EXHIBIT 10.7
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LOAN AGREEMENT
Dated as of February 18, 1997
between
SYBRON CHEMICALS INC.
and
CORESTATES BANK, N.A.
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SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION........ 1
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SECTION 1.01 Definitions............................... 1
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SECTION 1.02 Interpretation of Financial
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Measurements; Financial Statements........ 8
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SECTION 2. THE LOAN....................................... 8
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SECTION 2.01 Revolving Loan............................ 8
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SECTION 2.02 The Revolving Loan Note................... 9
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SECTION 2.03 Use of Revolving Loan Proceeds............ 9
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SECTION 2.04 Interest Rates and Calculation of
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Interest.................................. 9
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SECTION 2.05 Payments to Bank.......................... 14
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SECTION 2.06 Due Date Extenstion....................... 14
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SECTION 2.07 Mandatory Prepayment; Optional
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Prepayment; Application of Payments;
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Repayment Premium......................... 15
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SECTION 2.08 Facility Fee.............................. 15
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SECTION 2.09 Participations............................ 15
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SECTION 2.10 Letters of Credit......................... 16
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SECTION 2.11 Currency Considerations................... 19
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SECTION 2.12 Reduction of Revolving Loan Limit......... 20
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SECTION 3. CONDITIONS..................................... 20
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SECTION 3.01 Documents Required for the Closing........ 20
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SECTION 3.02 Certain Events............................ 21
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SECTION 4. REPRESENTATIONS, WARRANTIES AND SURVIVAL....... 21
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SECTION 4.01 Representations and Warranties............ 21
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SECTION 4.02 Survival.................................. 25
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SECTION 4.03 No Default................................ 25
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SECTION 5. COVENANTS...................................... 25
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SECTION 5.01 Affirmative Covenants..................... 25
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SECTION 5.02 Negative Covenants........................ 27
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SECTION 6. DEFAULT........................................ 28
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SECTION 6.01 Events of Default......................... 28
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SECTION 6.02 Remedies.................................. 31
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SECTION 7. MISCELLANEOUS.................................. 31
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SECTION 7.01 Construction.............................. 31
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SECTION 7.02 [INTENTIONALLY OMITTED]................... 31
SECTION 7.03 Enforcement and Waiver by the Bank........ 31
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SECTION 7.04 Expenses of the Bank...................... 31
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SECTION 7.05 Notices................................... 31
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SECTION 7.06 Waiver and Release by Borrower............ 32
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SECTION 7.07 Applicable Law............................ 32
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SECTION 7.08 Binding Effect; Assignment and Entire
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Agreement................................. 32
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SECTION 7.09 Severability.............................. 33
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SECTION 7.10 Counterparts.............................. 33
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SECTION 7.11 Headings.................................. 33
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SECTION 7.12 Modification.............................. 33
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SECTION 7.13 Third Parties............................. 33
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SECTION 7.14 Seal...................................... 33
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SECTION 7.15 WAIVER OF JURY TRIAL...................... 33
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SECTION 7.16 Jurisdiction.............................. 33
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SECTION 7.17 Indemnity................................. 33
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LOAN AGREEMENT
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THIS LOAN AGREEMENT, dated as of February 18, 1997 (herein called
the "Agreement"), is entered into between SYBRON CHEMICALS INC.
("Borrower") and CORESTATES BANK, N.A. ("Bank").
WITNESSETH:
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A. Borrower desires to establish certain financing arrangements with
and borrow funds from Bank and Bank is willing to establish such arrangements
for and make loans and advances to Borrower under the terms and provisions
hereinafter set forth.
B. The parties desire to define the terms and conditions
of their relationship and to reduce their agreements to writing.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
covenant and agree as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
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SECTION 1.01 Definitions.
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"Alternative Currency" shall mean pounds sterling, Italian lire and
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Dutch guilder.
"Annual Financial Statements" shall mean the annual consolidated and
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consolidating financial statements of Borrower, including all notes thereto,
which statements shall include a balance sheet as of the end of a fiscal year
and an income statement and a statement of cash flows for such year, all setting
forth in comparative form the corresponding figures from the previous year, all
prepared in conformity with Generally Accepted Accounting Principles and, with
respect to said consolidated financial statements, accompanied by an unqualified
financial audit of independent certified public accountants who are reasonably
satisfactory to Bank which shall state that such accountants have audited such
consolidated financial statements and that such financial statements are in
conformity with Generally Accepted Accounting Principles, and, with respect to
said consolidating financial statements, certified by Borrower's chief financial
officer.
"Approved Line of Business" shall mean, for purposes of Section 5.02(A)
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hereof, the primary line of business in which Borrower is presently engaged as
described in Exhibit 111.01(A)II hereto.
"Average Funded Debt" shall mean, as of any date, the daily
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average Funded Debt for the 12 months then ended (e.g. the sum of
Funded Debt for each day during such 12 month period divided by 365 or 364, as
applicable).
"Bank Indemnitees" shall mean the Bank, any pledgee, assignee or
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subsequent holder or owner of the Note or any interest in the Loan, including
each Participant, any affiliate, successor, assign or subsidiary of the Bank or
any Participant, and each of their respective shareholders, members, directors,
officers, employees, counsel, agents and contractors, as well as their
respective heirs, beneficiaries, administrators, executors, personal
representatives, trustees, receivers, successors and assigns.
"Base Currency" shall mean Dollars.
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"Business Day" shall mean a day, other than a Saturday or Sunday, on
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which Bank is open for business.
"Cash Flow Ratio" shall mean, as of any date, the ratio of (a) Average
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Funded Debt for the 12 months then ended to (b) EBITDA for such period.
"Closing Date" shall mean the date of this Agreement.
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"Consent Orders" shall mean the Consent Orders copies of which are
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attached hereto as Exhibit "1.01(B)".
"Current Ratio" shall mean, as of any date, current assets divided by
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current liabilities, determined in accordance with GAAP.
"Dollars" or "$" shall mean lawful money of the United
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States of America.
"EBIDTA" shall mean Pre Tax Earnings plus the sum of depreciation and
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amortization and interest expense during the period for which Pre Tax Earnings
was calculated.
"Eguivalent Dollar Amount" shall mean, with respect to an amount of any
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currency other than Dollars as of any date, the amount of Dollars into which
such amount of such other currency may be converted at the spot rate at which
Dollars are offered by the Bank in London for the purchase of such other
currency at approximately 12:00 noon, London time, on such date.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
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as amended.
"Event of Default" shall mean an event specified in Section
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6 hereof.
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"Financial Statements" means any Annual Financial Statements
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or Quarterly Financial Statements.
"Fixed Charges" means the sum of (a) principal Payments on Funded Debt,
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and (b) interest expense on all Indebtedness for borrowed money (including
capital lease obligations).
"Fixed Charge Coverage Ratio" shall mean, as of any date, the ratio of
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(a) net income plus depreciation and amortization and interest expense minus
dividends and other distributions (as determined in accordance with GAAP), all
for the 12 months then ended, to (b) Fixed Charges for such period.
"Funded Debt" means, as of any date, (i) all Indebtedness for borrowed
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money (including capital lease obligations) which matures more than one year
from such date and (ii) the Revolving Loan.
"Generally Accepted Accounting Principles" or "GAAP" shall mean, with
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respect to any Person, such accounting practice as, in the opinion of the
independent accountants retained by such Person and who are reasonably
acceptable to the Bank, conforms at the time to generally accepted accounting
principles, consistently applied. Generally accepted accounting principles means
those principles and practices which are (a) recognized as such by the Financial
Accounting Standards Board, (b) applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the most recent financial statements of the relevant Person furnished
to the Bank, and (c) consistently applied for all periods after the date hereof
so as to reflect properly the financial condition, and results of operations and
cash flows, of such Person. If any change in any accounting principle or
practice is required by the Financial Accounting Standards Board in order for
such principle or practice to continue as a generally accepted accounting
principle or practice, all reports and financial statements required hereunder
shall be prepared in accordance with such change. Solely for purposes of this
Agreement, if any such material change is made, then either (i) the financial
covenants shall be appropriately modified by agreement between the parties to
reflect such change or (ii) if the parties are unable in good faith to reach
such agreement, the financial covenant compliance computations shall be computed
without regard to such change.
"Guarantor" shall mean Sybron Chemie (Nederland) B.V.
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"Guaranty" shall mean a Guaranty Agreement in form and
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substance acceptable to Bank.
"Indebtedness" shall mean all items of indebtedness,
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obligation or liability, due or to become due, liquidated or
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unliquidated, direct or contingent, joint or several, of any nature whatsoever
and out of whatever transaction arising, including, without limitation:
(A) All indebtedness guaranteed, directly or indirectly, in any manner,
or endorsed (other than for collection or deposit in the ordinary course of
business) or discounted with recourse;
(B) All indebtedness in effect guaranteed, directly or indirectly,
through agreements, contingent or otherwise to (1) purchase such indebtedness,
(2) purchase, sell or lease (as lessee or lessor) property, products, materials
or supplies, or to purchase or sell services, primarily for the purpose of
enabling any debtor to make payment of such indebtedness or to assure the owner
of the indebtedness against loss, or (3) supply funds to or in any other manner
invest in any debtor;
(C) All indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance upon property owned or acquired subject to such mortgage, deed of
trust, pledge, lien, security interest, charge or encumbrance, whether or not
the liabilities secured thereby have been assumed; and
(D) All indebtedness incurred as the lessee of goods or services under
leases that, in accordance with GAAP, consistently applied, should be reflected
on the lessee's balance sheet.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
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as amended.
"Investment" shall mean for purposes of Section 5.02(A) hereof any loan
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or advance to or equity investment in any Person.
"Laws" shall mean all ordinances, statutes, rules, regulations, orders
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(including the Consent Orders), injunctions, writs or decrees of any government
or political subdivision or agency thereof or any court or similar entity
established by any thereof.
"Letter of Credit" shall have the meaning given thereto in Section 2.10
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hereof.
"Letter of Credit Disbursement" shall mean any payment or disbursement
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by Bank under any Letter of Credit.
"Letter of Credit Disbursement Date" shall mean the date on which any
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Letter of Credit Disbursement is made.
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"Leverage Ratio" means, as of any date, the ratio of (a) Indebtedness
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(other than Subordinated Indebtedness) as of such date to (b) Tangible Net Worth
on such date.
"Loan" shall mean the Revolving Loan.
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"Material Adverse Effect" shall mean any specified event, condition or
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occurrence as to any one or more of Borrower or any of its Subsidiaries which
individually or in the aggregate with any other such event, condition or
occurrence and whether through the effect on Borrower's or any of its
Subsidiary's business, property, prospects, profits or condition (financial or
otherwise) or otherwise could reasonably be expected to (a) result in, to the
extent not fully covered by insurance, any liability, loss, forfeiture, penalty,
costs, fine, expense,, payment or other monetary obligation or loss of property
of Borrower and/or any one or more of its subsidiaries in excess of $10,000,000,
and/or (b) in the reasonable judgment of the Bank, materially impair the ability
of the Borrower to meet all of its Obligations to the Bank.
"Note" shall mean the Revolving Loan Note.
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"Obligations" shall mean the obligations of Borrower to pay the
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principal of and interest on the Note and the obligations of Borrower and
Guarantor to satisfy and perform all of its other existing and future
obligations, liabilities and indebtedness to Bank under, as applicable, this
Agreement, the Note and the Guaranty, whether matured or unmatured, direct or
contingent, joint or several, including, without limitation, any extensions,
modifications, renewals thereof and substitutions therefor.
"Obligor" shall mean each of Borrower and Guarantor.
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"Participants" shall mean each Person to which Bank may pursuant to
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Section 2.09 hereof sell participations in or assign all or any portion of the
Loan.
"Permitted Investments" shall mean (a) direct obligations of, or
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obligations fully and unconditionally guaranteed by, the United States of
America, (b) deposit accounts in, or certificates of deposit issued by, any
commercial bank in the United States of America having total capital and surplus
in excess of Seventy Five Million Dollars ($75,000,000) or certificates of
deposit which are fully insured by the Federal Deposit Insurance Corporation,
(c) investment grade (rated in one of the four highest rating categories)
commercial paper, bankers' acceptances or similar financial instruments, (d)
investment grade bonds (rated in one of the four highest rating categories), (e)
mutual funds having at least eighty percent, (80%) of their assets in cash
and/or investments included in (a), (b), (c) or
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(d) above, and/or (f) the investment described in Exhibit
"1.01(C)" hereto.
"Permitted Liens" shall mean:
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(A) Liens for taxes, assessments or similar charges
incurred in the ordinary course of business which are not yet due
and payable;
(B) Pledges or deposits made in the ordinary course of
business to secure repayment of workers' compensation, or to participate in any
fund in connection with compensation, insurance, old-age pensions or other
social security programs, as well as any underlying lien, if any, being replaced
by such pledge or deposit;
(C) Liens of mechanics, materialmen, warehousemen, carriers,
or other like lienors, securing obligations incurred in the ordinary course of
business that are not yet due and payable;
(D) Good faith pledges or deposits made in the ordinary course
of business to secure performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, not in excess of ten percent (10%)
of the aggregate amount due thereunder, or to secure statutory obligations, or
surety, appeal, indemnity, performance or other similar bonds required in the
ordinary course of business, as well as any underlying lien, if any, being
replaced by such pledge, deposit or bond;
(E) Liens in favor of Bank; and
(F) Purchase money liens on equipment or other fixed assets
granted to the vendor or financier thereof as security for the purchase price of
the equipment or fixed asset covered thereby.
"Person" shall mean any individual, corporation, participation,
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association, joint-stock company, trust, unincorporated organization, joint
venture, court or government division or agency thereof.
"Pre-Tax Earnings" shall mean gross revenues and other proper income
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credits, less all proper income charges other than taxes on income, all
determined in accordance with Generally Accepted Accounting Principles; ided
that there shall not be included in such revenues or charges (a) any gains
resulting from the write-up of assets; (b) any proceeds of any life insurance
policy; or (c) any gain or loss which is classified as "extraordinary" in
accordance with Generally Accepted Accounting Principles. Pre-Tax Earnings can
be less than zero for all purposes of this Agreement.
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"Ouarterly Financial Statements" shall mean the quarterly consolidated
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and consolidating financial statements of the Borrower, including all notes (if
any) thereto, which statements shall include a balance sheet and an income
statement and a statement of cash flows for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures for the corresponding quarter of the preceding year
prepared in accordance with Generally Accepted Accounting Principles.
"Ouarterly Period" shall have the meaning given thereto in Section
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2.04(A) hereof.
"Rates" shall mean the respective rates of interest specified in
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Section 2.04 of this Agreement.
"Reimbursement Obligations" shall have the meaning set forth
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in Section 2.10 hereof.
"Reimbursement Rate" shall mean Bank's Prime Rate (as defined in
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Section 2.04 hereof) plus 200 basis points.
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"Revolving Loan" shall mean the Revolving Loan facility established
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pursuant to Section 2.01 of this Agreement.
"Revolvling Loan Limit" shall mean $40,000,000 or such lesser amount to
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which the Revolving Loan Limit may be permanently reduced in accordance with
Section 2.12 hereof.
"Revolving Loan Note" shall mean promissory note evidencing Borrower's
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obligation to repay the Revolving Loan.
"Revolving Loan Termination Date" shall mean February 18, 2002, or such
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other later date to which Bank and Borrower may (without obligation to do so)
hereafter agree in writing in connection with any renewal or extension of the
Revolving Loan.
"Subordinated Indebtedness" shall mean Indebtedness the repayment of
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which is subordinated to the Loan and all other obligations pursuant to one or
more written subordination agreements with Bank in form and substance reasonably
satisfactory to Bank.
"Subsidiary" shall mean an entity in excess of 50% of the capital stock
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or other equity interests of which is now or hereafter owned directly or
indirectly by Borrower.
"Tangible Net Worth" shall mean the excess of assets over liabilities
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as would be shown on a consolidated balance sheet of the Borrower, prepared in
accordance with GAAP, consistently applied, plus the principal balance of
Subordinated Indebtedness, provided that such amounts are to be net of amounts
carried with
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respect to any of the following: (i) unamortized debt discount and expense, (ii)
patents, patent applications, copyrights, trademarks, trade names, goodwill
(including any excess of cost over net assets of businesses acquired),
experimental or organization expenses and other like reserves and intangible
assets, (iii) loans and advances to employees, officers, directors, shareholders
or any other Person, and (iv) investments (other than Permitted Investments) or
other interests (whether debt, equity or otherwise) in any Person.
"25% Entities" shall mean each entity 25% or more but 50% or less of
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the capital stock or other equity interests of which is now or hereafter owned
directly or indirectly by Borrower.
SECTION 1.02 Interpretation of Financial Measurements;
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Financial Statements.
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Except where specifically otherwise provided herein, all financial
measurements shall be computed on a consolidated basis for the Borrower and its
consolidated subsidiaries, and all references herein to financial statements of
the Borrower shall be references to the consolidated and consolidating financial
statements of the Borrower and its consolidated subsidiaries.
SECTION 2. THE LOAN.
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SECTION 2.01 Revolving Loan. Under and subject to the terms and
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conditions of this Agreement and within the Revolving Loan Limit and as
requested by an authorized officer of Borrower from time to time through but not
including the Revolving Loan Termination Date, Bank hereby establishes a
Revolving Loan facility (the "Revolving Loan") pursuant to which Bank will from
time to time make cash advances to and issue Letters of Credit for the account
of Borrower. Unless sooner terminated pursuant to any other provision of this
Agreement, the Revolving Loan will terminate and the entire principal balance of
the Revolving Loan, together with all unpaid accrued interest thereon, shall be
repaid on the Revolving Loan Termination Date, without notice or demand. This
shall include, as to Letters of Credit outstanding on the Revolving Loan
Termination Date, payment by Borrower to Bank on the Revolving Loan Termination
Date of cash or cash equivalents acceptable to Bank in an amount equal to the
face amount of all outstanding Letters of Credit. Each advance under the
Revolving Loan shall be made or issued following the giving of notice by an
authorized officer of Borrower to Bank (which notice shall, subject to the
provisions of Sections 2.04(A)(v) and 2.11 hereof, be given not later than one
(1) Business Day preceding the Business Day on which such cash advance is
required and not later than three (3) Business Days preceding the Business Day
on which such Letter of Credit is required), specifying the date of borrowing
and the amount thereof. Subject to the provisions of Section 2.04(B)(2)(iii)
hereof, cash advance shall
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be in multiples of $1,000.00. Requests for advances may be made via telecopy or
telephonically, and Bank shall be fully justified in relying thereon. Upon
fulfillment of all applicable conditions to such advance set forth herein, Bank
will make such funds available to the Borrower at Bank's main office by
depositing same in Borrower's deposit account with Bank or issuing such Letter
of Credit. The outstanding principal balance under the Revolving Loan may
fluctuate from time to time, to be reduced by repayments made by Borrower, to be
increased by future loans, advances and extensions of credit which may be made
by Bank, to or for the benefit of Borrower.
SECTION 2.02 The Revolving Loan Note. Contemporaneously herewith,
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Borrower will execute and deliver to Bank the Revolving Loan Note to evidence
Borrower's obligation to repay Bank for all amounts due or which may become due
in connection with the Revolving Loan, with interest, all as more fully
described in the Revolving Loan Note, the terms of which are incorporated herein
by reference.
SECTION 2.03 Use Of Revolving Loan Proceeds. Advances under the
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Revolving Loan shall be used by the Borrower exclusively for working capital and
general corporate purposes of the Borrower, its Subsidiaries and its 25%
Entities, including short term acquisition financing, but subject in all events
to the limitation set forth in Section 5.02(A) hereof.
SECTION 2.04 Interest Rates and Calculation of Interest.
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(A) As used in this Section 2.04, the following terms shall
have the following meanings:
(i) "Applicable Margin" means, with
respect to principal of the Revolving Loan for which a LIBOR
Rate election is being made:
(1) 37.5 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 2.0, as reflected
in Borrower's Compliance
Certificate for such fiscal
quarter;
(2) 50 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 2.5 but exceeds
2.0, as reflected in
Borrower's Compliance
Certificate for such fiscal
quarter;
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(3) 75 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 3.0 but exceeds
2.5, as reflected in
Borrower's Compliance
Certificate for such fiscal
quarter;
(4) 125 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio exceeds 3.0, as
reflected in Borrower's
Compliance Certificate for
such fiscal quarter.
With respect to principal of the Revolving Loan for which a LIBOR Rate election
is made, the Applicable Margin will change during the applicable Rate Period as
a result of any change in Borrower's Cash Flow Ratio during such Rate Period.
With respect to principal of the Revolving Loan accruing interest at
the Prime-Based Rate, "Applicable Margin" means:
(1) -150 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 2.0, as reflected
in Borrower's Compliance
Certificate for such fiscal
quarter;
(2) -125 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 2.5 but exceeds
2.0, as reflected in
Borrower's Compliance
Certificate for such fiscal
quarter;
(3) -100 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio equals or is
less than 3.0 but exceeds
2.5, as reflected in
Borrower's Compliance
Certificate for such fiscal
quarter;
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(4) -75 basis points for any
Quarterly Period next
following a fiscal quarter
in which Borrower's Cash
Flow Ratio exceeds 3.0, as
reflected in Borrower's
Compliance Certificate for
such fiscal quarter.
(ii) "Euro-Rate Reserve Percentage" means,
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the applicable effective percentage in effect on such day as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency Liabilities").
(iii) "LIBOR Rate" means, with respect to the
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principal of the loan for which a LIBOR Rate election has been made for any Rate
Period, (a) the interest rate per annum determined by Bank by dividing (the
resulting quotient rounded upward to the nearest 1/16th of 1% per annum) (i) the
rate of interest determined by Bank in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the
eurodollar rate two (2) Business Days prior to the first day of such Rate Period
for an amount comparable to such principal amount and having a borrowing date
and a maturity comparable to such Rate Period by (ii) a number equal to 1.00
minus the Euro-Rate Reserve Percentage, plus (b) the Applicable Margin.
(iv) "Maximum Tranches" means ten (10).
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(v) "Notification" means, with respect to
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all periods in which the LIBOR Rate is in effect, telephonic notice (which shall
be irrevocable) by an authorized officer of Borrower to Bank, which notice shall
be given no later than 10:00 a.m. Philadelphia time, on the day which is at
least 3 Business Days prior to the Business Day on which such rate is to become
effective, which notice shall specify (a) that a LIBOR Rate is being selected
for a portion of outstanding principal of the Revolving Loan, (b) the principal
amount of Revolving Loan to be subject to such rate; (c) the Rate Period(s)
selected; and (d) the date on which such request is to become effective (which
date shall be a date selected in accordance with Section 2.04(B) hereof).
(vi) "Prime Rate" means a per annum rate of
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interest, equal to the rate of interest in effect from time to time at Bank as
its Prime Rate (which is not necessarily the lowest interest rate charged by
Bank for loans), and whether or
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not announced or otherwise communicated to Borrower, such Prime Rate to change
from time to time as of the effective date of each change in Prime Rate.
(vii) "Ouarterly Period" means the three (3)
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calendar month period commencing on the first day of the month next following
the month in which Borrower provides Bank with a Compliance Certificate pursuant
to Section 5.01(A)(3) hereof.
(viii) "Rate Period" means, with respect to all
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periods in which to the LIBOR Rate is in effect, the period of time for which a
particular LIBOR Rate shall apply to a portion of the principal of the Revolving
Loan. Rate Periods for principal earning interest at the LIBOR Rate shall be for
periods of one, two, three or six months, as selected by Borrower, commencing on
the date on which such LIBOR Rate is elected to commence; ided, that if a Rate
Period would end on a day which is not a Business Day, it shall end on the next
succeeding Business Day, unless such day falls in the succeeding calendar month
in which case the Rate Period shall end on the next preceding Business Day. In
no event shall any Rate Period end on a day after the Revolving Loan Termination
Date.
(B) (1) The outstanding principal balance of cash advances
under the Revolving Loan shall earn interest at the Prime Rate plus the
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Applicable Margin (the "Prime-Based Rate") provided, however, that, by giving
-----------------------
Notification, Borrower may request to have all or a portion of the outstanding
principal of the Revolving Loan earn interest, instead, at the LIBOR Rate as
follows: (i) with respect to such principal amount of the Loan, from the date of
such advance until the end of the Rate Period specified in the Notification;
and/or (ii) with respect to the principal amount of the Loan outstanding and
earning interest at the LIBOR Rate at the time of the Notification related to
such principal amount, from the expiration of the then current Rate Period
related to such principal amount until the end of the Rate Period specified in
the Notification; and/or (iii) with respect to all or any portion of the
principal amount of the Loan outstanding and earning interest at the Prime-Based
Rate at the time of Notification, from the date set forth in the Notification
until the end of the Rate Period specified in the Notification.
(2) Borrower understands and agrees: (i) that the
LIBOR Rate applicable to any portion of outstanding principal of the Revolving
Loan may be different from the LIBOR Rate applicable to any other portion of
outstanding principal of the Revolving Loan, (ii) that no more than the Maximum
Tranches of principal of the Revolving Loan bearing interest at the LIBOR Rate
may be outstanding at any one time, and (iii) that the minimum amount of
principal to which any LIBOR Rate shall apply shall be $100,000.
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(3) Borrower shall indemnify Bank against all
liabilities, losses or expenses (including loss of margin, any loss or expense
incurred in liquidating or employing deposits from third parties and any loss or
expense incurred in connection with funds acquired by Bank to fund or maintain
advances under the Loan bearing interest at the LIBOR Rate which Bank sustains
or incurs as a consequence of any attempt by Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or in part any notice given to
Bank to request, convert, renew or prepay any such principal. If Bank sustains
or incurs any such loss, it shall notify Borrower of the amount determined by
Bank to be necessary to indemnify Bank for such loss or expense (which
determination may include such assumptions, allocations of costs and expenses
and averaging or attribution methods as Bank deems appropriate). Such amount
shall be due and payable by Borrower thirty (30) days after such notice is
given.
(4) If Bank reasonably determines (which
determination shall be final and conclusive) that, by reason of circumstances
affecting the interbank eurodollar market generally, deposits in dollars (in the
applicable amounts) are not being offered to banks in the interbank eurodollar
market for the selected term, or adequate means do not exist for ascertaining
the LIBOR Rate, then Bank shall give notice thereof to Borrower. Thereafter,
until Bank notifies Borrower that the circumstances giving rise to such
suspension no longer exist (which notification shall be given promptly), (a) the
availability of the LIBOR Rate shall be suspended, and (b) the interest rate for
all principal then bearing interest at the LIBOR Rate shall bear interest at the
Prime-Based Rate at the expiration of the then current Rate Period(s).
In addition, if, after the date Agreement,
Bank shall reasonably determine (which determination shall be final and
conclusive) that any enactment, promulgation or adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Bank with any guideline, 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 Bank to make or maintain or fund loans at the
LIBOR Rate, Bank shall notify Borrower. Upon receipt of such notice, until Bank
notifies Borrower that the circumstances giving rise to such determination no
longer apply (which notification shall be given promptly), (a) the availability
of the LIBOR Rate shall be suspended, and (b) the interest rate on all principal
then bearing interest at the LIBOR Rate shall bear interest at the Prime-Based
Rate either (i) on the last day of the then current Rate Period(s) if Bank may
lawfully continue to maintain principal at the LIBOR Rate to such day, or
13
(ii) immediately if Bank may not lawfully continue to maintain
principal at the LIBOR Rate.
(C) Interest accruing at the LIBOR Rate or the Prime- Based
Rate shall be computed on the basis of a 360 day year but charged for the actual
number of days elapsed.
(D) If, at any time, any of the Rates shall be finally
determined by any court of competent jurisdiction, governmental agency or
tribunal to exceed the maximum rate of interest permitted by any applicable
Laws, then, for such time as such Rate would be deemed excessive, application
thereof shall be suspended and there shall be charged in lieu thereof the
maximum rate of interest permissible under such Laws.
(E) Should there occur an Event of Default under this
Agreement, then during the continuance of such Event of Default interest on the
Loan shall automatically without notice or demand increase to a rate per annum
which is two (2) percentage points above the otherwise applicable Rate(s)
("Default Rate").
Interest at the Default Rate shall continue to accrue notwithstanding the entry
of any judgment hereon or on the Note, and all such judgments shall bear
interest at the Default Rate provided for herein.
(F) Interest on the Revolving Loan shall be payable monthly on
the first day of each calendar month or, as to interest accruing at the LIBOR
Rate, on the last day of the Rate Period or on the 90th day of the Rate Period
if the Rate Period exceeds 90 days.
SECTION 2.05 Payments to Bank. All payments of interest on and
----------------
principal of the Loan, all fees and all other sums payable to Bank hereunder
shall be paid directly to Bank in immediately available funds, in such currency
of the United States of America as is, at the time of payment, legal tender for
the payment of public and private debts. Bank is hereby irrevocably authorized
to charge Borrower's deposit accounts with Bank, and/or charge the Loan, for any
and all principal, interest and any other amounts from time to time currently
due from Borrower to Bank hereunder and under the Note.
SECTION 2.06 Due Date Extension. If any payment of principal of, or
------------------
interest on the Loan or any payment of any fee provided for herein or any other
amount due hereunder shall fall due on a day which is not a Business Day of
Bank, then such due date shall be extended to the next succeeding Business Day
and additional interest and fees shall accrue and be payable for the period of
such extension.
14
SECTION 2.07 Mandatorv Prepayment; Optional Prepayment;
----------------------------------------
Application of Payments; Repayment Premium.
-------------------------------------------
(a) In the event the aggregate principal amount of the Loan
(including the face amount of all outstanding Letters of Credit and all related
Reimbursement Obligations) shall at the time of any determination of the
Revolving Loan Limit be in excess of the Revolving Loan Limit at such time,
Borrower will forthwith without notice or demand, repay and reduce the principal
balance of the Revolving Loan in an aggregate amount equal to such excess.
(b) Borrower may at its option but subject to the
terms of Section 2.04(B)(3), prepay the principal of the Loan
from time to time and in whole or in part.
(c) For purposes of subparts (a) and (b), Borrower will at the
time of prepayment designate the portion(s) of principal earning interest at a
particular Rate(s) to which such prepayment is to be applied.
(d) Notwithstanding anything in subparts (a)-(b) to the
contrary, upon acceleration by Bank of the Obligations after the occurrence of
an Event of Default, Bank may apply any and all payments to any portion of the
Loan in any order as it shall in its discretion determine.
SECTION 2.08 Facility Fee. Borrower shall pay Bank a Facility Fee equal
------------
to 1/8 of 1% of the Revolving Loan Limit, payable quarterly in arrears.
SECTION 2.09 Participations. Borrower acknowledges that the Bank may
--------------
from time to time sell participations in or, with Borrower's prior written
consent (which Borrower agrees not to unreasonably withhold), assign all or any
portion of the Loan to one or more financial institutions (each a "Participant")
as participant or assignee of Bank in the Loan. In this regard, Borrower agrees
that Bank may, subject to the following sentence, from time to time provide
financial and other information concerning the Borrower to each Participant as
well as to any or prospective participant. Bank agrees to exercise all
reasonable efforts to keep any information delivered or made available by the
Borrower confidential from anyone other than persons employed or retained by
Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loan, provided that nothing herein shall
prevent Bank from disclosing such information (i) to any affiliate of Bank, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over Bank, (iv)
which has been publicly disclosed, (v) in connection with any litigation
relating to the Loan, this Agreement or any transaction contemplated hereby to
which Bank or
15
Borrower may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to Bank's legal counsel and
independent auditors, and (viii) to any actual or proposed Participant or
assignee of all or any part of the Loan hereunder, if such other Person, prior
to such disclosure, agrees for the benefit of the Borrower to comply with the
provisions of this Section 2.09. Any out of pocket costs or expenses, including
attorneys' fees, incurred by Bank or any Participant in connection with the
consummation of any such sale or assignment shall be borne by Bank and/or such
Participant and not by Borrower.
SECTION 2.10 Letters of Credit.
------------------
(A) Agreement to Issue; Termination; Cash Collateral.
-------------------------------------------------
(i) Upon the request of Borrower, Bank shall
under and subject to the terms and conditions hereof issue documentary and
commercial letters of credit for the account of Borrower from time to time
through but not including the Revolving Loan Termination Date (a "Letter of
Credit" and, collectively, the "Letters of Credit"). Letters of Credit issued
hereunder shall be under such te=s, including provisions for draw, as shall be
acceptable to Bank in its discretion, and shall in no event have an expiry date
exceeding twelve (12) months from the date of issue.
(ii) In the event that any Letter of Credit
remains outstanding on the Revolving Loan Termination Date, Borrower shall on
said Revolving Loan Termination Date provide Bank with cash or cash equivalents
acceptable to Bank in an amount equal to the face amount of all Letters of
Credit so outstanding, to be held by Bank as-sdcurity for the Obligations. This
right to require cash collateral is in addition to the right of Bank to require
cash collateral upon the occurrence of an Event of Default as set forth in
Section 6 hereof.
(B) Letters of Credit Generallv.
----------------------------
(i) Reimbursement of Letters of Credit
----------------------------------
Disbursements. Borrower agrees to reimburse Bank for the amount of each Letter
-------------
of Credit Disbursement made by Bank on the corresponding Letter of Credit
Disbursement Date. Such obligation of Borrower to reimburse Bank for any such
Letter of Credit Disbursement is herein referred to as a "Reimbursement
--------------
Oblicgation." If any Reimbursement Obligation is not paid in full by Borrower to
-------------
Bank on the corresponding Letter of Credit Disbursement Date (for this purpose
payments received by Bank after 1:30 p.m., EST on any Business Day shall be
deemed to have been made on the next succeeding Business Day), the unpaid amount
of such Reimbursement Obligation shall bear interest for each day from the
corresponding Letter of Credit Disbursement Date until
16
payment in full thereof (after, as well as before, judgment), payable on demand,
at the Reimbursement Rate.
(ii) Letter of Credit Charges and Fees.
----------------------------------
Borrower agrees to pay on demand to Bank, as well as to any confirming bank of
any Letter of Credit required by the beneficiary thereof to be confirmed as a
condition to such beneficiary's acceptance thereof, with respect to the
issuance, amendment or transfer of any Letter of Credit and each drawing made
under any Letter of Credit, issuance, documentary and processing fees and
charges in accordance with Bank's and such confirming bank's fees and charges in
effect at the time of such issuance, amendment, transfer or drawing, as the case
may be.
(iii) Obligations Absolute. All Reimbursement
--------------------
Obligations of Borrower arising from Letter of Credit Disbursements shall be
unconditional and absolute and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances whatsoever including, without
limitation, the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim,
set-off, defense or other right which Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person for whom
any such beneficiary or transferee may be acting), or any other Person, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any Borrower
or any of its subsidiaries or affiliates and the beneficiary for which any
Letter of Credit was procured); (iii) any draft, demand, certificate or any
other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; or (iv) payment by Bank under any
Letter of Credit against presentation of a demand, draft, certificate or other
document which does not comply with the terms of the Letter of Credit, except to
the extent that Borrower proves that such payment was gross negligence or
willful misconduct on the part of Bank; (v) the failure or delay on the part of
Bank in giving any notice hereunder; (vi) any draw thereunder being a
consequence of Bank's non-renewal of any Letter of Credit; or (vii) any other
circumstance or happening whatsoever similar to any of the foregoing.
(iv) Indemnification; Nature of Duties.
----------------------------------
(a) In addition to amounts payable as
elsewhere provided in this Agreement, Borrower hereby indemnities and holds
harmless Bank from and against any and all claims, damages, losses, liabilities,
costs or expenses whatsoever which Bank may incur (or which may be claimed
against Bank by any Person) by reason of or in connection with the issuance or
17
transfer of, or payment or failure to pay under, any Letter of Credit, or the
involvement by Bank in any suit, proceeding or action as a consequence, direct
or indirect, of Bank's issuance of any Letter of Credit, except for any such
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, which Borrower proves were caused by the gross negligence or
willful misconduct of Bank in determining whether a certificate, draft,
statement or document presented under any Letter of Credit complied with the
terms of the Letter of Credit.
(b) As between Borrower and Bank,
Borrower assumes all risks of the acts or omissions of the beneficiary or any
transferee of any Letter of Credit with respect to such beneficiary's or
transferee's use of the Letter of Credit. Bank shall not be liable or
responsible for: (A) the use which may be made of any Letter of Credit or the
proceeds of any drawing thereunder or for any acts or omissions of the
beneficiary or any transferee in connection therewith; (B) the validity,
sufficiency or genuineness of certificates, drafts or documents presented under
any Letter of Credit that appear on their face to be in order, or of any
endorsement thereon, even if any of the same should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (C) payment by Bank
under any Letter of Credit against presentation of drafts, certificates or
documents which do not comply with the terms of the Letter of Credit, including
failure of any such drafts, certificates or documents to bear any reference or
adequate reference to the Letter of Credit, or for any failure of the
beneficiary of any Letter of Credit otherwise to comply fully with the
conditions required in order to draw under the Letter of Credit; (D) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or the proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; or (E) any other circumstances whatsoever
in making or failing to make payment under any Letter of Credit, except only
that Bank shall be liable to Borrower to the extent, but only to the extent, of
any direct, as opposed to consequential, damages suffered by Borrower which
Borrower proves were caused by Bank's gross negligence or willful misconduct in
connection with the matters referred to in clauses (B) through (E) above. In
furtherance and not in limitation of the foregoing, Bank may accept drafts,
certificates or documents presented to it under any Letter of Credit that appear
on their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and any action taken or
omitted by Bank under or in connection with any Letter of Credit, if taken or
omitted in good faith and without willful misconduct or gross negligence, shall
not put Bank to any resulting liability to any Borrower.
18
(v) Payments to Bank. All payments to be made by
----------------
Borrower to Bank hereunder in respect of Reimbursement Obligations due from
Borrower shall be payable on the day when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived, and an
action therefor shall immediately accrue.
(vi) Application. Borrower shall, as a condition
-----------
to the issuance by Bank of any Letter of Credit, execute and deliver to Bank
Bank's then standard Letter of Credit Application and Security Agreement.
SECTION 2.11 Currency Considerations.
------------------------
(A) Each advance (including Letters of Credit) under the
Revolving Loan shall be denominated in Base Currency unless Borrower, by not
less than five (5) nor more than ten (10) Business Days' written notice to Bank
given prior to the requested date of such advance, requests that such advance be
denominated in an Alternative Currency, in which case such advance shall,
subject to the other terms hereof, be denominated in such Alternative Currency.
(B) If Bank has prior to the requested date of such advance in
an Alternative Currency notified Borrower that (in Bank's opinion) it is
impractical for such advance to be so denominated or to give effect to such
request would cause more than five (5) Alternative currencies to be outstanding
under the Revolving Loan, then unless Borrower and Bank shall otherwise agree,
such advance shall be denominated in Dollars.
(C) All determinations as of any date of the outstanding
principal balance (including the face amount of outstanding Letters of Credit)
of the Revolving Loan will be made in Dollars using, in the case of outstanding
advances made in an Alternative Currency, the Equivalent Dollar Amount thereof
as of the date of any determination of the principal balance of the Revolving
Loan. In no event will Bank have any obligation to make any advance in
Alternative Currency if the Equivalent Dollar amount thereof (including the face
amount of Letters of Credit) as of the date of advance, when taken together with
the then Equivalent Dollar Amount of outstanding advances denominated in
Alternative Currencies and the Dollar amount of outstanding advances denominated
in Dollars, would exceed the Revolving Loan Limit. From time to time at Bank's
discretion, Bank may determine the Equivalent Dollar Amount of outstanding
advances made in Alternative Currency; if the Equivalent Dollar Amount so
determined, when taken together with outstanding advances (including the face
amount of Letters of Credit) made in Dollars, exceeds the Revolving Loan Limit,
Borrower will repay the principal of the Revolving Loan or, as to Letters of
Credit, provide Bank with cash collateral in the currency in which such
19
Letter of Credit is denominated, in the amount of such excess within one (1)
Business Day after notice thereof from Bank.
SECTION 2.12 Reduction of Revolving Loan Limit. Upon not less than ten
---------------------------------
(10) days prior written notice by Borrower to Bank, Borrower may elect to
permanently reduce the Revolving Loan Limit. Any such election will be permanent
and Borrower shall have no right to thereafter increase the same without the
Bank's agreement thereto.
SECTION 3. CONDITIONS.
-----------
The establishment by Bank of the Loan hereunder is subject to the following
conditions precedent (all documents to be in form and substance satisfactory to
Bank and its counsel):
SECTION 3.01 Documents Recruired for the Closing. The Borrower shall
-----------------------------------
have duly delivered to the Bank the following on the Closing Date:
(A) The Note, duly executed on behalf of Borrower;
(B) The Guaranty, duly executed on behalf of the
Guarantor;
(C) A certified (as of the date of the Closing hereof) copy of
resolutions of board of directors of each Obligor authorizing the execution,
delivery and performance of, as applicable, this Agreement, the Note and the
Guaranty;
(D) A certified (as of the date of the Closing) copy
of each Obligor's by-laws;
(E) A certificate (dated the date of the Closing) of each
obligor's corporate secretary or assistant secretary as to the incumbency and
specimen signatures of the officers of such Obligor executing, as applicable,
this Agreement, the Note and the Guaranty;
(F) A copy, certified as of the most recent date practicable
by the appropriate Secretary of State, of each obligor's articles of
incorporation, together with a certificate (dated the date of the Closing) of
each obligor's corporate secretary or assistant secretary to the effect that
such certificate of incorporation has not been amended since the date of the
aforesaid certification;
(G) Certificates, as of the most recent dates practicable, of
the aforesaid Secretaries of State and the Secretary of State of each state in
which any Obligor is qualified as a foreign corporation, as to the subsistence
and good standing of such Obligor;
20
(H) A written opinion of counsel to Obligors, dated the date
of the Closing and addressed to the Bank, in form and substance satisfactory to
Bank and its counsel;
(I) A certificate of Borrower, dated the date of the closing,
signed on its behalf by the president or a vice president of Borrower to the
effect that:
(1) The representations and warranties set forth
in Section 4 of this Agreement are true, complete and correct as
of the date of the Closing;
(2) No Event of Default hereunder, and no event
which, with the giving of notice or the passage of time, or both, would become
such an Event of Default, has occurred as of the date of the Closing;
(3) No material adverse change has occurred in
the Borrower's financial condition since that reflected in the
most recent financial statements delivered to Bank; and
(4) All conditions to Closing set forth in this
Agreement have been fulfilled.
SECTION 3.02 Certain Events. At the time of the Closing and each
--------------
request for an advance or Letter of Credit under the Revolving Loan, no Event of
Default shall have occurred and no event shall have occurred which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default.
SECTION 4. REPRESENTATIONS, WARRANTIES AND SURVIVAL.
-----------------------------------------
SECTION 4.01 Representations and Warranties. To induce Bank to enter
------------------------------
into this Agreement, Borrower represents and warrants to Bank that:
(A) Borrower and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation as shown on Exhibit 114.01(A)II hereto; has the
lawful power to own its property and to engage in the business it conducts, and
is duly qualified and in good standing in each of the jurisdictions where the
nature of its business makes such qualification necessary and where the failure
to so qualify would have a Material Adverse Effect;
(B) Neither Borrower nor any of its Subsidiaries is in default
with respect to any of its existing Indebtedness where such default would have a
Material Adverse Effect, and the making and performance of this Agreement, the
Note and the Guaranty will not (immediately, with the passage of time, or with
the giving of notice and the passage of time):
21
(1) Violate the charter, minutes or by-law
provisions of any Obligor or violate any Laws or result in a default under any
contract, agreement or instrument to which any Obligor is a party or by which
any Obligor or its property is or may be bound, where the same would have a
Material Adverse Effect, or
(2) Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the
assets of any Obligor;
(C) Each Obligor has the power and authority to enter into and
perform, as applicable, this Agreement, the Note and the Guaranty and to incur
the Obligations herein and therein provided for, and has taken all proper and
necessary action, corporate or otherwise, to authorize the execution, delivery
and performance of, as applicable, this Agreement, the Note and the Guaranty;
(D) This Agreement is and the Note and Guaranty when executed
and delivered will be, valid, binding and enforceable against each Obligor, as
applicable, in accordance with their respective terms, except to the extent that
the enforceability thereof is limited by bankruptcy and similar laws and
equitable principles affecting the rights of creditors generally;
(E) Except as disclosed in Exhibit "4.0l(E)" to this
Agreement, there are no judgments or judicial or administrative orders or
proceedings or other litigation pending, or threatened, against or affecting
Borrower or any of its Subsidiaries in any court or before any governmental
authority or arbitration board or tribunal, and neither Borrower nor any of its
Subsidiaries is in violation of any order of any court, governmental authority,
arbitration board or tribunal or administrative agency, or any applicable
statute, regulation or ordinance of the United States of America, or of any
state, city, town, municipality, county or of any other jurisdiction, or of any
agency thereof (including without limitation, environmental laws and
regulations), which would have a Material Adverse Effect;
(F) As of the date of the most recent financial statements
submitted to Bank ("Historical Financial Statements"), neither Borrower nor any
of its Subsidiaries had any material Indebtedness which is required by GAAP to
be disclosed therein including, without limitation, liabilities for taxes and
any interest or penalties relating thereto, except to the extent reflected (in a
footnote or otherwise) and reserved against in the Historical Financial
Statements or as disclosed in or permitted by this Agreement. Borrower does not
know of any basis for the assertion against it or any of its Subsidiaries of any
liability required by GAAP to be disclosed in the Historical Financial
Statements not fully reflected and reserved against therein;
22
(G) Borrower and each of its Subsidiaries has filed all
federal, state and local tax returns and other reports as required by Law to be
filed by it prior to the date hereof, has paid or caused to be paid all taxes,
assessments and other governmental charges that are due and payable prior to the
date hereof, and has made adequate provision for the payment of such taxes,
assessments or other charges accruing but not yet payable, where the failure to
do any of the foregoing would have a Material Adverse Effect, except to the
extent that Borrower or such Subsidiary is contesting the same in good faith and
by appropriate proceeding and an adequate reserve has been made therefor.
Borrower has no knowledge of any deficiency or additional assessment against it
or any of its Subsidiaries in connection with any taxes, assessments or charges
not provided for on its books the failure to pay any of which would have a
Material Adverse Effect;
(H) Except as otherwise disclosed in Exhibit "4.01(H)" to this
Agreement, Borrower and each of its Subsidiaries has complied with all
applicable Laws the noncompliance with which would have a Material Adverse
Effect with respect to (1) restrictions, specifications or other requirements
pertaining to products that it manufactures and sells or to the services it
performs, or that it intends to manufacture, sell or perform, (2) the conduct or
planned conduct of its business operations, and (3) the use, maintenance and
operation or planned use, maintenance and operation of the real and personal
property owned or leased by it in the operation or planned operation of its
business;
(I) All necessary consents, approvals or authorizations of, or
filing, registration or qualification with, any Person required to be obtained
by Borrower or Guarantor in connection with the execution and delivery of, as
applicable, this Agreement, the Note and the Guaranty or the undertaking or
performance of any Obligation hereunder or thereunder has been obtained;
(J) Any employee benefit plan including those subject to ERISA
maintained by Borrower or any of its Subsidiaries or to which any of them
contributed or contributes meets the minimum funding standards established in
Section 302 of ERISA and complies in all material respects with all applicable
requirements of ERISA and of the Internal Revenue Code and with all applicable
rulings and regulations issued under the provisions of ERISA and the Internal
Revenue Code, and no Prohibited Transaction or Reportable Event, within the
meaning of Section 4043 of ERISA, has occurred and is outstanding with respect
to any such employee benefit plan. Furthermore, no employee benefit plan,
including pension plan, has asserted or threatened to assert a claim or demand
for withdrawal liability under ERISA as a result of any withdrawal from any said
plan by Borrower or any
23
Subsidiary or any member of its Controlled Group which has
occurred on or before the date hereof;
(K) Neither Borrower nor any of its Subsidiaries is engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of the Loan will be
used, directly or indirectly, to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock;
(L) Borrower and each of its Subsidiaries has obtained all
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of its property and assets and to the conduct of its business, the
failure to obtain which would have a Material Adverse Effect;
(M) Neither Borrower nor any of its Subsidiaries is a
guarantor or surety of, or otherwise responsible in any manner with respect to,
any undertaking of any Person (other than Borrower or any of its Subsidiaries)
except as set forth in the Historical Financial Statements;
(N) Except as disclosed in Exhibit 4.01(E), Borrower has no
knowledge of any violations by Borrower or any of its Subsidiaries which would
have a Material Adverse Effect of any law pertaining to environmental matters,
including, without limitation the federal Comprehensive Environmental Response
Compensation and Liability Act ("CERCLA"), Environmental Cleanup Responsibility
Act ("ECRA") and the federal Resource Conservation and Recovery Act ("RCRA")
relating to the operations and properties of Borrower or any of its
Subsidiaries;
(0) Neither Borrower or any of its Subsidiaries has received a
summons, citation, notice, directive, letter or other communication, written or
oral, not heretofore fully complied with, from any governmental authority
concerning any intentional or unintentional action or omission by Borrower or
any of its Subsidiaries resulting in any material releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping or otherwise disposing of
Hazardous Waste (as defined in 12 U.S.C. ss. 6903(5)) or Hazardous Substance (as
defined in 42 U.S.C.
ss. 9609(14);
(P) Borrower presently has no corporate affiliates or
Subsidiaries other than the Subsidiaries listed on Exhibit "4.01(P)" hereto and
is not presently required by GAAP to consolidate its financial statements with
those of any Person other than said Subsidiaries;
24
(Q) There are no liens, security interests or other
encumbrances on or affecting any of Borrower's or any of its Subsidiaries,
personal or real property, other than Permitted Liens.
(R) Borrower is, as among itself and its Subsidiaries, the
primary chemical operating company in the United States and is not merely a
holding company for its operating Subsidiaries, and Guarantor is, as among
Borrower and its operating Subsidiaries, an operating Subsidiary with
substantial assets and not merely a holding company for other operating
Subsidiaries.
SECTION 4.02 Survival. By completing the Closing, Bank does not thereby
--------
waive any breach of warranty or misrepresentation made by Borrower hereunder, or
under any other document or agreement delivered to Bank at Closing or otherwise
referred to herein, and all of Bank's claims and rights resulting from any
breach or misrepresentation by Borrower is expressly reserved by Bank. All of
the foregoing representations and warranties set forth in this Section 4 shall
survive until all obligations hereunder are paid and satisfied in full.
SECTION 4.03 No Default. Each request by Borrower that Bank make an
----------
advance or issue a Letter of Credit under the Loan shall, as of the date of such
request, constitute a representation and warranty by Borrower to Bank that no
Event of Default or event which with the passage of time or the giving of notice
or both would constitute an Event of Default exists hereunder.
SECTION 5. COVENANTS.
----------
SECTION 5.01 Affirmative Covenants. Borrower covenants and agrees with
---------------------
Bank that, so long as any of the obligations hereunder remain unsatisfied or
Bank has any commitment in connection therewith, it will and will cause each
Subsidiary (or, as to subsection 5.01(K), each U.S. Subsidiary) to:
(A) Furnish to Bank:
(1) Within ninety (90) days after each fiscal
year of Borrower, a copy of Borrower's Annual Financial
Statements and Form 10K filing for such fiscal year;
(2) Within forty-five (45) days of the close of
each fiscal quarter, a copy of Borrower's Quarterly Financial Statements and
Form 10Q filing for such fiscal quarter;
(3) Concurrently with the foregoing, a
certificate (the "Compliance Certificate") of Borrower, signed on
its behalf by its chief financial officer, reflecting compliance
25
or non-compliance with the financial covenants set forth in
Exhibit "5.01(J)" hereof; and
(4) Upon Bank's request, annual projections of
Borrower's financial condition.
(B) Maintain its properties in good condition and repair
(normal wear and tear excepted), and pay and discharge or cause to be paid and
discharged when due, the cost of repairs to or maintenance of the same.
(C) Carry insurance with reputable insurers in form and amount
and against fire (with extended coverage), liability and such otherrisks as are
customary with companies in the same or similar business in the same area as
Borrower or such Subsidiary.
(D) Pay or cause to be paid when due, all taxes, assessments
and charges or levies imposed upon Borrower or such Subsidiary or on any of its
property or which it is required to withhold and pay over, except where
contested in good faith by appropriate proceedings with adequate reserves
therefor (as determined by Borrower's certified public accountants) having been
set aside on its books.
(E) Maintain complete and accurate books and records and
permit access by Bank during business hours and upon reasonable prior notice
(which may be oral or written) to such books and records and permit Bank to
inspect its properties and operations. Bank may at any time and from time to
time on reasonable notice to Borrower, but not more often than once every three
(3) months unless an Event of Default shall have occurred and is continuing,
audit and conduct examinations of Borrower's or any Subsidiary's books and
records and make abstracts and copies thereof, and Borrower will pay to Bank
Bank's standard fees therefor.
(F) Take all necessary steps to preserve and qualify its
existence and franchises and comply with all present and future Laws applicable
to it in the operation of its business, where the failure to do so would have a
Material Adverse Effect.
(G) Give prompt notice to the Bank of (1) any litigation to
which it is a party if an adverse decision therein would have a Material Adverse
Effect, and (2) the institution of any other suit or any administrative
proceeding involving Borrower or any Subsidiary that would have a Material
Adverse Effect.
(H) Notify Bank promptly upon becoming aware of the occurrence
of any Event of Default or of any fact, condition or event that, with the giving
of notice or passage of time, or
26
both, could become an Event of Default, or of the failure of any obligor to
observe any of its undertakings hereunder or under the Guaranty.
(I) (1) Fund all its employee benefit plans in accordance with
no less than the minimum funding standards of Section 302 of ERISA, (2) promptly
advise Bank of the occurrence of any Reportable Event or Prohibited Transaction
with respect to any such Employee Benefit Plan(s) and the action which Borrower
or such Subsidiary proposes to take with respect thereto; and (3) promptly
advise Bank of any claim for withdrawal liability made against it or a member of
its Controlled Group.
(J) Be in compliance with the financial covenants set forth in
Exhibit 115.01(J)" hereto.
(K) Maintain its major and primary deposit accounts with Bank.
(L) Provide Bank with prompt written notice of any change in
the management or control of Borrower or any Subsidiary, "control" for this
purpose meaning the power to directly or indirectly control the policies and
affairs of a Person through the ownership of stock or otherwise.
SECTION 5.02 Negative Covenants. Borrower hereby covenants and agrees
------------------
that so long as any of the Obligations remain unsatisfied or Bank has any
commitment in connection therewith, without the prior written consent of Bank,
Borrower will not or suffer or permit any Subsidiary to:
(A) Hereafter enter into any merger, consolidation or
reorganization, or acquire any stock in or all or substantially all of the
assets of or any partnership or joint venture interest in, or make any
Investment (other than a Permitted Investment) in any other Person, except:
(a) a merger or consolidation of one subsidiary
into Borrower or another Subsidiary,
(b) Investments (including intercompany advances
of Loan proceeds) hereafter made by Borrower in Borrower's Subsidiaries and 25%
Entities, provided that the aggregate of all such Investments (measured, as to
--------
equity investments, by paid-in capital, and, as to debt, by the outstanding
principal amount thereof) hereafter made by Borrower shall not exceed
$10,000,000 at any time outstanding as to Subsidiaries and $2,500,000 at any
time outstanding as to 25% Entities, and
(c) Acquisitions of the stock or assets of any
Person having an Approved Line of Business.
27
(B) Sell, transfer, lease or otherwise dispose of all or
(except for (i) the sale of Inventory in the ordinary course of its business,
and (ii) and disposition of fixed assets which in Borrower's reasonable judgment
are no longer necessary in the operation of its or such Subsidiary's business in
the ordinary course thereof) any part of its assets, except for sales of any
business unit (whether by sale of stock or assets) having a sales price of
$5,000,000 or less per sale transaction and of $10,000,000 or less in the
aggregate for all such sale transactions.
(C) Mortgage, pledge, grant or permit to exist a security
interest in or lien on any of its assets of any kind, real or personal, tangible
or intangible, now owned or hereafter acquired, except for Permitted Liens, or
enter into or suffer to permit or exist any agreement by which it agrees not to
grant liens in favor of Bank (either by specific reference to Bank or by
reference to any Person generally).
(D) Directly or indirectly apply any part of the proceeds of
the Loans to the purchasing or carrying of any "margin stock" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System, or any
regulations, interpretations or rulings thereunder.
(E) Be subject to any agreement or restriction which prohibits
any Subsidiary from repaying or making cash dividends on or reductions of any
Investment by the Borrower or any other Subsidiary in such Subsidiary.
SECTION 6. DEFAULT.
--------
SECTION 6.01 Events of Default. Each of the following events shall
-----------------
constitute an Event of Default and upon the occurrence thereof Bank shall
thereupon have the option (which is not intended to diminish, alter or limit any
other of Bank's rights described in this Agreement, the Collateral Documents or
any related agreements and documents) (A) to declare Borrower in default under
this Agreement, the Note, and all other agreements with Bank, (B) to terminate
any undertaking of Bank in connection with the Loan, and (C) require that
Borrower provide the Bank, and Borrower agree to provide to the Bank, cash or
cash equivalents acceptable to Bank in an amount equal to the face amount of all
outstanding Letters of Credit, and/or (D) to declare all Obligations immediately
due and payable, including, but not limited to, interest, principal, expenses,
advances to protect Bank's position and reasonable attorneys' fees to enforce
this Agreement, the Note, and all related agreements and documents, and all of
Bank's rights hereunder and thereunder, all without demand, notice, presentment
or protest, or further action of any kind:
28
(A) Borrower fails to pay to Bank when due any installment of
principal, interest, fee or other charge payable hereunder or under the Note
within ten (10)days after written notice thereof given by Bank to Borrower.
(B) Borrower or any other obligor fails to observe or perform
any other Obligation to be observed or performed by it hereunder or under the
Note or the Guaranty, or under any other existing or future agreement between
any Obligor and Bank, which failure, if other than a failure to comply with the
provisions of Sections 5.01(A), 5.01(J) or 5.02 hereof, is not cured within
thirty (30) days of Bank's giving Borrower written notice of the occurrence
thereof.
(C) Any Financial Statement or any representation made herein
or provided to Bank pursuant to any requirement hereof is materially false,
incorrect, or incomplete when made.
(D) Borrower or any Subsidiary becomes insolvent or generally
fails to pay, or admits its inability to pay, debts as they become due or makes
a general assignment for the benefit of any of its creditors, and, as to other
than an obligor, the same is reasonably likely to have a Material Adverse
Effect.
(E) Borrower or any Subsidiary applies for, consents to, or
acquiesces in the appointment of, a trustee, receiver or other custodian for it
or any of its property or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for Borrower
or such Subsidiary or for a substantial part of its property and is not
discharged within sixty (60) days; and, in any such event, as to other than an
Obligor, the same is reasonably likely to have a Material Adverse Effect.
(F) Any bankruptcy, reorganization, liquidation, dissolution
or other case and proceeding under any bankruptcy or insolvency law is commenced
in respect of Borrower or any Subsidiary and if such case or proceeding is not
commenced by Borrower or such Subsidiary, it is consented to or acquiesced in by
Borrower or such Subsidiary or remains for sixty (60) days undismissed, and, in
any such event, as to other than an obligor, the same is reasonably likely to
have a Material Adverse Effect.
(G) Borrower and its Subsidiaries discontinue their business
operations taken as a whole or materially change the nature of their business
taken as a whole from the Approved Line of Business.
(H) Borrower or any Subsidiary shall suffer final judgment(s)
for the payment of money not covered by insurance or reserves reasonably
satisfactory to Bank if any such judgment or judgments would have a Material
Adverse Effect and shall not
29
discharge, satisfy or stay the same within a period of sixty (60) days, or any
lien shall attach against any property of Borrower or any Subsidiary by reason
of any judgment or any execution issued in connection therewith where, as to
other than an obligor, the same is reasonably likely to have a Material Adverse
Effect.
(I) (1) Any reportable event which Bank reasonably determines
to constitute grounds for the termination of any employee benefit plan by the
PBGC or for the appointment by any United States District Court of a trustee to
administer or liquidate any Employee Benefit Plan; (2) the termination of any
employee benefit plan, or any Defined Benefit Plan described in Section 414(j)
or Section 414(k) of the Internal Revenue Code, the present value of whose
benefits that may be guaranteeable under Title IV of ERISA exceeds the amount of
plan assets allocable to such benefits; (3) the appointment by any United States
District Court of a trustee to administer any Employee Benefit Plan; (4) the
institution by the PBGC of proceedings to terminate any Employee Benefit Plan;
(5) the failure by Borrower or any Subsidiary or any member of any Controlled
Group to meet the minimum funding standards established in Section 302 of ERISA;
or (6) the assertion of any claim of, or demand for, withdrawal liability under
ERISA by any multi-employer pension plan to which Borrower or any subsidiary or
any member of its Controlled Group heretofore contributed or currently
contributes; but onlv if any of the events described in clauses (1) - (6),
-------
individually or in the aggregate, would have a Material Adverse Effect.
(K) (a) Failure by Borrower or any Subsidiary to perform or
observe any term, condition or covenant of any bond, note, debenture, loan
agreement, indenture, guaranty, trust agreement, mortgage or similar instrument
to which it is a party or by which it is bound, or by which any of its
properties or assets may be affected (a "Debt Instrument"), and, as a result
thereof (assuming the giving of appropriate notice thereof, if required),
Indebtedness which is included therein or secured or covered thereby shall have
been declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable; or
(b) Any event or condition referred to in any
Debt Instrument shall have occurred or failed to occur, and, as a result
thereof, Indebtedness which is included therein or secured or covered thereby
shall have been declared due and payable prior to the date on which such
Indebtedness would otherwise become due and payable; or
(c) Failure to pay any Indebtedness for borrowed
money due at final maturity or pursuant to demand under any Debt
Instrument;
30
and in any of said events set forth in (a), (b) and (c) the same
has a Material Adverse Effect.
SECTION 6.02 Remedies. After any acceleration of the Obligations, Bank
--------
shall have in addition to the rights and remedies given itby this Agreement, the
Note and the Guaranty, all those allowedby all applicable Laws.
SECTION 7. MISCELLANEOUS.
--------------
SECTION 7.01 Construction. The provisions of this Agreement shall be in
-------------
addition to those of the Note and the Guaranties all of which shall be construed
as integrated and complementary to each other.
SECTION 7.02 [INTENTIONALLY OMITTED].
SECTION 7.03 Enforcement and Waiver by the Bank. Bank shall have the
----------------------------------
right at all times to enforce the provisions of this Agreement and the Note in
strict accordance with the terms hereof and thereof, notwithstanding any conduct
or custom on the part of Bank in refraining from so doing at any time or times.
The failure of Bank at any time or times to enforce its rights under such
provisions, strictly in accordance with such provisions, shall not be construed
as having created a custom in any way or manner contrary to specific provisions
of this Agreement or as having in any way or manner modified or waived this
Agreement. All rights and remedies of Bank are cumulative and concurrent and the
exercise of one right or remedy shall not be deemed a waiver or release of any
other right or remedy.
SECTION 7.04 Expenses of the Bank. Borrower agrees to pay all costs and
--------------------
expenses, including reasonable attorneys' fees and expenses, and filing, search
and other out-of-pocket expenditures (including, during the continuance of any
Event of Default, environmental audit, consulting and appraisal fees), incurred
by Bank in connection with the preparation, negotiation, amendment, extension,
replacement, modification, enforcement, work-out or termination of this
Agreement, the Note, the Loan and the Guaranty and the collection or attempted
collection of the Note or any other Obligations, and the protection,
preservation or defense of Bank's rights and interests.
SECTION 7.05 Notices. Any notices or consents required or permitted by
-------
this Agreement shall (except as otherwise specifically provided in this
Agreement) be in writing and shall be sufficiently delivered if delivered in
person, or by commercial courier against receipt or if sent by certified mail,
postage prepaid, return receipt requested, or by telecopy, as follows, unless
such address or telecopy number is changed by written notice hereunder:
31
(A) If to Borrower:
Sybron Chemicals Inc.
Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxxx, Esq.
Telecopy No. (000) 000-0000
(B) If to Bank:
CoreStates Bank, N.A.
000 Xxxxxxxx Xxxx.
Xxxxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Vice President
Telecopy No. (000) 000-0000
SECTION 7.06 Waiver and Release by Borrower. To the maximum extent
------------------------------
permitted by applicable Laws, Borrower:
(A) Waives (1) protest of all commercial paper at any time
held by Bank on which Borrower is any way liable; and (2) except as otherwise
set forth herein, notice and opportunity to be heard, after acceleration in the
manner provided in Section 6.01 hereof, before exercise by Bank of the remedies
of set-off, or of other summary procedures permitted by any applicable Laws or
by any agreement with Borrower and, except where required hereby or by any
applicable Laws, notice of any other action taken by Bank; and
(B) Releases Bank and its officers, attorneys, agents and
employees from all claims for loss or damage caused by any act or omission on
the part of any of them except willful misconduct or gross negligence or bad
faith.
SECTION 7.07 Applicable Law. The substantive Laws of the State of New
--------------
Jersey shall govern the construction of this Agreement and the rights and
remedies of the parties hereto.
SECTION 7.08 Binding Effect; Assictnment and Entire
--------------------------------------
Agreement.
----------
This Agreement shall inure to the benefit of, and shall be binding
upon, the respective successors and permitted assigns of the parties hereto.
Borrower has no right to assign any of its respective rights or Obligations
hereunder without the prior
32
written consent of Bank. Bank may, subject to Section 2.09 hereof, assign its
rights hereunder to other financial institutions. This Agreement, and the
documents executed and delivered pursuant hereto, constitute the entire
agreement among the parties relating to the subject matter thereof.
SECTION 7.09 Severability. If any provision of this Agreement is held
------------
invalid under any applicable Laws, such invalidity will not affect any other
provision of this Agreement that can be given effect without the invalid
provision, and, to this end, the provisions hereof are severable.
SECTION 7.10 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute but one and the same instrument.
SECTION 7.11 Headings. The headings of any paragraph or section of this
--------
Agreement are for convenience only and shall not be used to interpret any
provision of this Agreement.
SECTION 7.12 Modification. No modification or amendment hereof or of
------------
any agreement referred to herein shall be binding or enforceable unless in
writing and signed on behalf of the party against whom enforcement is sought.
SECTION 7.13 Third Parties. No rights are intended to be created
-------------
hereunder for the benefit of any third party donee, creditor or incidental
beneficiary of Borrower.
SECTION 7.14 Seal. This Agreement is intended to take effect as an
----
instrument under seal.
SECTION 7.15 WAIVER OF JURY TRIAL. BORROWER AND BANK IRREVOCABLY
--------------------
WAIVETRIAL BY JURY AND THE RIGHT THERETO IN ANY LITIGATION IN ANYCOURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, THE NOTES,
COLLATERAL DOCUMENTS, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS
AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF.
SECTION 7.16 Jurisdiction. Borrower and Bank hereby irrevocably consent
------------
to the non-exclusive jurisdiction of the Superior Courts of New Jersey and of
the United States District Court for New Jersey in any and all actions and
proceedings in connection with this Agreement or the Note and irrevocably
consent, in addition to any methods of service of process permissible under
applicable law, to service of process by certified mail, return receipt
requested to the address of the Borrower and Bank as set forth herein.
33
SECTION 7.17 Indemnity. Borrower agrees to indemnify, defend and hold
---------
the Bank Indemnitees harmless from and against any and all loss, liability,
obligation, damage, penalty, judgment, claim, deficiency and expense (including
interest, penalties, reasonable attorneys' fees and amounts paid in settlement)
to which any Bank Indemnitee may become subject arising out of or based upon
this Agreement, the Note or the Loan through the alleged negligence of such Bank
Indemnitee or otherwise, except and to the extent that Borrower proves that such
loss, liability, etc. was caused by the gross negligence or willful misconduct
or bad faith of the Person otherwise so indemnified, and in no event including
(i) income taxes imposed on Bank by reason of interest income received on the
Loans or (ii) the internal administrative expenses incurred by Bank in the
administration of the Loans.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first above written.
SYBRON CHEMICALS INC.
By: s/s Xxxxxxxx X. Xxxxxxx
-------------------------
CORESTATES BANK, N.A.
By: s/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
34
EXHIBIT 5.01(J)
Financial Covenants
(a) Leverage Ratio of not more than 2.5 to 1.0 as of the end of each fiscal
quarter, commencing with fiscal quarter ending December 31, 1996.
(b) Current Ratio of not less than 1.5 to 1.0 as of the end of each fiscal
quarter, commencing with fiscal quarter ending December 31, 1996.
(c) Cash Flow Ratio of not less than 3.0 to 1.0 as of the end of each
fiscal quarter, commencing with fiscal quarter ending December 31,
1996.
(d) Fixed Charge Coverage Ratio of not less than 1.75 to 1.0 as of the end
of each fiscal quarter, commencing with fiscal quarter ending December
31, 1996.
(e) Tangible Net Worth as of the end of each fiscal year, commencing with
fiscal year ending December 31, 1996, of not less than the then prior
fiscal year Tangible Net Worth plus 50% of net income for the fiscal
year then ended.
(f) Borrower will not have any losses.
REVOLVING LOAN NOTE
$40,000,000 February 18, 1997
FOR VALUE RECEIVED and intending to be legally bound, the undersigned,
SYBRON CHEMICALS INC. ("Borrower"), promises to pay to the order of CORESTATES
BANK, N.A. ("Bank"), the principal sum of FORTY MILLION DOLLARS ($40,000,000) or
such lesser sum which constitutes the principal balance outstanding under the
Revolving Loan established by Bank pursuant to the provisions of that certain
Loan Agreement of even date herewith between Borrower and Bank (as the same may
from time to time be amended, restated, supplemented or otherwise modified, the
"Loan Agreement"), the terms of which are incorporated herein by reference. This
Note is that certain Revolving Loan Note issued to Bank and referred to in the
Loan Agreement and evidences the obligation of Borrower to repay the Loans under
the Revolving Loan. All capitalized terms used and not defined herein shall have
the meanings given them in the Loan Agreement.
1. Rate and Payment of Interest. Principal and interest shall be
----------------------------
calculated and payable as set forth in the Loan Agreement. If any payment of
principal of, or interest on, this Note shall fall due on a day which is not a
Business Day, then such due date shall be extended to the next Business Day and
additional interest shall accrue and be payable for the period of such
extension.
2. Holder's Rights Upon Default. If an Event of Default occurs under
----------------------------
the Loan Agreement, Bank shall thereupon have the option at any time and from
time to time to accelerate Borrower's obligations to Bank and exercise all
rights and remedies set forth in the Loan Agreement and in any of the other loan
documents referred to therein, as well as any and all rights and remedies
otherwise available to Bank at law or in equity to collect the unpaid
indebtedness evidenced hereby. Any failure or delay of Bank to exercise any
right hereunder shall not be construed as a waiver of the right to exercise the
same or any other right at any other time or times. The waiver by Bank of a
breach or default of any provision of this Note shall not operate or be
construed as a waiver of any subsequent breach or default thereof.
3. Borrower's Waiver. Borrower hereby waives protest, demand, notice of
-----------------
nonpayment and all other notices in connection with the delivery, acceptance,
performance or enforcement of this Note. Borrower hereby waives any and all
rights it may have to a jury trial in connection with any litigation commenced
against Borrower with respect to this Note.
4. Expenses. Borrower agrees to reimburse Bank for all expenses,
--------
including reasonable attorneys' fees and costs, incurred by Bank to enforce the
provisions of this Note, protect and preserve Bank's rights under the Loan
Agreement, and collect Borrower's obligations hereunder.
2
5. Governing Law. This Note shall be construed and governed by the laws
-------------
of the State of New Jersey without regard to conflict of laws principles.
Borrower hereby irrevocably consents to the non-exclusive jurisdiction of the
Superior Courts of New Jersey and of the United States District Court for New
Jersey in any and all actions and proceedings in connection with this Agreement
or the Note.
6. Miscellaneous. The provisions of this Note are severable
-------------
and the invalidity or unenforceability of any provision shall not
alter or impair the remaining provisions of this Note.
IN WITNESS WHEREOF, this Revolving Loan Note has been executed and
delivered as of the date set forth above.
SYBRON CHEMICALS INC.
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------
By: Xxxxxxxx X. Xxxxxxx
3
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made and entered into as of this
18th day of February, 1997, by SYBRON CHEMIE NEDERLAND B.V. ("Guarantor"), in
consideration of the extension of credit by CORESTATES BANK, N.A. ("Bank") to
SYBRON CHEMICALS INC. ("Borrower"), and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged.
1. Guaranty of Obligations. The Guarantor hereby guarantees, and becomes
-----------------------
surety for, the prompt payment and performance of all liabilities, obligations,
covenants and duties owing by the Borrower to the Bank of any kind or nature
under or in connection with that certain Loan Agreement (as amended from time to
time, the "Loan Agreement") between Bank and Borrower of even date herewith
relating to a $40,000,000 Revolving Loan, as more fully set forth therein, and
any amendments, extensions, renewals or increases thereof and all costs and
expenses of the Bank incurred in the documentation, negotiation, modification,
enforcement, collection or otherwise in connection with any of the foregoing,
including reasonable attorneys' fees and expenses (collectively, the
"Obligations"). If the Borrower defaults under any such Obligations, the
Guarantor will pay the amount due to the Bank.
2. Nature of Guaranty; Waivers. This is a guaranty of payment and not of
-----------------------------
collection and the Bank shall not be required, as a condition of the Guarantor's
liability, to make any demand upon or to pursue any of its rights against the
Borrower, or to pursue any rights which may be available to it with respect to
any other person who may be liable for
the payment of the Obligations. This is an absolute, unconditional,
irrevocable and continuing guaranty and will remain in full force and effect
until all of the Obligations have been indefeasibly paid in full. This Guaranty
will not be affected by any surrender, exchange, acceptance, compromise or
release by the Bank of any other party, or any other guaranty or any security
held by it for any of the Obligations, by any failure of the Bank to take any
steps to perfect or maintain its lien or security interest in or to preserve its
rights to any security or other collateral for any of the Obligations or any
guaranty, or by any irregularity, unenforceability or invalidity of any of the
Obligations or any part thereof or any security or other guaranty thereof. The
Guarantor's obligations hereunder shall not be affected, modified or impaired by
any counterclaim, set-off, deduction or defense based upon any claim the
Guarantor may have against the Borrower or the Bank, except payment or
performance of the Obligations.
Notice of acceptance of this Guaranty, notice of extensions of credit to
the Borrower from time to time, notice of default, diligence, presentment,
notice of dishonor, protest, demand for payment, and any defense based upon the
Bank's failure to comply with the notice requirements of the applicable version
of Uniform Commercial Code ss. 9-504 are hereby waived. The Bank at any time and
from time to time, without notice to or the consent of the Guarantor, and
without impairing or releasing, discharging or modifying the Guarantor's
liabilities hereunder, may (a) change the manner, place, time or terms of
payment or performance of or interest rates on, or other terms relating
2
to, any of the Obligations; (b) renew, substitute, modify, amend or alter,
or grant consents or waivers relating to any of the Obligations, any other
guaranties, or any security for any Obligations or guaranties; (c) apply any and
all payments by whomever paid or however realized including any proceeds of any
collateral, to any Obligations of the Borrower in such order, manner and amount
as the Bank may determine in its sole discretion; (d) deal with any other person
with respect to any Obligations in such manner as the Bank deems appropriate in
its sole discretion; (e) substitute, exchange or release any security or
guaranty; or (f) take such actions and exercise such remedies hereunder as
provided herein.
3. Repayments or Recovery from the Bank. If any demand is made at any time
------------------------------------
upon the Bank for the repayment or recovery of any amount received by it in
payment or on account of any of the Obligations and if the Bank repays all or
any part of such amount by reason of any judgment, decree or order of any court
or administrative body or by reason of any settlement or compromise of any such
demand, the Guarantor will be and remain liable hereunder for the amount so
repaid or recovered to the same extent as if such amount had never been received
originally by the Bank. The provisions of this section will be and remain
effective notwithstanding any contrary action which may have been taken by the
Guarantor in reliance upon such payment, and any such contrary action so taken
will be without prejudice to the Bank's rights hereunder and will be deemed to
have been conditioned upon such payment having become final and irrevocable.
3
4. Enforceability of Obligations. No modification, limitation or discharge
-----------------------------
of the Obligations arising out of or by virtue of any bankruptcy, reorganization
or similar proceeding for relief of debtors under federal or state law will
affect, modify, limit or discharge the Guarantor's liability in any manner
whatsoever and this Guaranty will remain and continue in full force and effect
and will be enforceable against the Guarantor to the same extent and with the
same force and effect as if any such proceeding had not been instituted. The
Guarantor waives all rights and benefits which might accrue to it by reason of
any such proceeding and will be liable to the full extent hereunder,
irrespective of any modification, limitation or discharge of the liability of
the Borrower that may result from any such proceeding.
5. Events of Default. If any Event of Default shall occur under and as
------------------
provided in the Loan Agreement, the Guarantor will, on the demand of the Bank,
immediately deposit with the Bank in U.S. dollars all amounts due or to become
due under the Obligations and the Bank will use such funds to repay the
Obligations. Upon the occurrence of any Event of Default, the Bank in its
discretion may exercise with respect to any collateral any one or more of the
rights and remedies provided a secured party under the applicable version of the
Uniform Commercial Code.
6. Right of Setoff. In addition to all liens upon and rights of setoff
----------------
against the money, securities or other property of the Guarantor given to the
Bank by law, the Bank shall have, with respect to the Guarantor's obligations to
the Bank under this Guaranty and to the extent permitted by
4
law, a contractual right of setoff against all deposits, moneys, securities
and other property of the Guarantor now or hereafter in the possession of or on
deposit with, or in transit to, the Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or whether held for
safekeeping or otherwise, excluding, however, all XXX, Xxxxx, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to the Guarantor. Every such right of setoff shall
be deemed to have occurred immediately upon the occurrence of an Event of
Default hereunder without any action of the Bank although the Bank may enter
such setoff on its books and records at a later time.
7. Costs. To the extent that the Bank incurs any costs or expenses in
-----
protecting or enforcing its rights under the Obligations or this Guaranty,
including reasonable attorneys' fees and the costs and expenses of litigation,
such costs and expenses will be due on demand, will be included in the
Obligations and will bear interest from the incurring or payment thereof at the
Default Rate (as defined in any of the Obligations).
8. Postponement of Subrogation. Until the Obligations are indefeasibly paid
---------------------------
in full, the Guarantor postpones and subordinates in favor of the Bank any and
all rights which the Guarantor may have to assert any claim against the Borrower
based on subrogation rights with respect to payments made hereunder.
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9. Notices. All notices, demands, requests, consents, approvals and other
-------
communications required or permitted hereunder must be in writing and will be
effective upon receipt if delivered personally, or if sent by facsimile
transmission with confirmation of delivery, or by nationally recognized
overnight courier service, to the addresses for the Bank and the Guarantor set
forth in the Loan Agreement or to such other address as one may give to the
other in writing for such purpose.
10. Preservation of Rights. No delay or omission on the Bank's part to
-----------------------
exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any such right or power, nor will the Bank's
action or inaction impair any such right or power. The Bank's rights and
remedies hereunder are cumulative and not exclusive of any other rights or
remedies which the Bank may have under other agreements, at law or in equity.
The Bank may proceed in any order against the Borrower, the Guarantor or any
other obligor of, or collateral securing, the Obligations.
11. Illegality. In case any one or more of the provisions contained in this
----------
Guaranty should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12. Changes in Writing. No modification, amendment or waiver of any
--------------------
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom, will be effective
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unless made in a writing signed by the Bank and Guarantor, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Guarantor in any case
will entitle the Guarantor to any other or further notice or demand in the same,
similar or other circumstance.
13. Entire Agreement. This Guaranty (including the documents and
------------------
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the Guarantor and the Bank with respect to the subject matter hereof.
14. Successors and Assigns. This Guaranty will be binding upon and inure to
----------------------
the benefit of the Guarantor and the Bank and their respective heirs, executors,
administrators, successors and assigns; provided, however, that the Guarantor
may not assign this Guaranty in whole or in part without the Bank's prior
written consent and the Bank at any time may assign this Guaranty in whole or in
part.
15. Interpretation. In this Guaranty, unless the Bank and the Guarantor
--------------
otherwise agree in writing, the singular includes the plural and the plural the
singular; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to; the
word "or" shall be deemed to include "and/or", the words "including", "includes"
and "include" shall be deemed to be followed by the words "without limitation";
and references to sections or exhibits are to
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those of this Guaranty unless otherwise indicated. Section headings in this
Guaranty are included for convenience of reference only and shall not constitute
a part of this Guaranty for any other purpose. If this Guaranty is executed by
more than one party as Guarantor, the obligations of such persons or entities
will be joint and several.
16. Indemnity. The Guarantor agrees to indemnify each of the Bank, its
---------
directors, officers and employees and each legal entity, if any, who controls
the Bank (the "Indemnified Parties") and to hold each Indemnified Party harmless
from and against any and all claims, damages, losses, liabilities and expenses
(including all fees of counsel with whom any Indemnified Party may consult and
all expenses of litigation or preparation therefor) which any Indemnified Party
may incur or which may be asserted against any Indemnified Party as a result of
the execution of or performance under this Guaranty; provided, however, that the
foregoing indemnity agreement shall not apply to claims, damages, losses,
liabilities and expenses attributable to an Indemnified Party's gross negligence
or willful misconduct. The indemnity agreement contained in this Section shall
survive the termination of this Guaranty. Bank shall give notice to Guarantor of
any third party claim which Bank believes may result in any claim under the
provisions of this Section 16 promptly after Bank becomes aware of such claim.
17. Governing Law and Jurisdiction. This Guaranty shall be construed and
-------------------------------
governed by the laws of the State of New Jersey without regard to conflict of
laws principles. The Guarantor hereby irrevocably consents to the non-exclusive
8
jurisdiction of the Superior Courts of New Jersey and of the United States
District Court for New Jersey in any and all actions and proceedings in
connection with this Guaranty; provided that nothing contained in this Guaranty
will prevent the Bank from bringing any action, enforcing any award or judgment
or exercising any rights against the Guarantor individually, against any
security or against any property of the Guarantor within any other county, state
or other foreign or domestic jurisdiction. The Guarantor acknowledges and agrees
that the venue provided above is the most convenient forum for both the Bank and
the Guarantor. The Guarantor waives any objection to venue and any objection
based on a more convenient forum in any action instituted under this Guaranty.
18. WAIVER OF JURY TRIAL. THE GUARANTOR IRREVOCABLY WAIVES ANY AND ALL
--------------------
RIGHT THE GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
CLAIM OF ANY NATURE RELATING TO THIS GUARANTY, ANY DOCUMENTS EXECUTED IN
CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION CONTEMPLATED IN ANY OF OUCH
DOCUMENTS. THE GUARANTOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.
The Guarantor acknowledges that it has read and understood all the
provisions of this Guaranty, including the confession of judgment and waiver of
jury trial, and has been advised by counsel as necessary or appropriate.
9
WITNESS the due execution hereof as a document under seal, as of the date
first written above, with the intent to be legally bound hereby.
SYBRON CHEMIE NEDERLAND B.V.
/s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Secretary
CORESTATES BANK, N.A.
/S/ Xxxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
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