1
Exhibit 10.9
CREDIT AGREEMENT
between
Preformed Line Products Company
and
National City Bank
December 30, 1994
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TABLE OF CONTENTS
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Page
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1A. CROSS-REFERENCE..........................................................................................1
2A. SUBJECT COMMITMENT.......................................................................................1
2A.01 AMOUNT..........................................................................................1
2A.02 TERM............................................................................................1
2A.03 OPTIONAL REDUCTIONS.............................................................................2
2A.04 COMMITMENT FEE..................................................................................2
2A.05 EXTENSION OF SUBJECT COMMITMENTS................................................................2
2B. SUBJECT LOANS............................................................................................2
2B.01 SUBJECT NOTE....................................................................................3
2B.02 CREDIT REQUESTS.................................................................................3
2B.03 CONDITION: NO DEFAULT..........................................................................3
2B.04 CONDITION: PURPOSE.............................................................................4
2B.05 LOAN MIX........................................................................................4
2B.06 AMOUNT..........................................................................................4
2B.07 CONTRACT PERIODS................................................................................4
2B.08 MATURITIES......................................................................................4
2B.09 ROLLOVER........................................................................................4
2B.10 INTEREST: RR LOANS.............................................................................5
2B.11 INTEREST: FIXED-RATE LOANS.....................................................................5
2B.12 DISBURSEMENT....................................................................................6
2B.13 PREPAYMENTS.....................................................................................6
2B.14 FIXED-RATE: UNAVAILABILITY......................................................................6
2B.15 FIXED-RATE LOANS: ILLEGALITY....................................................................7
2B.16 PRIOR LOANS.....................................................................................7
3A. INFORMATION..............................................................................................7
3A.01 FINANCIAL STATEMENTS............................................................................7
3A.02 NOTICE..........................................................................................8
3B. GENERAL FINANCIAL STANDARDS..............................................................................9
3B.01 NET WORTH.......................................................................................9
3B.02 LEVERAGE........................................................................................9
3B.03 WORKING CAPITAL.................................................................................9
3B.04 PRETAX INTEREST COVERAGE........................................................................9
3C. AFFIRMATIVE COVENANTS...................................................................................10
3C.01 TAXES..........................................................................................10
3C.02 FINANCIAL RECORDS..............................................................................10
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3C.03 VISITATION.....................................................................................10
3C.04 INSURANCE......................................................................................10
3C.05 CORPORATE EXISTENCE............................................................................11
3C.06 COMPLIANCE WITH LAW............................................................................11
3C.07 PROPERTIES.....................................................................................11
3D. NEGATIVE COVENANTS......................................................................................12
3D.01 EQUITY TRANSACTIONS............................................................................12
3D.02 CREDIT EXTENSIONS..............................................................................12
3D.03 LIENS, LEASES..................................................................................13
3D.04 DIVIDENDS......................................................................................15
4A. CLOSING.................................................................................................15
4A.01 SUBJECT NOTE...................................................................................15
4A.02 FINANCIAL STATEMENTS...........................................................................15
4A.03 DOCUMENTATION FEE..............................................................................15
4B. WARRANTIES..............................................................................................15
4B.01 EXISTENCE......................................................................................15
4B.02 GOVERNMENTAL RESTRICTIONS......................................................................15
4B.03 CORPORATE AUTHORITY............................................................................16
4B.04 LITIGATION.....................................................................................16
4B.05 TAXES..........................................................................................16
4B.06 TITLE..........................................................................................16
4B.07 LAWFUL OPERATIONS..............................................................................16
4B.08 INSURANCE......................................................................................17
4B.09 FINANCIAL STATEMENTS...........................................................................17
4B.10 DEFAULTS.......................................................................................17
5A. EVENTS OF DEFAULT.......................................................................................17
5A.01 PAYMENTS.......................................................................................17
5A.02 WARRANTIES.....................................................................................17
5A.03 COVENANTS WITHOUT GRACE........................................................................18
5A.04 COVENANTS WITH GRACE...........................................................................18
5A.05 CROSS-DEFAULT..................................................................................18
5A.06 JUDGMENTS/ERISA DEFAULTS.......................................................................18
5A.07 OWNERSHIP......................................................................................18
5A.08 SOLVENCY.......................................................................................18
5B. EFFECTS OF DEFAULT......................................................................................19
5B.01 OPTIONAL DEFAULTS..............................................................................19
5B.02 AUTOMATIC DEFAULTS.............................................................................19
5B.03 OFFSETS........................................................................................19
6A. INDEMNITY: STAMP TAXES..................................................................................19
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6B. INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS..........................................................19
6C. INDEMNITY: FUNDING COSTS................................................................................20
6D. CREDIT REQUESTS.........................................................................................20
6E. INDEMNITY: UNFRIENDLY TAKEOVERS.........................................................................20
6F. INDEMNITY: CAPITAL REQUIREMENTS.........................................................................20
6G. INDEMNITY: COLLECTION COSTS.............................................................................21
6H. CERTIFICATE FOR INDEMNIFICATION.........................................................................21
7. PARTICIPATION...........................................................................................21
8. INTERPRETATION..........................................................................................21
8.01 WAIVERS........................................................................................21
8.02 CUMULATIVE PROVISIONS..........................................................................22
8.03 BINDING EFFECT.................................................................................22
8.04 SURVIVAL OF PROVISIONS.........................................................................22
8.05 IMMEDIATE U.S. FUNDS...........................................................................22
8.06 CAPTIONS.......................................................................................22
8.07 SUBSECTIONS....................................................................................22
8.08 ILLEGALITY.....................................................................................22
8.09 OHIO LAW.......................................................................................22
8.10 INTEREST/FEE COMPUTATIONS......................................................................22
8.11 NOTICE.........................................................................................23
8.12 ACCOUNTING TERMS...............................................................................23
8.13 ENTIRE AGREEMENT...............................................................................23
8.14 WAIVER OF JURY TRIAL...........................................................................23
8.15 LATE CHARGE; APPLICATION OF PAYMENTS...........................................................23
8.16 CONFIDENTIALLY.................................................................................23
9. DEFINITIONS.............................................................................................24
account officer.........................................................................................24
accumulated funding deficiency..........................................................................24
Agreement...............................................................................................24
Bank....................................................................................................24
banking day.............................................................................................24
Borrower................................................................................................24
company.................................................................................................24
contract period.........................................................................................24
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credit request..........................................................................................24
current assets..........................................................................................24
current liabilities.....................................................................................25
debt....................................................................................................25
default under ERISA.....................................................................................25
default under this Agreement............................................................................25
distribution............................................................................................25
environmental law.......................................................................................25
ERISA...................................................................................................25
ERISA regulator.........................................................................................25
expiration date.........................................................................................26
federal funds rate......................................................................................26
funded indebtedness.....................................................................................26
GAAP....................................................................................................26
guarantor...............................................................................................26
insider.................................................................................................26
insolvency action.......................................................................................27
LIBO pre-margin rate....................................................................................27
LIBOR loan..............................................................................................27
AIM loan................................................................................................27
money market rate.......................................................................................27
most recent 4A.02 financial statements..................................................................27
net income..............................................................................................27
net worth...............................................................................................27
pension plan............................................................................................27
prime rate..............................................................................................28
receivable..............................................................................................28
reference rate..........................................................................................28
related writing.........................................................................................28
reportable event........................................................................................28
RR loan.................................................................................................28
short-term loan.........................................................................................28
short-term note.........................................................................................28
subject commitment......................................................................................28
subject indebtedness....................................................................................28
subject loan............................................................................................28
subject note............................................................................................28
subordinated............................................................................................29
subsidiary..............................................................................................29
supplemental schedule...................................................................................29
term loan...............................................................................................29
term note...............................................................................................29
total liabilities.......................................................................................29
wholly-owned............................................................................................29
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CREDIT AGREEMENT
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This Agreement is made as of December 30, 1994 by and between Preformed Line
Products Company (BORROWER) and NATIONAL CITY BANK (BANK), a national banking
association headquartered in Cleveland, Ohio:
I N T R O D U C T I O N:
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WHEREAS, A. Borrower and Bank are parties to an agreement made as of
July 22, 1981, as amended by an Amendment Agreement made as of July 22, 1984,
and as further amended by a Second Amendment Agreement made as of July 2, 1987,
pursuant to which Borrower has made its Term Note (the TERM NOTE), dated July
22, 1987, payable to the order of Bank in the principal sum of two million five
hundred thousand dollars ($2,500,000), and evidencing a loan (the TERM loan)
made by Bank to Borrower;
B. Borrower has made its Grid Note: Short-Term Loans (@ Base
Rate or Fixed Rate) (the SHORT-TERM NOTE), dated June 15, 1994, payable to the
order of Bank in the principal sum of seven million dollars ($7,000,000), and
evidencing loans (each such loan, a SHORT-TERM LOAN) made by Bank to Borrower;
C. Borrower has requested that the short-term loans and the
terns loan, to the extent outstanding on the date hereof, be continued
outstanding as subject loans pursuant to the terms and conditions of this
Agreement;
D. Borrower has requested Bank to agree, pursuant to the terms
and conditions of this Agreement, to make, until, but not including, the
expiration date, such other loans to Borrower as Borrower may from time to time
request;
THEREFORE, in consideration of the premises, in consideration of the
mutual covenants herein contained, and, in the case of Bank, in reliance on the
representations, warranties, and other statements made in or pursuant to this
Agreement and the related writings, Borrower and Bank hereby agree as follows:
1A. CROSS-REFERENCE -- Certain terms are defined in section 9.
2A. SUBJECT COMMITMENT -- The basic terms of the subject commitment and the
compensation therefor are as follows:
2A.01 AMOUNT -- The amount of the subject commitment is fifteen million
dollars ($15,000,000), but that amount may be reduced from time to time
pursuant to subsection 2A.03 and the subject commitment may be
terminated pursuant to section 5B.
2A.02 TERM -- The subject commitments shall commence as of the date of
this Agreement and shall remain in effect on a revolving basis until
(but not including) December 31, 1997 (the EXPIRATION DATE) EXCEPT that
a later expiration date may be established from time to time pursuant
to subsection 2A.05 and EXCEPT that the subject
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commitments shall end in any event upon any earlier reduction thereof
to zero pursuant to subsection 2A.03 or any earlier termination
pursuant to section 5B.
2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at all
times and without the payment of any premium, to permanently reduce the
amount of the subject commitments by giving Bank one (1) banking day's
prior written notice of the amount of each such reduction and the
effective date thereof subject, however, to the following:
(a) No such reduction shall reduce the subject commitments to
a lesser aggregate amount than the sum of the aggregate unpaid
principal balance of the fixed-rate loans then outstanding
plus the aggregate unpaid principal balance o any fixed-rate
loans to be obtained pursuant to any unfulfilled credit
request under subsection 2B.02.
(b) Concurrently with each reduction Borrower shall prepay
such part, if any, of the principal of the subject loans then
outstanding as may be in excess of the amount of the subject
commitments as so reduced. Subsection 2B.13 and section 6C
shall apply to each such prepayment.
2A.04 COMMITMENT FEE -- Borrower agrees to pay Bank a commitment fee
(a) based on the average daily difference between the amount
of the subject commitments from time to time in effect and the
aggregate unpaid principal balance of the subject loans then
outstanding,
(b) computed (on the basis of a 360-day year and the actual
number of days elapsed) at a rate of one-fifth of one percent
(1/5%) per annum so long as the subject commitment remains in
effect and
(c) payable in arrears on April 1, 1995 and on the first day
of each July 1, October 1, January 1, and April 1 thereafter
and at the end of the subject commitment.
2A.05 EXTENSION OF SUBJECT COMMITMENTS -- Whenever Borrower furnishes
its audited financial statements to Bank pursuant to clause (b) of
subsection 3A.01, commencing with Borrower's audited financial
statements for its fiscal year ending December 31, 1995, Borrower may
request that the subject commitments be extended one year to the
December 31 next following the expiration date then in effect. Bank
agrees to give consideration to each such request; but in no event
shall Bank be committed to extend the subject commitments, nor shall
the subject commitments be so extended, unless and until both Borrower
and Bank shall have executed and delivered an extension agreement
substantially in the form of Exhibit C with the blanks appropriately
filled.
2B. SUBJECT LOANS -- Bank agrees that so long as the subject commitment remains
in effect Bank will, subject to the conditions of this Agreement, grant Borrower
such subject loans as Borrower may from time to time request.
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2B.01 SUBJECT NOTE --The subject loans shall be evidenced at all times
by a subject note executed and delivered by Borrower, payable to the
order of Bank in a principal amount equal to the dollar amount of the
subject commitment as in effect at the execution and delivery of the
subject note and being in the form and substance of Exhibit B with the
blanks appropriately filled.
(a) Whenever Borrower shall obtain a subject loan, Bank shall
endorse an appropriate entry on the subject note or make an
appropriate entry in a loan account in Bank's books and
records, or both. Each entry shall be prima facic evidence of
the data entered; but such entries shall not be a condition to
Borrower's obligation to pay.
(b) No holder of the subject note shall transfer the same or
seek a judgment or file a proof of claim based thereon,
without in each case first endorsing the subject note to
reflect the true amount owing thereon.
2B.02 CREDIT REQUESTS -- Except as provided in subsection 2B.
Whenever Borrower desires to borrow pursuant to this Agreement,
Borrower shall give Bank an appropriate notice (a CREDIT REQUEST) with
such information as Bank may reasonably request. The credit request
shall be irrevocable and shall (EXCEPT in the case of any obtained at
the execution and delivery of this Agreement) be given to Bank not
later than 12:00 noon Cleveland time
(a) on the banking day the proceeds of any requested RR loan
or MM loan are to be disbursed to Borrower and
(b) on the third (3rd) banking day prior to the banking day on
which the proceeds of any requested LIBOR loan are to be
disbursed to Borrower.
Each credit request shall be made either in writing or by telephone,
PROVIDED that any telephone request shall be promptly confirmed in
writing and Borrower shall assume the risk of misunderstanding.
2B.03 CONDITION: NO DEFAULT -- Borrower shall not be entitled to obtain
any subject loan if
(a) any default under this Agreement shall then exist or would
thereupon begin to exist or
(b) if any representation, warranty, or other statement made
by any person or entity (other than Bank) in any related
writing (other than any financial statement) would, if made
either as of the time of Borrower's request for that subject
loan or when that loan is to be made, be untrue or incomplete
in any respect.
Each credit request, both when made and when honored, shall of itself
constitute a continuing representation and warranty by Borrower that
Borrower is entitled to obtain, and Bank is obligated to make, the
requested subject loan.
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2B.04 CONDITION: PURPOSE -- Borrower shall not use the proceeds of any
subject loan in any manner that would violate or be inconsistent with
Regulation U or X of the Board of Governors of the Federal Reserve
System; nor will it use any such proceeds for the purpose of financing
the acquisition of any corporation or other business entity if the
acquisition is publicly opposed by the latter's management and if Bank
deems that its participation in the financing would involve it in a
conflict of interest.
2B.05 LOAN MIX -- The subject loans at any one time outstanding may
consist of RR loans or LIBOR loans or MM loans or any combination
thereof as Borrower may from time to time duly elect.
2B.06 AMOUNT -- No subject loan shall be made if, after giving effect
thereto, the aggregate unpaid principal balance of the subject loans
would exceed the amount of the subject commitment then in effect. Each
fixed-rate loan shall be in the principal sum of one million dollars
($1,000,000) or any greater amount (subject to the aforesaid
limitations) that is an integral multiple of one hundred thousand
dollars ($100,000).
2B.07 CONTRACT PERIODS -- Each fixed-rate loan shall have applicable
thereto a contract period to be duly elected by Borrower in the credit
request therefor. Each contract period shall begin on the date the loan
proceeds are to be disbursed and shall end on such date, not later than
the expiration date, as Borrower may select subject, however, to the
following:
(a) The contract period for each MM loan shall be subject to
Bank's assent thereto and, if the contract period otherwise
would end on a day not a banking day, it shall end on the next
following banking day.
(b) The contract period for each LIBOR loan shall end one
month or two or three or six months after the date of
borrowing; PROVIDED, that
(1) if any such contract period otherwise would end
on a day that is not a banking day, it shall end
instead on the next following banking day unless that
day falls in another calendar month, in which latter
case the contract period shall end instead on the
last banking day of the next preceding calendar
month, and
(2) if the contract period commences on a day for
which there is no numerical equivalent in the
calendar month in which the contract period is to
end, it shall end on the last banking day of that
calendar month.
2B.08 MATURITIES -- The stated maturity of each RR loan shall be the
expiration date. The stated maturity of each fixed-rate loan shall be
the last day of the contract period applicable thereto. In no event,
however, shall the stated maturity of any subject loan be later than
the expiration date.
2B.09 ROLLOVER -- If
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(a) prior to the expiration date any fixed-rate loan shall not
be paid in full at the stated maturity thereof and
(b) Borrower shall have failed to duly give Bank a timely
credit request in respect thereof, Borrower shall be deemed to
have duly given Bank a timely credit request to obtain (and
Bank shall accordingly make) a RR loan in a principal amount
equal to the unpaid principal of the fixed-rate loan then due,
the proceeds of which RR loan shall be applied to the payment
in full of the fixed-rate loan then due; PROVIDED that no such
RR. loan shall of itself constitute a waiver of any
then-existing default under this Agreement.
2B.10 INTEREST: RR LOANS -- The principal of and overdue interest on
the RR loans shall bear interest payable in arrears on April 1, 1995
and the first day of each July, October January and April thereafter
and at maturity and computed (in accordance with subsection 8.10)
(a) prior to maturity, at a fluctuating rate equal to the
reference rate from time to time in effect and
(b) after maturity (whether occurring by lapse of time or by
acceleration), at a fluctuating rate equal to the reference
rate from time to time in effect plus two percent (2%) per
annum,
with each change in the reference rate automatically and immediately changing
the rate thereafter applicable to the RR loans; PROVIDED, that in no event shall
the rate applicable to the RR loans after the maturity thereof be less than the
rate applicable thereto immediately after maturity.
2B.11 INTEREST: FIXED-RATE LOANS -- The principal of and overdue
interest on each fixed-rate loan shall bear interest computed (in
accordance with subsection 8.10) and payable as follows:
(a) Prior to maturity each MM loan shall bear interest at a
rate equal to the money market rate in effect at the start of
the applicable contract period plus one-half of one percent
(1/2%) per annum.
(b) Prior to maturity each LIBOR loan shall bear interest at a
rate equal to the LIBO pre-margin rate in effect at the start
of the applicable contract period plus one-half of one percent
(1/2%) per annum.
(c) After maturity (whether occurring by lapse of time or by
acceleration), each fixed-rate loan shall bear interest
computed and payable in the same manner as in the case of RR
loans EXCEPT that in no event shall any fixed-rate loan bear
interest after maturity at a lesser rate than that applicable
thereto immediately after maturity.
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(d) Interest on each fixed-rate loan shall be payable in
arrears on the last day of the contract period applicable
thereto and at maturity and, in the case of any contract
period having a longer term than
(i) ninety (90) days, in the case of any MM loan,
shall also be payable every ninety (90) days after
the first day of the contract period and
(ii) three months, in the case of any LIBOR loan,
shall also be payable every three (3) months after
the first day of the contract period.
2B.12 DISBURSEMENT -- Bank shall, in the absence of Borrower's written
instructions to the contrary, disburse the proceeds of each subject
loan, in each case in immediately available funds, to Borrower's
general checking account with Bank.
2B.13 PREPAYMENTS -- Borrower may from time to time prepay the
principal of the RR loans in whole or in part and may from time to time
prepay the principal of any fixed-rate loan in whole or in part,
subject to the following:
(a) Each prepayment of fixed-rate loans shall be applied
solely to a single fixed-rate loan, shall aggregate one
million dollars ($1,000,000) or any greater amount that is an
integral multiple of one hundred thousand dollars ($100,000)
or an amount equal to the then aggregate unpaid principal
balance thereof.
(b) Each prepayment of the RR loans may be made without
penalty or premium. Any prepayment of any fixed-rate loans
(regardless of the reason for the prepayment) shall be subject
to the payment of any indemnity required by section 6C.
(c) No prepayment shall of itself reduce the subject
commitment.
(d) Concurrently with each prepayment of a fixed-rate loan,
Borrower shall prepay the interest accrued on the prepaid
principal.
2B.14 FIXED-RATE: UNAVAILABILITY -- If at any time
(a) Bank shall determine that dollar deposits of the relevant
amount for the relevant contract period are not available in
the London interbank eurodollar market (in the case of LIBOR
loans) or other market (in the case of MM loans) for the
purpose of funding the fixed-rate loan in question, or
(b) Bank shall determine that circumstances affecting that
market make it impracticable for Bank to ascertain the rate or
rates applicable to fixed-rate loans,
then and in each such case Bank shall, by written notice to Borrower, suspend
Borrower's right thereafter to obtain fixed-rate loans, which suspension shall
remain in effect until such time, if any, as Bank may give written notice to
Borrower that the condition giving rise to the suspension no longer prevails.
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2B.15 FIXED-RATE LOANS: ILLEGALITY -- If any governmental authority
shall assert that it is unlawful for Bank to fund, make or maintain any
fixed-rate loans,
(a) Bank shall give Borrower prompt written notice thereof and
(b) Borrower shall promptly pay in full the principal of and
interest on the fixed-rate loan in question and make the
reimbursement, if any, required by section 6C.
2B.16 PRIOR LOANS -- Upon the execution and delivery of this Agreement,
each of the prior loans outstanding on the date of this Agreement
shall, subject to the terms and conditions of this Agreement, continue
to be outstanding and shall be deemed an RR loan and shall bear
interest accordingly until paid in full. Upon Borrowers' satisfaction
of the conditions precedent set forth in section 4A, Bank shall return
the short-term note and the term note, each marked "EXCHANGED", to
Borrower.
3A. INFORMATION -- Borrower agrees that so long as the subject commitment
remains in effect and thereafter until all the subject indebtedness shall have
been paid in full, Borrower will perform and observe each of the following:
3A.01 FINANCIAL STATEMENTS -- Borrower will furnish to Bank
(a) as soon as available (and in any event within forty-five
(45) days after the end of each month of each of Borrower's
fiscal years), balance sheets of the companies as at the end
of that period and their statements of cash flow, income and
surplus reconciliation for the year to the end of that period,
all prepared (but unaudited) on a consolidated net equity
basis, on a comparative basis with the prior year, in
accordance with the accounting principles used in preparing
Borrower's November 30, 1994 financial statements (released
December 13, 1994) heretofore furnished by Borrower to Bank,
and otherwise in form and detail reasonably satisfactory to
Bank,
(b) as soon as available (and in any event within one hundred
twenty (120) days after the end of each of Borrower's fiscal
years), a complete copy of the annual audit report (including
without limitation all financial statements of the companies
therein and notes thereto) of Borrower for that year which
shall be
(1) prepared on a consolidated basis, on a
comparative basis with the prior year, in accordance
with GAAP (EXCEPT as disclosed therein) and in form
and detail reasonably satisfactory to Bank and
(2) certified (without qualification as to GAAP,
except any qualification required as a result of the
non-disclosure of certain segment information about
Borrower's operations as required by Statement No. 14
of the Financial Accounting Standards Board) by Ernst
& Young or other independent certified public
accountants selected by Borrower and reasonably
satisfactory to Bank,
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(c) concurrently with each delivery of financial statements
pursuant to clause (a) or (b), a certificate by Borrower's
chief financial officer
(1) certifying that to the best of the officer's
knowledge and belief, (A) those financial statements
fairly present in all material respects the financial
condition and results of operations of the companies
in accordance with GAAP subject, in the case of
interim financial statements, to routine year-end
audit adjustments and (B) no default under this
Agreement then exists or if any does, a brief
description of the default and Borrower's intentions
in respect thereof, and
(2) setting forth calculations indicating whether or
not the companies are in compliance with the general
financial standards of section 3B,
(d) promptly when filed (in final form) or sent, a copy of
(1) each registration statement, Form 10-K annual
report, Form 10-Q quarterly report, Form 8-K current
report or similar document, if any, filed by Borrower
with the Securities and Exchange Commission (or any
similar federal agency having regulatory jurisdiction
over Borrower's securities) and
(2) each proxy statement, annual report, certificate,
notice or other document sent by Borrower to the
holders of any of its securities (or any trustee
under any indenture which secures any of its
securities or pursuant to which such securities are
issued) and
(e) forthwith upon Bank's written request, such other
information about the financial condition, properties
and operations of the companies and their pension
plans as that Bank may from time to time reasonably
request.
3A.02 NOTICE -- Borrower will cause its chief financial officer, or in
his absence another officer designated by Borrower, to give Bank prompt
written notice whenever any responsible officer of any company
(a) reasonably believes (or receives notice from any
governmental agency alleging) that any reportable event has
occurred in respect of any pension plan or that any company
has become in material non-compliance with any law or
governmental order referred to in subsection 3C.06 if
non-compliance therewith would materially and adversely affect
the financial condition, operations or properties of the
companies on a consolidated basis,
(b) receives from the Internal Revenue Service or any other
federal, state or local taxing authority any allegation of any
default by any company in the payment of any tax that is
material in amount or notice of any assessment in respect
thereof,
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(c) learns there has been brought against any company before
any court, administrative agency or arbitrator any litigation
or proceeding which, if successful, might have a material,
adverse effect on the financial condition, operations or
properties of the companies on a consolidated basis,
(d) reasonably believes that any representation, warranty, or
other statement made by any person or entity (other than Bank)
in any related writing (other than any financial statement)
would, if made as of the time in question, be untrue or
incomplete in any material respect or
(e) reasonably believes that there has occurred or begun to
exist any other event, condition or thing that likely may have
a material, adverse effect on the financial condition,
operations or properties of the companies viewed on a
consolidated basis.
3B. GENERAL FINANCIAL STANDARDS -- Borrower agrees that so long as the subject
commitments remain in effect and thereafter until all of the subject
indebtedness shall have been paid in full, Borrower will observe each of the
following:
3B.01 NET WORTH -- Borrower will not suffer or permit the consolidated
net worth (exclusive of the cumulative foreign currency translation
adjustment component thereof as reflected in Borrower's financial
statements) of the companies at any time to be less than sixty million
dollars ($60,000,000).
3B.02 LEVERAGE -- Borrower will not suffer or permit
(a) the total liabilities of the companies at any time to
exceed an amount equal to seventy-five percent (75%) of the
net worth of the companies, all as determined on a
consolidated basis, or
(b) the total liabilities of Borrower (including only those of
Borrower and excluding those of its subsidiaries) at any time
to exceed an amount equal to fifty-two percent (52%) of
Borrower's net worth.
3B.03 WORKING CAPITAL -- Borrower will not suffer or permit
(a) the companies' current assets, as determined on a
consolidated basis, less the companies' current liabilities,
as determined on a consolidated basis, at any time to fall
below eighteen million dollars ($18,000,000) or
(b) Borrower's current assets (exclusive of those of its
subsidiaries) less Borrower's current liabilities (exclusive
of those of its subsidiaries) at any time to fall below
thirteen million dollars ($13,000,000).
3B.04 PRETAX INTEREST COVERAGE -- Borrower will not suffer or permit
the aggregate, determined as of the last day each fiscal year
(commencing with the present fiscal year), of
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(a) the net income of the companies for that fiscal year plus
(b) the aggregate interest expense of the companies for that
fiscal year plus
(c) the aggregate federal, state and local income taxes of the
companies for that fiscal year to be less than an amount equal
to three hundred percent (300%) of the aggregate interest
expense of the companies for that fiscal year, all as
determined on a consolidated basis.
3C. AFFIRMATIVE COVENANTS -- Borrower agrees that so long as the subject
commitments remain in effect and thereafter until all of the subject
indebtedness shall have been paid in full, Borrower will perform and observe,
and will cause each subsidiary to perform and observe, each of the following
provisions on their respective parts to be complied with, namely:
3C.01 TAXES -- Each company will pay in full
(a) prior in each case to the date when penalties for the
nonpayment thereof would attach, all taxes, assessments and
governmental charges and levies for which it may be or become
subject and
(b) prior in each case to the date the claim would become
delinquent for non-payment, all other lawful claims (whatever
their kind or nature);
PROVIDED, that no item need be paid so long as and to the extent that
it is contested in good faith and by timely and appropriate proceedings
which are effective to stay enforcement thereof as well as the
imposition of any lien or charge upon its property.
3C.02 FINANCIAL RECORDS -- Each company will at all times keep true and
complete financial records in accordance with GAAP and, without
limiting the generality of the foregoing, make appropriate accruals to
reserves for estimated and contingent losses and liabilities. Each
fiscal year of each company shall commence on January 1 of a calendar
year and conclude on December 31 of the same calendar year.
3C.03 VISITATION -- Each company will permit Bank at all reasonable
times, upon reasonable advance notice, except in the case of an
emergency,
(a) to visit and inspect that company's properties and examine
its financial records and to make copies of and extracts from
such records and
(b) to consult with that company's directors, officers,
employees (with an officer of the company present, provided
that the company shall furnish such an officer promptly after
receipt of the aforementioned advance notice), accountants,
actuaries, trustees and plan administrators in respect of its
financial condition, properties and operations and the
financial condition of its pension plans, each of which
parties is hereby authorized to make such information
available to Bank to the same extent that it would to that
company.
3C.04 INSURANCE -- Each company will
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(a) keep itself and all of its insurable properties insured at
all times to such extent, with such deductibles, by such
insurers and against such hazards and liabilities as is
generally and prudently done by other business enterprises
respectively similar to the companies and
(b) forthwith upon Bank's written request, cause an
appropriate officer to deliver to each of Bank a certificate
setting forth, in form and detail satisfactory to Bank, such
information about that insurance, all as Bank may from time to
time reasonably request.
3C.05 CORPORATE EXISTENCE -- Each company will at all times maintain
its corporate existence, rights and franchises; PROVIDED, that this
subsection shall not prevent any dissolution and liquidation of any
subsidiary or any merger or consolidation permitted by subsection
3D.01.
3C.06 COMPLIANCE WITH LAW -- Each company will comply with all laws
(whether federal, state or local and whether statutory, administrative
or judicial or other) and with every lawful governmental order (whether
administrative or judicial) and will, without limiting the generality
of the foregoing,
(a) use and operate all of its facilities and properties in
material compliance with all environmental laws and handle all
hazardous materials in material compliance therewith; keep in
full effect each permit, approval, certification, license or
other authorization required by any environmental law for the
conduct of any material portion of its business; and comply in
all other material respects with all environmental laws;
(b) make a full and timely payment of premiums required by
ERISA and perform and observe all such further and other
requirements of ERISA such that no default under ERISA shall
occur or begin to exist and
(c) comply with all material requirements of all occupational
health and safety laws;
PROVIDED, that this subsection shall not apply to any of the foregoing
(i) if and to the extent that the same shall be contested in
good faith by timely and appropriate proceedings which are
effective to stay enforcement thereof and against which
appropriate reserves shall have been established or
(ii) in any other case so long as no default under this
agreement would occur or begin to exist if the maximum
liability of all such items (including, without limitation,
those referred to in clause (i)) were reflected in Borrower's
consolidated balance sheet as a current liability.
3C.07 PROPERTIES -- Each company will maintain all fixed assets
necessary to its continuing operations in good working order and
condition, ordinary wear and tear excepted.
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3D. NEGATIVE COVENANTS -- Borrower agrees that so long as the subject
commitments remain in effect and thereafter until all of the subject
indebtedness shall have been paid in full, Borrower will observe, and will cause
each subsidiary to observe, each of the following provisions on their respective
parts to be complied with, namely:
3D.01 EQUITY TRANSACTIONS -- No company will
(a) be a party to any merger or consolidation, PROVIDED, that
if no default under this agreement shall then exist and if
none would thereupon begin to exist, this clause (a) shall not
apply to any merger or consolidation involving only
subsidiaries, any merger involving Borrower in which Borrower
is the surviving corporation, or any dissolution and
liquidation of a subsidiary, or
(b) lease as lessor, sell, sell-leaseback or otherwise
transfer (whether in one transaction or a series of
transactions) all or any substantial part of its fixed assets
EXCEPT chattels that shall have become obsolete or no longer
useful in its present business.
3D.02 CREDIT EXTENSIONS -- No company will
(a) make or keep any investment in any notes, bonds or other
obligations of any kind for the payment of money or make or
have outstanding at any time any advance or loan to anyone or
(b) be or become a guarantor of any kind;
PROVIDED, that this subsection shall not apply to
(i) any existing or future advance made to an officer or
employee of any company solely for the purpose of paying
ordinary and reasonable business expenses of that company,
(ii) any existing or future investment in direct obligations
of the United States of America or any agency thereof, in
certificates of deposit issued by Bank, or in any other
money-market investment if it carries the highest quality
rating of any nationally-recognized rating agency, PROVIDED,
that no investment permitted by this clause (ii) shall mature
more than ninety (90) days after the date when made,
(iii any existing investment, advance, loan or guaranty fully
disclosed in Borrower's most recent 4A.02 financial statements
or in the supplemental schedule,
(iv) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the
normal course of business,
(v) any existing or future investment, advance or loan,
PROVIDED that after giving effect thereto the aggregate amount
of all investments, advances and loans
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(exclusive of investments, advances and loans permitted under
clauses (i), (ii) and (iii) of this subsection 3D.02) made by
any one or more of the companies would not at any time exceed
an amount equal to fifteen million dollars ($15,000,000),
(vi) any existing or future guaranty by a company of any
liability owing by another company, or
(vii) any existing or future guaranty, PROVIDED that after
giving effect thereto, the maximum aggregate amount of all
liabilities incurred by any one or more of the companies
pursuant to any one or more guaranties (exclusive of
guaranties permitted by clauses (iii), (iv) and (vi) of this
subsection 3D.02) would not at any time exceed an amount equal
to ten million dollars ($10,000,000).
3D.03 LIENS, LEASES -- No company will
(a) ease any property as lessee or acquire or hold any
property subject to any land contract, inventory consignment
or other title retention contract,
(b) ell or otherwise transfer any receivables, whether with or
without recourse, except for any sale of receivables
classified as bad debts in accordance with GAAP and which, in
the aggregate, are in an amount that is immaterial in relation
to the seller's aggregate receivables, or
(c) suffer or permit any property now owned or hereafter
acquired by it to be or become encumbered by any mortgage,
security interest, lien or financing statement;
PROVIDED, that this subsection shall not apply to
(i) any tax lien, or any lien securing workers' compensation
or unemployment insurance obligations, or any mechanic's,
carrier's or landlord's lien, or any lien arising under ERISA,
or any security interest arising under article four (Bank
deposits and collections) or five (letters of credit) of the
Uniformly Commercial Code, or any similar security interest or
other lien, EXCEPT that this clause (i) shall apply only to
security interests and other liens arising by operation of law
(whether statutory or common law) and in the ordinary course
of business and shall not apply to any security interest or
other lien that secures any indebtedness for borrowed money or
any Guaranty thereof or any obligation that is in material
default in any manner (other than any default contested in
good faith by timely and appropriate proceedings effective to
stay enforcement of the security interest or other lien in
question),
(ii) zoning or deed restrictions, public utility easements,
minor title irregularities and similar matters having no
adverse effect as a practical matter on the ownership or use
of any of the property in question,
(iii) any lien securing or given in lieu of surety, stay,
appeal or performance bonds, or securing performance of
contracts or bids (other than contracts for the
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payment of money borrowed), or deposits required by law or
governmental regulations or by any court order, decree,
judgment or rule or as a condition to the transaction of
business or the exercise of any right, privilege or license,
EXCEPT that this clause (iii) shall not apply to any lien or
deposit securing an obligation that is in material default in
any manner (other than any default contested in good faith by
timely and appropriate proceedings effective to stay
enforcement of the security interest or other lien in
question),
(iv) any mortgage, security interest or other lien securing
only the subject indebtedness,
(v) any mortgage, security interest, capitalized lease, or
other lien (each, a "purchase money security interest") which
is created or assumed in purchasing, constructing or improving
any real property or equipment or to which any such property
is subject when purchased, PROVIDED, that (A) the purchase
money security interest shall be confined to the aforesaid
property, (B) the indebtedness secured thereby does not exceed
the total cost of the purchase, construction or improvement
and (C) any such indebtedness, if repaid in whole or in part,
cannot be reborrowed,
(vi) any lease other than any capitalized lease (it being
agreed that a capitalized lease is a lien rather than a lease
for the purposes of this Agreement),
(vii) any mortgage, security interest or other lien which (A)
is fully disclosed in Borrower's most recent 4A.02 financial
statements or in the supplemental schedule and (B) secures
only indebtedness that is fully disclosed in Borrower's most
recent 4A.02 financial statements or in the supplemental
schedule or any renewal or refinancing of any such
indebtedness if and to the extent that the renewal or
refinancing does not increase the then amount of the
indebtedness renewed or refinanced,
(viii) any mortgage, security interest or other lien (other
than any purchase money security interest) which encumbers any
fixed asset of any corporation or other business entity that
is not a subsidiary on the date of this Agreement but which
becomes, by acquisition, a subsidiary of any company after the
date of this Agreement, but only if (A) the mortgage, security
interest or other lien in question encumbered the fixed asset
in question at the time such subsidiary is acquired and (B)
the aggregate amount of all indebtedness secured by mortgages,
security interests and other liens permitted by this clause
(viii) does not at any time exceed an amount equal to five
million dollars ($5,000,000) (or the equivalent thereof if not
denominated in U.S. dollars) at any one time outstanding,
(ix) any mortgage, security interest or other lien not
otherwise permitted under his subsection 3D.03 provided that
the aggregate amount of all indebtedness secured by mortgages,
security interests and other liens permitted by this clause
(ix) does not at any time exceed an amount equal to two
million dollars
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($2,000,000) (or the equivalent thereof if not denominated in
U. S. dollars) at any one time outstanding, or
(viii) any financing statement perfecting a security interest
that would be permissible under this subsection.
3D.04 DIVIDENDS -- Borrower will not make or commit itself to make any
distribution to its shareholders at any time if any default under this
agreement shall then exist or would thereupon occur, nor will Borrower
at any time make any distribution other than any dividend payable
solely in cash.
4A. CLOSING -- Prior to or at the execution and delivery of this Agreement
Borrower shall have complied or caused compliance with each of the following:
4A.01 SUBJECT NOTE --Borrower shall have executed and delivered a
subject note to Bank in accordance with subsection 213.01.
4A.02 FINANCIAL STATEMENTS -- Borrower shall have furnished to Bank at
least one true and complete copy of each of the following: Borrower's
annual audit report (including, without limitation, all financial
statements therein and notes thereto and the accompanying accountants'
certificate) prepared as at December 31, 1993 and annual audit reports
for each of Borrower's two next preceding fiscal years (each having
been certified by Ernst & Young) and Borrower's unaudited interim
financial statements prepared as at November 30, 1994. 4A.03
DOCUMENTATION FEE -- Borrower shall pay Bank a documentation fee of
five thousand dollars ($5000).
4B. WARRANTIES -- Subject only to such exceptions, if any, as may be set forth
in the supplemental schedule or in Borrower's most recent 4A.02 financial
statements, Borrower represents and warrants as follows:
4B.01 EXISTENCE -- Borrower is a duly organized and validly existing
Ohio corporation in good standing. Exhibit D sets forth, as of the date
of this Agreement, the name of each of Borrower's subsidiaries, the
address of its chief executive office and the jurisdiction in which it
is incorporated. Each subsidiary is a duly organized and validly
existing corporation in good standing where incorporated, and all of
its outstanding stock is fully paid and non-assessable and owned by
Borrower free from any security interest, option, equity or other right
of any kind except to the extent, if any, set forth in Exhibit D. Each
company is duly qualified to transact business in each state or other
jurisdiction in which it owns or leases any real property or in which
the nature of the business conducted makes such qualification necessary
or, if not so qualified, such failure to qualify will have no material
adverse effect upon the financial condition of the companies and their
ability to transact business, all on a consolidated basis.
4B.02 GOVERNMENTAL RESTRICTIONS -- No registration with or approval of
any governmental agency of any kind is required on the part of any
company for the due execution and delivery or for the enforceability of
this Agreement or any related writing.
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4B.03 CORPORATE AUTHORITY -- Borrower has requisite corporate power and
authority to enter into this Agreement and to obtain subject loans in
accordance with this Agreement. Each officer executing and delivering
this Agreement or any related writing on behalf of Borrower has in each
case been duly authorized by that company to do so. Neither any such
execution and delivery nor any performance and observance by Borrower
of such of the respective provisions of this Agreement and those
related writings as are on its part to be complied with will violate
any existing provision in its articles of incorporation, regulations or
by-laws or any applicable law or violate or otherwise constitute a
default under any contract or other obligation now existing and binding
upon Borrower. This Agreement and each such related writing will, upon
the execution and delivery thereof, become a valid and binding
obligation enforceable against Borrower subject, however, to any
applicable insolvency or Bankruptcy law and general principles of
equity.
4B.04 LITIGATION -- No litigation or proceeding is pending against any
company before any court, administrative agency or arbitrator which
could reasonably be expected to, if successful, have a material adverse
effect on the companies on a consolidated basis.
4B.05 TAXES -- Each company has filed all federal, state and local tax
returns which are required to be filed by it and paid all taxes due as
shown thereon (EXCEPT to the extent, if any, permitted by subsection
3C.01). The Internal Revenue Service has audited Borrower's tax returns
through the year ended December 31, 1989, and, as of the date of this
Agreement, is in the process of auditing Borrower's tax returns through
the year ended December 31, 1992, and has not alleged any material
default by any company in the payment of any tax material in amount or
threatened to make any assessment in respect thereof which has not been
reflected in Borrower's most recent 4A.02 financial statements.
4B.06 TITLE -- The companies have good and marketable title to all
assets reflected in Borrower's most recent 4A.02 financial statements
EXCEPT for changes resulting from transactions in the ordinary course
of business. All such assets are clear of any mortgage, security
interest or other lien of any kind other than any permitted by
subsection 3D.04.
4B.07 LAWFUL OPERATIONS -- Except if and to the extent that
non-compliance would not have a material adverse effect on the
financial condition, operations or properties of the companies on a
consolidated basis, each company's operations have at all relevant
times been and continue to be in compliance with all requirements
imposed by law, whether federal, state or local, whether statutory,
regulatory or other, including (without limitation) ERISA, all
environmental laws and occupational safety and health laws and all
zoning ordinances. Without limiting the generality of the foregoing,
(a) no condition exists at, on or under any facility or other
property now or previously owned by any company which would
give rise to any material liability under any environmental
law; and no company has received any notice from any
governmental agency, court or anyone else to the effect that
(i) such company is a potentially responsible party for any
clean-up of any environmental waste site, the cost of which
clean-up would be material, (ii) such company is in material
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violation of any environmental permit or law or (iii) any
property at any time owned or operated by that company has
been placed on any registry of solid or hazardous waste
disposal site, unless the placement of that property on such
registry is unlikely to result in a material liability on the
part of that company; and
(b) no material accumulated funding deficiency exists in
respect of any of the companies' pension plans; and no
reportable event has occurred in respect of any such plan
which is continuing and which constitutes grounds either for
termination of the plan or for court appointment of a trustee
for the administration thereof.
4B.08 INSURANCE -- The companies' insurance coverage complies with the
standards set forth in subsection 3C.04.
4B.09 FINANCIAL STATEMENTS -- Each of the financial statements referred
to in subsection 4A.02 has been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with those
used by it during its then next preceding full fiscal year EXCEPT to
the extent, if any, specifically noted therein and fairly presents in
all material respects (subject to routine year-end audit adjustments in
the case of the unaudited financial statements) the consolidated
financial condition of the companies as of the date thereof (including
a full disclosure of material contingent liabilities, if any) and the
consolidated results of their operations, if any, for the fiscal period
then ending. There has been no material adverse change in the financial
condition, properties or business of the companies viewed on a
consolidated basis since the date of Borrower's most recent 4A.02
financial statements nor any change in their accounting procedures
since the end of Borrower's latest full fiscal year covered by those
statements.
4B.10 DEFAULTS -- No default under this agreement exists, nor will any
exist immediately after the execution and delivery of this Agreement.
5A. EVENTS OF DEFAULT -- Each of the following shall constitute an event of
default hereunder:
5A.01 PAYMENTS -- If (a) any debt (other than any principal of any
subject loan or any debt payable on demand), including, without
limitation, any subject indebtedness, shall not be paid in full
promptly when the same becomes due and shall remain unpaid for ten (10)
consecutive days thereafter, (b) any principal of any subject loan
shall not be paid in full promptly when the same becomes due or (c) any
debt payable on demand shall not be paid in full promptly within ten
(10) consecutive days after any actual demand for payment therefor.
5A.02 WARRANTIES -- If any representation, warranty or statement made
in this Agreement or in any related writing referred to in subsection
4A shall be false or erroneous in any material respect; or if any
representation, warranty or statement hereafter made by or on behalf of
any company in any related writing not referred to in section 4A shall
be false or erroneous in any material respect.
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5A.03 COVENANTS WITHOUT GRACE -- If any company shall fail or omit to
perform or observe any provision in sections 3A, 3B or 3D or in
subsections 3C.02, 3C.03 or 3C.05.
5A.04 COVENANTS WITH GRACE -- If anyone (other than Bank) shall fail or
omit to perform and observe any agreement (other than those referred to
in subsections 5A.01 or 5A.03) contained in this Agreement or any
related writing that is on its part to be complied with, and that
failure or omission shall not have been fully corrected within thirty
(30) days after the giving of written notice to Borrower by Bank that
it is to be remedied.
5A.05 CROSS-DEFAULT -- If any indebtedness (other than the subject
indebtedness) of any company for borrowed money (regardless of
maturity) or any of its funded indebtedness shall be or become "in
default" (as defined below) EXCEPT any indebtedness if and only so long
as the aggregate unpaid principal balance of all such indebtedness in
default does not exceed five million dollars ($5,000,000) at any one
time outstanding. In this subsection, ` fa t means that (a) there shall
have occurred (or shall exist) in respect of the indebtedness in
question (either as in effect at the date of this Agreement or as in
effect at the time in question) any event, condition or other thing
which constitutes, or which with the giving of notice or the lapse of
any applicable grace period or both would constitute, a default which
accelerates (or permits any creditor or creditors or representative or
creditors to accelerate) the maturity of any such indebtedness; or (b)
any such indebtedness (other than any payable on demand) shall not have
been paid in full at its stated maturity; or (c) any such indebtedness
payable on demand shall not have been paid in full within ten (10)
banking days after any actual demand for payment.
5A.06 JUDGMENTS/ERISA DEFAULTS -- If at any time (a) the aggregate of
all undischarged final judgments (excluding any judgments the execution
of which, on the date of determination, are effectively stayed) against
the companies or any thereof for the payment of money shall exceed an
amount equal to five million dollars ($5,000,000), or (b) the aggregate
of all liabilities of the companies or any thereof arising from
defaults under ERISA, shall exceed an amount equal to five million
dollars ($5,000,000).
5A.07 OWNERSHIP -- If any person or group of persons (as those terms
are defined in sections 13 and 14 of the Securities Exchange Act of
1934, as amended), other than those persons identified as officers or
directors of Borrower in Borrower's 1993 annual report (or their
respective immediate family members, heirs, devisees, legatees, or
trusts for the benefit of any of the foregoing), shall at any time have
or acquire beneficial ownership (within the meaning of Rule 13d 3
promulgated by the Securities and Exchange Commission under the
aforementioned act) of shares constituting fifty percent (50%) or more
of the outstanding equity securities of Borrower.
5A.08 SOLVENCY -- If (a) any company shall discontinue operations, or
(b) any company shall commence any insolvency action of any kind or
admit (by answer, default or otherwise) the material allegations of, or
consent to any relief requested in, any insolvency action of any kind
commenced against that company by its creditors or any
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thereof, or (c) any creditor or creditors shall commence against any
company any insolvency action of any kind which shall remain in effect
(neither dismissed nor stayed) for thirty (30) consecutive days.
5B. EFFECTS OF DEFAULT -- Notwithstanding any contrary provision or inference in
this Agreement or in any related writing:
5B.01 OPTIONAL DEFAULTS -- If any event of default referred to in
subsection 5A.01 through 5A.07, both inclusive, shall occur and be
continuing, Bank shall have the right in its discretion, by giving
written notice to Borrower,
(a) to terminate the subject commitment (if not already
expired or reduced to zero pursuant to section 2A or
terminated pursuant to this section) and Bank shall have no
obligation thereafter to grant any subject loan to Borrower,
and
(b) to accelerate the maturity of all of Borrower's debt to
Bank (other than debt, if any, already due and payable), and
all such debt shall thereupon become and thereafter be
immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind,
all of which are hereby waived by Borrower.
5B.02 AUTOMATIC DEFAULTS -- If any event of default referred to in
subsection 5A.08 shall occur,
(a) the subject commitment shall automatically and immediately
terminate (if not already expired or reduced to zero pursuant
to section 2A or terminated pursuant to this section) and Bank
shall have no obligation thereafter to grant any subject loan
to Borrower, and
b all of Borrower's debt to Bank other than debt if an alread
due and payable) shall thereupon become and thereafter be
immediately due and payable in full, all without any
presentment, demand or notice of any kind, which are hereby
waived by Borrower.
5B.03 OFFSETS -- If there shall occur or exist any default under this
Agreement referred to in subsection 5A.08, then, so long as that
default under this Agreement exists, Bank shall have the right at any
time to set off against and to appropriate and apply toward the payment
of the subject indebtedness then owing to it, whether or not the same
shall then have matured, any and all deposit balances then owing by
Bank to or for the credit or account of Borrower, all without notice to
or demand upon Borrower, all such notices and demands being hereby
expressly waived.
6A. INDEMNITY: STAMP TAXES -- Borrower will pay all stamp taxes and similar
taxes, if any, including interest and penalties, if any, payable in respect of
the issuance of the subject indebtedness.
6B. INDEMNITY: GOVERNMENTAL COSTS/FIXED-RATE LOANS -- If
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(a) there shall be introduced or changed any treaty, statute,
regulation or other law, or there shall be made any change in the
interpretation or administration thereof, or there shall be made any
request from any central bank or other lawful governmental authority,
the effect of any of which events shall be to (1) impose, modify or
deem applicable any reserve or special deposit requirements against
assets held by or deposits in or loans by any national banking
association (whether or not applicable to Bank) or by Bank or (2)
subject Bank to any tax, duty, fee, deduction or withholding or (3)
change the basis of taxation of payments due to Bank from Borrower
(otherwise than by a change in taxation of Bank's overall net income)
or (4) impose on Bank any penalty in respect of any fixed-rate loans
and
(b) in Bank's sole opinion any such event (1) increases (or, if the
event were applicable to Bank, would increase) the cost of making,
funding or maintaining any fixed-rate loan or (2) reduces the amount of
any payment to be made to Bank in respect of the principal or interest
on any fixed-rate loan or other payment under this Agreement, then and,
in each such case, Borrower shall, within fifteen (15) days of Bank's
demand, pay Bank an amount equal to each such cost increase or reduced
payment, as the case may be.
6C. INDEMNITY: FUNDING COSTS -- Borrower agrees to indemnify Bank against any
loss relating in any way to its funding of any fixed-rate loan paid before its
stated maturity (whether a prepayment or a payment following any acceleration of
maturity) and to pay Bank, as liquidated damages for any such loss, an amount
(discounted to the present value in accordance with standard financial practice
at a rate equal to the treasury yield) equal to interest computed on the
principal payment from the payment date to the respective stated maturities
thereof at a rate equal to the difference of the contract rate less the treasury
yield, all as determined by Bank in its reasonable discretion. TREASURY YIELD
means the annual yield on direct obligations of the United States having a
principal amount and maturity similar to that of the principal being paid.
6D. CREDIT REQUESTS -- Whenever Borrower shall revoke any credit request for a
fixed-rate loan, or shall for any other reason fail to borrow pursuant thereto
or otherwise comply therewith, or shall fail to honor any prepayment notice,
then, in each case on Bank's demand, Borrower shall pay Bank such amount as will
compensate it for any loss, cost or expense incurred by it by reason of its
liquidation or reemployment of deposits or other funds.
6E. INDEMNITY: UNFRIENDLY TAKEOVERS -- Borrower agrees to indemnify Bank and
hold Bank harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including, without limitation, the reasonable
fees and disbursements of counsel in connection with any investigative,
administrative or judicial proceeding, whether or not Bank shall be designated a
party thereto) which may be incurred by Bank relating to or arising out of any
actual or proposed use of proceeds of the subject loans in connection with the
financing of an acquisition of any corporation or other business entity,
PROVIDED that Bank shall have no right to be indemnified hereunder for its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.
6F. INDEMNITY: CAPITAL REQUIREMENTS -- If
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(a) at any time any governmental authority shall require National City
Corporation or Bank, whether or not the requirement has the force of
law, to maintain, as support for the subject commitment, capital in a
specified minimum amount that either is not required or is greater than
that required at the date of this Agreement, whether the requirement is
implemented pursuant to the "risk-based capital guidelines" (published
at 12 CFR 3 in respect of "national banking associations", 12 CFR 208
in respect of "state member banks" and 12 CFR 225 in respect of "bank
holding companies") or otherwise, and
(b) as a result thereof the rate of return on capital of National City
Corporation or Bank or both (taking into account their then policies as
to capital adequacy and assuming full utilization of their capital)
shall be directly or indirectly reduced by reason of any new or added
capital thereby allocable to the subject commitment, then, and in each
such case, Borrower shall, within fifteen (15) days of Bank's demand,
pay Bank as an additional fee such amounts as will in Bank's reasonable
opinion reimburse National City Corporation and Bank for any such
reduced rate of return.
6G. INDEMNITY: COLLECTION COSTS -- If any event of default shall occur and shall
be continuing, Borrower will pay Bank such further amounts, to the extent
permitted by law, as shall cover Bank's costs and expenses (including, without
limitation, the reasonable fees, interdepartmental charges and disbursements of
its counsel) incurred in collecting the subject indebtedness or in otherwise
enforcing its rights and remedies in respect thereof.
6H. CERTIFICATE FOR INDEMNIFICATION -- Each demand by Bank: for payment pursuant
to section 6A, 613, 6C, 6D, 6E, 6F or 6G shall be accompanied by a certificate
setting forth the reason for the payment, the amount to be paid, and the
computations and assumptions in determining the amount, which certificate shall
be presumed to be correct in the absence of manifest error. In determining the
amount of any such payment, Bank may use reasonable averaging and attribution
methods.
7. PARTICIPATION -- Bank shall have the right at any time and from time to time
to sell to any person participations in all or part of the subject loans and the
related writings and this Agreement or any thereof. The provisions of sections
6A, 6B, 6C, 6D, 6E, 6F and 6G shall inure to the benefit of each purchaser of a
participation, provided that each such participant shall look solely to the
seller of its participation for those benefits and Borrower's liabilities, if
any, under any of sections 6A, 613, 6C, 6D, 6E, 6F and 6G shall not be increased
as a result of the sale of any such participation. In addition to, and not in
limitation of, the foregoing, each such participant shall have the right of
setoff in respect of its beneficial interest in amounts owing under the related
writings and this Agreement or any thereof to the same extent as if the
participant's beneficial interest were a legal interest.
8. INTERPRETATION -- This Agreement and the related writings shall be governed
by the following provisions:
8.01 WAIVERS -- Bank may from time to time in its discretion grant
Borrower waivers and consents in respect of this Agreement or any
related writing or assent to amendments thereof, but no such waiver,
consent or amendment shall be binding upon Bank unless specifically
granted by Bank in writing, which writing shall be strictly
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27
construed. Without limiting the generality of the foregoing, Borrower
agrees that no course of dealing in respect of, nor any omission or
delay in the exercise of, any right, power or privilege by Bank shall
operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any further or other exercise thereof or of any other,
as each such right, power or privilege may be exercised either
independently or concurrently with others and as often and in such
order as Bank may deem expedient.
8.02 CUMULATIVE PROVISIONS -- Each right, power or privilege specified
or referred to in this Agreement or any related writing is in addition
to and not in limitation of any other rights, powers and privileges
that Bank may otherwise have or acquire by operation of law, by other
contract or otherwise.
8.03 BINDING EFFECT -- The provisions of this Agreement and the related
writings shall bind and benefit Borrower and Bank and their respective
successors and assigns, including each subsequent holder, if any, of
the subject notes or any thereof; PROVIDED, that no person or entity
other than Borrower may obtain subject loans; and PROVIDED, further,
that neither any holder of any subject note or assignee of any subject
loan, whether in whole or in part, shall thereby become obligated
thereafter to grant Borrower any subject loan.
8.04 SURVIVAL OF PROVISIONS -- All representations and warranties made
in or pursuant to this Agreement or any related writing shall survive
the execution and delivery of this Agreement and the subject notes. The
provisions of sections 6A, 613, 6C, 6D, 6E and 6F shall survive the
payment of the subject indebtedness.
8.05 IMMEDIATE U.S. FUNDS -- Any reference to money is a reference to
lawful money of the United States of America which, if in the form of
credits, shall be in immediately available funds.
8.06 CAPTIONS -- The several captions to different sections and
subsections of this Agreement are inserted for convenience only and
shall be ignored in interpreting the provisions thereof.
8.07 SUBSECTIONS -- Each reference to a section includes a reference to
all subsections thereof (i.e., those having the same character or
characters to the left of the decimal point) EXCEPT where the context
clearly does not so permit.
8.08 ILLEGALITY -- If any provision in this Agreement or any related
writing shall for any reason be or become illegal, void or
unenforceable, that illegality, voidness or unenforceability shall not
affect any other provision.
8.09 OHIO LAW -- This Agreement and the related writings and the
respective rights and obligations of the parties hereto shall be
construed in accordance with and governed by internal Ohio law.
8.10 INTEREST/FEE COMPUTATIONS -- All interest and all fees for any
given period shall accrue on the first day thereof but not on the last
day thereof and in each case shall be computed on the basis of a
360-day year and the actual number of days elapsed.
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In no event shall interest accrue at a higher rate than the maximum
rate, if any, permitted by 1aw.
8.11 NOTICE -- A notice to or request of Borrower shall be deemed to
have been given or made under this Agreement or any related writing
either upon the delivery of a writing to that effect (either in person
or by transmission of a telecopy) to an officer of Borrower or five (5)
days after a writing to that effect shall have been deposited in the
United States mail and sent, with postage prepaid, by registered or
certified mail, properly addressed to Borrower (Attention: chief
financial officer). No other method of actually giving actual notice to
or making a request of Borrower is hereby precluded. Every notice
required to be given to Bank pursuant to this Agreement or any related
writing shall be delivered (either in person or by transmission of a
telecopy) to an account officer of Bank. A notice or request by mail is
properly addressed to a party when addressed to it at the address set
forth opposite its signature below or at such other address as that
party may furnish to each of the others in writing for that purpose. A
telecopy is transmitted to a party when transmitted to the telecopy
number set forth opposite that party's signature below (or at such
other telecopy number as that party may furnish to the other in writing
for that purpose).
8.12 ACCOUNTING TERMS -- Any accounting term used in this Agreement
shall have the meaning ascribed thereto by GAAP subject, however, to
such modification, if any, as may be provided by section 9 or elsewhere
in this Agreement.
8.13 ENTIRE AGREEMENT -- This Agreement and the related writings
referred to in or otherwise contemplated by this Agreement set forth
the entire agreement of the parties as to the transactions contemplated
by this Agreement.
8.14 WAIVER OF JURY TRIAL -- The parties acknowledge and agree that any
controversy that may arise under this Agreement and the related
writings would involve difficult and complex issues and therefore agree
that any law suit growing out of or incidental to any such controversy
will be tried in a court of competent jurisdiction by a judge sitting
without a jury.
8.15 LATE CHARGE; APPLICATION OF PAYMENTS -- If Borrower fails to pay
any amount due hereunder, or any fee in connection herewith, in full
within ten (10) days after its due date, Borrower will, in each case,
incur and shall pay a late charge equal to the greater of twenty
dollars ($20.00) or five percent (5%) of the unpaid amount. The payment
of a late charge will not cure or constitute a waiver of any event of
default under this Agreement. Except as otherwise agreed in writing,
payments will be applied first to accrued but unpaid interest and fees,
in that order, on an invoice by invoice basis in the order of their
respective due dates, until paid in full, then to late charges and then
to principal.
8.16 CONFIDENTIALLY -- Bank agrees that if that it obtains, pursuant to
subsection 3C.03, any information not otherwise in Bank's possession,
Bank will not disclose the information so obtained; PROVIDED that
nothing contained in this subsection 8.16 shall prohibit Bank from
disclosing any such information (a) to persons employed by Bank, (b)
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to persons retained by Bank, including, without limitation,
accountants, attorneys, auditors, and other advisors and consultants,
provided that any such other advisor or consultant to whom disclosure
is made pursuant to this clause (b) agrees to be bound by the
provisions of this subsection 8.16, (c) to any actual or prospective
participant or assignee of all or part of Bank's rights arising out of
or in connection with the related writings and this Agreement or any
thereof, provided that the person to whom disclosure is made pursuant
to this clause (c) agrees to be bound by the provisions of this
subsection 8.16, (d) upon the demand, order or request of any court or
administrative agency or other regulatory authority, whether or not
such demand, order or request has the force and effect of law, (e) to
anyone. if it shall have been already publicly disclosed other than in
contravention of this subsection 8.16, and (f) as may be required by
subpoena or other legal process, or in connection with the exercise of
an)- right or remedy under this Agreement or any related writing.
9. DEFINITIONS -- As used in this Agreement and in the related writings, EXCEPT
where the context clearly requires otherwise,
ACCOUNT OFFICER means that officer who at the time in question is
designated by Bank as the officer having primary responsibility for
giving consideration to Borrower's requests for credit or, in that
officer's absence, that officer's immediate superior or any other
officer who reports directly to' that superior officer;
ACCUMULATED FUNDING DEFICIENCY shall have the meaning ascribed thereto
in section 302(a)(2) of ERISA;
AGREEMENT means this Agreement and includes each amendment, if any, to
this Agreement;
BANK is defined in the first paragraph of this Agreement;
BANKING DAY means (a) in the case of a LIBOR loan, a day on which banks
in the London Interbank Market deal in United States dollar deposits
and on which banking institutions are generally open for domestic and
international business in Cleveland, Ohio and in New York City and (b)
in any other case, any day other than a Saturday or a Sunday or a
public holiday or other day on which banking institutions in Cleveland,
Ohio, are generally closed and do not conduct a general banking
business;
BORROWER is defined in the first paragraph of this Agreement;
COMPANY refers to Borrower or to a subsidiary of Borrower, as the case
may be;
CONTRACT PERIOD is defined in subsection 213.07;
CREDIT REQUEST means a request made pursuant to subsection 213.02;
CURRENT ASSETS means the net book value of all such assets (after
deducting applicable reserves, if any, and without consideration to any
reappraisal or write-up of assets) as determined in accordance with
GAAP;
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CURRENT LIABILITIES means all such liabilities as determined in
accordance with GAAP and includes (without limitation) all accrued
taxes and all principal of any funded indebtedness maturing within
twelve months of the date of determination;
DEBT means, collectively, all liabilities of the party or parties in
question to Bank, whether owing by one such party alone or with one or
more others in a joint, several, or joint and several capacity, whether
now owing or hereafter arising, whether owing absolutely or
contingently, whether created by loan, overdraft, guaranty of payment
or other contract or by quasi-contract or tort, statute or other
operation of law or other, and whether participated to or from Bank in
whole or in part; and in the case of Borrower includes, without
limitation, the subject indebtedness;
DEFAULT UNDER ERISA means (a) the occurrence or existence of a material
accumulated funding deficiency in respect of any of the companies'
respective pension plans, (b) any failure by the companies to make a
full and timely payment of premiums required by ERISA for insurance
against any employer's liability in respect of any such plan, (c) any
material breach of a fiduciary duty by any company or trustee in
respect of any such plan or (d) the existence of any action for the
forceable termination of any such plan;
DEFAULT UNDER THIS AGREEMENT means an event, condition or thing which
constitutes (or which with the lapse of any applicable grace period or
the giving of notice or both would constitute) an event of default
referred to in section SA and which has not been appropriately waived
in writing in accordance with this Agreement or corrected to Bank's
full satisfaction;
DISTRIBUTION means a payment made, liability incurred or other
consideration (other than any stock dividend or stock split payable
solely in capital stock of Borrower) given by any company for the
purchase, acquisition, redemption or retirement of any capital stock of
Borrower or as a dividend, return of capital or other distribution in
respect of Borrower's capital stock; and DISTRIBUTE means to make a
distribution;
ENVIRONMENTAL LAW means the comprehensive Environmental Response,
compensation, and Liability Act (42 USC 9601 et seq.), the Hazardous
Material Transportation Act (49 USC 1801 et seq.), the Resource
Conservation and Recovery Act (42 USC 6901 et seq.), the Federal Water
Pollution Control Act (33 USC 1251 et seq.), the Toxic Substances
Control Act (15 USC 2601 et seq.) and the Occupational Safety and
Health Act (29 USC 651 et seq.), as such laws have been or hereafter
may be amended, and any and all analogous future federal, or present or
future state or local, statutes and the regulations promulgated
pursuant thereto;
ERISA means the Employee Retirement Income Security Act of 1974 (P.L.
93-406) as amended from time to time and in the event of any amendment
affecting any section thereof referred to in this Agreement, that
reference shall be a reference to that section as amended,
supplemented, replaced or otherwise modified;
ERISA REGULATOR means any governmental agency (such as the Department
of Labor, the Internal Revenue Service and the Pension Benefit Guaranty
Corporation) having any
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regulatory authority over any of the companies' pension plans; EVENT OF
DEFAULT is defined in section 5A;
EXPIRATION DATE means the date referred to as such in subsection 2A.02,
EXCEPT that in the event of any extension pursuant to subsection 2A.05,
EXPIRATION DATE shall mean the latest date to which the subject
commitment shall have been so extended;
FEDERAL FUNDS RATE means a fluctuating interest rate per annum, as in
effect at the time in question, that is the rate determined by Bank to
be the opening federal funds rate per annum paid or payable by it on
the day in question in its regional federal funds market for overnight
borrowings from other banking institutions; FIXED-RATE LOAN means a
subject loan that is not a RR loan;
FUNDED INDEBTEDNESS means indebtedness of the person or entity in
question which matures or which (including each renewal or extension,
if any, in whole or in part) remains unpaid for more than twelve months
after the date originally incurred and includes, without limitation (a)
any indebtedness (regardless of its maturity) if it is renewable or
refundable in whole or in part solely at the option of that person or
entity (in the absence of default) to a date more than one year after
the date of determination, (b) any capitalized lease, (c) any guaranty
of funded indebtedness owing by another person or entity and (d) any
funded indebtedness secured by a security interest, mortgage or other
lien encumbering any property owned or being acquired by the person or
entity in question even if the full faith and credit of that person or
entity is not pledged to the payment thereof; PROVIDED, that in the
case of any indebtedness payable in installments or evidenced by serial
notes or calling for sinking fund payments, those payments maturing
within twelve months after the date of determination shall be
considered current indebtedness rather than funded indebtedness for the
purposes of subsection 313.03 but shall be considered funded
indebtedness for all other purposes;
GAAP means generally accepted accounting principles applied in a manner
consistent with those used in Borrower's latest fiscal year-end
financial statements referred to in subsection 4A.02;
GUARANTOR means one who pledges his credit or property in any manner
for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any
guarantor (whether of collection or payment), any obligor in respect of
a standby letter of credit or surety bond issued for the obligor's
account, any surety, any co-maker, any endorser, and anyone who agrees
conditionally or otherwise to make any loan, purchase or investment in
order thereby to enable another to prevent or correct a default of any
kind; and GUARANTY means the obligation of a guarantor;
INSIDER, as applied to subordinated indebtedness, refers to
subordinated indebtedness which at the time in question is owing to any
person who is a director or officer of Borrower or who is the record
and beneficial owner of ten percent (10%) or more of Borrower's capital
stock or who is a member of the immediate family of any such director,
officer or stockholder;
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INSOLVENCY ACTION means either (a) a pleading of any kind filed by the
person, corporation or entity (an "insolvent") in question to seek
relief from the insolvent's creditors, or filed by the insolvent's
creditors or any thereof to seek relief of any kind against that
insolvent, in any court or other tribunal pursuant to any law (whether
federal, state or other) relating generally to the rights of creditors
or the relief of debtors or both, or (b) any other action of any kind
commenced by an insolvent or the insolvent's creditors or any thereof
for the purpose of marshalling the insolvent's assets and liabilities
for the benefit of the insolvent's creditors; and INSOLVENCY ACTION
includes (without limitation) a petition commencing a case pursuant to
any chapter of the federal bankruptcy code, any application for the
appointment of a receiver, trustee, liquidator or custodian for the
insolvent or any substantial part of the insolvent's assets, and any
assignment by an insolvent for the general benefit of the insolvent's
creditors;
LIBO PRE-MARGIN RATE means the rate per annum (rounded upwards, if
necessary, to the next higher 1/16 of 1%), as determined by Bank which
equals the average rate per annum at which deposits in United States
dollars are offered for deposits of the maturity and amount in
question, at 11:00 A.M. London time (or as soon thereafter as
practicable) two banking days prior to the first day of the contract
period in question, to Bank by prime banking institutions in any
Eurodollar market reasonably selected by Bank;
LIBOR LOAN means a subject loan having a contract period described in
clause (b) of subsection 2B.07 and bearing interest in accordance with
clause (b) of subsection 2B.1 l;
AIM LOAN means a subject loan having a contract period described in
clause (a) of subsection 2B.07 and bearing interest in accordance with
clause (a) of subsection 2B.11;
MONEY MARKET RATE means the rate per as determined by Bank in its sole
discretion, on the first day of the contract period in question, and
then quoted by Bank to Borrower as the rate which, if elected by
Borrower at the time of Bank's quotation, will be applicable during
that contract period to an MM loan of the principal amount in question;
MOST RECENT 4A.02 FINANCIAL STATEMENTS means Borrower's most recent
financial statements that are referred to in subsection 4A.02;
NET INCOME means net income as determined in accordance with GAAP,
after taxes and after extraordinary items, but without giving effect to
any gain resulting from any reappraisal or write-up of any asset;
NET WORTH means the excess (as determined on a consolidated basis and
in accordance with GAAP) of the net book value (after deducting all
applicable valuation reserves and without consideration to any
reappraisal or write-up of assets) of the tangible assets (i.e., all
assets other than intangibles such as patents, costs of businesses over
net assets acquired, good will and treasury stock) of the company or
companies in question over their total liabilities;
PENSION PLAN means a defined benefit plan (as defined in section 3(35)
of ERISA) of the companies or any thereof and includes, without
limitation, any such plan that is a multi-
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employer plan (as defined in section 3(37) of ERISA) applicable to any
of the companies' employees;
PRIME RATE means the fluctuating rate of interest which is publicly
announced from time to time by Bank at its principal place of business
as being its "prime rate" or "base rate" thereafter in effect, with
each change in the prime rate automatically, immediately and without
notice changing the fluctuating interest rate thereafter applicable
hereunder, it being agreed that the prime rate is not necessarily the
lowest rate of interest then available from Bank on fluctuating rate
loans; PRIOR a means a short-term loan or a term loan;
RECEIVABLE means a claim for money due or to become due, whether
classified as an account, instrument, chattel paper, general
intangible, incorporeal hereditament or otherwise, and any proceeds of
the foregoing;
REFERENCE RATE means, on any given date, either the prime rate in
effect for that day or a rate equal to one percent (1%) per annum plus
the federal funds rate in effect for that day, whichever rate shall be
the higher for that day;
RELATED WRITING means any note, mortgage, security agreement, other
lien instrument, financial statement, audit report, notice, legal
opinion, credit request, officer's certificate or other writing of any
kind which is delivered to the Bank and which is relevant in any manner
to this Agreement or any related writing and includes, without
limitation, the subject notes and the other writings referred to in
sections 3A and 4A;
REPORTABLE EVENT has the meaning ascribed thereto by ERISA;
RR LOAN means a subject loan maturing in the manner described in the
first sentence of subsection 2B.08 and bearing interest in accordance
with subsection 2B.10;\
SHORT-TERM LOAN is defined in paragraph B of the introduction to this
Agreement;
SHORT-TERM NOTE is defined in paragraph B of the introduction to this
Agreement;
SUBJECT COMMITMENT means Bank's commitment to extend credit to Borrower
pursuant to sections 2A and 2B of this Agreement and upon the terms,
subject to the conditions of this Agreement and in accordance with the
other provisions of this Agreement;
SUBJECT INDEBTEDNESS means, collectively, the principal of and interest
on the subject loans and all fees and other liabilities, if any,
incurred by Borrower to Bank pursuant to this Agreement or any related
writing;
SUBJECT LOAN means a loan obtained by Borrower pursuant to this
Agreement, or a prior loan that is deemed to be an RR loan pursuant to
subsection 2B.16;
SUBJECT NOTE means a note executed and delivered by Borrower and being
in the form and substance of Exhibit B with the blanks appropriately
filled;
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SUBORDINATED, as applied to any liability of Borrower, means a
liability which at the time in question is subordinated (by written
instrument in form and substance satisfactory to Bank in favor of the
prior payment in full of Borrower's debt to Bank;
SUBSIDIARY means a corporation or other business entity if shares
constituting a majority of its outstanding capital stock (or other form
of ownership) or constituting a majority of the voting power in any
election of directors (or shares constituting both majorities) are (or
upon the exercise of any outstanding warrants, options or other rights
would be) owned directly or indirectly at the time in question by the
corporation in question or another SUBSIDIARY of that corporation or
any combination of the foregoing;
SUPPLEMENTAL SCHEDULE means the schedule incorporated into this
Agreement as Exhibit A;
TERM LOAN is defined in paragraph A of the introduction to this
Agreement;
TERM NOTE is defined in paragraph A of the introduction to this
Agreement;
TOTAL LIABILITIES means the aggregate (without duplication) of all
liabilities of the entity or entities in question and includes, without
limitation. (a) any, indebtedness which is secured by any mortgage,
security interest or other lien on any of their property even if the
full faith and credit of none of them is pledged to the payment
thereof, (b) any indebtedness for borrowed money or funded indebtedness
of any kind if any such corporation or corporations is a guarantor
thereof and (c) any subordinated indebtedness; PROVIDED, that there
shall be excluded any liability under a reimbursement agreement
relating to a letter of credit issued to finance the importation or
exportation of goods;
WHOLLY-OWNED, as applied to a subsidiary, means that all of the
outstanding shares of stock and all of the outstanding warrants,
options and other rights to purchase stock, other than directors'
qualifying shares, are held of record and beneficially owned by
Borrower;
the foregoing definitions shall be applicable to the respective plurals
of the foregoing defined terms.
[The remainder of this page has been intentionally left blank.]
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Address: Preformed Line Products Company
000 Xxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
telecopy: (000) 000-00000
By: /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx, Vice President
and Chief Financial Officer
Address: National City Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Telecopy: (000) 000-0000
Attn: Metro/Ohio Division By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Xxxxx X. Xxxxxxx, Vice President
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SUPPLEMENTAL SCHEDULE
There is no item which Borrower must disclose in this supplemental schedule in
order to be in full compliance with subsections 3D.01, 3D.02, 3D.03 and 3D.04,
nor is there any addition or exception to the representations and warranties in
section 4B.
EXHIBIT A
37
EXTENSION AGREEMENT
This extension agreement made as of March 20, 1996 by and between Preformed Line
Products Company (BORROWER) and National City Batik (BANK):
The parties have executed and delivered a certain credit agreement dated
December 30, 1994 which provides for, among other things, a subject commitment
aggregating $15,000,000 and available to Borrower, upon certain terms and
conditions until December 31, 1997 (the EXPIRATION DATE now in effect) subject
to any earlier reduction or termination pursuant to the credit agreement
In consideration of our mutual agreements and for other valuable considerations,
the parties agree that subsection 2A.02 of the credit agreement (captioned
"TERM") is hereby amended by deleting the date December 31, 1997 and by
substituting therefor the date "December 31, 1998", which xxxxxx date shall be
the EXPIRATION DATE hereafter in effect.
1n all other respects the credit agreement shall remain in full effect.
Preformed Line Products Company
By /s/ Xxxx X. Xxxxx
------------------------------------
Vice President - Finance
National City Bank
By /s/ Xxxxx X. Xxxxxxx
------------------------------------
Vice President
EXHIBIT C
38
EXTENSION AGREEMENT
This extension agreement made as of April 30, 1998 by and between Preformed Line
Products Company (BORROWER) and National City Bank (BANK):
The parties have executed and delivered a certain credit agreement dated
December 30, 1994 and amended November 30, 1997 which provides for, among other
things, a subject aggregating $40,000,000 and available to Borrower, upon
certain terms and conditions until December 31, 2000 (the EXPIRATION DATE now in
effect) subject to any earlier reduction or termination pursuant to the credit
agreement.
In consideration of our mutual agreements and for other valuable considerations,
the parties agree that subsection 2A.02 of the credit agreement (captioned
"TERM") is hereby amended by deleting the date December 31 , 2000 and by
substituting therefor the date "December 31, 2001", which latter date shall be
the expiration date hereafter in effect.
In all other respects the credit agreement shall remain in full effect.
Preformed Line Products Company
By /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
Vice President - Finance
National City Bank
By /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Vice President
EXHIBIT C
39
EXTENSION AGREEMENT
This extension agreement made as of JUNE 9, 2000 by and between Preformed Line
Products Company (Borrower) and National City Bank (Bank):
The parties have executed and delivered a certain credit agreement dated
December 30, 1994 and amended November 30, 1997 which provides for, among other
things, a subject aggregating $40,000,000 and available to Borrower, upon
certain terms and conditions until DECEMBER 31, 2001 (the EXPIRATION DATE now in
effect) subject to any earlier reduction or termination pursuant to the credit
agreement.
In consideration of our mutual agreements and for other valuable considerations,
the parties agree that subsection 2A.02 of the credit agreement (captioned
"TERM") is hereby amended by deleting the date DECEMBER 31, 2001 and by
substituting therefor the date "DECEMBER 31, 2002", which latter date shall be
the EXPIRATION DATE hereafter in effect.
In all other respects the credit agreement shall remain in full effect.
Preformed Line Products Company
By /s/ Xxxx X. Xxxxx
---------------------------------
Xxxx X. Xxxxx
Vice President - Finance
National City Bank
By /s/ Xxxxx X. Xxxxxxx
---------------------------------
Vice President
EXHIBIT C
40
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered into as of
the 30th day of November, 1997, by and between PREFORMED LINE PRODUCTS COMPANY,
an Ohio corporation with its principal office and place of business in Xxxxxxxx
Village, Ohio (the "Borrower") and NATIONAL CITY BANK, a national banking
association with its principal office and place of business in Cleveland, Ohio
(the "Bank").
WITNESSETH:
WHEREAS, the Borrower and the Bank are parties to that certain Credit
Agreement dated December 30, 1994 (the "Credit Agreement");
WHEREAS, the Borrower and the Bank mutually desire to amend the Credit
Agreement in order to increase the amount of the Subject Commitments from
Fifteen Million and No/ 100ths Dollars ($15,000,000.00) to Forty Million and
No/100ths Dollars ($40,000,000.00) in two (2) Tranches, extend the expiration
date and modify the commitment fee applicable to the Subject Commitments.
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
1. Section 2A. SUBJECT COMMITMENTS of the Credit Agreement is hereby
amended to read in its entirety as follows:
2A. SUBJECT COMMITMENTS -- The basic terms of the Subject Commitments
and the compensation therefor are as follows:
2A.01 AMOUNT -- The aggregate amount of the Subject
Commitments is Forty Million Dollars ($40,000,000) consisting
of two (2) Tranches. The Tranche A Subject Commitment being in
the amount of Twenty Million Dollars ($20,000,000) and the
Tranche B Subject Commitment being in the amount of Twenty
Million Dollars ($20,000,000). The Tranche B Subject
Commitment shall only become effective when activated by
Borrower. Borrower may activate the Tranche B Subject
Commitment, if no default under this Agreement shall have
occurred and be continuing, by written notice to Bank given on
and after the effective date of this Amendment. The Subject
Commitments may be reduced from time to time pursuant to
subsection 2A.03 and the Subject Commitments may be terminated
pursuant to section 5B.
2A.02 TERM -- The Subject Commitment shall commence as of the
date of this Agreement and shall remain in effect on a
revolving basis until December 31, 1997 (the EXPIRATION DATE)
EXCEPT that a later Expiration Date may be established from
time to time pursuant to subsection 2A.05 and EXCEPT that the
Subject Commitment shall end in any event upon any earlier
reduction thereof to zero pursuant to subsection 2A.03 or any
earlier termination pursuant to section 5B.
41
2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at
all times and without the payment of any penalty or premium,
to permanently reduce the amount of the Subject Commitment by
giving Bank one Banking Day's prior written notice of the
amount of each such reduction and the effective date thereof
subject, however, to the following:
(a) No such reduction shall reduce the subject
commitment to a lesser aggregate amount than the sum
of the aggregate unpaid principal balance of the
fixed-rate loans then outstanding plus the aggregate
unpaid principal balance of any fixed-rate loans to
be obtained pursuant to any unfulfilled credit
request under subsection 2B.02.
(b) Concurrently with each reduction Borrower shall
prepay such part, if any, of the principal of the
subject loans then outstanding as may be in excess of
the amount of the subject commitment as so reduced.
Subsection 213.13 and section 6C shall apply to each
such prepayment.
2A.04 COMMITMENT FEE -- Borrower agrees to pay Bank a
commitment fee
(a) based on the average daily difference between the
amount of the subject commitment from time to time in
effect and the aggregate unpaid principal balance of
the subject loans then outstanding,
(b) computed (on the basis of a 360-day year and the
actual number of days elapsed) at a rate of one-fifth
of one percent (1/5%) per annum so long as the
subject commitment remains in effect and
(c) payable in arrears on April 1, 1995 and on the
first day of each July 1, October 1, January 1, and
April 1 thereafter and at the end of the subject
commitment.
2A.05 EXTENSION OF SUBJECT COMMITMENT -- Whenever Borrower
furnishes its audited financial statements to Bank pursuant to
clause (b) of subsection 3A.01, commencing with Borrower's
audited financial statements for its fiscal year ending
December 31, 1995, Borrower may request that the subject
commitment be extended one year to the December 31 next
following the expiration date then in effect. Bank agrees to
give consideration to each such request; but in no event shall
Bank be committed to extend the subject commitment, nor shall
the subject commitment be so extended, unless and until both
Borrower and Bank shall have executed and delivered an
extension agreement substantially in the form of Exhibit C
with the blanks appropriately filled.
2. Subsection 3B.04..PRETAX INTEREST COVERAGE of the Credit Agreement
is hereby amended to read in its entirety as follows:
-2-
42
3B.04 PRETAX INTEREST COVERAGE -- Borrower will not suffer or
permit the aggregate, determined as of the last day each
fiscal quarter (commencing with the present fiscal quarter),
of
(a) the net income of the companies for the previous
four (4) quarters plus
(b) the aggregate interest expense of the companies
for the previous four (4) quarters plus
(c) the aggregate federal, state and local income
taxes of the companies for the previous four (4)
quarters
to be less than an amount equal to three hundred percent
(300%) of the aggregate interest expense of the companies for
the previous four quarters, all as determined on a
consolidated basis.
3. From and after the effective date of this First Amendment,
references in the Credit Agreement shall be deemed to be references to the
Credit Agreement as amended hereby.
This First Amendment and the modifications set forth herein shall be
and become effective as of the date hereof.
Except for the modifications set forth in this First Amendment, the
Credit Agreement referred to above, as amended, is ratified and affirmed and
shall be binding upon the parties, their successors and assigns.
IN WITNESS WHEREOF, the parties hereto have cause this First Amendment
to Credit Agreement to be duly executed.
NATIONAL CITY BANK PREFORMED LINE PRODUCTS COMPANY
By:/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
-------------------------- ----------------------------
Title: Vice President Title: Vice President - Finance
----------------------- ----------------------------
-3-
43
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT is made and entered into as
of the 6th day of July, 2000, by and between PREFORMED LINE PRODUCTS COMPANY, an
Ohio corporation with its principal office and place of business in Xxxxxxxx
Village, Ohio (the "Borrower") and NATIONAL CITY BANK, a national banking
association with its principal office and place of business in Cleveland, Ohio
(the "Bank").
WITNESSETH:
WHEREAS, the , as amended by a First Amendment to Credit Agreement
dated November 30, 1997, (the "Credit Agreement");
WHEREAS, the Borrower and the Bank mutually desire to amend the Credit
Agreement in order to extend the expiration date and amend the Net Worth
financial covenant.
NOW, THEREFORE, the Borrower and the Bank hereby agree as follows:
1. Section 2A.02 TERM of the Credit Agreement is hereby amended to read
in its entirety as follows:
2A.02 TERM -- The Subject Commitments shall commence as of the
date of this Agreement and shall remain in effect on a
revolving basis until December 31, 2002 (the EXPIRATION DATE)
EXCEPT that a later Expiration Date may be established from
time to time pursuant to subsection 2A.05 and EXCEPT that the
Subject Commitments shall end in any event upon any earlier
reduction thereof to zero pursuant to subsection 2A.03 or any
earlier termination pursuant to section 5B.
2. Subsection 3B.01 NET WORTH of the Credit Agreement is hereby amended
to read in its entirety as follows:
3B.01 NET WORTH -- Borrower will not suffer or permit the
consolidated net worth (exclusive of the cumulative foreign
currency translation adjustment component thereof as reflected
in Borrower's financial statements) of the companies at any
time to be less than eighty-five million dollars
($85,000,000).
3. From and after the effective date of this Second Amendment,
references in the Credit Agreement shall be deemed to be references to the
Credit Agreement as amended hereby.
This Second Amendment and the modifications set forth herein shall be
and become effective as of the date hereof.
Except for the modifications set forth in this Second Amendment, the
Credit Agreement referred to above, as amended, is ratified and affirmed and
shall be binding upon the parties, their successors and assigns.
44
IN WITNESS WHEREOF, the parties hereto have cause this Second Amendment
to Credit Agreement to be duly executed.
NATIONAL CITY BANK PREFORMED LINE PRODUCTS COMPANY
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
------------------------- --------------------------------
Title: Vice President Title: Vice President - Finance
---------------------- ------------------------------
-2-
45
TRANCHE A PROMISSORY NOTE
$20,000,000 Cleveland, Ohio November 30, 1997
FOR VALUE RECEIVED, the undersigned, Preformed Line Products Company (BORROWER),
an Ohio corporation, promises to pay to the order of NATIONAL CITY BANK, at the
payee's main office in Cleveland, Ohio, the principal sum of
TWENTY MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side), together with interest computed thereon in accordance with
the credit agreement referred to below, which principal and interest is payable
in accordance with the provisions in the credit agreement.
This note is issued pursuant to a certain Agreement (the "credit agreement")
made as of December 30, 1994, as amended, by and between the payee and Borrower.
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: Preformed Line Products Company
000 Xxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000 By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx, Vice President
and Chief Financial Officer
46
TRANCHE A PROMISSORY NOTE
$20,000,000 Cleveland, Ohio November 30, 1997
FOR VALUE RECEIVED, the undersigned, Preformed Line Products Company (BORROWER),
an Ohio corporation, promises to pay to the order of NATIONAL CITY BANK, at the
payee's main office in Cleveland, Ohio, the principal sum of
TWENTY MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side), together with interest computed thereon in accordance with
the credit agreement referred to below, which principal and interest is payable
in accordance with the provisions in the credit agreement.
This note is issued pursuant to a certain Agreement (the "credit agreement")
made as of December 30, 1994, as amended, by and between the payee and Borrower.
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: Preformed Line Products Company
000 Xxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000 By: /s/ Xxxx X. Xxxxx
-------------------------------
Xxxx X. Xxxxx, Vice President
and Chief Financial Officer
