,
whether or not similar to any of the foregoing;
provided that such other circumstance or event shall
not have been the result of gross negligence or wilful
misconduct of such Issuing Bank.
It is understood that in making any payment under a
Letter of Credit or Back-up LOC (x) an Issuing Bank's or a
Bank's exclusive reliance on the documents presented to it
under such Letter of Credit or Back-up LOC as to any and all
matters set forth therein, including reliance on the amount
of any draft presented under such Letter of Credit or Back-
up LOC, whether or not the amount due to the beneficiary
equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit or
Back-up LOC proves to be insufficient in any respect, if
such document on its face appears to be in order, and
whether or not any other statement or any other document
presented pursuant to such Letter of Credit or Back-up LOC
proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever,
even if such Issuing Bank is informed thereof, and (y) any
noncompliance in any immaterial respect of the documents
presented under a Letter of Credit or Back-up LOC with the
terms thereof shall, in each case, not be deemed wilful
misconduct or gross negligence of such Issuing Bank or Bank.
(i) Each Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit
issued by such Issuing Bank to ascertain that the same
appear on their face to be in substantial conformity with
the terms and conditions of such Letter of Credit. Such
Issuing Bank shall as promptly as possible give oral
notification, confirmed by telex or telecopy, to the Agent
and the Borrower of such demand for payment and the
determination by such Issuing Bank as to whether such demand
for payment was in accordance with the terms and conditions
of such Letter of Credit and whether such Issuing Bank has
made or will make a Letter of Credit Disbursement
thereunder, provided that the failure to give such notice
shall not relieve the Borrower of its obligation to
reimburse such Issuing Bank with respect to any such Letter
of Credit Disbursement, and the Agent shall promptly give
each Bank notice thereof.
(j) In the event that the Borrower is required
pursuant to the terms of this Agreement or any other Loan
Document to provide cash collateral in respect of the Letter
of Credit Exposure, the Borrower shall deposit in an account
with the Security Agent, for the benefit of the Banks, an
amount in cash equal to the Letter of Credit Exposure (or
such lesser amount as shall be required hereunder or
thereunder). In addition, the Borrower may elect to provide
cash collateral in order to increase the Borrowing Base by
depositing in an account with the Security Agent, for the
benefit of the Banks, an amount in cash equal to the desired
increase in the Borrowing Base. Any such deposit shall be
held by the Security Agent as collateral for the payment and
performance of the Obligations. The Security Agent shall
have exclusive dominion and control, including the exclusive
right of withdrawal, over any such account. Other than any
interest earned on the investment of such deposits in
Temporary Cash Investments, which investments shall be
selected by the Security Agent in its sole but reasonable
discretion (unless an Event of Default shall have occurred
and be continuing, in which case the Security Agent shall
have the option, in its sole but reasonable discretion, to
decline to invest such deposits), such deposits shall not
bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in
such account shall automatically be applied by the Security
Agent to reimburse the Issuing Banks and the Banks, as
applicable, for Letter of Credit Disbursements and, if the
maturity of the Loans has been accelerated, to satisfy the
Obligations. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of an Event
of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three
Domestic Business days after all Events of Default have been
cured or waived. If the Borrower is required to provide an
amount of cash collateral hereunder pursuant to
Section 2.08(c), or elects to provide an amount of cash
collateral hereunder in order to increase the Borrowing
Base, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower upon demand; provided
that, after giving effect to such return, (i) the sum of the
Letter of Credit Exposure plus the aggregate outstanding
principal amount of Working Capital Loans would not exceed
the Borrowing Base and (ii) no Default shall have occurred
and be continuing.
(k) The Issuing Banks agree to provide the Agent
with such information with respect to the Letters of Credit
as it may reasonably request, including a written monthly
report with respect to the status of each outstanding Letter
of Credit as of the last day of the preceding month.
(l) Notwithstanding any contrary provisions herein,
each payment to be made by the Borrower pursuant to
subsection (g) of this Section in respect of any Letter of
Credit Disbursement (including interest thereon) shall be
payable in the same currency that such Letter of Credit
Disbursement is made, except to the extent the applicable
Issuing Bank shall have received payment from any Bank or
Banks in Dollars in the amount of the Dollar Reimbursement
Amount pursuant to Section 2.14(d), in which case each such
payment to be made by the Borrower shall, to such extent, be
payable in Dollars. The foregoing shall not be construed to
require any Bank to make any Loan hereunder or make any
payment pursuant to Section 2.02(e) or subsection (d) of
this Section 2.14 in any currency other than Dollars.
(m) For purposes of determining the Letter of Credit
Exposure hereunder and fees payable under subsection (f) of
this Section, each Letter of Credit denominated in an
Alternative Letter of Credit Currency and each Letter of
Credit Disbursement made thereunder shall be valued in
Dollars at the Dollar Equivalent (determined as of the date
of issuance of such Letter of Credit) of the amount thereof.
Each valuation of any Letter of Credit or Letter of Credit
Disbursement hereunder shall be determined by the Agent, and
its determination thereof shall be conclusive absent
manifest error. The Agent shall give prompt notice to the
Borrower and the Banks of the valuations so determined.
Valuations pursuant to this paragraph (m) shall be solely
for purposes of determining the Letter of Credit Exposure
and determining fees payable under subsection (f) of this
Section and shall not be construed to affect the currency in
which payments are to be made hereunder.
(n) if each Issuing Bank that shall have issued any
of the Xxxxxxxxx Letters of Credit shall have received the
letters of credit and written agreement (if any) referred to
in Section 1(b)(v) of the Amendment, Waiver and Consent
dated as of June 6, 1996, relating to the Original Credit
Agreement, then on and as of the Xxxxxxxxx Closing Date
(i) the Xxxxxxxxx Letters of Credit shall cease to
constitute Letters of Credit hereunder, (ii) the Borrower,
ESCO and the Subsidiaries shall be released from their
obligations and liabilities in respect of the Xxxxxxxxx
Letters of Credit and (iii) the Banks shall be released from
their participations in the Xxxxxxxxx Letters of Credit;
provided that (i) the Borrower shall indemnify the Issuing
Banks in respect of the Xxxxxxxxx Letters of Credit for any
failure by Xxxxxxxxx (or the purchaser of its assets) to pay
fees in respect of the Xxxxxxxxx Letters of Credit after the
Xxxxxxxxx Closing Date, and (ii) unless the Xxxxxxxxx
Transaction is consummated as a sale by Xxxxxxxxx of its
assets, Xxxxxxxxx shall not be released from its obligations
and liabilities in respect of the Xxxxxxxxx Letters of
Credit and shall remain liable on and after the Xxxxxxxxx
Closing Date for the reimbursement of drawings under the
Xxxxxxxxx Letters of Credit and for the payment of fees in
respect thereof to the respective Issuing Banks, all on the
terms specified in this Agreement applicable to Letters of
Credit, notwithstanding any contrary provision herein or in
any other Loan Document.
SECTION 2.15. Taxes. (a) Any and all payments by
the Borrower hereunder shall be made free and clear of and
without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding taxes
imposed on the Agent's or any Issuing Bank's or Bank's net
income and franchise taxes imposed on the Agent or any
Issuing Bank or Bank by the United States or any
jurisdiction under the laws of which it is organized or any
political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to the Agent
or any Issuing Bank or Bank, (i) the sum payable shall be
increased by the amount necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.15) the
recipient shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower will indemnify the Agent, each
Issuing Bank and each Bank for the full amount of Taxes and
Other Taxes (including any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.15)
paid by such Issuing Bank or Bank or the Agent, as the case
may be, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant taxing authority or other
Governmental Authority. Such indemnification shall be made
within 30 days after the date any Issuing Bank or Bank or
the Agent, as the case may be, makes written demand
therefor. If the Agent or any Issuing Bank or Bank shall
become aware that it is entitled to receive a refund in
respect of Taxes or Other Taxes, it shall promptly notify
the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by the Borrower,
apply for such refund at the Borrower's expense. If the
Agent or any Issuing Bank or Bank receives a refund in
respect of any Taxes or Other Taxes for which the Agent or
such Issuing Bank or Bank has received payment from the
Borrower hereunder it shall promptly notify the Borrower of
such refund and shall, within 30 days after receipt of a
request by the Borrower (or promptly upon receipt, if the
Borrower has requested application for such refund pursuant
hereto), repay such refund to the Borrower, net of all out-
of-pocket expenses and without interest; provided that the
Borrower, upon the request of the Agent or such Issuing Bank
or Bank, agrees to return such refund (plus penalties,
interest or other charges) to the Agent or such Issuing Bank
or Bank in the event the Agent or such Issuing Bank or Bank
is required to repay such refund.
(d) Within 30 days after the date of any payment of
Taxes or Other Taxes withheld by the Borrower in respect of
any payment to the Agent or any Issuing Bank or Bank, the
Borrower will furnish to the Agent, at its address referred
to in Section 9.01, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations
contained in this Section 2.l5 shall survive the payment in
full of the principal of and interest on all Loans made
hereunder.
(f) Unless the Borrower and the Agent have received
forms or other documents satisfactory to them indicating
that payments hereunder or under the Notes are not subject
to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrower
or the Agent shall withhold taxes from such payments at the
applicable statutory rate in the case of payments to or for
any Issuing Bank or Bank organized under the laws of a
jurisdiction outside the United States.
(g) The Borrower shall not be required to pay any
additional amounts to any Issuing Bank or Bank in respect of
United States withholding tax pursuant to paragraph (a)
above if the obligation to pay such additional amounts would
not have arisen but for a failure by such Issuing Bank or
Bank to comply with the provisions of Section 2.13 unless
such failure results from (i) a change in applicable law,
regulation or official interpretation thereof or (ii) an
amendment, modification or revocation of any applicable tax
treaty or a change in official position regarding the
application or interpretation thereof, in each case after
the Effective Date.
(h) Any Bank claiming any additional amounts payable
pursuant to this Section 2.l5 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Borrower or to
change the jurisdiction of its Applicable Lending Office if
the making of such a filing or change would avoid the need
for or reduce the amount of any such additional amounts
which may thereafter accrue and would not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank.
SECTION 2.16. Extension of Working Capital
Availability Period. Not earlier than the date two years
prior to the then scheduled expiration of the Working
Capital Availability Period, the Borrower may, by written
notice to the Agent and the Banks, request a one-year
extension of the Working Capital Availability Period. If
the Agent shall receive written approval of such extension
from each Bank within 30 days after the date of such notice
from the Borrower, then the scheduled expiration date of the
Working Capital Availability Period shall be deemed to be
extended to the date one year after the then scheduled
expiration date in respect thereof. The Agent shall notify
the Borrower and the Banks promptly following the expiration
of such 30-day period (or such earlier date as the Agent
shall have received written approval of such extension from
all the Banks) whether the Working Capital Availability
Period has been extended. The approval by any Bank of any
extension requested hereunder may be granted or withheld in
the sole discretion of such Bank.
ARTICLE III
CONDITIONS
SECTION 3.01. Effectiveness. The Original Credit
Agreement became effective on the date that each of the
following conditions was satisfied (or waived in accordance
with Section 9.05 thereof):
(a) receipt by the Agent of counterparts of the
Original Credit Agreement signed by each of the parties
thereto (or, in the case of any party as to which an
executed counterpart was not received, receipt by the
Agent in form satisfactory to it of telegraphic, telex
or other written confirmation from such party of
execution of a counterpart thereof by such party);
(b) receipt by the Agent for the account of each Bank
of a duly executed Note for each Class (as defined in
the Original Credit Agreement) of Loans, dated on or
before the Effective Date complying with the provisions
of Section 2.03 of the Original Credit Agreement;
(c) receipt by the Agent of an opinion of Xxxxx Xxxx,
counsel for the Borrower, substantially in the form of
Exhibit G thereto and covering such additional matters
relating to the transactions contemplated thereby as
the Required Banks may reasonably request;
(d) receipt by the Agent of (i) a certificate signed
by any Vice President of the Borrower, dated the
Effective Date, to the effect set forth in clauses (b),
(c) and (d) of Section 3.02 thereof and (ii) a
certificate signed by any Vice President of Xxxxxxx,
dated the Effective Date, to the effect set forth in
Section 4.13 thereof regarding information furnished by
Xxxxxxx to the Agent or any Bank;
(e) receipt by the Agent of counterparts of the
Guarantee Agreement and the Subordination Agreement,
duly executed by the parties thereto;
(f) receipt by the Security Agent of counterparts of
the Pledge Agreement, duly executed by the parties
thereto, and certificates representing all outstanding
shares of capital stock of the Borrower and each
Subsidiary of the Borrower to be pledged under the
Pledge Agreement, accompanied by stock powers endorsed
in blank;
(g) receipt by the Security Agent of counterparts of
the Security Agreement, duly executed by the parties
thereto, and a duly completed and executed Perfection
Certificate from each grantor under the Security
Agreement, substantially in the form of Exhibit H
hereto;
(h) receipt by the Security Agent of copies of each
document (including each Uniform Commercial Code
financing statement) required by law or reasonably
requested by the Security Agent to be filed, registered
or recorded in order to create in favor of the Security
Agent for the benefit of the Banks a valid, legal and
perfected security interest in or lien on the
collateral that is the subject of the Security
Agreement;
(i) receipt by the Security Agent of (i) the results
of a search of the Uniform Commercial Code financing
statements filed with respect to ESCO, the Borrower and
the Specified Subsidiaries in the States in which are
located the chief executive offices of such Persons and
the other jurisdictions in which Uniform Commercial
Code financing statements are to be filed pursuant to
the preceding paragraph, together with copies of all
financing statements disclosed by such search, and
accompanied by evidence reasonably satisfactory to the
Required Banks that each Lien indicated in any such
financing statement is permitted thereunder or that the
collateral subject to the Lien indicated thereby has
been released; or (ii) if the condition set forth in
clause (i) is not fully satisfied, a written
undertaking from Xxxxxxx, in form and substance
satisfactory to the Required Banks and for the benefit
of the Borrower and the Banks, to (A) cause (at
Xxxxxxx'x cost and expense) the termination of any
financing statement indicating a Lien that is not
permitted thereunder and that would have been disclosed
by information required to be delivered pursuant to
clause (i) above and not so delivered prior to the
Effective Date and the release of the collateral
subject to such Lien and (B) discharge (at Xxxxxxx'x
cost and expense) each obligation the payment of which
is secured by the collateral described in such
financing statement (provided that Xxxxxxx'x
undertaking may require that the Borrower bear the
costs and expenses of all such terminations, releases
and discharges if the total thereof does not exceed
$100,000);
(j) receipt by the Security Agent of each mortgage,
deed of trust, assignment of leases and similar
instrument or document required by law or reasonably
requested by the Security Agent (all in form and
substance reasonably satisfactory to the Required
Banks) to be filed, registered or recorded in order to
create in favor of the Security Agent (or a trustee on
its behalf) for the benefit of the Banks a valid, legal
and perfected first priority security interest in or
lien on the real property (and improvements thereon)
owned by the Borrower or any Specified Subsidiary and
identified on Schedule 3.01(j) thereto, in each case
duly executed and delivered by each mortgagor, grantor
or pledgor thereunder;
(k) ESCO shall have acquired direct beneficial and
record ownership of all outstanding shares of capital
stock of the Borrower, and the Borrower shall have
acquired direct (or, in the case of DCS and Vacco,
indirect) beneficial and record ownership of all
outstanding shares of capital stock of each Specified
Subsidiary and ESCO, the Borrower and the Specified
Subsidiaries shall have acquired the other assets to be
transferred to them pursuant to the Distribution
Agreement, free and clear of any Liens (other than
Liens granted under the Security Documents);
(l) receipt by the Banks of true and complete copies
of the Information Statement and the Transaction
Documents, satisfaction of the Banks with the form,
terms and provisions of the Transaction Documents, and
consummation of all transactions contemplated thereby
to be consummated on or prior to the Effective Date in
accordance with the terms and conditions thereof
without giving effect to any amendment, modification or
waiver not approved by the Banks;
(m) satisfaction of the Banks with any material
changes in or to the terms of the Transactions or the
organization and capital structure of ESCO, the
Borrower and the Specified Subsidiaries, in each case
from the terms, organization and capital structure
thereof disclosed to the Banks prior to the Effective
Date;
(n) receipt by the Banks of satisfactory evidence
that any and all Governmental Reviews shall have been
concluded without any action having been taken that, in
the opinion of the Required Banks, could have a
Material Adverse Effect;
(o) the Banks shall be satisfied that none of ESCO,
the Borrower and the Specified Subsidiaries have any
Debt (other than Debt permitted under clauses (ii),
(iii), (iv) and (v) of Section 5.11(a) of the Original
Credit Agreement) and shall be satisfied with the terms
and conditions of any such Debt permitted thereunder;
(p) receipt by the Banks of satisfactory evidence
that XXXX, Xxxxxxx and their respective affiliates
shall have obtained all consents and approvals of, and
shall have made all filings and registrations with, any
Governmental Authority required in order to consummate
the Transactions (other than the declaration by the
Securities and Exchange Commission of the effectiveness
of the Borrower's Form 10 Registration Statement filed
in connection with the Transactions), in each case
without the imposition of any condition which, in the
judgment of the Required Banks, could have a Material
Adverse Effect;
(q) the Banks shall be satisfied that, after giving
effect to the Transactions, the total liabilities of
the Borrower shall increase by less than 100% and the
ratio of the Borrower's total liabilities to total
assets shall be less than 75%;
(r) receipt by the Banks of an environmental audit
report, satisfactory in substance and scope to the
Banks and from an environmental consulting firm
acceptable to the Banks, as to any environmental
hazards, conditions or liabilities to which ESCO, the
Borrower or any of the Specified Subsidiaries may be
subject, and the Banks shall be satisfied with the
amount and nature of any such hazards, conditions or
liabilities and with the Borrower's plans with respect
thereto;
(s) receipt by the Banks of historical and pro forma
(giving effect to the Transactions) consolidated
balance sheets of ESCO as of a recent date, and the
Banks shall be satisfied with the form and substance
thereof;
(t) receipt by the Agent of a written, irrevocable
acknowledgment by Xxxxxxx, on behalf of itself and its
subsidiaries and in form and substance satisfactory to
the Required Banks, that all Xxxxxxx Debt outstanding
as of September 28, 1990, is forgiven as of
September 28, 1990;
(u) the fact that the Required Banks shall not have
advised the Agent that, in their judgment, either (i)
there shall have occurred a material adverse change in
the business, assets, operations, prospects or
condition, financial or otherwise, of ESCO, the
Borrower and the Specified Subsidiaries, taken as a
whole, since June 30, 1990, or (ii) there is an action,
suit or proceeding pending or threatened against the
Borrower, Xxxxxxx or any of their respective affiliates
in which there is a reasonable possibility of an
adverse decision, or there is a pending dispute
involving any contract, agreement or purchase order
relating to the business of any Specified Subsidiary,
and, in any such case, there is a reasonable
possibility that the resolution of such action, suit,
proceeding or dispute could materially adversely affect
the ability of the Borrower to perform any of its
obligations under the Loan Documents or the rights of
the Banks thereunder or the ability of the Banks to
exercise such rights;
(v) receipt by the Agent and the Banks of all fees
and other compensation payable to them on or prior to
the Effective Date pursuant to their agreements with
Xxxxxxx, XXXX or the Borrower; and
(w) receipt by the Agent of all documents it may
reasonably request relating to the existence of ESCO,
the Borrower and the Specified Subsidiaries, the
corporate authority for and the validity of the Loan
Documents, and any other matters relevant hereto, all
in form and substance satisfactory to the Agent.
SECTION 3.02. Each Credit Event. The obligation of
any Bank to make a Loan on the occasion of any Borrowing and
of an Issuing Bank to issue a Letter of Credit is subject to
the satisfaction of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as
required by Section 2.02 or a notice requesting
issuance of a Letter of Credit as required by
Section 2.14(c), as applicable;
(b) the fact that, immediately after such Borrowing
or the issuance of such Letter of Credit, the aggregate
outstanding principal amount of the Loans and the
Letter of Credit Exposure will not exceed the
limitations set forth in Sections 2.01 and 2.14(a);
(c) the fact that, immediately after such Borrowing
or the issuance of such Letter of Credit, no Default
shall have occurred and be continuing; and
(d) the fact that the representations and warranties
of ESCO, the Borrower and its Subsidiaries contained in
this Agreement and the other Loan Documents shall be
true on and as of the date of such Borrowing or of the
issuance of such Letter of Credit.
Each Borrowing hereunder and the issuance of each Letter of
Credit hereunder shall be deemed to be a representation and
warranty by the Borrower on the date of such Borrowing or
issuance as to the facts specified in clauses (b), (c), and
(d) of this Section.
SECTION 3.03. Amendment and Restatement. This
amendment and restatement shall become effective, and this
Agreement as in effect prior to this amendment and
restatement shall be amended and restated in its entirety in
the form of this Agreement, only upon satisfaction, on or
prior to February 15, 1997, of the following conditions
precedent (the date on which each of such conditions has
been satisfied (or waived in accordance with Section 9.05)
(such date being herein called the "Amendment and
Restatement Effective Date"):
(a) receipt by the Agent of counterparts hereof
signed by each of the parties hereto (or, in the case
of any party as to which an executed counterpart shall
not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other
written confirmation from such party of execution of a
counterpart hereof by such party);
(b) receipt by the Agent of an opinion of Xxxxx Xxxx
LLP, in form and substance satisfactory to the Agent,
covering such matters relating to this amendment and
restatement as the Agent shall reasonably request;
(c) receipt by the Agent for distribution to the
Banks of the aggregate amount of the fees due and
payable pursuant to Section 2.06(c), all in the manner
specified in Section 2.10;
(d) receipt by the Agent for distribution to the
Issuing Banks and the Banks party to this Agreement
immediately prior to the effectiveness of the amendment
and restatement of this Agreement on the Amendment and
Restatement Effective Date and prior to giving effect
to any assignments becoming effective on such date of
the aggregate amount accrued to the Amendment and
Restatement Effective Date of the commitment fees
referred to in Section 2.06 and of the fees referred to
in Section 2.14(f), all in the manner specified in
Section 2.10 (the amounts of such fees and the
distribution thereof to be in accordance with the
interests of the Issuing Banks and such Banks hereunder
immediately prior to the effectiveness of the amendment
and restatement of this Agreement on the Amendment and
Restatement Effective Date and any assignments becoming
effective on such date);
(e) any Loans outstanding immediately prior to the
effectiveness of the amendment and restatement of this
Agreement on the Amendment and Restatement Effective
Date shall have been prepaid, together with accrued
interest thereon and any amount owed as a result of
such prepayment pursuant to Section 2.11 (unless such
amount owed is otherwise waived by the Banks); provided
that the foregoing shall not prejudice the Borrower's
right to finance such prepayment with the proceeds of
Borrowings hereunder, subject to the terms and
conditions hereof, on the Amendment and Restatement
Effective Date;
(f) as of the Amendment and Restatement Effective
Date and after giving effect to this Agreement, (i) no
Default shall have occurred and be continuing and
(ii) the representations and warranties of ESCO, the
Borrower and its Subsidiaries contained in this
Agreement and the other Loan Documents shall be true on
and as of such date;
(g) receipt by the Security Agent of a duly completed
and executed Perfection Certificate, dated as of the
Amendment and Restatement Effective Date and
substantially in the form of Exhibit I hereto;
(h) receipt by the Security Agent of copies of each
document (including each Uniform Commercial Code
financing statement), if any, required by law or
reasonably requested by the Security Agent to be filed,
registered or recorded in order to create in favor of
the Security Agent for the benefit of the Banks a
valid, legal and perfected security interest in or lien
on all of the collateral that is the subject of the
Security Agreement and with respect to which the lien
thereon, or security interest therein, has not been
previously perfected;
(i) the fact that the Required Banks shall not have
advised the Agent that, in their judgment, there shall
have occurred a material adverse change in the
business, assets, operations, prospects or condition,
financial or otherwise, of ESCO, the Borrower and the
Specified Subsidiaries, taken as a whole, since
September 30, 1996;
(j) receipt by the Agent of all documents it may
reasonably request relating to any matter relevant to
this Agreement, including such evidence as it may
request as to the perfection and first-priority status
of each security interest and Lien created or intended
to be created by the Security Documents and such
documents as it deems necessary in order to amend or
modify any of the Security Documents to reflect the
changes made pursuant to this amendment and
restatement, all in form and substance satisfactory to
the Agent and the Banks;
(k) receipt by the Agent for the account of each Bank
of a duly executed Note or Notes, dated on or before
the Amendment and Restatement Effective Date and
complying with the provisions of Section 2.03; and
(l) consummation of the Filtertek Acquisition on the
terms and conditions set forth in the Filtertek
Acquisition Documents, without any material amendment
to, modification of, or waiver under, any of the
Filtertek Acquisition Documents previously delivered to
the Banks (except such as have been approved by the
Required Banks), and receipt by the Agent of all
documents required to be delivered pursuant to Section
5.08 resulting from the creation of any new
Subsidiaries in connection with the Filtertek
Acquisition.
The Agent shall promptly notify the Borrower and the Banks
of the effectiveness of this amendment and restatement of
this Agreement, and such notice shall be conclusive and
binding on all parties hereto. Each of the parties hereto
agrees that, as of the Amendment and Restatement Effective
Date, each Bank shall be deemed to have assigned a
proportionate part of its rights and obligations under this
Agreement and the Notes to the other Banks to the extent
necessary such that the Commitments of the Banks as of the
Amendment and Restatement Effective Date shall be as set
forth in Schedule 1 hereto and the participation of each
Bank in any outstanding Letters of Credit shall be
proportionate to its pro rata share of the Working Capital
Commitments, and the Banks agree to assume, as of the
Amendment and Restatement Effective Date, such rights and
obligations to such extent.
On and after the Amendment and Restatement Effective
Date, all Letters of Credit issued prior to such date which
remain outstanding on such date shall continue to constitute
"Letters of Credit" for all purposes of this Agreement and
the other Loan Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of ESCO and the Borrower represents and warrants
that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery
and performance by each of ESCO, the Borrower and the
Specified Subsidiaries of this Agreement and the other Loan
Documents to which it is or is to be a party and the
consummation of the Financing Transactions and, to the
extent involving ESCO, the Borrower or any Specified
Subsidiary, the other Transactions and the Filtertek
Acquisition are within its corporate powers, have been duly
authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any Governmental
Authority (other than such as have been duly taken or made)
and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the
certificate of incorporation or by-laws of ESCO, the
Borrower or any Specified Subsidiary or of any agreement,
judgment, injunction, order, decree or other instrument
binding upon ESCO, the Borrower or any Specified Subsidiary
or result in the creation or imposition of any Lien (other
than the Liens of the Security Documents) on any asset of
ESCO, the Borrower or any of its Subsidiaries, in each case
both before and after giving effect to the Transactions and
consummation of the Filtertek Acquisition.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of each of ESCO
and the Borrower and the other Loan Documents, when executed
and delivered in accordance with this Agreement, will
constitute valid and binding obligations of each of ESCO,
the Borrower and the Specified Subsidiaries party thereto,
in each case enforceable in accordance with its terms.
SECTION 4.04. Financial Information. (a) The
consolidated and consolidating balance sheets of ESCO, the
Borrower and its Consolidated Subsidiaries as of
September 30, 1996 and 1995, and the related consolidated
and consolidating statements of income and cash flows for
each of the years in the two-year period ended September 30,
1996, reported on by KPMG Peat Marwick and delivered to each
of the Banks pursuant to Section 5.01(a), fairly present, in
conformity with generally accepted accounting principles,
the financial position of ESCO, the Borrower and its
Consolidated Subsidiaries as of such dates and the results
of their operations and cash flows for such years.
(b) Since September 30, 1996, there has been no
material adverse change in the business, assets, operations,
prospects or condition, financial or otherwise, of the
Specified Subsidiaries or of ESCO, the Borrower and its
Consolidated Subsidiaries, in each case considered as a
whole.
SECTION 4.05. Litigation. There is no
(i) injunction, stay, decree or order of any Governmental
Authority, (ii) Governmental Review or (iii) except as
disclosed in Schedule 4.05, action, suit or proceeding
pending against, or to the knowledge of ESCO or the Borrower
threatened against or affecting, Emerson, ESCO, the Borrower
or any of its Subsidiaries before any court or arbitrator or
any governmental body, agency or official in which there is
a reasonable possibility of an adverse decision, which in
any such case could have a Material Adverse Effect or which
in any manner draws into question the validity or
enforceability of the Distribution Agreement, this Agreement
or the other Loan Documents.
SECTION 4.06. Compliance with ERISA. Each member of
the ERISA Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Internal Revenue
Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code, and has not incurred
any liability to the PBGC or a Plan under Title IV of ERISA
other than a liability to the PBGC for premiums under
Section 4007 of ERISA.
SECTION 4.07. Taxes. ESCO, the Borrower and its
Subsidiaries have filed or caused to be filed all United
States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid
or caused to be paid all taxes shown to be due on such
returns or pursuant to any assessment received by ESCO, the
Borrower or any Subsidiary, except where the same may be
contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of ESCO, the
Borrower and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of ESCO and the
Borrower, adequate.
SECTION 4.08. Subsidiaries. Each of ESCO and the
Borrower's corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted. As of the Amendment and
Restatement Effective Date, the only direct Subsidiary of
ESCO shall be the Borrower and the only Subsidiaries of the
Borrower shall be the Specified Subsidiaries and FSI, each
of which shall be a Wholly-Owned Consolidated Subsidiary.
SECTION 4.09. Not an Investment Company. Neither
ESCO nor the Borrower is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 4.10. Compliance with Laws. Neither ESCO,
the Borrower nor any of the Subsidiaries is in violation of
any material law, rule or regulation, or in default with
respect to any material judgment, writ, injunction or decree
applicable to it of any Governmental Authority.
SECTION 4.11. Agreements. (a) Neither ESCO, the
Borrower nor any of the Subsidiaries is a party to any
agreement or instrument or subject to any corporate
restriction that has resulted or could result in a Material
Adverse Effect. Neither ESCO, the Borrower nor any of the
Subsidiaries is a party to any agreement or instrument or
subject to any corporate restriction that restricts or
impairs (i) the ability of ESCO, the Borrower and its
Subsidiaries to grant to the Security Agent Liens on any of
their assets to secure the Obligations or (ii) the ability
of any Subsidiary to pay dividends on its capital stock.
(b) Neither ESCO, the Borrower nor any of the
Subsidiaries is in default in any manner under any provision
of any indenture or other agreement or instrument evidencing
Debt, or (except as disclosed in Schedule 4.05) any other
agreement or instrument to which it is a party or by which
it or any of its properties or assets are or may be bound
(including any Exposed Government Contract), where such
default could result in a Material Adverse Effect.
SECTION 4.12. Federal Reserve Regulations. Neither
ESCO, the Borrower nor any of the Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing
or carrying Margin Stock.
SECTION 4.13. Disclosure. All information
heretofore furnished by ESCO, the Borrower or any Subsidiary
to the Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby
was, and all such information hereafter furnished by ESCO,
the Borrower or any Subsidiary to the Agent or any Bank will
be, true and accurate in all material respects or based on
reasonable estimates on the date as of which such
information is stated or certified. ESCO and the Borrower
have disclosed to the Banks in writing any and all facts
known to any officer of ESCO or the Borrower which
materially and adversely affect or may materially and
adversely affect (to the extent ESCO and the Borrower can
now reasonably foresee) the business, financial position or
results of operations of ESCO, the Borrower and its
Consolidated Subsidiaries, considered as a whole. The
Borrower has heretofore provided the Banks with certain
projected financial information which ESCO and the Borrower
believe to have been prepared in a reasonable manner and
based on reasonable assumptions with respect to ESCO's
business; provided that no representation is made by ESCO or
the Borrower that the future results of ESCO will equal
those set forth in such projected financial information.
SECTION 4.14. Solvency. After giving effect to the
Transactions, (a) the fair salable value of each of the
assets of ESCO, the Borrower and the Specified Subsidiaries
will exceed the amount that will be required to be paid on
or in respect of its existing debts and other liabilities
(including contingent liabilities) as they mature; (b) the
assets of each of ESCO, the Borrower and the Specified
Subsidiaries will not constitute unreasonably small capital
to carry out its business as conducted or as proposed to be
conducted; and (c) none of ESCO, the Borrower and the
Specified Subsidiaries will intend to, or will believe that
it will, incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of
cash to be received by it and the amounts to be payable on
or in respect of its obligations).
SECTION 4.15. Governmental Approvals. As of the
Effective Date, all consents and approvals of, and filings
and registrations with, and all other actions in respect of,
all Governmental Authorities or any other Person required in
order to consummate the Transactions were obtained, given,
filed or taken and shall be in full force and effect, other
than the declaration by the Securities and Exchange
Commission of the effectiveness of the Borrower's Form 10
Registration Statement filed in connection with the
Transactions.
SECTION 4.16. Security Interests. (a) The security
interests created in favor of the Security Agent under the
Pledge Agreement will at all times after the execution and
delivery of the Pledge Agreement constitute valid, first-
priority, perfected security interests in the Pledged
Securities (as defined therein), and such Pledged Securities
will be subject to no Liens or security interests of any
other Person. No filings or recordings are or will be
required in order to perfect the security interests in the
Pledged Securities created under the Pledge Agreement.
(b) Upon the completion of the filings and
recordation referred to in clauses (h) and (j) of
Section 3.01 and in clause (h) of Section 3.03 in the filing
and recording offices specified in the Perfection
Certificates referred to in clause (g) of Section 3.01 and
clause (g) of Section 3.03, the security interests created
in favor of the Security Agent for the benefit of the Banks
under the Security Agreement and Mortgages will constitute
valid, perfected security interests in the collateral
subject thereto, subject only to Liens permitted by the Loan
Documents.
SECTION 4.17. Employment and Management Agreements.
Except as disclosed in Schedule 4.17, as of the Amendment
and Restatement Effective Date, there are no (a) employment
agreements covering management employees of ESCO, the
Borrower or any of the Specified Subsidiaries, (b)
agreements for management or consulting services to which
ESCO, the Borrower or any of the Specified Subsidiaries is a
party or by which it is bound (other than for consulting
services in the ordinary course of business), or
(c) collective bargaining agreements or other labor
agreements covering any of the employees of ESCO, the
Borrower or any of the Specified Subsidiaries.
SECTION 4.18. Capitalization. As of the Effective
Date, the authorized capital stock of ESCO consists of
50,000,000 shares of common stock, par value $0.01 per share
(the "ESCO Common Stock"), and 10,000,000 shares of
preferred stock (the "ESCO Preferred Stock"), of which
approximately 11,150,000 shares of ESCO Common Stock and no
shares of ESCO Preferred Stock were issued and outstanding
on the Effective Date. All such outstanding shares of ESCO
Common Stock shall be fully paid and nonassessable and shall
be owned beneficially and of record as described in the
Information Statement. All the outstanding shares of
capital stock of the Borrower are owned beneficially and of
record by ESCO. There are no outstanding subscriptions,
options, warrants, calls, rights (including preemptive
rights) or other agreements or commitments of any nature
relating to any capital stock of ESCO or the Borrower,
except as described in the Information Statement with
respect to capital stock of ESCO and except for options to
acquire up to 2,390,000 shares of ESCO Common Stock
authorized by the Board of Directors of ESCO to be granted
to members of the management of the Borrower or a Specified
Subsidiary.
SECTION 4.19. Environmental Matters. Each of ESCO,
the Borrower and the Subsidiaries has complied in all
material respects with all Federal, state, local and other
statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to
environmental regulation or control. None of ESCO, the
Borrower and the Subsidiaries has received notice of any
failure so to comply which alone or together with any other
such failure could result in a Material Adverse Effect. The
facilities of ESCO, the Borrower and the Subsidiaries do not
manage or handle any hazardous wastes, hazardous substances,
hazardous materials, toxic substances or toxic pollutants,
as those terms are used in the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act of 1986, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act, the
Clean Air Act or the Clean Water Act, in violation thereof
or in violation of any regulations promulgated pursuant
thereto or of any other applicable law where such violation
could result, individually or together with other
violations, in a Material Adverse Effect.
ARTICLE V
COVENANTS
ESCO and the Borrower jointly and severally agree
that, so long as any Bank has any Commitment hereunder or
any amount payable under any Loan Document remains unpaid or
any Letter of Credit remains outstanding:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event within 90
days after the end of each fiscal year of ESCO,
consolidated and consolidating balance sheets of ESCO,
the Borrower and its Consolidated Subsidiaries as of
the end of such fiscal year and the related
consolidated and consolidating statements of income and
cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous
fiscal year, all reported on by KPMG Peat Marwick or
other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 45
days after the end of each of the first three quarters
of each fiscal year of ESCO, consolidated balance
sheets of ESCO, the Borrower and its Consolidated
Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash
flows for such quarter and for the portion of ESCO's
fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion
of ESCO's previous fiscal year, all certified (subject
to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles
and consistency by the chief financial officer or the
chief accounting officer of ESCO;
(c) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer or
the chief accounting officer of ESCO (i) setting forth
in reasonable detail a list of Investments in order to
establish whether ESCO was in compliance with
Section 5.16 and the calculations required to establish
whether ESCO was in compliance with the requirements of
Sections 5.21, 5.22 and 5.23 on the date of such
financial statements, (ii) stating whether any Default
exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof
and the action which ESCO and the Borrower are taking
or propose to take with respect thereto and
(iii) stating whether, since the date of the most
recent financial statements previously delivered
pursuant to this Section, there has been any material
change in the generally accepted accounting principles
applied in the preparation of such statements and, if
so, describing such change;
(d) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a
statement of the firm of independent public accountants
which reported on such statements (i) whether anything
has come to their attention to cause them to believe
that any Default existed on the date of such statements
and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, (i) a Receivables aging report broken down by
division with respect to the Receivables outstanding as
of the last day of the immediately preceding quarter
and (ii) a report setting forth the twenty largest
Receivables obligors with respect to all Receivables
outstanding as of the last day of the immediately
preceding quarter, in each case, together with an
attached certificate of the chief financial officer or
the chief accounting officer of ESCO certifying as to
the accuracy of such report;
(f) simultaneously with the delivery of each set of
financial statements referred to in clause (a), a
report setting forth the aggregate dollar amount of
Receivables written-off as uncollectible during the
immediately preceding fiscal year, together with an
attached certificate of the chief financial officer,
the chief accounting officer or the treasurer of ESCO
certifying as to the accuracy of such report;
(g) within 20 days after the last day of each
calendar month, a Borrowing Base Certificate as of such
last day certified by the chief financial officer or
chief accounting officer of ESCO (which certificate the
Agent and the Security Agent shall have the right to
audit at the expense of the Borrower); provided that
Schedules II and III to each Borrowing Base Certificate
shall be delivered only to the Security Agent;
(h) prompt notice of (i) any default or alleged
default under the Distribution Agreement or any claim
or request by Xxxxxxx for any payment or collateral
thereunder, (ii) any Governmental Reviews initiated or
threatened and (iii) any notice received by ESCO, the
Borrower or any Subsidiary regarding the termination or
possible termination of any Exposed Government Contract
(or any other material contract) or alleging any
default thereunder or requesting the return of progress
payments made thereunder;
(i) prompt notice of each Prepayment Event, including
a reasonably detailed calculation of the Net Cash
Proceeds therefrom;
(j) within five days after any officer of ESCO or the
Borrower obtains knowledge of any Default, if such
Default is then continuing, a certificate of the chief
financial officer or the chief accounting officer of
ESCO setting forth the details thereof and the action
which ESCO and the Borrower are taking or propose to
take with respect thereto;
(k) promptly upon the mailing thereof to the
shareholders of ESCO generally, copies of all financial
statements, reports and proxy statements so mailed;
(l) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits
thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) which ESCO shall have filed with
the Securities and Exchange Commission;
(m) if and when any member of the ERISA Group
(i) gives or is required to give notice to the PBGC of
any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV
of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such
reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of
such notice; or (iii) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate or
appoint a trustee to administer any Plan, a copy of
such notice;
(n) promptly upon delivery thereof to Xxxxxxx, copies
of any and all financial plans and projections
delivered pursuant to Section F-4(a) or (b) of
Exhibit F to the Distribution Agreement, to the extent
not duplicative of information previously delivered to
the Banks;
(o) promptly upon the formation of any Restricted
Subsidiary or Permitted Joint Venture, a written
description thereof in sufficient detail satisfactory
to the Banks and in the case of a Permitted Joint
Venture, copies of the joint-venture agreement and
related documents (including such documents as shall be
necessary or as any Bank shall request in order for
such Bank to make its own determination that such
Permitted Joint Venture is in compliance with the
conditions contained in the definition thereof and the
other restrictions pertaining thereto contained in this
Agreement); and
(p) from time to time such additional information
regarding the financial position or business of ESCO,
the Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request; provided,
that notwithstanding this or any other provision of
this Agreement or any other Loan Document (i) any Bank
which is a "foreign interest", as defined in relevant
regulations of the Department of Defense, shall not
require, will not have, and will be effectively
excluded from, access to any and all classified
information in the possession of any cleared facility
of ESCO, the Borrower or any Specified Subsidiary, in
each case to the extent prohibited by regulations of
the Department of Defense, and (ii) the access of any
and all of the Banks, their agents and representatives
to any information shall at all times be subject to all
laws and regulations of the United States with respect
to national security and classified information,
including without limitation Section 721 of Title VII
of the Defense Production Act of 1950, as amended by
Section 5021 of the Omnibus Trade and Competitiveness
Act of 1988 and the regulations thereunder.
SECTION 5.02. Payment of Obligations. ESCO and the
Borrower will pay and discharge, and will cause each
Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities,
including, without limitation, tax liabilities, except where
the same may be contested in good faith by appropriate
proceedings, and will maintain, and will cause each
Subsidiary to maintain, in accordance with generally
accepted accounting principles, appropriate reserves for the
accrual of any of the same.
SECTION 5.03. Maintenance of Property; Insurance.
(a) ESCO and the Borrower will keep, and will cause each
Subsidiary to keep, all property useful and necessary in its
business in good working order and condition, ordinary wear
and tear excepted.
(b) ESCO and the Borrower will maintain, and will
cause each Subsidiary to maintain, (i) physical damage
insurance on all real and personal property on an all risks
basis (including the perils of flood and quake), covering
the repair and replacement cost of all such property and
consequential loss coverage for business interruption and
extra expense, (ii) comprehensive general liability
insurance (including products/completed operations liability
coverage) in an amount not less than $200,000,000 per
occurrence, in the case of aircraft product liability
insurance, and in an amount not less than $25,000,000 per
occurrence in all other cases, and (iii) such other
insurance coverage in such amounts and with respect to such
risks as shall be required by the terms of any other Loan
Document or as the Required Banks may reasonably request.
All such insurance shall be provided by insurers having an
A.M. Best policyholders rating of not less than B+ or such
other insurers as the Required Banks may approve in writing;
provided that, as long as the Borrower obtains insurance
through Xxxxxxx, Xxxxxxx shall be an acceptable insurer to
the extent of its self-insurance levels unless and until the
Required Banks notify the Borrower that Xxxxxxx shall no
longer be an acceptable insurer due to a material adverse
change in its financial condition. The Borrower will
deliver to the Banks (i) on the date of the first Borrowing
hereunder, a certificate dated such date showing the amount
of coverage as of such date, (ii) upon request of any Bank
through the Agent from time to time full information as to
the insurance carried, (iii) within five days of receipt of
notice from any insurer a copy of any notice of cancellation
or material change in coverage from that existing on the
date of this Agreement and (iv) forthwith, notice of any
cancellation or nonrenewal of coverage by the Borrower.
SECTION 5.04. Conduct of Business and Maintenance of
Existence. ESCO and the Borrower will continue, and will
cause each Subsidiary to continue, to engage in business of
the same general type as now conducted by the Specified
Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each Subsidiary to
preserve, renew and keep in full force and effect, their
respective corporate existences and their respective rights,
privileges and franchises necessary or desirable in the
normal conduct of business; provided that the foregoing
shall not prohibit the liquidation of any Subsidiary or the
merger or consolidation of any Subsidiary with any other
Person if such liquidation, merger or consolidation is
expressly permitted by Section 5.13. ESCO's only business
shall be the ownership of the Borrower's capital stock and
activities incidental thereto.
SECTION 5.05. Compliance with Laws. ESCO and the
Borrower will comply, and cause each Subsidiary to comply,
in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of
Governmental Authorities (including, without limitation,
ERISA and the rules and regulations thereunder) except where
the necessity of compliance therewith is contested in good
faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and
Records. ESCO and the Borrower will keep, and will cause
each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities; and will permit, and will cause each Subsidiary
to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records (except to the extent
prohibited by applicable law) and to discuss their
respective affairs, finances and accounts with their
respective officers, employees and independent public
accountants, all at such reasonable times and as often as
may reasonably be desired.
SECTION 5.07. Fiscal Year. ESCO will cause its
fiscal year to end on September 30.
SECTION 5.08. Further Assurances. (a) ESCO and the
Borrower will execute any and all further documents,
financing statements, agreements and instruments, and take
all further action, which may be required under applicable
law, or which the Required Banks or the Agent or Security
Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order
to grant, preserve, protect and perfect the validity and
first priority of the security interests created or intended
to be created by the Security Documents, including, without
limitation, such actions as shall be requested (i) in order
to amend or modify any of the Security Documents to reflect
the changes made pursuant to this amendment and restatement
or any future amendment, extension or modification to this
Agreement or (ii) in order to effectuate the assignment in
accordance with the Assignment of Claims Act of any
Receivables intended to be included in the Borrowing Base as
Eligible Government Receivables. In addition, from time to
time (including promptly following the Filtertek
Acquisition), ESCO and the Borrower will, at the Borrower's
cost and expense, promptly secure the Obligations by
pledging or creating, or causing to be pledged or created,
first priority perfected security interests with respect to
such assets and properties of ESCO, the Borrower and the
Subsidiaries as the Agent or the Required Banks shall
reasonably designate, including, without limitation, if the
Required Banks permit an additional Subsidiary under
Section 5.09, or if an additional Subsidiary is acquired as
contemplated by clause (f) of Section 5.16, causing such
Subsidiary to become a party to the Guarantee Agreement and
the Security Agreement and pledging (or causing to be
pledged) the capital stock of such Subsidiary under the
Pledge Agreement; provided, that ESCO and the Borrower shall
not be required to cause any Subsidiary to pledge or create
a security interest in its assets or properties in violation
of any applicable law or regulation; provided further, that
the Borrower shall not be required to pledge or create a
security interest in any of the assets of SFL, FBV, FGMBH,
FSA, Filtrotec or PPD (including the capital stock of PPD),
nor shall SFL, FBV, FGMBH, FSA, Filtrotec or PPD be required
to become a party to the Guarantee Agreement or the Security
Agreement, and the pledge by the Borrower of the capital
stock of SFL, and the pledge by Filtertek of the capital
stock of FBV, FGMBH, FSA and Filtrotec shall be limited to
65% of each class of such capital stock. Such security
interests and Liens will be created under security
agreements, mortgages, deeds of trust and other instruments
and documents in form and substance reasonably satisfactory
to the Required Banks, and ESCO and the Borrower shall
deliver or cause to be delivered to the Banks all such
instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Required Banks
shall reasonably request to evidence compliance with this
Section 5.08. ESCO and the Borrower agree to provide such
evidence as the Required Banks shall reasonably request as
to the perfection and first priority status of each such
security interest and Lien.
(b) The Borrower shall deliver to the Security Agent
(at the Borrower's cost and expense), with respect to each
property identified on Schedule 3.01(j), (i) within 90 days
after the Effective Date, a title report and copies of each
instrument of record identified therein as a Lien with
respect to such property, (ii) on or prior to October 31,
1991, an ALTA lender's extended coverage title insurance
policy from a reputable title insurance company with such
endorsements as the Security Agent may reasonably require,
providing coverage to the Security Agent (for the benefit of
the Banks) in an amount equal to the approximate fair market
value of such property (both land and improvements),
insuring the Mortgage thereon as a valid, first priority
Lien on such property, free and clear of Liens (other than
Liens permitted under the Loan Documents), and (iii) within
90 days after the Effective Date, a current survey of such
property, certified to the Security Agent and the title
company issuing the insurance policy obtained under
clause (ii) above, by a surveyor licensed in the state where
such property is located, showing no state of facts that
materially and adversely affect the Lien of the applicable
Mortgage. In the event that any title report or survey so
delivered discloses any information that, in the reasonable
opinion of the Security Agent, materially impairs the Lien
of any Mortgage, ESCO and the Borrower shall take, or cause
to be taken, such action as the Security Agent may
reasonably request in order to cure such impairment and
grant, preserve, protect and perfect the Lien created or
intended to be created by such Mortgage.
(c) In the event that the condition specified in
subclause (i) of clause (i) of Section 3.01 shall not have
been fully satisfied prior to the Effective Date, ESCO and
the Borrower shall, within 60 days after the Effective Date,
deliver to the Security Agent (at the Borrower's cost and
expense) all searches, copies of financing statements and
evidence contemplated thereby and not delivered prior to the
Effective Date. In the event that the foregoing materials
disclose any Lien not permitted under the Loan Documents,
the Borrower shall promptly take such remedial action as
shall be required by the Security Agent, including
enforcement of Xxxxxxx'x undertaking referred to in
subclause (ii) of clause (i) of Section 3.01.
SECTION 5.09. Subsidiaries; Partnerships. ESCO will
not have any direct Subsidiaries other than the Borrower and
any Restricted Subsidiaries. The Borrower will not have any
direct or indirect Subsidiaries, other than the Specified
Subsidiaries and any Subsidiaries resulting from any
Investments made in accordance with clause (f) of
Section 5.16 and any Restricted Subsidiaries, all of which
shall be direct Subsidiaries (except that (i) PPD shall be a
direct Subsidiary of SFL, (ii) Comtrak shall be a direct
Subsidiary of SEI, (iii) EMC Test Systems shall be a limited
partnership as described in the definition of "EMC Test
Systems Reorganization", (iv) Rantec shall be a direct
Subsidiary of Rantec Holding as described in the definition
of "EMC Test Systems Reorganization", (v) Rantec Commercial
shall be a direct Subsidiary of Rantec as described in the
definition of "EMC Test Systems Reorganization", (vi) FBV,
FGMBH, Filtrotec and FDPR shall be direct subsidiaries of
Filtertek and (vii) FSA shall be a subsidiary of Filtertek
and FBV). Neither ESCO nor the Borrower will, and they will
not permit any of their Subsidiaries to, enter into any
partnership or joint venture other than EMC Test Systems and
a Permitted Joint Venture. Notwithstanding anything to the
contrary contained in this Section (i) Uniexcel shall be a
partially-owned Subsidiary of SFL and (ii) Filtertek de
Puerto Rico S.A. may issue Class B Common Stock to certain
of its senior executives.
SECTION 5.10. Amendment of Certain Documents.
Neither ESCO nor the Borrower will permit any amendment or
modification to be made to, or any waiver of its rights or
the rights of any Subsidiary under, any Transaction Document
or any Filtertek Acquisition Document unless, in the
reasonable judgment of the Required Banks, such amendment,
modification or waiver does not adversely affect the
Borrower or the Banks.
SECTION 5.11. Debt; Preferred Stock; Letters of
Credit. (a) Neither ESCO nor the Borrower will, nor will
they permit any of their Subsidiaries to, incur or at any
time be liable with respect to any Debt, except:
(i) Debt outstanding under this Agreement and the
other Loan Documents;
(ii) Debt identified in Schedule 5.11 hereto
outstanding on the Effective Date (but not any
renewals, extensions, refinancings or refundings of
such Debt);
(iii) Debt owed by ESCO or any Wholly-Owned
Consolidated Subsidiary of the Borrower to the Borrower
(other than Debt owed by Xxxxxxxxx to the Borrower
consisting of obligations of Xxxxxxxxx in respect of
the industrial revenue bonds referred to in clause (vi)
below) or by the Borrower to any Wholly-Owned
Consolidated Subsidiary, and permitted under clause (b)
of Section 5.16;
(iv) Debt consisting of the obligations of the
Borrower or any Subsidiary under any Rate Protection
Agreement that is a foreign currency forward exchange
agreement or a foreign currency option contract, but
only to the extent that such Rate Protection Agreement
is entered into in order to satisfy the requirements of
clause (iii) of Section 2.14(a) or (A) in connection
with a contract under which a Subsidiary is to receive
or make payments in, or valued by reference to, a
foreign currency and (B) for the purpose of protecting
against fluctuations in exchange rates by providing for
the exchange of such foreign currency for Dollars in
the approximate amounts and at the approximate times
that payments are anticipated to be received or made
under such contract;
(v) Debt consisting of loans made by The Boatmen's
National Bank of St. Louis to Southwest under the "MO
BUCKS for More Jobs" program of the State of Missouri;
provided that the aggregate principal amount of Debt at
any time outstanding under this clause (v) shall not
exceed $7,500,000;
(vi) Debt consisting of obligations of Xxxxxxxxx in
respect of industrial revenue bonds issued and loans
provided by the State of New York or political
subdivisions thereof in connection with the
construction of Xxxxxxxxx'x new Antenna Technology
Center in Greenlawn, New York, and the renovation of
its existing facilities in Greenlawn, New York;
provided that the aggregate principal amount of Debt at
any time outstanding under this clause (vi) shall not
exceed $6,250,000;
(vii) Debt evidenced by the PTI Note;
(viii) Debt consisting of obligations as lessee which
are capitalized in accordance with generally accepted
accounting principles and are entered into in the
ordinary course of business of such lessee; provided
that the aggregate principal amount of Debt at any time
outstanding under this clause (viii) shall not exceed
$2,500,000;
(ix) upon and after consummation of the SFL
Acquisition, the SFL Debt and PPD Debt; and
(x) unsecured Debt of ESCO in respect of debt
securities issued in a public offering registered under
the Securities Act of 1933 and convertible into shares
of common stock of ESCO; provided that such Debt does
not mature, or require any scheduled repayment of
principal, on or prior to September 30, 2000.
(b) Neither ESCO nor the Borrower will, nor will
they permit any of their Subsidiaries to, issue any
additional capital stock other than in the case of ESCO, (i)
additional shares of its common stock and (ii) shares of its
preferred stock issued in a public offering registered under
the Securities Act of 1933 and convertible into shares of
common stock of ESCO; provided that any such preferred stock
shall not be subject to any mandatory redemption or
repurchase provisions that would require redemption or
repurchase thereof on or prior to September 30, 2000.
(c) Neither ESCO nor the Borrower will, nor will
they permit any of their Subsidiaries to, incur or at any
time be liable with respect to any obligation as an account
party in respect of a letter of credit, except as an account
party in respect of (i) the Letters of Credit, (ii) the
Existing LOCs, (iii) the Designated Letter of Credit and
(iv) any letter of credit issued by an issuing bank that
holds as collateral therefor a Letter of Credit in an amount
equal to the amount of such letter of credit.
(d) ESCO and the Borrower shall not, nor shall they
permit any of their Subsidiaries to, (i) agree to any
amendment or modification of the PTI Note or any of the
terms or provisions of any agreement or other instrument
governing or evidencing any of the Debt evidenced thereby or
(ii) directly or indirectly repurchase or prepay, in whole
or in part, any such Debt.
SECTION 5.12. Restricted Payments. Neither ESCO nor
the Borrower will, nor will they permit any of their
Subsidiaries to, declare or make or agree to make, directly
or indirectly, any Restricted Payment, except (i) the
Borrower may pay a cash dividend to ESCO, and ESCO may pay a
cash dividend to Xxxxxxx, on the Effective Date in the
aggregate amount of $20,000,000; (ii) ESCO may pay cash
dividends if, after giving effect to any such dividend,
(a) no Default shall have occurred and be continuing and
(b) the aggregate, cumulative dividends paid pursuant to
this clause (ii) does not exceed during any fiscal year 25%
of Consolidated Net Income for the next preceding fiscal
year of ESCO plus additional dividends not to exceed, on a
cumulative basis commencing with the Xxxxxxxxx Closing Date,
the Restricted Payment Amount less any amounts paid for
stock repurchases based on the Restricted Payment Amount
pursuant to clause (iii) below; (iii) ESCO may purchase
shares of its common stock or trust receipts representing
such shares if, after giving effect to such purchase, (a) no
Default shall have occurred and be continuing and
(b) aggregate Restricted Payments pursuant to this
clause (iii) shall not exceed $5,000,000 during the 12-month
period ending on the date of such purchase and shall not
exceed $10,000,000 on a cumulative basis commencing with
September 30, 1995, plus additional stock repurchases not to
exceed, on a cumulative basis commencing with the Xxxxxxxxx
Closing Date, the Restricted Payment Amount less any amounts
paid as cash dividends based on the Restricted Payment
Amount pursuant to clause (ii) above; (iv) the Borrower may
pay cash dividends to ESCO in such amounts and at such times
as shall be necessary to permit ESCO to make Restricted
Payments permitted to be paid by it hereunder and to pay
expenses incurred in the ordinary course of business;
(v) the foregoing shall not prohibit the payment of
Subordinated Obligations to the extent not prohibited by the
Subordination Agreement or Section 5.20; and (vi) Filtertek
de Puerto Rico S.A. may pay dividends on its Class B Common
Stock to its senior executive officers in an amount not to
exceed $500,000 in any fiscal year.
SECTION 5.13. Mergers, Consolidations, Acquisitions
and Sales of Assets. (a) Neither ESCO nor the Borrower
will, nor will they permit any of their Subsidiaries to,
merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or
purchase or otherwise acquire (in one transaction or a
series of transactions) any material assets, except that
(i) the foregoing shall not prohibit the transfer to the
Borrower of the Specified Subsidiaries and other assets
pursuant to the Distribution Agreement, (ii) the foregoing
shall not prohibit the acquisition of assets in the ordinary
course of business, (iii) if at the time thereof and after
giving effect thereto no Default shall have occurred and be
continuing, the Borrower may acquire for cash consideration
(not to exceed, on a cumulative basis commencing with the
Amendment and Restatement Effective Date, the excess of
(A) $10,000,000 over (B) the aggregate cumulative amount of
Investments made in reliance upon clause (f) of
Section 5.16) assets constituting a business of the same
general type as now conducted by the Specified Subsidiaries
(as determined in the reasonable judgment of the Borrower's
Board of Directors by a resolution, with a certified copy
thereof delivered to the Agent), subject to 30 days' prior
written notice to the Banks of such acquisition describing
the material terms of such acquisition, the assets to be
acquired and any actions necessary in order to perfect liens
on such assets under the Security Documents, provided that
this clause (iii) shall not be construed as permitting or
restricting acquisitions of businesses through the
acquisition of capital stock, which shall be subject to
Section 5.16, and (iv) if at the time thereof and
immediately after giving effect thereto no Default shall
have occurred and be continuing (A) any Wholly-Owned
Consolidated Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving
corporation, (B) any Wholly-Owned Consolidated Subsidiary
may merge into or consolidate with any other Wholly-Owned
Consolidated Subsidiary in a transaction in which the
surviving entity is a Wholly-Owned Consolidated Subsidiary
and no person other than the Borrower or a Wholly-Owned
Consolidated Subsidiary receives any consideration and (C)
the EMC Test Systems Reorganization and the Filtertek
Acquisition may be consummated.
(b) Neither ESCO nor the Borrower will, nor will
they permit any of their Subsidiaries to, sell, assign,
transfer or otherwise dispose of any asset, including any
stock, without the prior written consent of the Required
Banks to such sale, assignment, transfer or disposition and
the terms thereof; provided, however, that the foregoing
shall not prohibit (1) the sale of (i) inventory in the
ordinary course of business, (ii) used or surplus equipment
in the ordinary course of business, (iii) the Scheduled
Properties and (iv) other tangible personal property and
real property not exceeding $10,000,000 in fair market value
in any fiscal year of ESCO; provided further, however, that
such sales shall be made for fair market value and solely
for cash consideration, (2) the transfer of all the issued
and outstanding capital stock of DCS and Vacco to the
Borrower by means of a dividend declared and paid by
Southwest or (3) the EMC Test Systems Reorganization or
(4) the transfer of certain assets located in Puerto Rico
from Filtertek to FDPR.
SECTION 5.14. Transactions with Affiliates. Neither
ESCO nor the Borrower will, nor will they permit any of
their Subsidiaries to, directly or indirectly, (a) make any
Investment in an Affiliate, except as expressly permitted
under Section 5.16(b), (b) sell, lease or otherwise transfer
any assets to an Affiliate, (c) purchase or acquire assets
from an Affiliate, or (d) enter into any other transaction
directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, Guarantees and
assumptions of obligations of an Affiliate); provided that
(i) the Borrower or any of its Subsidiaries may enter into
any such transaction with an Affiliate if the monetary or
business consideration arising therefrom would be
substantially as advantageous to the Borrower or such
Subsidiary as the monetary or business consideration which
would obtain in a comparable arm's length transaction with a
Person not an Affiliate, (ii) the foregoing shall not
prohibit the Transactions (including the processing of
intercompany payables and receivables with Xxxxxxx and its
subsidiaries prior to September 30, 1990, as contemplated by
Section 5.06 of the Distribution Agreement), (iii) ESCO may
Guarantee the performance of any Specified Subsidiary under
any contract entered into in the ordinary course of such
Specified Subsidiary's business requiring it to furnish
products or services to one or more third parties and
(iv) the foregoing shall not prohibit the EMC Test Systems
Reorganization.
SECTION 5.15. Sale and Lease-Back Transactions.
Neither ESCO nor the Borrower will, nor will they permit any
of their Subsidiaries to, enter into any arrangement,
directly or indirectly, with any Person whereby it shall
sell or transfer any asset, real or personal, whether now
owned or hereafter acquired, and thereafter rent or lease
such asset or other assets which it intends to use for
substantially the same purpose or purposes as the asset
being sold or transferred.
SECTION 5.16. Investments. Neither ESCO nor the
Borrower will, nor will they permit any of their
Subsidiaries to, make or acquire any Investment in any
Person other than:
(a) Temporary Cash Investments;
(b) additional Investments by the Borrower in ESCO or
any Wholly-Owned Consolidated Subsidiary (other than a
Restricted Subsidiary) or Investments by any Wholly-
Owned Consolidated Subsidiary in the Borrower; provided
that (i) such Investments are made as unsecured loans
pursuant to promissory notes duly executed by ESCO, the
Borrower or the applicable Subsidiary and pledged by
the Borrower or the applicable Subsidiary pursuant to
the Pledge Agreement, except that any such promissory
note evidencing any such loan to SFL or PPD need not be
pledged pursuant to the Pledge Agreement if the
aggregate amount of all such loans to SFL and PPD shall
not at any time exceed U.K. 2,800,000 (or its
equivalent in Dollars), exclusive of accrued interest,
(ii) the Borrower shall make such loans to ESCO only in
such amounts and at such times as shall be necessary to
permit ESCO to make Restricted Payments permitted to be
made by it hereunder and to pay expenses incurred in
the ordinary course of business and (iii) any Wholly-
Owned Consolidated Subsidiary that shall be indebted to
the Borrower in respect of any such loan shall not make
any such loan to the Borrower;
(c) if at the time thereof and after giving effect
thereto no Default shall have occurred and be
continuing, an Investment by the Borrower consisting of
the EMCO Acquisition (i) for consideration consisting
solely of (A) cash consideration not in excess of
$5,100,000 in the aggregate (which includes the amount
of all trade payables and Debt to be assumed or paid in
connection with the EMCO Acquisition) payable at the
closing of such acquisition (or from installments from
an escrow, as applicable) plus (B) an agreement to pay
an additional amount (not in excess of $5,500,000 in
the aggregate) approximately two years after such
closing based on an earn-out formula to be agreed
between the Borrower and Xxxx and (ii) otherwise on the
terms heretofore provided to the Banks; provided that
the Agent shall have received prior to such Investment
(i) a certified copy of a resolution of the Board of
Directors of the Borrower that it has, in its
reasonable judgment, determined that the businesses of
EMCO are of the same general type as now conducted by
the Specified Subsidiaries, (ii) certified copies of
all agreements entered into by the Borrower (or ESCO or
any of the Specified Subsidiaries) with the seller (or
any affiliate of the seller) in connection with the
EMCO Acquisition and (iii) notice from the Borrower
describing the assets to be acquired in connection with
the EMCO Acquisition and any actions necessary in order
to perfect Liens on such assets under the Security
Documents; provided further that, upon consummation of
the EMCO Acquisition, all outstanding shares of EMCO's
capital stock shall be pledged pursuant to the Pledge
Agreement and EMCO shall take the other actions
required to be taken by it pursuant to Section 5.08(a)
as an additional Subsidiary;
(d) additional Investments by ESCO or the Borrower in
Rantec S.A.; provided, however, that the amount of such
Investments shall not exceed 750,000 French francs
unless, prior to the making of any such Investments,
(i) Rantec S.A. shall have granted to the Security
Agent for the benefit of the Banks (pursuant to the
Security Agreement and any other Security Document as
may be necessary or appropriate) a legal, valid and
binding first priority security interest in or lien on
all its assets and all actions necessary or appropriate
in the sole judgment of the Security Agent (including
the delivery of opinions of counsel) to perfect such
security interest or lien and to assure the Agent that
such security interest or lien has been created and is
perfected under United States, French or other
appropriate law shall have been delivered to the
Security Agent and (ii) any Investment in Rantec S.A.
in excess of the above-referenced 750,000 French francs
shall be made in accordance with Section 5.16(b) above;
(e) an Investment by the Borrower consisting of the
PTI Acquisition (i) for consideration consisting solely
of (A) cash consideration not in excess of $20,000,000
in the aggregate (subject to adjustment in accordance
with the Stock Purchase Agreement dated as of
August 20, 1992, and entered into in connection
therewith) plus (B) the PTI Note with a detachable
warrant for the purchase of up to 500,000 shares of
ESCO Common Stock (or trust receipts representing such
shares) and (ii) otherwise on the terms provided to the
Banks prior to August 20, 1992; provided that the Agent
shall have received in connection with such Investment
(i) a certified copy of a resolution of the Board of
Directors of the Borrower that it has, in its
reasonable judgment, determined that the businesses of
PTI are of the same general type as now conducted by
the Specified Subsidiaries, (ii) certified copies of
all agreements entered into by the Borrower (or ESCO or
any of ESCO's Subsidiaries) with the seller (or any
affiliate of the seller) in connection with the PTI
Acquisition and (iii) notice from the Borrower
describing the assets to be acquired in connection with
the PTI Acquisition and any actions necessary in order
to perfect Liens on such assets under the Security
Documents; provided further that, upon consummation of
the PTI Acquisition, all outstanding shares of PTI's
capital stock shall be pledged pursuant to the Pledge
Agreement and PTI shall take all the other actions
required to be taken by it pursuant to Section 5.08(a)
as an additional Subsidiary;
(f) any Investment that is not otherwise permitted by
the other clauses of this Section constituting either
the LRA Acquisition or an acquisition by the Borrower
of all the outstanding capital stock of another
corporation if (i) immediately after such Investment is
made or acquired, no Default shall have occurred and be
continuing, (ii) such Investment is made solely for
cash consideration, (iii) immediately after such
Investment is made or acquired, the aggregate
cumulative amount of all Investments made in reliance
upon this clause (f) after the Amendment and
Restatement Effective Date does not exceed the excess
of (A) $10,000,000 over (B) the sum of the aggregate,
cumulative amount of consideration paid in respect of
acquisitions made in reliance upon clause (iii) of
Section 5.13(a) plus the outstanding amount of loans
made by the Borrower to SFL and PPD in reliance upon
clause (b) above, (iv) such Investment (other than the
LRA Acquisition) results in the corporation whose
capital stock is acquired becoming a Wholly-Owned
Consolidated Subsidiary that is in a business of the
same general type as now conducted by the Specified
Subsidiaries (as determined in the reasonable judgment
of the Borrower's Board of Directors by a resolution,
with a certified copy thereof delivered to the Agent),
(v) 30 days' prior written notice of such Investment is
given to the Banks describing the material terms of
such Investment, the assets to be acquired through such
Investment and any action necessary in order to perfect
Liens on such assets under the Security Documents and
(vi) all the capital stock of the corporation acquired
as a result of such Investment, including all shares of
LRA's preferred stock acquired in connection with the
LRA Acquisition, shall be pledged pursuant to the
Pledge Agreement and such corporation shall, upon such
acquisition, take all other actions required to be
taken by it pursuant to Section 5.08(a) as an
additional Subsidiary;
(g) an Investment by the Borrower consisting of the
SFL Acquisition (i) pursuant to (A) payment of cash
consideration for the shares of SFL, including related
non-competition payments and payments to guarantors, of
not more than the foreign currency equivalent of
$4,500,000 plus (B) the assumption, purchase or payment
of certain long-term debt and related accrued interest
that would constitute SFL Debt in an amount not to
exceed the foreign currency equivalent of $4,000,000
and (ii) otherwise on the terms provided to the Banks
prior to November 30, 1993; provided that the Agent
shall have received in connection with such Investment
(i) a certified copy of a resolution of the Board of
Directors of the Borrower that it has, in its
reasonable judgment, determined that the businesses of
SFL and PPD are of the same general type as now
conducted by the Specified Subsidiaries and
(ii) certified copies of all agreements entered into by
ESCO (or the Borrower or any of ESCO's Subsidiaries)
with the sellers (or any affiliate of the sellers) in
connection with the SFL Acquisition; provided further
that, upon consummation of the SFL Acquisition, sixty-
five percent (65%) of all the outstanding shares of
each class of capital stock of SFL shall be pledged
pursuant to the Pledge Agreement;
(h) an Investment by SFL consisting of (i) the
Uniexcel Investment and (ii) additional Investments in
Uniexcel in an amount which, in the aggregate, shall
not exceed $250,000; provided that (i) both the
Uniexcel Investment and any additional Investments in
Uniexcel shall be in accordance with the terms
previously disclosed to the Agent and the Banks in a
letter dated August 1, 1994 from ESCO to the Agent and
the Banks and (ii) any additional Investments in
Uniexcel in accordance with the terms hereof shall be
included in the computation of the aggregate cumulative
amount of all Investments permitted under
Section 5.16(f)(iii);
(i) if at the time thereof and after giving effect
thereto no Default shall have occurred and be
continuing, an Investment by Rantec consisting of the
MD&M Acquisition (i) for consideration consisting
solely of cash not in excess of $4,000,000 in the
aggregate payable at the closing of such acquisition
(or from installments from an escrow, as applicable)
and (ii) otherwise on the terms heretofore provided to
the Banks; provided that the Agent shall have received
prior to such Investment (i) a certified copy of a
resolution of the Board of Directors of each of the
Borrower and Rantec that it has, in its reasonable
judgment, determined that the businesses of MD&M are of
the same general type as now conducted by the Specified
Subsidiaries, (ii) certified copies of all agreements
entered into by the Borrower (or ESCO or any of the
Specified Subsidiaries) with MD&M (or any affiliate of
MD&M) in connection with the MD&M Acquisition and
(iii) notice from the Borrower describing the assets to
be acquired in connection with the MD&M Acquisition and
any actions necessary in order to perfect Liens on such
assets under the Security Documents;
(j) if at the time thereof and after giving effect
thereto no Default shall have occurred and be
continuing, Investments by the Borrower and the
Specified Subsidiaries resulting from the EMC Test
Systems Reorganization; and
(k) if at the time thereof and after giving effect
thereto no Default shall have occurred and be
continuing, an Investment on the Amendment and
Restatement Effective Date consisting of the Filtertek
Acquisition on the terms and conditions set forth in
the Filtertek Acquisition Documents.
SECTION 5.17. Negative Pledge. Neither ESCO nor the
Borrower will, nor will they permit any of their
Subsidiaries to, create, assume or suffer to exist any Lien
on any asset now owned or hereafter acquired by it, except
Liens granted under the Security Documents and except:
(a) any Lien existing on any asset (other than an
asset subject to a security interest granted under the
Pledge Agreement or the Security Agreement) prior to
the acquisition thereof by the Borrower or a
Consolidated Subsidiary and not created in
contemplation of such acquisition;
(b) Liens for taxes not delinquent or being contested
in good faith and by appropriate proceedings;
(c) deposits or pledges to secure obligations under
workers' compensation, social security or similar laws,
or under unemployment insurance;
(d) mechanics', workers', materialmen's or other like
Liens arising in the ordinary course of business with
respect to obligations which are not due or which are
being contested in good faith;
(e) Liens arising under the regulations of any
Governmental Authority in connection with any
procurement contract entered into with such
Governmental Authority providing for progress payments,
provided that such Liens attach only to inventory to be
sold under such contract;
(f) Liens identified on Schedule 5.11 hereto securing
Debt identified on such Schedule;
(g) Liens arising in the ordinary course of its
business which (i) do not attach to any asset subject
to a security interest granted under the Pledge
Agreement or the Security Agreement, (ii) do not secure
Debt or any other monetary obligation and (iii) do not
in the aggregate materially detract from the value of
its assets or materially impair the use thereof in the
operation of its business;
(h) Liens represented by capitalized leases permitted
under Section 5.11(a)(viii);
(i) cash and Temporary Cash Investments deposited
with or pledged to The Boatmen's National Bank of
St. Louis to secure Debt outstanding under clause (v)
of Section 5.11(a); provided that the aggregate
principal amount of such cash and Temporary Cash
Investments shall not exceed the proceeds of such Debt;
(j) Liens on Xxxxxxxxx'x interests in the real
property and improvements thereon located in Greenlawn,
New York, and referred to in clause (vi) of
Section 5.11(a); provided that such Liens secure only
the obligations of Xxxxxxxxx in respect of the
industrial revenue bonds identified in such
clause (vi);
(k) cash deposited with or pledged to the issuer of
the Designated Letter of Credit; provided that the
aggregate amount of such cash shall not exceed the
amount of the Designated Letter of Credit; and
(l) Liens on assets of SFL and PPD securing SFL Debt
and PPD Debt; provided that such Liens were created
prior to the SFL Acquisition and not in contemplation
thereof.
SECTION 5.18. Use of Proceeds and Letters of Credit.
The proceeds of the Loans made under this Agreement will be
used by the Borrower only for the purposes set forth in the
preamble to this Agreement, except that the proceeds of the
Term Loans representing the incremental increase in the Term
Loans on the Amendment and Restatement Effective Date will
be used by the Borrower to pay consideration payable in
connection with the Filtertek Acquisition and related fees
and expenses. None of such proceeds will be used, directly
or indirectly, for the purpose, whether immediate,
incidental or ultimate, of buying or carrying any Margin
Stock. The Letters of Credit will be used by the Borrower
only for general corporate purposes in the ordinary course
of business of the Borrower and its Subsidiaries and,
subject to Section 5.20, to provide Adequate Collateral (as
defined in the Distribution Agreement) pursuant to the
Distribution Agreement.
SECTION 5.19. Grants of Negative Pledges or Dividend
Restrictions. Neither ESCO nor the Borrower will, nor will
they permit any of their Subsidiaries to, agree to or become
bound by any agreement or other arrangement that would
restrict or impair (i) the ability of ESCO, the Borrower and
its Subsidiaries to grant to the Security Agent a Lien on
any of their respective properties or assets pursuant to
Section 5.08 or (ii) the ability of any Subsidiary of the
Borrower to pay dividends on its capital stock.
SECTION 5.20. Certain Contract Payments. Neither
ESCO nor the Borrower will, nor will they permit any of
their Subsidiaries to, (a) refund any progress payments
received under any Exposed Government Contract upon any
termination of such Exposed Government Contract for default
or alleged default or under any threat thereof, (b) make any
payment to Xxxxxxx or any affiliate thereof in respect of
any claims made by Xxxxxxx or any such affiliate (under the
Distribution Agreement or otherwise) as a result of any
liability arising out of its guarantee or other obligations
in respect of a Guaranteed Contract (as defined in the
Distribution Agreement), (c) make any payment to an issuing
bank (other than an Issuing Bank hereunder) in respect of a
claim for reimbursement arising out of a draw on a letter of
credit supporting a Guaranteed Contract or (d) use any
Letter of Credit to provide Adequate Collateral (as defined
in the Distribution Agreement) pursuant to the Distribution
Agreement, unless (i) the amount to be paid in respect of
such claimed refund or payment or the amount of such Letter
of Credit does not exceed (A) the amount of cash and
Temporary Cash Investments then held by the Borrower, minus
(B) the aggregate outstanding principal amount of Working
Capital Loans and the Letter of Credit Exposure plus
$5,000,000, or (ii) after giving effect to such refund or
payment or the issuance of such Letter of Credit, the ratio
of (A) Cash Available For Cash Charges (for the period of
four consecutive fiscal quarters, or shorter period
commencing with October 1, 1990, ended at the date of ESCO's
most recent balance sheet made available to the Banks
pursuant to Section 5.01) minus the amount of such refund,
payment or Letter of Credit (and the amount of all other
such refunds and payments made and such Letters of Credit
issued since the date of such balance sheet), to (B) Cash
Charges (for the period of four consecutive fiscal quarters,
or shorter period commencing with October 1, 1990, ended at
the date of such balance sheet), would not be less than (1)
1.10 to 1.00, if the date of such balance sheet shall be
September 30, 1991, or earlier, (2) 1.40 to 1.00, if the
date of such balance sheet shall be after September 30,
1991, and on or prior to September 30, 1992, (3) 1.20 to
1.00, if the date of such balance sheet shall be after
September 30, 1992, and on or prior to September 30, 1993,
or (4) 1.35 to 1.00, if the date of such balance sheet shall
be after September 30, 1993.
SECTION 5.21. Coverage Ratio. At each March 31,
June 30, September 30 and December 31, commencing June 30,
1995, the ratio of (i) Consolidated Adjusted EBIT to
(ii) Consolidated Adjusted Interest Expense, in each case
for the period of four consecutive fiscal quarters then
ended, will not be less than 2.00 to 1.00 at each such date;
provided that, for purposes of determining such ratio for
any period that includes either or both of the two fiscal
quarters ended June 30 and September 30, 1996, Consolidated
Adjusted EBIT shall be determined excluding (to the extent
otherwise included therein) the Excluded Items.
SECTION 5.22. Minimum Consolidated Adjusted Tangible
Net Worth. Consolidated Adjusted Tangible Net Worth will
not at any date be less than the sum of (i) $130,000,000
plus (ii) the aggregate amount of increases to Consolidated
Adjusted Tangible Net Worth attributable to the issuance of
additional equity securities or receipt of capital
contributions subsequent to September 30, 1991, and prior to
such date plus (iii) after September 30, 1991, if positive,
(x) 75% of Consolidated Adjusted Net Income from October 1,
1991 to September 30, 1993 (treated as a single accounting
period) and (y) 50% of Consolidated Adjusted Net Income
thereafter for the period from October 1, 1993 to such date
(treated as a single accounting period) minus (iv) the
aggregate amount that Consolidated Adjusted Tangible Net
Worth is reduced as a result of repurchases of ESCO capital
stock or the payment of any cash dividends to the holders of
ESCO capital stock pursuant to clause (ii) or (iii) of
Section 5.12, but only to the extent made in reliance upon
the Restricted Payment Amount.
SECTION 5.23. Leverage Ratio. The Leverage Ratio
will not exceed (i) 0.70 to 1.00 at any date on or prior to
September 30, 1997, (ii) 0.60 to 1.00 at any date on or
after October 1, 1997 and prior to October 1, 1998, or
(iii) 0.50 to 1.00 at any date on or after October 1, 1998.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of
the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due any
principal of or interest on any Loan, any fees or any
other amount payable hereunder or under any other Loan
Document;
(b) ESCO or the Borrower shall fail to observe or
perform any covenant contained in Section 5.01(g) or
5.07 or in Sections 5.09 to 5.23, inclusive;
(c) ESCO or the Borrower or any Subsidiary shall fail
to observe or perform any covenant or agreement
contained in any Loan Document (other than those
covered by clause (a) or (b) above) for 10 days after
written notice thereof has been given to the Borrower
by the Agent at the request of any Bank;
(d) any representation, warranty, certification or
statement made (or deemed made) by ESCO or the Borrower
or any Subsidiary in any Loan Document or by Emerson,
ESCO, the Borrower or any Subsidiary in any
certificate, financial statement or other document
delivered pursuant to any Loan Document shall prove to
have been incorrect in any material respect when made
(or deemed made);
(e) ESCO or the Borrower or any Subsidiary shall fail
to make any payment in respect of any Material Debt
(other than the Notes) when due or within any
applicable grace period;
(f) any event or condition shall occur which results
in the acceleration of the maturity of any Material
Debt or enables (or, with the giving of notice or lapse
of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to
accelerate the maturity thereof or to terminate any
commitment to lend such Debt;
(g) Xxxxxxx or any subsidiary thereof shall for any
reason (other than payment or performance in accordance
with its terms) cease to be liable under its guarantees
with respect to any Guaranteed Contract (as defined in
the Distribution Agreement);
(h) ESCO, the Borrower or any Subsidiary (i) shall
commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
or (ii) shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case or other proceeding
commenced against it, or (iii) shall make a general
assignment for the benefit of creditors, or (iv) shall
fail generally or admit in writing its inability to pay
its debts as they become due, or (v) shall take any
corporate action to authorize any of the foregoing;
(i) an involuntary case or other proceeding shall be
commenced against ESCO, the Borrower or any Subsidiary
seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar
official of it or any substantial part of its property,
and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60
days; or an order for relief shall be entered against
ESCO, the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
(j) any member of the ERISA Group shall fail to pay
when due an amount or amounts aggregating in excess of
$1,000,000 which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or
notice of intent to terminate a Plan or Plans having
aggregate Unfunded Vested Liabilities in excess of
$5,000,000 (collectively, a "Material Plan") shall be
filed under Title IV of ERISA by any member of the
ERISA Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against any member of
the ERISA Group to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed
within 30 days thereafter; or a Reportable Event or
Reportable Events shall have occurred with respect to a
Material Plan and the Agent shall have notified the
Borrower that the Required Banks have made a
determination that, on the basis of such Reportable
Event or Reportable Events, there are reasonable
grounds for the termination of such Material Plan by
the PBGC or for the appointment by an appropriate
United States district court of a trustee to administer
such Material Plan and any such Reportable Event shall
be continuing 10 days after such notice;
(k) one or more judgments or orders for the payment
of money in an aggregate amount in excess of $1,000,000
shall be rendered against ESCO, the Borrower, any
Subsidiary or any combination thereof and shall
continue unsatisfied and unstayed for a period of
10 days, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of
ESCO, the Borrower or any Subsidiary to enforce any
such judgment;
(l) a Change of Control shall occur; or
(m) any security interest purported to be created by
any Security Document shall cease to be, or shall be
asserted by ESCO, the Borrower or any Subsidiary not to
be, a valid, perfected, first priority security
interest in respect of any material amount of
collateral, except as expressly permitted under the
Loan Documents and except as a result of an act or
omission of the Security Agent, the Agent or any Bank;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest
thereon and all other amounts payable hereunder) to be, and
the Notes (together with accrued interest thereon and all
other amounts payable hereunder) shall thereupon become,
immediately due and payable (in whole or, at the option of
the Banks, in part) without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by
the Borrower, (iii) if requested by Banks having more than
50% of the Letter of Credit Exposure, require cash
collateral as contemplated by Section 2.14(j) in an amount
not exceeding the Letter of Credit Exposure, (iv) exercise
and direct the Security Agent to exercise remedies available
under the Guarantee Agreement, the Security Documents or
otherwise, as requested by the Required Banks, or (v) take
any combination of the foregoing actions; provided that in
the case of any of the Events of Default specified in
clause (h) or (i) above with respect to the Borrower without
any notice to the Borrower or any other act by the Agent or
the Banks, the Commitments shall thereupon terminate and the
Notes (together with accrued interest thereon and all other
amounts payable hereunder) shall become immediately due and
payable (in whole) without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by
the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by any Bank, and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT, SECURITY AGENT AND ISSUING BANK
SECTION 7.01. Appointment and Authorization. Each
Bank irrevocably appoints and authorizes each of the Agent,
the Security Agent and the Issuing Banks (each being
referred to as an "Agent" for purposes of this Article VII)
to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan
Documents as are delegated to such Agent by the terms hereof
or thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agent and Affiliates. Each Bank that
is an Agent shall have the same rights and powers under this
Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not an Agent, and each
such Bank and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or Affiliate of the Borrower
as if it were not an Agent.
SECTION 7.03. Action by Agent. The obligations of
any Agent under the Loan Documents are only those expressly
set forth herein and therein. Without limiting the
generality of the foregoing, no Agent shall be required to
take any action with respect to any Default, except as
expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. Each Agent
may consult with legal counsel (who may be counsel for the
Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken
or omitted to be taken by it in good faith in accordance
with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither any Agent
nor any of its directors, officers, agents, or employees
shall be liable for any action taken or not taken by it in
connection herewith (i) with the consent or at the request
of the Required Banks (or all the Banks, as applicable) or
(ii) in the absence of its own gross negligence or willful
misconduct. Neither any Agent nor any of its directors,
officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection
with this Agreement or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or
agreements of ESCO, the Borrower or any Subsidiary;
(iii) the satisfaction of any condition specified in
Article III, except receipt of items required to be
delivered to it; or (iv) the validity, effectiveness or
genuineness of this Agreement, any other Loan Document or
any other instrument or writing furnished in connection
herewith. No Agent shall incur any liability by acting in
reliance upon any notice, consent, certificate, statement,
or other writing (which may be a bank wire, telex or similar
writing) believed by it to be genuine or to be signed by the
proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify each
Agent (to the extent not reimbursed by the Borrower) against
any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability
(except such as result from such Agent's gross negligence or
willful misconduct) that such Agent may suffer or incur in
connection with this Agreement or any other Loan Document or
any action taken or omitted by such Agent hereunder or
thereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon any 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 any 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 any action
under this Agreement. Without limiting the generality of
the foregoing, each Bank acknowledges that it has,
independently and without reliance upon the Agent, the
Issuing Bank, or any other Bank, made its own determination
that it is not required under applicable law and regulations
in the context of the transactions contemplated hereby to
obtain any real estate appraisal.
SECTION 7.08. Successor Agent. Any Agent (other
than an Issuing Bank in respect of Letters of Credit issued
by it) may resign at any time by giving written notice
thereof to the Banks and the Borrower. Upon any such
resignation, the Required Banks shall have the right to
appoint a successor to such Agent. If no successor to such
Agent shall have been so appointed by the Required Banks,
and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which, in the case of the Agent under this
Agreement, shall be a commercial bank organized or licensed
under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of
at least $500,000,000. Upon the acceptance of its
appointment as an Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations. After any retiring Agent's resignation, the
provisions of this Article shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
an Agent.
SECTION 7.09. Agents Fees. The Borrower shall pay
to each Agent for its own account fees in the amounts and at
the times previously agreed upon between the Borrower and
such Agent.
SECTION 7.10. Sub-Agents. Each Agent (other than an
Issuing Bank) may perform any of its obligations and
exercise any of its rights under the Loan Documents by or
through sub-agents. The provisions of this Article VII
shall inure to the benefit of any sub-agent of any Agent in
the same manner and to the same extent as they inure to the
benefit of such Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any Fixed Rate Borrowing:
(a) the Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant
market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount
of the Commitments of the applicable Class advise the
Agent that the Adjusted CD Rate or the Adjusted London
Interbank Offered Rate, as the case may be, as
determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding their CD
Loans or Euro-Dollar Loans, as the case may be, for
such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Banks to
make CD Loans or Euro-Dollar Loans, as the case may be,
shall be suspended. Unless the Borrower notifies the Agent
at least two Domestic Business Days before the date of any
Fixed Rate Borrowing for which a Notice of Borrowing has
previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. If, on or after the date
of this Agreement, the adoption of any applicable law, rule
or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different Euro-
Dollar Lending Office if such designation will avoid the
need for giving such notice and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. If
such Bank shall determine that it may not lawfully continue
to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the
Borrower shall immediately prepay in full the then
outstanding principal amount of each such Euro-Dollar Loan,
together with accrued interest thereon. Concurrently with
prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from
such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the
other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after the Effective Date the adoption of any
applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance
by any Bank (or its Applicable Lending Office) or any
Issuing Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank
or comparable agency:
(i) shall subject any Bank (or its Applicable Lending
Office) or any Issuing Bank to any tax, duty or other
charge with respect to its Fixed Rate Loans, its Note
or its obligation to make Fixed Rate Loans or
participate in Letters of Credit or, in the case of an
Issuing Bank, its Letters of Credit or its obligation
to issue Letters of Credit, or in the case of a Bank,
its Back-up LOCs or its obligation to issue Back-up
LOCs or shall change the basis of taxation of payments
to any Bank (or its Applicable Lending Office) or any
Issuing Bank of the principal of or interest on its
Fixed Rate Loans or any other amounts due under this
Agreement in respect of its Fixed Rate Loans or its
obligation to make Fixed Rate Loans or participate in
Letters of Credit or, in the case of an Issuing Bank,
its fees in respect of its Letters of Credit (except
for changes in the rate of tax on the overall net
income of such Bank or its Applicable Lending Office or
such Issuing Bank, as the case may be, imposed by the
jurisdiction in which such Bank's or Issuing Bank's
principal executive office or the Applicable Lending
Office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement
(including , without limitation, any such requirement
imposed by the Board of Governors of the Federal
Reserve System, but excluding (A) with respect to any
CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (B) with respect to any
Euro-Dollar Loan any such requirement included in an
applicable Euro-Dollar Reserve Percentage) against
assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending
Office) or any Issuing Bank or shall impose on the Bank
(or its Applicable Lending Office) or any Issuing Bank
or on the United States market for certificates of
deposit or the London interbank market, as applicable,
any other condition affecting its Fixed Rate Loans, its
Note or its obligation to make Fixed Rate Loans or
participate in Letters of Credit or, in the case of an
Issuing Bank, its Letters of Credit or its obligation
to issue Letters of Credit or in the case of a Bank,
its Backup LOCs or its obligation to issue Backup LOCs;
and the result of any of the foregoing is to increase the
cost to such Bank (or its Applicable Lending Office) or
Issuing Bank, as the case may be, of making or maintaining
any Fixed Rate Loan or issuing, participating in or
maintaining any Letter of Credit, or issuing or maintaining
any Back-up LOC, or to reduce the amount of any sum received
or receivable by such Bank (or its Applicable Lending
Office) or Issuing Bank under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
or Issuing Bank to be material, then, within 15 days after
demand by such Bank or Issuing Bank (with a copy to the
Agent), the Borrower shall pay to such Bank or Issuing Bank
such additional amount or amounts as will compensate such
Bank or Issuing Bank for such increased cost or reduction.
(b) If any Bank or Issuing Bank shall have
determined that, after the Effective Date, the adoption of
any applicable law, rule or regulation regarding capital
adequacy, or any change in any applicable law, rule or
regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing
the rate of return on capital of such Bank or Issuing Bank
(or its Parent) as a consequence of such Bank's or Issuing
Bank's obligations hereunder or under its Letters of Credit
or Back-up LOCs, as the case may be to a level below that
which such Bank or Issuing Bank (or its Parent) could have
achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank or
Issuing Bank to be material, then from time to time, within
15 days after demand by such Bank or Issuing Bank (with a
copy to the Agent), the Borrower shall pay to such Bank or
Issuing Bank such additional amount or amounts as will
compensate such Bank or Issuing Bank (or its Parent) for
such reduction.
(c) Each Bank and Issuing Bank will promptly notify
the Borrower and the Agent of any event of which it has
knowledge, occurring after the Effective Date, which will
entitle such Bank or Issuing Bank to compensation pursuant
to this Section and, in the case of a Bank, will designate a
different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of
any Bank or Issuing Bank claiming compensation under this
Section and setting forth the additional amount or amounts
to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, such
Bank or Issuing Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant
to Section 8.02 or (ii) any Bank has demanded compensation
under Section 8.03(a) and the Borrower shall, by at least
five Euro-Dollar Business Days' prior notice to such Bank
through the Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances
giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such
Bank as CD Loans or Euro-Dollar Loans, as the case may
be, shall be made instead as Base Rate Loans (on which
interest and principal shall be payable
contemporaneously with the related Fixed Rate Loans of
the other Banks), and
(b) after each of its CD Loans or Euro-Dollar Loans,
as the case may be, has been repaid, all payments of
principal which would otherwise be applied to repay
Fixed Rate Loans shall be applied to repay its Base
Rate Loans instead.
Notwithstanding the foregoing, any election by the Borrower
in accordance with this Section 8.04 shall not affect the
Borrower's obligations under Section 8.02 and Section 8.03.
SECTION 8.05. HLT Classification. (a) If, after
the Effective Date, the Agent determines that, or the Agent
is advised by any Bank that such Bank has received notice
from any governmental authority, central bank or comparable
agency having jurisdiction over such Bank that, Loans
hereunder are classified as a "highly leveraged transaction"
(an "HLT Classification"), the Agent shall promptly give
notice of such HLT Classification to the Borrower and the
other Banks. Thereupon, the Agent, the Banks and the
Borrower shall commence negotiations in good faith to agree
on the extent to which fees, interest rates and/or margins
hereunder should be increased so as to reflect such HLT
Classification. If the Borrower and Banks holding more than
50% in aggregate amount of the outstanding Loans, Letter of
Credit Exposure and unused Commitments agree on the amount
of such increase or increases, this Agreement may be amended
to give effect to such increase or increases as provided in
Section 9.05 without the necessity of approval by the
Required Banks. If the Borrower and Banks holding more than
50% in aggregate amount of the outstanding Loans, Letter of
Credit Exposure and unused Commitments fail to so agree
within 45 days after notice is given by the Agent as
provided above, then the Agent shall, if requested by Banks
holding 50% or more in aggregate amount of the outstanding
Loans, Letter of Credit Exposure and unused Commitments, by
notice to the Borrower, terminate the Commitments and they
shall thereupon terminate and the Borrower shall repay each
outstanding Loan at the end of the Interest Period
applicable thereto. The Banks acknowledge that an HLT
Classification is not a Default.
(b) The Borrower and the Banks recognize that
applicable regulations or guidelines of Governmental
Authorities may require the Agent to determine whether an
HLT Classification should be made and that such
determination may be binding upon the Borrower and the
Banks. The Borrower and the Banks understand that any such
determination will be made solely by the Agent based upon
such factors (which may include the Agent's internal
policies and prevailing market practices) as the Agent shall
deem relevant and agree that the Agent shall have no
liability for the consequences of any such determination.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. (a) All notices, requests
and other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party:
(w) in the case of ESCO, the Borrower or the Agent, at its
address or telecopy number set forth on the signature pages
hereof, (x) in the case of any Bank, at its address or
telecopy or telex number set forth in its Administrative
Questionnaire, (y) in the case of the Security Agent, at
Xxxxxx Guaranty Trust Company of New York, Delaware Branch,
000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention of
Loan Department (telecopy number: (000) 000-0000) or (z) in
the case of any party, at such other address or telecopy or
telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Borrower; provided
that copies of any notice of Default given to the Borrower
shall also be sent to the attention of the Borrower's
General Counsel (at the address or telecopy number of the
Borrower set forth on the signature pages hereof) and to
Xxxxx Xxxx LLP, 000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx,
Xxxxxxxx 00000, Attention of Xxxx X. Xxxxx, Esq., provided,
further, that any failure or delay in the delivery of any
notice pursuant to the foregoing proviso shall not affect
the validity of any notice given to the Borrower in
accordance herewith. Each such notice, request or other
communication shall be effective (i) if given by telecopy or
telex, when such telecopy or telex is transmitted to the
telecopy or telex number specified in this Section and the
appropriate confirmation of receipt or answer back is
received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (iii) if given
by any other means, when delivered at the address specified
in this Section; provided that notices to the Agent under
Article II or Article VIII shall not be effective until
received.
(b) Payments to be made to the Agent hereunder shall
be made to it at its address set forth on the signature
pages hereof or at such other address as the Agent may
specify for the purpose by notice to the Borrower and the
Banks.
SECTION 9.02. No Waivers. No failure or delay by
the Agent, the Security Agent, any Issuing Bank or any Bank
in exercising any right, power or privilege hereunder or
under any other Loan Document shall operate as a waiver
thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes;
Indemnification. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Agent, the Security
Agent and (in the case of expenses relating to the issuance
of a Letter of Credit) each Issuing Bank, including fees and
disbursements of special counsel for the Agent, in
connection with the preparation of this Agreement and the
other Loan Documents, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default
or alleged Default hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by
the Agent, the Security Agent, any Issuing Bank or (in the
case of expenses of collection and other enforcement
proceedings) any Bank, including fees and disbursements of
counsel, in connection with such Event of Default and
collection and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or
charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement or the other Loan
Documents.
(b) The Borrower agrees to indemnify the Agent, the
Security Agent, each Issuing Bank and each Bank and hold the
Agent, the Security Agent, each Issuing Bank and each Bank
harmless from and against any and all liabilities, losses,
damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of
counsel, which may be incurred by any Bank (or by the Agent,
the Security Agent or any Issuing Bank in connection with
its actions as such) in connection with any investigative,
administrative or judicial proceeding (whether or not the
Agent, the Security Agent or such Issuing Bank or such Bank
shall be designated a party thereto) relating to or arising
out of the Loan Documents or any actual or proposed use of
proceeds of Loans or Letters of Credit hereunder; provided
that neither the Agent, the Security Agent nor any Issuing
Bank or any Bank shall have the right to be indemnified
hereunder for its own bad faith, gross negligence or willful
misconduct as determined by a court of competent
jurisdiction.
SECTION 9.04. Sharing of Set-Offs. Each Bank agrees
that if it shall, by exercising any right of set-off or
counterclaim or otherwise, receive payment of a proportion
of the aggregate amount of its claims in respect of Letter
of Credit Disbursements and principal and interest due with
respect to any Note held by it which is greater than the
proportion received by any other Bank in respect of the
aggregate amount of claims in respect of Letter of Credit
Disbursements and principal and interest due with respect to
any Note held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such
participations in the claims in respect of Letter of Credit
Disbursements and Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that
all such payments of claims in respect of Letter of Credit
Disbursements and of principal and interest with respect to
the Notes held by the Banks shall be shared by the Banks pro
rata; provided that nothing in this Section shall impair the
right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower
other than its indebtedness under the Loan Documents. The
Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that any holder of a participation
in a Letter of Credit or Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights
of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a
participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision
of this Agreement or any other Loan Document may be amended
or waived if, but only if, such amendment or waiver is in
writing and is signed or otherwise approved in writing by
ESCO, the Borrower and the Required Banks (and, if the
rights or duties of the Agent, the Security Agent or any
Issuing Bank are affected thereby, by the Agent, the
Security Agent or such Issuing Bank, as the case may be);
provided that no such amendment or waiver shall, unless
signed by all the Banks affected thereby, (i) increase the
Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest
on any Loan, the reimbursement obligation of the Borrower in
respect of any Letter of Credit Disbursement or any fees
hereunder, (iii) postpone the date fixed for any payment of
principal of any Loan under Section 2.08(a) or (b), for any
reimbursement in respect of any Letter of Credit
Disbursement under Section 2.14(g), for any payment of
interest on any Loan or any fees hereunder or for any
reduction or termination of any Commitment, (iv) permit the
release of any material amount of collateral under any
Security Document (except as provided therein), (v) limit or
release the Guarantee Agreement, (vi) amend or modify the
provisions of this Section 9.05 or the definition of
"Required Banks" or (vii) change the percentage of the
Commitments, the percentage of the aggregate unpaid
principal amount of the Notes, the percentage of the Letter
of Credit Exposure or the number of Banks which shall be
required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement;
provided further that no such amendment or waiver shall,
unless signed by each Issuing Bank and each Bank, amend or
modify the definition of "Alternative Letter of Credit
Currency" or "Permitted Letter of Credit Currency" or change
the currencies in which Letters of Credit may be issued
hereunder or payments are required to be made hereunder.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that neither ESCO nor the
Borrower may assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of
all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in any or all of its Commitment or
its Loans or its participations in Letters of Credit. In
the event of any such grant by a Bank of a participating
interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, and the
Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's
rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating
interest shall provide that such Bank shall retain the sole
right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right
to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such
participation agreement may provide that such Bank will not
agree to any modification, amendment or waiver described in
clause (i), (ii), (iii) or (iv) of Section 9.05 without the
consent of the Participant. The Borrower agrees that each
Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of
Article VIII and Section 2.11 with respect to its
participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or more
banks or other financial institutions (each an "Assignee")
all, or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant
to an instrument executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed
consent (which consent shall not be unreasonably withheld)
of the Borrower and the Agent (and, in the case of an
assignment of any Working Capital Commitment, the Issuing
Banks); provided that (i) each such assignment shall be in a
minimum amount of $5,000,000, (ii) each such assignment
shall be of a constant, and not a varying, percentage of all
such transferor Bank's rights and obligations under this
Agreement and the Notes, (iii) if there exists a Default or
an Event of Default, no such consent of the Borrower shall
be required and (iv) if an Assignee is a Bank or an
affiliate of a Bank, no such consent shall be required.
Upon execution and delivery of such an instrument, payment
by such Assignee to such transferor Bank of an amount equal
to the purchase price agreed between such transferor Bank
and such Assignee, delivery to the Agent of an executed copy
of such instrument and payment to the Agent by the Assignee
of a processing fee of $2,000, then such Assignee shall be a
Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in
such instrument of assumption, and the transferor Bank shall
be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the effective date of any
such assignment, Schedule I shall be deemed amended to
reflect such assignment. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note or Notes are
issued to the Assignee. If the Assignee is not incorporated
under the laws of the United States of America or a state
thereof, it shall, on or prior to the date on which it
becomes a Bank party to this Agreement, deliver to the
Borrower and the Agent certification as to exemption from
deduction or withholding of any United States federal income
taxes in accordance with Section 2.13.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Notes to
a Federal Reserve Bank. No such assignment shall release
the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of
any Bank's rights shall be entitled to receive any greater
payment under Section 8.03 than such Bank would have been
entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior
written consent or by reason of the provisions of
Section 8.02 or 8.03 requiring such Bank to designate a
different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving
rise to such greater payment did not exist.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any Margin Stock as
collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. Waiver of Trial by Jury. Each of the
parties hereto irrevocably waives any and all rights to
trial by jury in any legal proceeding arising out of or
relating to this Agreement or any other Loan Document or the
transactions contemplated hereby.
SECTION 9.09. New York Law. THIS AGREEMENT AND EACH
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
SECTION 9.10. Counterparts; Integration. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
SECTION 9.11. Confidentiality. Any information
disclosed by the Borrower to the Agent or any of the Banks,
which is either non-public financial information or
designated proprietary or confidential at the time of
receipt thereof by the Agent or such Bank, shall be used
solely for purposes of this Agreement and, if such
information is not otherwise in the public domain, shall not
be disclosed by the Agent or such Bank to any other Person
except (i) to its independent accountants and legal counsel
(it being understood that the Persons to whom such
disclosure is made will be informed of the confidential
nature of such information and instructed to keep such
information confidential), (ii) pursuant to statutory and
regulatory requirements, including in connection with
examinations by regulatory authorities, (iii) pursuant to
any mandatory court order, subpoena or other legal process,
(iv) to the Agent or any other Bank, (v) pursuant to any
agreement heretofore or hereafter made between such Bank and
the Borrower which permits such disclosure, (vi) in
connection with the enforcement of any Loan Document or
(vii) subject to an agreement containing provisions
substantially the same as those of this Section, to any
Participant in or Assignee of, or prospective Participant in
or Assignee of, any Loan or Commitment or participation in
any Letter of Credit.
SECTION 9.12. Conflicts. The Loan Documents shall
be construed to the fullest extent possible in such manner
as shall avoid any conflict among the provisions thereof;
however, in the event of any clear conflict between the
terms of this Agreement and the terms of any other Loan
Document, the terms of this Agreement shall control.
SECTION 9.13. Rates and Fees Unaffected Prior to
Amendment and Restatement Effective Date. Accrued interest
and fees under the Original Credit Agreement prior to the
Amendment and Restatement Effective Date shall not be
affected by this Agreement; provided that interest rates and
fees accruing on and after the Amendment and Restatement
Effective Date shall be calculated in accordance with, and
after giving effect to, this Agreement.
SECTION 9.14. Survival of Agreement. All covenants,
agreements, representations and warranties made by ESCO and
the Borrower herein and in the certificates or other
instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been
relied upon by the Banks and shall survive the making by the
Banks of the Loans and the Letters of Credit, regardless of
any investigation made by the Banks or on their behalf, and
shall continue in full force and effect as long as any
Obligation is outstanding and unpaid or so long as the
Commitments have not been terminated.
SECTION 9.15. Severability. In the event any one or
more of the provisions contained in this Agreement should be
held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way
be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 9.16. Currencies. (a) Each Loan hereunder
shall be made in Dollars and each payment of principal of
and interest on each Loan, and each payment of fees
hereunder and of any other amount payable hereunder or under
any other Loan Document shall be payable in Dollars, except
that amounts expressly provided in Section 2.14(l) to be
payable in an Alternative Letter of Credit Currency shall be
payable in such currency as provided therein.
(b) The Borrower's obligations hereunder and under
the other Loan Documents to make payments in Dollars or in
any Alternative Letter of Credit Currency (the "Obligation
Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery
results in the effective receipt by the Agent, an Issuing
Bank or a Bank of the full amount of the Obligation Currency
expressed to be payable to the Agent, such Issuing Bank or
such Bank under this Agreement or the other Loan Documents.
If, for the purpose of obtaining or enforcing judgment
against the Borrower or any Guarantor in any court or in any
jurisdiction, it becomes necessary to convert into or from
any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the
conversion shall be made, at the Alternative Currency
Equivalent or Dollar Equivalent, in the case of any
Alternative Letter of Credit Currency or Dollars, and, in
the case of other currencies, the rate of exchange (as
quoted by the Agent or if the Agent does not quote a rate of
exchange on such currency, by a known dealer in such
currency designated by the Agent) determined, in each case,
as of the Domestic Business Day immediately preceding the
day on which the judgment is given (such Domestic Business
Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(c) If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and
the date of actual payment of the amount due, the Borrower
covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid
in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the
amount of the Obligation Currency which could have been
purchased with the amount of Judgment Currency stipulated in
the judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.
(d) For purposes of determining the Alternative
Currency Equivalent or Dollar Equivalent or rate of exchange
for this Section, such amounts shall include any premium and
costs payable in connection with the purchase of the
Obligation Currency.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
ESCO ELECTRONICS CORPORATION,
by
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President &
Treasurer
0000 Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
DEFENSE HOLDING CORP.,
by
Name: Xxxxxx X. Xxxx
Title: Senior Vice President &
CFO
0000 Xxxxx Xxxx
Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Agent,
by
Name:
Title:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of Xxxxx X. X'Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK,
by
Name:
Title:
THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS,
by
Name:
Title:
THE BANK OF NEW YORK,
by
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
Name:
Title:
THE SUMITOMO BANK, LIMITED,
by
Name:
Title:
by
Name:
Title:
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
by
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION,
by
Name:
Title:
SCHEDULE 1
Commitments
Name of Bank
Working
Capital
Commitment
Term
Commitment
Total
Commitment
Percentage of
Total
Commitment
Xxxxxx Guaranty Trust
Company of New York
$17,143,000
$12,857,000
$30,000,000
21.43%
The Boatmen's National
Bank of St. Louis
$16,000,000
$12,000,000
$28,000,000
20.00%
Sanwa Business Credit
Corporation
$12,000,000
$9,000,000
$21,000,000
15.00%
The Bank of New York
$13,143,000
$9,857,000
$23,000,000
16.43%
The Bank of Nova Scotia
$8,000,000
$6,000,000
$14,000,000
10.00%
First Union National
Bank of North Carolina
$8,000,000
$6,000,000
$14,000,000
10.00%
The Sumitomo Bank
Limited
$5,714,000
$4,286,000
$10,000,000
7.14%
TOTAL ............
$ 80,000,000
$ 60,000,000
$140,000,000
100%
*/ The Table of Contents is not a part of this
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