CREDIT AGREEMENT
By and among
II-VI INCORPORATED
and
SUBSIDIARY GUARANTORS
and
THE LENDERS HERETO
and
PNC BANK, NATIONAL ASSOCIATION, As Agent
Dated as of August 14, 2000
1. CERTAIN DEFINITIONS.............................................................................................. 1
1.1 Certain Definitions......................................................................................... 1
1.2 Construction................................................................................................ 17
1.2.1 Number; Inclusion.................................................................................... 17
1.2.2 Determination........................................................................................ 17
1.2.3 Agent's Discretion and Consent....................................................................... 18
1.2.4 Documents Taken as a Whole........................................................................... 18
1.2.5 Headings............................................................................................. 18
1.2.6 Implied References to this Agreement................................................................. 18
1.2.7 Persons.............................................................................................. 18
1.2.8 Modifications to Documents........................................................................... 18
1.2.9 From, To and Through................................................................................. 18
1.2.10 Shall; Will......................................................................................... 19
1.3 Accounting Principles....................................................................................... 19
2. REVOLVING CREDIT AND SWING LOAN FACILITIES....................................................................... 19
2.1 Revolving Credit Commitments................................................................................ 19
2.1.1 Revolving Credit Loans............................................................................... 19
2.1.2 Swing Loan Commitment................................................................................ 19
2.2 Nature of Lenders' Obligations with Respect to Revolving Credit Loans....................................... 20
2.3 Commitment Fees............................................................................................. 20
2.4 Revolving Credit Facility Fee............................................................................... 20
2.5 Revolving Credit Loan Requests; Swing Loan Requests......................................................... 20
2.5.1 Revolving Credit Loan Requests....................................................................... 20
2.5.2 Swing Loan Requests.................................................................................. 21
2.6 Making Loans................................................................................................ 21
2.6.1 Revolving Credit Loans............................................................................... 21
2.6.2 Making Swing Loans................................................................................... 22
2.7 Notes....................................................................................................... 22
2.7.1 Revolving Credit Notes............................................................................... 22
2.7.2 Swing Loan Note...................................................................................... 22
2.8 Use of Proceeds............................................................................................. 22
2.9 Borrowings to Repay Swing Loans............................................................................. 22
2.10 Letter of Credit Subfacility................................................................................ 23
2.10.1 Issuance of Letters of Credit....................................................................... 23
2.10.2 Letter of Credit Fees............................................................................... 23
2.10.3 Disbursements, Reimbursement........................................................................ 24
2.10.4 Repayment of Participation Advances................................................................. 25
2.10.5 Documentation....................................................................................... 25
2.10.6 Determinations to Honor Drawing Requests............................................................ 25
2.10.7 Nature of Participation and Reimbursement Obligations............................................... 26
2.10.8 Indemnity........................................................................................... 27
2.10.9 Liability for Acts and Omissions.................................................................... 27
3. TERM LOAN........................................................................................................ 28
3.1 Conversion of Revolving Credit Loan to Term Loan............................................................ 28
3.2 Amortization................................................................................................ 28
4. INTEREST RATES................................................................................................... 29
4.1 Interest Rate Options....................................................................................... 29
4.1.1 Revolving Credit Interest Rate Options............................................................... 29
4.1.2 Term Loan Interest Rate Options...................................................................... 29
4.1.3 Rate Quotations...................................................................................... 30
4.1.4 Change in Fees or Interest Rates..................................................................... 30
4.2 Interest Periods............................................................................................ 30
4.2.1 Ending Date and Business Day......................................................................... 31
4.2.2 Amount of Borrowing Tranche.......................................................................... 31
4.2.3 Termination Before Expiration Date................................................................... 31
4.2.4 Renewals............................................................................................. 31
4.3 Interest After Default...................................................................................... 31
4.3.1 Interest Rate........................................................................................ 31
4.3.2 Other Obligations.................................................................................... 31
4.3.3 Acknowledgment....................................................................................... 31
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available.............................. 32
4.4.1 Unascertainable...................................................................................... 32
4.4.2 Illegality; Increased Costs; Deposits Not Available.................................................. 32
4.4.3 Agent's and Lender's Rights.......................................................................... 32
4.5 Selection of Interest Rate Options.......................................................................... 33
5. PAYMENTS......................................................................................................... 33
5.1 Payments.................................................................................................... 33
5.2 Pro Rata Treatment of Lenders............................................................................... 34
5.3 Interest Payment Dates...................................................................................... 34
5.4 Voluntary Prepayments....................................................................................... 34
5.4.1 Right to Prepay...................................................................................... 34
5.4.2 Replacement of a Lender.............................................................................. 35
5.4.3 Change of Lending Office............................................................................. 36
5.5 Mandatory Prepayments....................................................................................... 36
5.5.1 Offerings and Dispositions........................................................................... 36
5.5.2 Application Among Interest Rate Options.............................................................. 37
5.6 Additional Compensation in Certain Circumstances............................................................ 37
5.6.1 Increased Costs or Reduced Return Resulting from Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc........................................................................................ 37
5.6.2 Indemnity............................................................................................ 38
5.7 Settlement Date Procedures.................................................................................. 38
-iii-
6. REPRESENTATIONS AND WARRANTIES.................................................................................. 39
6.1 Representations and Warranties............................................................................. 39
6.1.1 Organization and Qualification..................................................................... 39
6.1.2 Capitalization and Ownership....................................................................... 39
6.1.3 Subsidiaries....................................................................................... 39
6.1.4 Power and Authority................................................................................ 40
6.1.5 Validity and Binding Effect........................................................................ 40
6.1.6 No Conflict........................................................................................ 40
6.1.7 Litigation......................................................................................... 41
6.1.8 Title to Properties................................................................................ 41
6.1.9 Financial Statements............................................................................... 41
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries............................................. 42
6.1.11 Full Disclosure.................................................................................... 43
6.1.12 Taxes.............................................................................................. 43
6.1.13 Consents and Approvals............................................................................. 44
6.1.14 No Event of Default; Compliance with Instruments................................................... 44
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc..................................................... 44
6.1.16 Security Interests................................................................................. 44
6.1.17 Status of the Pledged Collateral................................................................... 45
6.1.18 Insurance.......................................................................................... 45
6.1.19 Compliance with Laws............................................................................... 45
6.1.20 Material Contracts; Burdensome Restrictions........................................................ 45
6.1.21 Investment Companies; Regulated Entities........................................................... 46
6.1.22 Plans and Benefit Arrangements..................................................................... 46
6.1.23 Employment Matters................................................................................. 47
6.1.24 Environmental Matters.............................................................................. 47
6.1.25 Senior Debt Status................................................................................. 49
6.1.26 Employment Matters................................................................................. 49
6.1.27 Solvency........................................................................................... 49
6.1.28 Year 2000 Problem.................................................................................. 49
6.1.29 No Material Adverse Change......................................................................... 49
6.1.30 Acquisition of LPC................................................................................. 50
6.2 Continuation of Representations............................................................................ 50
6.3 Updates to Schedules....................................................................................... 50
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT......................................................... 51
7.1 First Loans and Letters of Credit.......................................................................... 51
7.1.1 Officer's Certificate.............................................................................. 51
7.1.2 Secretary's Certificate............................................................................ 52
7.1.3 Delivery of Loan Documents......................................................................... 52
7.1.4 Opinion of Counsel................................................................................. 52
7.1.5 Legal Details...................................................................................... 53
7.1.6 Payment of Fees.................................................................................... 53
7.1.7 Appraisals......................................................................................... 53
7.1.8 Consents........................................................................................... 53
7.1.9 Officer's Certificate Regarding MACs............................................................... 53
7.1.10 No Violation of Laws............................................................................... 53
7.1.11 No Actions or Proceedings.......................................................................... 53
-iv-
7.1.12 Insurance Policies; Certificates of Insurance; Endorsements......................................... 54
7.1.13 Landlord's Waiver................................................................................... 54
7.1.14 Administrative Questionnaire........................................................................ 54
7.1.15 Refinancing......................................................................................... 54
7.1.16 LPC Matters......................................................................................... 54
7.2 Term Loan................................................................................................... 56
7.3 Each Additional Loan or Letter of Credit.................................................................... 56
8. COVENANTS........................................................................................................ 56
8.1 Affirmative Covenants....................................................................................... 56
8.1.1 Preservation of Existence, Etc...................................................................... 57
8.1.2 Payment of Liabilities, Including Taxes, Etc........................................................ 57
8.1.3 Maintenance of Insurance............................................................................ 57
8.1.4 Maintenance of Properties and Leases................................................................ 57
8.1.5 Maintenance of Patents, Trademarks, Etc............................................................. 58
8.1.6 Visitation Rights................................................................................... 58
8.1.7 Keeping of Records and Books of Account............................................................. 58
8.1.8 Plans and Benefit Arrangements...................................................................... 58
8.1.9 Compliance with Laws................................................................................ 58
8.1.10 Further Assurances.................................................................................. 59
8.2 Negative Covenants.......................................................................................... 59
8.2.1 Indebtedness........................................................................................ 59
8.2.2 Liens and Agreements Not to Grant Liens............................................................. 60
8.2.3 Guaranties.......................................................................................... 60
8.2.4 Loans and Investments............................................................................... 60
8.2.5 Dividends and Related Distributions................................................................. 60
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions................................................. 61
8.2.7 Dispositions of Assets or Subsidiaries.............................................................. 62
8.2.8 Affiliate Transactions.............................................................................. 63
8.2.9 Subsidiaries, Partnerships and Joint Ventures....................................................... 63
8.2.10 Continuation of or Change in Business............................................................... 63
8.2.11 Plans and Benefit Arrangements...................................................................... 63
8.2.12 Fiscal Year......................................................................................... 64
8.2.13 Changes in Organizational Documents................................................................. 64
8.2.14 Minimum Consolidated Fixed Charge Coverage Ratio.................................................... 65
8.2.15 Maximum Consolidated Leverage Ratio................................................................. 65
8.2.16 Minimum Net Worth................................................................................... 65
8.3 Reporting Requirements...................................................................................... 66
8.3.1 Quarterly Financial Statements...................................................................... 66
8.3.2 Annual Financial Statements......................................................................... 66
8.3.3 Certificate of the Borrower......................................................................... 66
8.3.4 Notice of Default................................................................................... 67
8.3.5 Notice of Litigation................................................................................ 67
8.3.6 Sale of Assets...................................................................................... 67
8.3.7 Budgets, Forecasts, Other Reports and Information................................................... 67
8.3.8 Notices Regarding Plans and Benefit Arrangements.................................................... 68
-v-
9. DEFAULT........................................................................................................... 69
9.1 Events of Default.......................................................................................... 69
9.1.1 Payments Under Loan Documents...................................................................... 69
9.1.2 Breach of Warranty................................................................................. 70
9.1.3 Breach of Negative Covenants or Visitation Rights.................................................. 70
9.1.4 Breach of Other Covenants.......................................................................... 70
9.1.5 Defaults in Other Agreements or Indebtedness....................................................... 70
9.1.6 Final Judgments or Orders.......................................................................... 70
9.1.7 Loan Document Unenforceable........................................................................ 70
9.1.8 Uninsured Losses; Proceedings Against Assets....................................................... 71
9.1.9 Notice of Lien or Assessment....................................................................... 71
9.1.10 Insolvency......................................................................................... 71
9.1.11 Events Relating to Plans and Benefit Arrangements.................................................. 71
9.1.12 Cessation of Business.............................................................................. 72
9.1.13 Change of Control.................................................................................. 72
9.1.14 Material Adverse Change............................................................................ 72
9.1.15 Involuntary Proceedings............................................................................ 72
9.1.16 Voluntary Proceedings.............................................................................. 72
9.2 Consequences of Event of Default........................................................................... 73
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings.................. 73
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings............................................... 73
9.2.3 Set-off............................................................................................ 73
9.2.4 Suits, Actions, Proceedings........................................................................ 74
9.2.5 Application of Proceeds............................................................................ 74
9.2.6 Other Rights and Remedies.......................................................................... 75
10. THE AGENT......................................................................................................... 75
10.1 Appointment................................................................................................ 75
10.2 Delegation of Duties....................................................................................... 75
10.3 Nature of Duties; Independent Credit Investigation......................................................... 75
10.4 Actions in Discretion of Agent; Instructions From the Lenders.............................................. 76
10.5 Reimbursement and Indemnification of Agent by the Borrower................................................. 76
10.6 Exculpatory Provisions; Limitation of Liability............................................................ 77
10.7 Reimbursement and Indemnification of Agent by Lenders...................................................... 78
10.8 Reliance by Agent.......................................................................................... 78
10.9 Notice of Default.......................................................................................... 78
10.10 Notices.................................................................................................... 78
10.11 Lenders in Their Individual Capacities..................................................................... 79
10.12 Holders of Notes........................................................................................... 79
10.13 Equalization of Lenders.................................................................................... 79
10.14 Successor Agent............................................................................................ 80
-vi-
10.15 Agent's Fee............................................................................................... 80
10.16 Availability of Funds..................................................................................... 80
10.17 Calculations.............................................................................................. 81
10.18 Beneficiaries............................................................................................. 81
11. MISCELLANEOUS...................................................................................................... 81
11.1 Modifications, Amendments or Waivers...................................................................... 81
11.1.1 Increase of Commitment; Extension or Expiration Date.............................................. 82
11.1.2 Extension of Payment; Reduction of Principal Interest or Fees; Modification of Terms of Payment... 82
11.1.3 Release of Collateral or Guarantor................................................................ 82
11.1.4 Miscellaneous..................................................................................... 82
11.2 No Implied Waivers; Cumulative Remedies; Writing Required................................................. 82
11.3 Reimbursement and Indemnification of Lenders by the Borroweraxes.......................................... 83
11.4 Holidays.................................................................................................. 83
11.5 Funding by Branch, Subsidiary or Affiliate................................................................ 84
11.5.1 Notional Funding.................................................................................. 84
11.5.2 Actual Funding.................................................................................... 84
11.6 Notices................................................................................................... 84
11.7 Severability.............................................................................................. 85
11.8 Governing Law............................................................................................. 86
11.9 Prior Understanding....................................................................................... 86
11.10 Duration; Survival........................................................................................ 86
11.11 Successors and Assigns.................................................................................... 86
11.12 Confidentiality........................................................................................... 87
1.12.1 General........................................................................................... 87
1.12.2 Sharing Information With Affiliates of the Lenders................................................ 88
11.13 Counterparts.............................................................................................. 88
11.14 Agent's or Lender's Consent............................................................................... 88
11.15 Exceptions................................................................................................ 88
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.................................................................... 88
11.17 Tax Withholding Clause.................................................................................... 89
11.18 Joinder of Guarantors..................................................................................... 89
-vii-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of August 14, 2000 and is made by and
among II-VI INCORPORATED, a Pennsylvania corporation (the "Borrower"), each of
the Guarantors (as defined below), the LENDERS (as defined below), and PNC BANK,
NATIONAL ASSOCIATION, as a Lender ("PNC"), Swing Loan Lender, Issuing Bank and
Agent (the "Agent") for the Lenders under this Agreement.
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to provide a revolving
credit facility in the aggregate principal amount of $45,000,000, $25,000,000 of
which will convert to a term loan facility, and a sublimit of which will be
available for letters of credit (the "Credit Facilities"); and
WHEREAS, the revolving credit and term loan facilities shall be used to
fund the cash portion of an acquisition, to refinance existing indebtedness, to
pay fees and expenses associated with the Credit Facilities and for general
corporate purposes; and
WHEREAS, the Lenders are willing to provide such credit upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
-------------------
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
"Acquisition of LPC" shall mean the acquisition of all the
capital stock of LPC, whether by tender, merger or both.
"Acquisition Date" shall mean the date on which the Acquisition
of LPC shall be complete.
"Affiliate" as to any Person shall mean any other Person (i)
which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds 5% or more of
any class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control, as
used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
"Agent" shall mean PNC Bank, National Association, and its
successors and assigns.
"Agent's Fee" shall have the meaning assigned to that term in
Section 10.15.
"Agent's Letter" shall have the meaning assigned to that term in
Section 10.15.
"Agreement" shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
"Annual Statements" shall have the meaning assigned to that term
in Section 6.1.9(i).
"Applicable Commitment Fee Rate" shall mean the percentage rate
per annum at the level indicated in the pricing grid on Schedule 1.1.1(a) below
the heading "Commitment Fee."
"Applicable Margin" shall mean the number of basis points shown
on the pricing grid on Schedule 1.1.1(a) to be added to the Base Rate or the
Euro-Rate or to be charged per annum under Section 2.3 to determine the
Commitment Fee.
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement by and among a Purchasing Lender, a Transferor Lender
and the Agent, as Agent and on behalf of the remaining Lenders, substantially in
the form of Exhibit D.
---------
"Authorized Officer" shall mean those individuals, designated by
written notice to the Agent from the Borrower, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder.
The Borrower may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.
"Base Rate" shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
0.5% per annum.
"Base Rate Option" shall mean either the Revolving Credit Base
Rate Option or the Term Loan Base Rate Option.
"Benefit Arrangement" shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer
-2-
Plan and which is maintained, sponsored or otherwise contributed to by any
member of the ERISA Group.
"Borrower" shall mean II-VI Incorporated, a corporation organized
and existing under the laws of the Commonwealth of Pennsylvania.
"Borrowing Date" shall mean, with respect to any Loan, the date
for advancing funds or the renewal or conversion of previously advanced funds at
or to the same or a different Interest Rate Option, which shall be a Business
Day.
"Borrowing Tranche" shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrower and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.
"Business Day" shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania; and if the applicable Business
Day relates to any Loan to which the Euro-Rate Option applies, such day must
also be a day on which dealings are carried on in the London interbank market.
"Closing Date" shall mean the Business Day on which the first
Loan shall be made, which shall be August 14, 2000 or, if all the conditions
specified in Section 7 have not been satisfied or waived by such date, such
other date as the parties agree. The closing shall take place at 10:00 a.m., on
the Closing Date at the offices of Xxxxxxxxxxx & Xxxxxxxx LLP, or at such other
time and place as the parties agree.
"Collateral" shall mean the Pledged Collateral and the UCC
Collateral.
"Commercial Letter of Credit" shall mean any Letter of Credit
which is a commercial letter of credit issued in respect of the purchase of
goods or services by one or more of the Loan Parties in the ordinary course of
their business.
"Commitment" shall mean as to any Lender its Revolving Credit
Commitment and its Term Loan Commitment and, in the case of the Agent, its Swing
Loan Commitment, and "Commitments" shall mean the aggregate Commitments of all
the Lenders.
"Commitment Fee" shall have the meaning assigned in Section 2.3.
"Consideration" shall mean with respect to any Permitted
Acquisition, the aggregate of (i) the cash paid by any of the Loan Parties,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of
the seller or otherwise and whether fixed or contingent, (iii) any Guaranty
given or incurred by any Loan Party in connection therewith, and (iv) any other
consideration given or obligation incurred by any of the Loan Parties in
connection therewith.
-3-
"Consolidated EBITDA" shall mean, for any period, the
consolidated net income (or net loss) of any Person for such period as
determined in accordance with GAAP plus the sum of (a) consolidated interest
----
expense, (b) total income tax expense, (c) consolidated amortization and
depreciation expense, and (d) any extraordinary or unusual losses, minus any
-----
extraordinary or non-recurring gains. After the Acquisition Date, the
Calculation of Consolidated EBITDA shall include the trailing twelve-month
EBITDA of LPC.
"Consolidated Fixed Charges" shall mean, for any person, the sum
of interest expense, cash taxes, scheduled principal amounts on long-term debt,
scheduled payments under capital leases, Non-Financial Capital Expenditures and
dividends of any Person for such period as determined in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean the ratio
of Consolidated EBITDA to Consolidated Fixed Charges.
"Consolidated Leverage Ratio" shall mean the ratio of
Consolidated Total Indebtedness to Consolidated EBITDA.
"Consolidated Net Worth" shall mean stockholders' equity of any
Person determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Indebtedness" shall mean the consolidated
Indebtedness of a Person for such period.
"Derivatives" means, including without limitation, (a) any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between the Lender or an Affiliate of a Lender and the
Borrower or any Loan Party which is a rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions); (b) any combination of these transactions; and (c) any
agreements, instruments, certificates or documents contemplated thereby, as any
of the same may be supplemented or amended from time to time.
"Dollar, Dollars, U.S. Dollars" and the symbol $ shall mean
-
lawful money of the United States of America.
"Domestic Subsidiary" shall mean a Subsidiary organized under the
laws of the United States, any State thereof or the District of Columbia.
"Drawing Date" shall have the meaning assigned to that term in
Section 2.10.3.2.
"Environmental Complaint" shall mean any written complaint
setting forth a cause of action for personal or property damage or natural
resource damage or equitable relief, order, notice of violation, citation,
request for information issued pursuant to any
-4-
Environmental Laws by an Official Body, subpoena or other written notice of any
type relating to, arising out of, or issued pursuant to, any of the
Environmental Laws or any Environmental Conditions, as the case may be.
"Environmental Conditions" shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances resulting
from the use of, or operations on, any Property.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the workplace.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
"ERISA Group" shall mean, at any time, the Borrower and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
"Euro-Rate" shall mean the interest rate per annum determined by
the Agent by dividing (the resulting quotient rounded upwards, if necessary, to
the nearest 1/100th of 1% per annum) (i) the rate of interest determined by the
Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the average of the London interbank
offered rates for U.S. Dollars quoted by the British Bankers' Association as set
forth on Dow Xxxxx Markets Service (formerly known as Telerate) display page
3750 (or appropriate successor or, if the British Bankers' Association or its
successor ceases to provide such quotes, a comparable replacement determined by
the Agent) two (2) Business Days prior to the first day of such Interest Period
for an amount comparable to such Borrowing Tranche and having a borrowing date
and a maturity comparable to such Interest Period by (ii) a number equal to 1.00
minus the Euro-Rate Reserve Percentage. Euro-Rate may also be expressed by the
following formula:
Average of London interbank offered rates on Dow Xxxxx
Markets Service display page 3750 as quoted by
Euro-Rate = British Bankers' Association or appropriate successor
-----------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
-5-
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
"Euro-Rate Option" shall mean either the Revolving Credit Euro-
Rate Option, or the Term Loan Euro-Rate Option.
"Euro-Rate Reserve Percentage" shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Event of Default" shall mean any of the events described in
Section 9.1 and referred to therein as an "Event of Default."
"Expiration Date" shall mean, with respect to the Commitments,
the earliest to occur of (i) 180 days after the Closing Date or (ii) termination
or abandonment of the Tender; provided, however, that if the Tender Date occurs
within 180 days of the Closing Date and a portion of the Revolving Credit Loans
converts to the Term Loan pursuant to Section 3.1, the Expiration Date will be
August 13, 2005.
"Facility Fees" shall mean the fees referred to in Section 2.4.
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
--------
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Financial Projections" shall have the meaning assigned to that
term in Section 6.1.9(ii).
"Foreign Subsidiary" shall mean any Subsidiary that is not a
Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles as are
in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
-6-
"Governmental Acts" shall have the meaning assigned to that term
in Section 2.10.8.
"Guarantor" shall mean each of the parties to this Agreement
which is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 11.18.
"Guarantor Joinder" shall mean a joinder by a Person as a
Guarantor under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of Exhibit K.
---------
"Guaranty" of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
"Guaranty Agreement" shall mean the Guaranty and Suretyship
Agreement in substantially the form of Exhibit I executed and delivered by each
---------
of the Guarantors to the Agent for the benefit of the Lenders.
"Historical Statements" shall have the meaning assigned to that
term in Section 6.1.9(i).
"Indebtedness" shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than thirty (30) days past due), or (v) any Guaranty of Indebtedness for
borrowed money.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
"Insolvency Proceeding" shall mean, with respect to any Person,
(a) a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii) for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
-7-
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect of
such Person's creditors generally or any substantial portion of its creditors;
undertaken under any Law.
"Interest Period" shall have the meaning assigned to such term in
Section 4.2.
"Interest Rate Option" shall mean any Euro-Rate Option or Base
Rate Option.
"Interim Statements" shall have the meaning assigned to that term
in Section 6.1.9(i).
"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
"Labor Contracts" shall mean all employment agreements,
employment contracts, collective bargaining agreements and other agreements
among any Loan Party or Subsidiary of a Loan Party and its employees.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
"Lenders" shall mean the financial institutions named on Schedule
--------
1.1.1(b) and their respective successors and assigns as permitted hereunder,
--------
each of which is referred to herein as a Lender.
"Lender to be Terminated" shall have the meaning assigned to such
term in Section __.
"Letter of Credit" shall have the meaning assigned to that term
in Section 2.10.1.
"Letter of Credit Borrowing" shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.10.3.2.
"Letter of Credit Fee" shall have the meaning assigned to that
term in Section 2.10.2.
-8-
"Letters of Credit Outstanding" shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
"LLC Interests" shall have the meaning in Section 6.1.3.
"Loan Documents" shall mean this Agreement, the Agent's Letter,
the Guaranty Agreement, the Pledge Agreements, the Security Agreements, the Rate
Protection Agreement, the Rate Protection Term Loan and any other instruments,
certificates or documents delivered or contemplated to be delivered hereunder or
thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and "Loan Document" shall mean any of the Loan Documents.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loan Request" shall have the meaning given to such term in
Section 2.5.
"Loans" shall mean collectively and "Loan" shall mean separately
all Revolving Credit Loans, Swing Loans, and the Term Loan or any Revolving
Credit Loan, Swing Loan, or the Term Loan.
"LPC" shall mean Laser Power Corporation, a Delaware corporation.
"Mandatory Prepayment Date" shall have the meaning assigned to
that term in Section 5.5.1.
"Material Adverse Change" shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects of the Loan Parties taken as a whole, (c)
impairs materially or could reasonably be expected to impair materially the
ability of the Loan Parties taken as a whole to duly and punctually pay or
perform its Indebtedness, or (d) impairs materially or could reasonably be
expected to impair materially the ability of the Agent or any of the Lenders, to
the extent permitted, to enforce their legal remedies pursuant to this Agreement
or any other Loan Document or (e) has or could reasonably be expected to have a
material adverse effect whatsoever on the Tender or the Acquisition of LPC.
-9-
"Month", with respect to an Interest Period under the Euro-Rate Option,
shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any Euro-
Rate Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
"Multiple Employer Plan" shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
"Non-Financial Capital Expenditures" shall mean capital expenditures to the
extent they are made with funds from the Borrower's cash flow from operations
but shall not include capital expenditures made with borrowed funds or through
other financing arrangements.
"Notes" shall mean the Revolving Credit Notes, Swing Note and the Term
Notes.
"Notices" shall have the meaning assigned to that term in Section 11.6.
"Obligation" shall mean any obligation or liability of any of the Loan
Parties to the Agent or any of the Lenders, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
any Notes, the Letters of Credit, the Agent's Letter, the Rate Protection
Agreement, the Rate Protection Term Loan or any other Loan Document.
"Official Body" shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Participation Advance" shall mean, with respect to any Lender, such
Lender's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Section 2.10.4.
"Partnership Interests" shall have the meaning given to such term in
Section 6.1.3.
-10-
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Permitted Acquisitions" shall have the meaning in Section 8.2.6.
"Permitted Investments" shall mean:
(i) direct obligations of the United States of America or any agency or
instrumentality thereof or obligations backed by the full faith and credit of
the United States of America maturing in twelve (12) months or less from the
date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower than
A-1, by Standard & Poor's or P-1 by Moody's on the date of acquisition; and
(iii) demand deposits, time deposits or certificates of deposit maturing
within one year in commercial banks whose obligations are rated A-1, A or the
equivalent or better by Standard & Poor's on the date of acquisition.
"Permitted Liens" shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business and which are not yet due and payable;
(ii) Pledges or deposits made in the ordinary course of business to
secure payment of workmen's compensation, or to participate in any fund in
connection with workmen's compensation, unemployment insurance, old-age pensions
or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable and Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default;
(iv) Good-faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, not in excess of the aggregate amount
due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in favor of the Agent for
the benefit of the Lenders;
-11-
(vii) Liens on property leased by any Loan Party or Subsidiary of a
Loan Party under capital and operating leases financed through Indebtedness
permitted in Section 8.2.1(vii) securing obligations of such Loan Party or
Subsidiary to the lessor under such leases;
(viii) Any Lien existing on the date of this Agreement and described
on Schedule 1.1.1(c), provided that the principal amount secured thereby is not
----------------- --------
hereafter increased, and no additional assets become subject to such Lien;
(ix) Purchase Money Security Interests, provided that the aggregate
--------
amount of loans and deferred payments secured by such Purchase Money Security
Interests shall not exceed $1,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1.1(c); and
-----------------
(x) The following, (A) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (B) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry, and in either case, they do not affect the
Collateral or, in the aggregate materially impair the ability of any Loan Party
to perform its Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due
and payable and subject to interest or penalty, provided that the
--------
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings to
foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including any
attachment of personal or real property or other legal process prior to
adjudication of a dispute on the merits;
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens; or
(4) Liens resulting from final judgments or orders described
in Section 9.1.6.
"Person" shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
"Plan" shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been
-12-
maintained by any entity which was at such time a member of the ERISA Group for
employees of any entity which was at such time a member of the ERISA Group.
"Pledge Agreements" shall mean the Pledge Agreements in substantially
the form of Exhibit __ executed and delivered by the Loan Parties to the Agent
for the benefit of the Lenders, and "Pledge Agreement" shall mean any of the
Pledge Agreements.
"PNC Bank" shall mean PNC Bank, National Association, its successors
and assigns.
"Potential Default" shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Lenders,
or any combination of the foregoing, would constitute an Event of Default.
"Principal Office" shall mean the main banking office of the Agent in
Pittsburgh, Pennsylvania.
"Prior Security Interest" shall mean a valid and enforceable perfected
first priority security interest under the Uniform Commercial Code in the UCC
Collateral and the Pledged Collateral which is subject only to Liens for taxes
not yet due and payable to the extent such prospective tax payments are given
priority by statute or Purchase Money Security Interests as permitted hereunder.
"Prohibited Transaction" shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
"Property" shall mean all real property, both owned and leased, of any
Loan Party or Subsidiary of a Loan Party.
"Purchase Money Security Interest" shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.
"Purchasing Lender" shall mean a Lender which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
"Ratable Share" shall mean the proportion that a Lender's Commitment
(excluding the Swing Loan Commitment) bears to the Commitments excluding the
Swing Loan Commitments) of all of the Lenders.
"Rate Protection Agreement" shall means the Amended and Restated
Letter Agreement dated March 26, 1999 (as the same may be amended) under which
PNC Bank extended a Rate Protection Term Loan to the Borrower (the "Rate
Protection Term Loan").
"Regulated Substances" shall mean any substance, including any solid,
liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse,
garbage, wastes,
-13-
chemicals, petroleum products, by-products, coproducts, impurities, dust, scrap,
heavy metals, defined as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous substance,"
"toxic chemical," "toxic waste," "hazardous waste," "industrial waste,"
"residual waste," "solid waste," "municipal waste," "mixed waste," "infectious
waste," "chemotherapeutic waste," "medical waste," or "regulated substance" or
any related materials, substances or wastes as now or hereafter defined pursuant
to any Environmental Laws, ordinances, rules, regulations or other directives of
any Official Body, the generation, manufacture, extraction, processing,
distribution, treatment, storage, disposal, transport, recycling, reclamation,
use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying,
discharge, escape, release or other management or mismanagement of which is
regulated by the Environmental Laws.
"Regulation U" shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.
"Reimbursement Obligation" shall have the meaning assigned to such
term in Section 2.10.3.2.
"Reportable Event" shall mean a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan.
"Required Lenders" shall mean:
(i) if there are no Loans, Reimbursement Obligations or Letter of
Credit borrowings outstanding, Lenders whose Commitments aggregate at least 51%
of the Commitments of all Lenders, or
(ii) if there are Loans, Reimbursement Obligations or Letter of Credit
Borrowings outstanding, Lenders for which Loans, Reimbursement Obligations and
Letter of Credit Borrowings then outstanding aggregate at least 51% of the total
then outstanding.
Reimbursement Obligations and Letter of Credit Borrowings shall be deemed, for
purposes of this definition, to be in favor of the Agent and not a participating
Lender if such Lender has not made its Participation Advance in respect thereof
and shall be deemed to be in favor of such Lender to the extent of its
Participation Advance if it has made its Participation Advance in respect
thereof.
"Required Share" shall have the meaning in Section 5.7.
"Revolving Credit Base Rate Option" shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(i).
"Revolving Credit Commitment" shall mean as to any Lender its
commitment to make Revolving Credit Loans to the Borrower up to the aggregate
amount shown on Schedule 1.1.1(b) subject to the terms of this Agreement and
"Revolving Credit Commitments" shall mean the commitments of all Lenders to make
Revolving Credit Loans.
-14-
"Revolving Credit Euro-Rate Option" shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(ii).
"Revolving Credit Loans" shall mean collectively and "Revolving Credit
Loan" shall mean separately all Revolving Credit Loans or any Revolving Credit
Loan made by the Lenders or one of the Lenders to the Borrower pursuant to
Section 2.1 or 2.10.3.
"Revolving Credit Notes" shall mean any Revolving Credit Note of the
Borrower in the form of Exhibit B issued by the Borrower at the request of a
---------
Lender pursuant to Section 2.7 evidencing the Revolving Credit Loans to such
Lender, together with all amendments, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.
"SEC" shall mean the Securities and Exchange Commission or any
governmental agencies substituted therefor.
"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding
company controlling any Lender, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Security Agreements" shall mean the Security Agreements in
substantially the form of Exhibit E executed and delivered by each of the Loan
---------
Parties to the Agent for the benefit of the Lenders, and "Security Agreement"
shall mean each of the Security Agreements.
"Settlement Date" shall mean the day of each week (if such day is a
Business Day and if not, the next succeeding Business Day) and any other
Business Day on which the Agent elects to effect settlement pursuant to Section
5.7.
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that shall be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it shall, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities shall be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Shares" shall have the meaning assigned to that term in Section
6.1.2.
-15-
"Standard & Poor's" shall mean Standard & Poor's Ratings Services.
"Standby Letter of Credit" shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or otherwise,
which finance the working capital and business needs of the Loan Parties
incurred in the ordinary course of business.
"Subsidiary" of any Person at any time shall mean (i) any corporation
or trust of which 50% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, (ii) any partnership of which such Person is a general partner or
of which 50% or more of the partnership interests is at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries,
(iii) any limited liability company of which such Person is a member or of which
50% or more of the limited liability company interests is at the time directly
or indirectly owned by such Person or one or more of such Person's Subsidiaries
or (iv) any corporation, trust, partnership, limited liability company or other
entity which is controlled or capable of being controlled by such Person or one
or more of such Person's Subsidiaries.
"Subsidiary Shares" shall have the meaning assigned to that term in
Section 6.1.3.
"Swing Loan Commitment" shall mean PNC Bank's commitment to make Swing
Loans to the Borrower pursuant to Section 2.1.2 hereof in an aggregate principal
amount up to $5,000,000.
"Swing Loan Note" shall mean the Swing Loan Note of the Borrower in
the form of Exhibit C evidencing the Swing Loans, together with all amendments,
---------
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.
"Swing Loan Request" shall mean a request for a Swing Loan made in
accordance with Section 2.5.2.
"Swing Loans" shall mean collectively and Swing Loan shall mean
----------
separately all Swing Loans or any Swing Loan made by PNC Bank to the Borrower
pursuant to Section 2.1.2.
"Syndication Period" shall mean the time period from the Closing Date
until the earlier of (i) ninety (90) days from the Closing Date or (ii) the date
on which PNC's Commitment shall have been reduced, through assignments to other
Lenders, to $20,000,000.
"Tender" shall mean the Borrower's offer to exchange a combination of
its stock and cash for stock of LPC as described more fully in a Form S-4 dated
July 13, 2000 as amended on August 2, 2000 and on August 4, 2000, and the
consummation of the transaction contemplated thereby.
-16-
"Tender Date" shall mean the date on which the Tender is consummated.
"Term Loan" shall mean the Converted Amount plus any amount advanced
as a Term Loan.
"Term Loan Base Rate Option" shall mean the option of the Borrower to
have Term Loan bear interest at the rate and under the terms and conditions set
forth in Section 4.1.2(i).
"Term Loan Commitment" shall mean as to any Lender its commitment to
have a portion of the Revolving Credit Loans convert to a Term Loan to the
Borrower pursuant to Section 3.1 and "Term Loan Commitments" shall mean the
commitments of all Lenders with respect to the Term Loan.
"Term Loan Euro-Rate Option" shall mean the option of the Borrower to
have Term Loan bear interest at the rate and under the terms and conditions set
forth in Section 4.1.2(ii).
"Term Notes" shall mean collectively and "Term Note" shall mean
separately all of the Term Notes of the Borrower in the form of Exhibit A
---------
evidencing the Term Loans together with all amendments, extensions, renewals,
replacements, refinancings or refunds thereof in whole or in part.
"Transferor Lender" shall mean the selling Lender pursuant to an
Assignment and Assumption Agreement.
"Xxxxx Fargo Credit Facility" shall mean the Credit and Security
Agreement dated November 24, 1999, by and among LPC, Exotic Materials, Inc. and
Xxxxx Fargo Credit, Inc. which has a maximum line of credit of $4,000,000.
1.2 Construction.
------------
1.2.1 Number; Inclusion.
------------------------
references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";|
1.2.2 Determination.
--------------------
references to "determination" of or by the Agent or the Lenders
shall be deemed to include good-faith estimates by the Agent or the Lenders (in
the case of quantitative determinations) and good-faith beliefs by the Agent or
the Lenders (in the case of qualitative determinations) and such determination
shall be conclusive absent manifest error;
-17-
1.2.3 Agent's Discretion and Consent.
--------------------------------------
whenever the Agent or the Lenders are granted the right herein to
act in its or their sole discretion or to grant or withhold consent such right
shall be exercised in good faith;
1.2.4 Documents Taken as a Whole.
----------------------------------
the words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;
1.2.5 Headings.
----------------
the section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents preceding this Agreement or
such other Loan Document are for reference purposes only and shall not control
or affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
--------------------------------------------
article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;
1.2.7 Persons.
---------------
reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;
1.2.8 Modifications to Documents.
----------------------------------
reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.9 From, To and Through.
----------------------------
relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including"; and
-18-
1.2.10 Shall; Will.
--------------------
references to "shall" and "will" are intended to have the
same meaning.
1.3 Accounting Principles.
--------------------------
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
-------- -------
used in Section 8.2 [Negative Covenants] (and all defined terms used in the
definition of any accounting term used in Section 8.2 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in Section 6.1.9(i) [Historical Statements]. In the event
of any change after the date hereof in GAAP, and if such change would result in
the inability to determine compliance with the financial covenants set forth in
Section 8.2 based upon the Borrower's regularly prepared financial statements by
reason of the preceding sentence, then the parties hereto agree to endeavor, in
good faith, to agree upon an amendment to this Agreement that would adjust such
financial covenants in a manner that would not affect the substance thereof, but
would allow compliance therewith to be determined in accordance with the
Borrower's financial statements at that time.
2. REVOLVING CREDIT AND SWING LOAN FACILITIES
-----------------------------------------------
2.1 Revolving Credit Commitments.
---------------------------------
2.1.1 Revolving Credit Loans.
------------------------------
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Lender severally
agrees to make Revolving Credit Loans to the Borrower at any time or from time
to time on or after the date hereof to the Expiration Date provided that after
giving effect to such Loan the aggregate amount of Loans from such Lender shall
not exceed such Lender's Revolving Credit Commitment minus such Lender's Ratable
Share of the Letters of Credit Outstanding. Within such limits of time and
amount and subject to the other provisions of this Agreement, the Borrower may
borrow, repay and reborrow pursuant to this Section 2.1.
2.1.2 Swing Loan Commitment.
-----------------------------
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, and in order to facilitate
loans and repayments between Settlement Dates, PNC Bank may, at its option,
cancelable at any time for any reason whatsoever, make swing loans (the "Swing
Loans") to the Borrower at any time or from time to time after the date hereof
to, but not including, the Expiration Date, in an aggregate principal
-19-
amount up to but not in excess of $5,000,000 (the "Swing Loan Commitment"),
provided that the aggregate principal amount of PNC Bank's Swing Loans and the
Revolving Credit Loans of all the Lenders at any one time outstanding shall not
exceed the Revolving Credit Commitments of all the Lenders. Within such limits
of time and amount and subject to the other provisions of this Agreement, the
Borrower may borrow, repay and reborrow pursuant to this Section 2.1.2.
2.2 Nature of Lenders' Obligations with Respect to Revolving Credit
---------------------------------------------------------------
Loans.
-----
Each Lender shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests]
in accordance with its Ratable Share. The aggregate of each Lender's Revolving
Credit Loans outstanding hereunder to the Borrower at any time shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the Letters of
Credit Outstanding. The obligations of each Lender hereunder are several. The
failure of any Lender to perform its obligations hereunder shall not affect the
Obligations of the Borrower to any other party nor shall any other party be
liable for the failure of such Lender to perform its obligations hereunder. The
Lenders shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
2.3 Commitment Fees.
---------------
Accruing from the date hereof until the Expiration Date, the Borrower
agrees to pay to the Agent for the account of each Lender, as consideration for
such Lender's Revolving Credit Commitment hereunder, a nonrefundable commitment
fee (the "Commitment Fee") equal to the Applicable Commitment Fee Rate (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) on the average daily difference between the amount of (i) such Lender's
Revolving Credit Commitment as the same may be constituted from time to time
(for purposes of this computation, PNC Bank's Swing Loans shall be deemed to be
borrowed amounts under its Revolving Credit Commitment) and the (ii) the sum of
such Lender's Revolving Credit Loans outstanding plus its Ratable Share of
Letters of Credit Outstanding. All Commitment Fees shall be payable in arrears
on the first Business Day of each January, April, July, and October after the
date hereof and on the Expiration Date or upon acceleration of the Notes.
2.4 Revolving Credit Facility Fee.
------------------------------
The Borrower agrees to pay to the Agent for the account of each
Lender, as consideration for such Lender's Revolving Credit Commitment, a
nonrefundable facility fee equal to 25 basis points of such Lender's Revolving
Credit Commitment, payable on the Closing Date.
2.5 Revolving Credit Loan Requests; Swing Loan Requests.
---------------------------------------------------
2.5.1 Revolving Credit Loan Requests.
-------------------------------
Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request the Lenders to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to
existing Revolving Credit Loans or Term
-20-
Loans pursuant to Section 4.1.4 [Interest Periods], by delivering to the Agent,
not later than 10:00 a.m., Pittsburgh time, (i) three (3) Business Days prior to
the proposed Borrowing Date with respect to the making of Revolving Credit Loans
to which the Euro-Rate Option applies or the conversion to or the renewal of the
Euro-Rate Option for any Loan; and (ii) one (1) Business Day prior to either the
proposed Borrowing Date with respect to the making of a Revolving Credit Loan to
which the Base Rate Option applies or the last day of the preceding Interest
Period with respect to the conversion to the Base Rate Option for any Loan, of a
duly completed request therefor substantially in the form of Exhibit G-1 or a
-----------
request by telephone immediately confirmed in writing by letter, facsimile or
telex in such form (each, a "Loan Request"), it being understood that the Agent
may rely on the authority of any individual making such a telephonic request
without the necessity of receipt of such written confirmation. Each Loan Request
shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the
aggregate amount of the proposed Loans comprising each Borrowing Tranche; (iii)
whether the Euro-Rate Option or Base Rate Option shall apply to the proposed
Loans comprising the applicable Borrowing Tranche; and (iv) in the case of a
Borrowing Tranche to which the Euro-Rate Option applies, an appropriate Interest
Period for the Loans comprising such Borrowing Tranche.
2.5.2 Swing Loan Requests.
----------------------------
Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request PNC Bank to make Swing Loans
by delivery to PNC Bank not later than 12:00 noon Pittsburgh time on the
proposed Borrowing Date of a duly completed request therefor substantially in
the form of Exhibit G-1 hereto or a request by telephone immediately confirmed
-----------
in writing by letter, facsimile or telex (each, a "Swing Loan Request"), it
being understood that the Agent may rely on the authority of any individual
making such a telephonic request without the necessity of receipt of such
written confirmation. Each Swing Loan Request shall be irrevocable and shall
specify the proposed Borrowing Date and the principal amount of such Swing Loan,
which shall be not less than $1,000,000 and shall be in integral multiples of
$100,000.
2.6 Making Loans.
-------------
2.6.1 Revolving Credit Loans.
------------------------------
The Agent shall, promptly after receipt by it of a Loan
Request pursuant to Section 2.5 [Revolving Credit Loan Requests], notify the
Lenders of its receipt of such Loan Request specifying: (i) the proposed
Borrowing Date and the time and method of disbursement of the Revolving Credit
Loans requested thereby; (ii) the amount and type of each such Revolving Credit
Loan and the applicable Interest Period (if any); and (iii) the apportionment
among the Lenders of such Revolving Credit Loans as determined by the Agent in
accordance with Section 2.2 [Nature of Lenders' Obligations]. Each Lender shall
remit the principal amount of each Revolving Credit Loan to the Agent such that
the Agent is able to, and the Agent shall, to the extent the Lenders have made
funds available to it for such purpose and subject to Section 7.3 [Each
Additional Loan], fund such Revolving Credit Loans to the Borrower in U.S.
Dollars and immediately available funds at the Principal Office prior to 2:00
p.m., Pittsburgh time, on the applicable Borrowing Date, provided that if any
--------
Lender fails to
-21-
remit such funds to the Agent in a timely manner, the Agent may elect in its
sole discretion to fund with its own funds the Revolving Credit Loans of such
Lender on such Borrowing Date, and such Lender shall be subject to the repayment
obligation in Section 10.16 [Availability of Funds].
2.6.2 Making Swing Loans.
--------------------------
So long as PNC Bank elects to make Swing Loans, PNC Bank
shall, after receipt by it of a Swing Loan Request pursuant to Section 2.5.2,
fund such Swing Loan to the Borrower in U.S. Dollars and immediately available
funds at the Principal Office prior to 3:00 p.m. Pittsburgh time on the
Borrowing Date.
2.7 Notes.
-----
2.7.1 Revolving Credit Notes.
------------------------------
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Lender,
together with interest thereon, shall be evidenced by a Revolving Credit Note
dated the Closing Date payable to the order of such Lender in a face amount
equal to the Revolving Credit Commitment of such Lender.
2.7.2 Swing Loan Note.
-----------------------
The obligation of the Borrower to repay the unpaid principal
amount of the Swing Loans made to it by PNC Bank together with interest thereon
shall be evidenced by a demand promissory note of the Borrower dated the Closing
Date in substantially the form attached hereto as Exhibit C payable to the order
---------
of PNC Bank in a face amount equal to the Swing Loan Commitment.
2.8 Use of Proceeds.
---------------
Subject to the provisions of Section 6.1.10.1, the proceeds of the
Revolving Credit Loans shall be used (i) to make cash payments in connection
with the Acquisition of LPC, (ii) to pay transaction costs associated with the
Tender and the Acquisition of LPC, (iii) to refinance existing indebtedness of
the Borrower, (iv) on or after the Tender Date, to refinance existing
indebtedness of LPC through the Xxxxx Fargo Credit Facility, (v) to pay fees and
expenses associated with the Credit Facilities, and (vi) for general corporate
purposes.
2.9 Borrowings to Repay Swing Loans.
-------------------------------
PNC may, at its option, exercisable at any time for any reason
whatsoever, demand repayment of the Swing Loans, and each Lender shall make a
Revolving Credit Loan in an amount equal to such Lender's Ratable Share of the
aggregate principal amount of the outstanding Swing Loans, plus, if PNC so
requests, accrued interest thereon, provided that no Lender shall be obligated
--------
in any event to make Revolving Credit Loans in excess of its Revolving Credit
Commitment. Revolving Credit Loans made pursuant to the preceding
-22-
sentence shall bear interest at the Base Rate Option and shall be deemed to have
been properly requested in accordance with Section 2.5.1 without regard to any
of the requirements of that provision. PNC shall provide notice to the Lenders
(which may be telephonic or written notice by letter, facsimile or telex) that
such Revolving Credit Loans are to be made under this Section 2.9 and of the
apportionment among the Lenders, and the Lenders shall be unconditionally
obligated to fund such Revolving Credit Loans (whether or not the conditions
specified in Section 2.5.1 are then satisfied) by the time PNC so requests,
which shall not be earlier than 3:00 p.m. Pittsburgh time on the Business Day
next after the date the Lenders receive such notice from PNC.
2.10 Letter of Credit Subfacility.
----------------------------
2.10.1 Issuance of Letters of Credit.
--------------------------------------
Borrower may request the issuance of a letter of credit
(each a "Letter of Credit") on behalf of itself or another Loan Party by
delivering to the Agent a completed application and agreement for letters of
credit in such form as the Agent may specify from time to time by no later than
10:00 a.m., Pittsburgh time, at least three (3) Business Days, or such shorter
period as may be agreed to by the Agent, in advance of the proposed date of
issuance. Each Letter of Credit shall be either a Standby Letter of Credit or a
Commercial Letter of Credit. Subject to the terms and conditions hereof and in
reliance on the agreements of the other Lenders set forth in this Section 2.9,
the Agent will issue a Letter of Credit provided that each Letter of Credit
shall (A) have a maximum maturity of twelve (12) months from the date of
issuance, and (B) in no event expire later than five (5) Business Days prior to
the Expiration Date. Any Letter of Credit with a one-year tenor may provide for
the renewal of this Letter of Credit for additional one-year periods as long as
no renewal would extend the expiry date of the Letter of Credit beyond ten (10)
Business Days before the Expiration Date. In no event shall (i) the Letters of
Credit Outstanding exceed, at any one time, $5,000,000 or (ii) the Revolving
Credit Lines outstanding and the Swing Loan exceed, at any one time, the
Revolving Credit Commitments.
2.10.2 Letter of Credit Fees.
------------------------------
The Borrower shall pay (i) to the Agent for the ratable
account of the Lenders a fee (the "Letter of Credit Fee") equal to the
Applicable Margin per annum, and (ii) to the Agent for its own account a
fronting fee as described in the Agent's Letter (computed on the basis of a year
of 360 days and actual days elapsed), which fees shall be computed on the daily
average Letters of Credit Outstanding and shall be payable quarterly in arrears
commencing with the first Business Day of each January, April, July and October
following issuance of each Letter of Credit and on the Expiration Date. The
Borrower shall also pay to the Agent for the Agent's sole account the Agent's
then in effect customary fees and administrative expenses payable with respect
to the Letters of Credit as the Agent may generally charge or incur from time to
time in connection with the issuance, maintenance, modification (if any),
assignment or transfer (if any), negotiation, and administration of Letters of
Credit.
-23-
2.10.3 Disbursements, Reimbursement.
-------------------------------------
2.10.3.1 Immediately upon the Issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Agent a participation in such
Letter of Credit and each drawing thereunder in an amount equal to such Lender's
Ratable Share of the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively.
2.10.3.2 In the event of any request for a drawing
under a Letter of Credit by the beneficiary or transferee thereof, the Agent
will promptly notify the Borrower. Provided that it shall have received such
notice, the Borrower shall reimburse (such obligation to reimburse the Agent
shall sometimes be referred to as a "Reimbursement Obligation") the Agent prior
to 12:00 noon, Pittsburgh time on each date that an amount is paid by the Agent
under any Letter of Credit (each such date, an "Drawing Date") in an amount
equal to the amount so paid by the Agent. In the event the Borrower fails to
reimburse the Agent for the full amount of any drawing under any Letter of
Credit by 12:00 noon, Pittsburgh time, on the Drawing Date, the Agent will
promptly notify each Lender thereof, and the Borrower shall be deemed to have
requested that Revolving Credit Loans be made by the Lenders under the Base Rate
Option to be disbursed on the Drawing Date under such Letter of Credit, subject
to the amount of the unutilized portion of the Revolving Credit Commitment and
subject to the conditions set forth in Section 7.3 [Each Additional Loan] other
than any notice requirements. Any notice given by the Agent pursuant to this
Section 2.10.3.2 may be oral if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.
2.10.3.3 Each Lender shall upon any notice pursuant to
Section 2.10.3.2 make available to the Agent an amount in immediately available
funds equal to its Ratable Share of the amount of the drawing, whereupon the
participating Lenders shall (subject to Section 2.10.3.4) each be deemed to have
made a Revolving Credit Loan under the Base Rate Option to the Borrower in that
amount. If any Lender so notified fails to make available to the Agent for the
account of the Agent the amount of such Lender's Ratable Share of such amount by
no later than 2:00 p.m., Pittsburgh time on the Drawing Date, then interest
shall accrue on such Lender's obligation to make such payment, from the Drawing
Date to the date on which such Lender makes such payment (i) at a rate per annum
equal to the Federal Funds Effective Rate during the first three days following
the Drawing Date and (ii) at a rate per annum equal to the rate applicable to
Loans under the Revolving Credit Base Rate Option on and after the fourth day
following the Drawing Date. The Agent will promptly give notice of the
occurrence of the Drawing Date, but failure of the Agent to give any such notice
on the Drawing Date or in sufficient time to enable any Lender to effect such
payment on such date shall not relieve such Lender from its obligation under
this Section 2.10.3.3.
2.10.3.4 With respect to any unreimbursed drawing that
is not converted into Revolving Credit Loans under the Base Rate Option to the
Borrower in whole or in part as contemplated by Section 2.10.3.2, because of the
Borrower's failure to satisfy the conditions set forth in Section 7.3 [Each
Additional Loan] other than any notice requirements or for any other reason, the
Borrower shall be deemed to have incurred from the Agent a Letter
-24-
of Credit Borrowing in the amount of such drawing. Such Letter of Credit
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at the rate per annum applicable to the Revolving Credit Loans
under the Base Rate Option. Each Lender's payment to the Agent pursuant to
Section 2.10.3.3 shall be deemed to be a payment in respect of its participation
in such Letter of Credit Borrowing and shall constitute a Participation Advance
from such Lender in satisfaction of its participation obligation under this
Section 2.10.3.
2.10.4 Repayment of Participation Advances.
--------------------------------------------
2.10.4.1 Upon (and only upon) receipt by the Agent for
its account of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Agent under the Letter of Credit with
respect to which any Lender has made a Participation Advance to the Agent, or
(ii) in payment of interest on such a payment made by the Agent under such a
Letter of Credit, the Agent will pay to each Lender, in the same funds as those
received by the Agent, the amount of such Lender's Ratable Share of such funds,
except the Agent shall retain the amount of the Ratable Share of such funds of
any Lender that did not make a Participation Advance in respect of such payment
by Agent.
2.10.4.2 If the Agent is required at any time to
return to any Loan Party, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made by
any Loan Party to the Agent pursuant to Section 2.10.4.1 in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Lender
shall, on demand of the Agent, forthwith return to the Agent the amount of its
Ratable Share of any amounts so returned by the Agent plus interest thereon from
the date such demand is made to the date such amounts are returned by such
Lender to the Agent, at a rate per annum equal to the Federal Funds Effective
Rate in effect from time to time.
2.10.5 Documentation.
----------------------
Each Loan Party agrees to be bound by the terms of the
Agent's application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from the such Loan Party's own. In the event of
a conflict between such application or agreement and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the Agent shall not be liable for any
error, negligence and/or mistakes, whether of omission or commission, in
following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.
2.10.6 Determinations to Honor Drawing Requests.
-------------------------------------------------
In determining whether to honor any request for drawing
under any Letter of Credit by the beneficiary thereof, the Agent shall be
responsible only to determine that the documents and certificates required to be
delivered under such Letter of Credit have been delivered and that they comply
on their face with the requirements of such Letter of Credit.
-25-
2.10.7 Nature of Participation and Reimbursement Obligations.
--------------------------------------------------------------
Each Lender's obligation in accordance with this Agreement
to make the Revolving Credit Loans or Participation Advances, as contemplated by
Section 2.10.3, as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Agent upon a draw under a Letter of
Credit, shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.9 under all
circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the Agent, the Borrower or any
other Person for any reason whatsoever;
(ii) the failure of any Loan Party or any other
Person to comply, in connection with a Letter of Credit Borrowing, with the
conditions set forth in Section 2.1 [Revolving Credit Commitments], 2.5
[Revolving Credit Loan Requests], 2.5.2 [Making Revolving Credit Loans] or 7.3
[Each Additional Loan] or as otherwise set forth in this Agreement for the
making of a Revolving Credit Loan, it being acknowledged that such conditions
are not required for the making of a Letter of Credit Borrowing and the
obligation of the Lenders to make Participation Advances under Section 2.10.3;
(iii) any lack of validity or enforceability of any
Letter of Credit;
(iv) the existence of any claim, set-off, defense or
other right which any Loan Party or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), the Agent or any Lender or any other Person
or, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for
which any Letter of Credit was procured);
(v) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect even if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan
Document by any party thereto;
-26-
(ix) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party;
(x) the fact that an Event of Default or a
Potential Default shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall have
passed or this Agreement or the Commitments hereunder shall have been
terminated; and
(xii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
2.10.8 Indemnity.
------------------
In addition to amounts payable as provided in Section 10.5
[Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of outside counsel) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
2.10.9 Liability for Acts and Omissions.
-----------------------------------------
As between any Loan Party and the Agent, such Loan Party
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if the Agent shall have been notified thereof); (ii)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
-27-
telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Agent, including any Governmental Acts, and none of the above
shall affect or impair, or prevent the vesting of, any of the Agent's rights or
powers hereunder. Nothing in the preceding sentence shall relieve the Agent from
liability for the Agent's gross negligence or willful misconduct in connection
with actions or omissions described in such clauses(i) through (viii) of such
sentence.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put the Agent under any resulting liability to the Borrower or any Lender.
3. TERM LOAN
---------
3.1 Conversion of Revolving Credit Loan to Term Loan.
------------------------------------------------
On the Acquisition Date, a portion of the Revolving Credit Loans will
convert to a Term Loan in the aggregate principal amount of $25,000,000 (the
"Converted Amount"). Upon the conversion, the Revolving Credit Commitments will
permanently reduce by an amount equal to the Converted Amount.
3.2 Amortization.
------------
The Term Loan shall be repayable in quarterly amounts as a percentage
of the total Term Loan as follows:
Year Percent Payable Percent Payable
Quarterly Annually
1 0.00% 0.00%
2 5.00% 20.00%
3 5.00% 20.00%
4 7.50% 30.00%
5 7.50% 30.00%
-28-
The Borrower will make principal payments on the first day of each January,
April, July and October beginning [October 1, 2001]. The Borrower may not
reborrow amounts repaid under the Term Loan.
4. INTEREST RATES
--------------
4.1 Interest Rate Options.
---------------------
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loan as selected by it from the Base Rate Option or
Euro-Rate Option set forth below applicable to the Loan, it being understood
that, subject to the provisions of this Agreement, the Borrower may select
different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loan comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any
portion of the Loan comprising any Borrowing Tranche, provided that there shall
--------
not be at any one time outstanding more than eight (8) Borrowing Tranches in the
aggregate among all of the Loan, and provided further that only the Base Rate
----------------
Option shall apply to the Swing Loans. If at any time the designated rate
applicable to any Loan made by any Lender exceeds such Lender's highest lawful
rate, the rate of interest on such Lender's Loan shall be limited to such
Lender's highest lawful rate.
4.1.1 Revolving Credit Interest Rate Options.
-----------------------------------------------
The Borrower shall have the right to select from the
following Interest Rate Options applicable to the Revolving Credit Loans
(subject to the provisions above regarding Swing Loans.
(i) Revolving Credit Base Rate Option: A fluctuating
---------------------------------
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate; or
(ii) Revolving Credit Euro-Rate Option: A rate per
---------------------------------
annum (computed on the basis of a year of 360 days and actual days elapsed equal
to the Euro-Rate plus the Applicable Margin.
4.1.2 Term Loan Interest Rate Options.
----------------------------------------
The Borrower shall have the right to select from the
following Interest Rate Options applicable to the Term Loans:
(i) Term Loan Base Rate Option: A fluctuating rate per
--------------------------
annum (computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such
interest rate to change
-29-
automatically from time to time effective as of the effective date of each
change in the Base Rate; or
(ii) Term Loan Euro-Rate Option: A rate per annum
--------------------------
(computed on the basis of a year of 360 days and actual days elapsed equal to
the Euro-Rate plus the Applicable Margin.
4.1.3 Rate Quotations.
------------------------
The Borrower may call the Agent on or before the date on
which a Loan Request is to be delivered to receive an indication of the rates
then in effect, but it is acknowledged that such projection shall not be binding
on the Agent or the Lenders nor affect the rate of interest which thereafter is
actually in effect when the election is made.
4.1.4 Change in Fees or Interest Rates.
-----------------------------------------
If the Applicable Margin or Applicable Fee Amount is
increased or reduced with respect to any period for which the Borrower has
already paid interest, Letter of Credit Fees or Commitment Fees, the Agent shall
recalculate the additional interest, Letter of Credit Fees or Commitment Fees
due from or to the Borrower and shall, within fifteen (15) Business Days after
the Borrower notifies the Agent of such increase or decrease, give the Borrower
and the Lenders notice of such recalculation.
4.1.4.1 Any additional interest, Letter of Credit Fees
or Commitment Fee due from the Borrower shall be paid to the Agent for the
account of the Lenders on the next date on which an interest, Letter of Credit
Fees or fee payment is due; provided, however, that if there are no Loans
-------- -------
outstanding or if the Loans are due and payable, such additional interest,
Letter of Credit Fees or Commitment Fee shall be paid promptly after receipt of
written request for payment from the Agent.
4.1.4.2 Any interest, Letter of Credit Fees or
Commitment Fee refund due to the Borrower shall be credited against payments
otherwise due from the Borrower on the next interest or fee payment due date or,
if the Loans have been repaid and the Lenders are no longer committed to lend
under this Agreement, the Lenders shall pay the Agent for the account of the
Borrower such interest, Letter of Credit Fees or Commitment Fee refund not later
than five Business Days after written notice from the Agent to the Lenders.
4.2 Interest Periods.
----------------
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option, the Borrower shall notify the Agent thereof at least three (3)
Business Days prior to the effective date of such Euro-Rate Option by delivering
a Loan Request. The notice shall specify an interest period (the " Interest
Period") during which such Interest Rate Option shall apply, such Interest
Period to be one, two, three or six Months; provided, however, that during the
Syndication Period, the Borrower will only select Interest Periods of one Month
each. Notwithstanding the preceding sentence, the following provisions shall
apply to any selection of, renewal of, or conversion to a Euro-Rate Option:
-30-
4.2.1 Ending Date and Business Day.
------------------------------------
any Interest Period which would otherwise end on a date which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
4.2.2 Amount of Borrowing Tranche.
-----------------------------------
each Borrowing Tranche of Euro-Rate Loans shall be in
integral multiples of $250,000 and not less than $250,000;
4.2.3 Termination Before Expiration Date.
------------------------------------------
the Borrower shall not select, convert to or renew an
Interest Period for any portion of the Loans that would end after the Expiration
Date; and
4.2.4 Renewals.
----------------
in the case of the renewal of a Euro-Rate Option at the end
of an Interest Period, the first day of the new Interest Period shall be the
last day of the preceding Interest Period, without duplication in payment of
interest for such day.
4.3 Interest After Default.
----------------------
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
4.3.1 Interest Rate.
---------------------
the rate of interest for each Loan otherwise applicable
pursuant to Section 2.10.2 [Letter of Credit Fees] or Section 4.1 [Interest Rate
Options], respectively, shall be increased by 2.0% per annum; and
4.3.2 Other Obligations.
-------------------------
each other Obligation hereunder if not paid when due shall
bear interest at a rate per annum equal to the sum of the rate of interest
applicable under the Revolving Credit Base Rate Option plus an additional 2.0%
per annum from the time such Obligation becomes due and payable and until it is
paid in full.
4.3.3 Acknowledgment.
----------------------
The Borrower acknowledges that the increase in rates referred
to in this Section 4.3 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Lenders are entitled to
-31-
additional compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits Not
--------------------------------------------------------------------
Available.
---------
4.4.1 Unascertainable.
-----------------------
If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a contingency has occurred which materially and
adversely affects the London interbank eurodollar market relating to the Euro-
Rate, the Agent shall have the rights specified in Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits Not Available.
-----------------------------------------------------------
If at any time any Lender shall have determined that:
(i) the making, maintenance or funding of any Loan to
which a Euro-Rate Option applies has been made impracticable or unlawful by
compliance by such Lender in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately and
fairly reflect the cost to such Lender of the establishment or maintenance of
any such Loan, or
(iii) after making all reasonable efforts, deposits of
the relevant amount in Dollars for the relevant Interest Period for a Loan to
which a Euro-Rate Option applies, respectively, are not available to such Lender
with respect to such Loan, in the London interbank market,
then the Agent shall have the rights specified in Section 4.4.3.
4.4.3 Agent's and Lender's Rights.
-----------------------------------
In the case of any event specified in Section 4.4.1 above,
the Agent shall promptly so notify the Lenders and the Borrower thereof, and in
the case of an event specified in Section 4.4.2 above, such Lender shall
promptly so notify the Agent and endorse a certificate to such notice as to the
specific circumstances of such notice, and the Agent shall promptly send copies
of such notice and certificate to the other Lenders and the Borrower. Upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given), the obligation of (A) the Lenders, in the case of
such notice given by the Agent, or
-32-
(B) such Lender, in the case of such notice given by such Lender, to allow the
Borrower to select, convert to or renew a Euro-Rate Option shall be suspended
until the Agent shall have later notified the Borrower, or such Lender shall
have later notified the Agent, of the Agent's or such Lender's, as the case may
be, determination that the circumstances giving rise to such previous
determination no longer exist. If at any time the Agent makes a determination
under Section 4.4.1 and the Borrower has previously notified the Agent of its
selection of, conversion to or renewal of a Euro-Rate Option and such Interest
Rate Option has not yet gone into effect, such notification shall be deemed to
provide for selection of, conversion to or renewal of the Base Rate Option
otherwise available with respect to such Loans. If any Lender notifies the Agent
of a determination under Section 4.4.2, the Borrower shall, subject to the
Borrower's indemnification Obligations under Section 5.6.2 [Indemnity], as to
any Loan of the Lender to which a Euro-Rate Option applies, on the date
specified in such notice either convert such Loan to the Base Rate Option
otherwise available with respect to such Loan or prepay such Loan in accordance
with Section 5.4 [Voluntary Prepayments]. Absent due notice from the Borrower of
conversion or prepayment, such Loan shall automatically be converted to the Base
Rate Option otherwise available with respect to such Loan upon such specified
date.
4.5 Selection of Interest Rate Options.
-----------------------------------
If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche of Loans under the Euro-Rate Option at the expiration of an
existing Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 4.1.4 [Interest Periods], the Borrower shall be deemed
to have converted such Borrowing Tranche to the Revolving Credit Base Rate
Option or Term Loan Base Rate Option, as applicable, commencing upon the last
day of the existing Interest Period.
5. PAYMENTS
--------
5.1 Payments.
--------
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Facility Fees, Letter of Credit Fees, Agent's Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the account of PNC with respect to the
Swing Loans and for the ratable accounts of the Lenders with respect to the
Revolving Credit Loans or Term Loans and in immediately available funds, and the
Agent shall promptly distribute such amounts to the Lenders in immediately
available funds, provided that in the event payments are received by 11:00 a.m.,
--------
Pittsburgh time, by the Agent with respect to the Loans and such payments are
not distributed to the Lenders on the same day received by the Agent, the Agent
shall pay the Lenders the Federal Funds Effective Rate with respect to the
amount of such payments for each day held by the Agent and not distributed to
the Lenders. The Agent's and each Lender's statement of account, ledger or
other relevant record shall, in the absence of manifest error, be
-33-
conclusive as the statement of the amount of principal of and interest on the
Loans and other amounts owing under this Agreement and shall be deemed an
"account stated."
5.2 Pro Rata Treatment of Lenders.
-----------------------------
Each borrowing shall be allocated to each Lender according to its Ratable
Share, and each selection of, conversion to or renewal of any Interest Rate
Option and each payment or prepayment by the Borrower with respect to principal
Loans, or interest, Commitment Fees, Facility Fees, Letter of Credit Fees, or
other fees (except for the Agent's Fee or amounts due from the Borrower
hereunder to the Lenders with respect to the Loans, shall (except as provided in
Section 4.4.3 [Agent's and Lender's Rights] in the case of an event specified in
Section 4.4 [Euro-Rate Unascertainable; Etc.], 5.4.2 [Replacement of a Lender].
[Additional Compensation in Certain Circumstances]) be made in proportion to the
applicable Loans outstanding from each Lender and, if no such Loans are then
outstanding, in proportion to the Ratable Share of each Lender. Notwithstanding
any of the foregoing, each borrowing or payment or prepayment by the Borrower of
principal, interest, fees or other amounts from the Borrower with respect to
Swing Loans shall be made by or to PNC Bank according to Section 2.
5.3 Interest Payment Dates.
----------------------
Interest on Loans to which the Base Rate Option applies shall be due and
payable in arrears on the first Business Day of each January, April, July and
October after the date hereof and on the Expiration Date or upon acceleration of
the Notes. Interest on Loans to which the Euro-Rate Option applies shall be due
and payable on the last day of each Interest Period for those Loans and, if such
Interest Period is longer than three (3) Months, also on the 90th day of such
Interest Period. Interest on mandatory prepayments of principal under Section
5.5 [Mandatory Prepayments] shall be due on the date such mandatory prepayment
is due. Interest on the principal amount of each Loan or other monetary
Obligation shall be due and payable on demand after such principal amount or
other monetary Obligation becomes due and payable (whether on the stated
maturity date, upon acceleration or otherwise).
5.4 Voluntary Prepayments.
---------------------
5.4.1 Right to Prepay.
-----------------------
The Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.4.2 below or in Section 5.6 [Additional Compensation in
Certain Circumstances]):
(i) at any time with respect to any Loan to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period
with respect to Loans to which a Euro-Rate Option applies,
-34-
(iii) on the date specified in a notice by any Lender
pursuant to Section 4.4 [Euro-Rate Unascertainable, Etc.] with respect to any
Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it
shall provide a prepayment notice to the Agent by 1:00 p.m. at least one (1)
Business Day prior to the date of prepayment of the Revolving Credit Loans or
Term Loans or no later than 2:00 p.m., Pittsburgh time, on the date of
prepayment of Swing Loans, setting forth the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment between
the Swing Loans, Revolving Credit Loans and Term Loans; and
(z) the total principal amount of such prepayment, which shall not be
less than $50,000 for any Swing Loan or $1,000,000 for any Revolving Credit
Loan or Term Loan.
All prepayment notices shall be irrevocable. The principal amount of
the Loans for which a prepayment notice is given, together with interest on such
principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made. Except as
provided in Section 5.5, all Term Loan prepayments permitted pursuant to this
Section 5.4.1 shall be applied to the unpaid installments of principal of the
Term Loans in the inverse order of scheduled maturities. Except as provided in
Section 4.4.3 [Agent's and Lender's rights], if the Borrower prepays a Loan but
fails to specify the applicable Borrowing Tranche which the Borrower is
prepaying, the prepayment shall be applied (i) first to Revolving Credit Loans
and then to Term Loans; and (ii) after giving effect to the allocations in
clause (i) above and in the preceding sentence, first to Loans to which the Base
Rate Option applies, then to Loans to which the Euro-Rate Option applies. Any
prepayment hereunder shall be subject to the Borrower's Obligation to indemnify
the Lenders under Section 5.6.2 [Indemnity].
5.4.2 Replacement of a Lender.
-------------------------------
In the event any Lender (i) gives notice under Section 4.4
[Euro-Rate Unascertainable, Etc.] or Section 5.6.1 [Increased Costs, Etc.], (ii)
does not fund Loans because the making of such Loans would contravene any Law
applicable to such Lender, (iii) does not approve any action as to which consent
of the Required Lenders is requested by the Borrower and obtained hereunder, or
(iv) becomes subject to the control of an Official Body (other than normal and
customary supervision), then the Borrower shall have the right at its option,
with the consent of the Agent, which shall not be unreasonably withheld, to
prepay the Loans of such Lender in whole, together with all interest accrued
thereon, and terminate such Lender's Commitment within ninety (90) days after
(w) receipt of such Lender's notice under Section 4.4 [Euro-Rate
Unascertainable, Etc.] or 5.6.1 [Increased Costs, Etc.], (x) the date such
-35-
Lender has failed to fund Loans because the making of such Loans would
contravene Law applicable to such Lender, (y) the date of obtaining the consent
which such Lender has not approved, or (z) the date such Lender became subject
to the control of an Official Body, as applicable; provided that the Borrower
--------
shall also pay to such Lender at the time of such prepayment any amounts
required under Section 5.6 [Additional Compensation in Certain Circumstances]
and any accrued interest due on such amount and any related fees; provided,
--------
however, that the Commitment and any Term Loan of such Lender shall be provided
by one or more of the remaining Lenders or a replacement Lender acceptable to
the Agent; provided, further, the remaining Lenders shall have no obligation
--------
hereunder to increase their Commitments. Notwithstanding the foregoing, the
Agent may only be replaced subject to the requirements of Section 10.14
[Successor Agent] and provided that all Letters of Credit have expired or been
--------
terminated or replaced.
5.4.3 Change of Lending Office.
--------------------------------
Each Lender agrees that upon the occurrence of any event
giving rise to increased costs or other special payments under Section 4.4.2
[Illegality, Etc.] or 5.6.1 [Increased Costs, Etc.] with respect to such Lender,
it will if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
--------
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
is this Section 5.4.3 shall affect or postpone any of the Obligations of the
Borrower or any other Loan Party or the rights of the Agent or any Lender
provided in this Agreement.
5.5 Mandatory Prepayments.
---------------------
5.5.1 Offerings and Dispositions. Within five (5) Business Days
---------------------------------
of (i) any equity offering by the Borrower (an "Offering") (whether such equity
is sold in a private placement or a public offering, but not including the
exercise of stock options granted in the ordinary course of business) or (ii)
the sale of a portion of a Loan Party's assets or business (a "Disposition")
(each a "Mandatory Prepayment Date"), the Borrower shall make a mandatory
prepayment of principal on the Term Loan equal to (y) 50% of the net cash
proceeds of the Offering or 100% of the net cash proceeds of the Disposition [to
the extent that Dispositions have involved, in the aggregate, assets with a fair
market value in excess of $1,000,000], as the case may be, together with accrued
interest on such principal amount. Each mandatory prepayment shall be applied
ratably to other remaining unpaid, scheduled principal amortization payments. To
the extent that a mandatory prepayment exceeds the outstanding principal amount
of the Term Loan, such prepayment shall be limited to the amount necessary to
prepay the Term Loan in full.
5.5.2 Application Among Interest Rate Options.
-----------------------------------------------
All prepayments required pursuant to this Section 5.5 shall
first be applied among the Interest Rate Options to the principal amount of the
Loans subject to the Base
-36-
Rate Option, then to Loans subject to a Euro-Rate Option. In accordance with
Section 5.6.2 [Indemnity], the Borrower shall indemnify the Lenders for any loss
or expense, including loss of margin, incurred with respect to any such
prepayments applied against Loans subject to a Euro-Rate Option on any day other
than the last day of the applicable Interest Period.
5.6 Additional Compensation in Certain Circumstances.
------------------------------------------------
5.6.1 Increased Costs or Reduced Return Resulting from Taxes,
--------------------------------------------------------------
Reserves, Capital Adequacy Requirements, Expenses, Etc.
-------------------------------------------------------
If any Law, guideline or interpretation or any change in any
Law, guideline or interpretation or application thereof by any Official Body
charged with the interpretation or administration thereof or compliance with any
request or directive (whether or not having the force of Law) of any central
lender or other Official Body:
(i) subjects any Lender to any tax or changes the basis
of taxation with respect to this Agreement, the Notes, the Loans or payments by
the Borrower of principal, interest, Commitment Fees, or other amounts due from
the Borrower hereunder or under the Notes (except for taxes on the overall net
income of such Lender),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Lender, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Lender, or (B) otherwise applicable to the obligations of any Lender under
this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Lender's capital, taking into consideration such Lender's customary policies
with respect to capital adequacy) by an amount which such Lender in its sole
discretion deems to be material, such Lender shall from time to time notify the
Borrower and the Agent of the amount determined in good faith (using any
averaging and attribution methods employed in good faith) by such Lender to be
necessary to compensate such Lender for such increase in cost, reduction of
income, additional expense or reduced rate of return. Such notice shall set
forth in reasonable detail the basis for such determination. Such amount shall
be due and payable by the Borrower to such Lender ten (10) Business Days after
such notice is given.
5.6.2 Indemnity.
-----------------
In addition to the compensation required by Section 5.6.1
[Increased Costs, Etc.], the Borrower shall indemnify each Lender against all
liabilities, losses or
-37-
expenses (including loss of margin, any loss or expense incurred in liquidating
or employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Lender to fund or maintain Loans subject to
a Euro-Rate Option), which such Lender sustains or incurs as a consequence of
any
(i) payment, prepayment, conversion or renewal of any
Loan to which a Euro-Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such payment or prepayment
is then due),
(ii) attempt by the Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or part any Loan Requests
under Section 2.5 [Revolving Credit Loan Requests] or Section 4.1.4 [Interest
Periods] or notice relating to prepayments under Section 5.4 [Voluntary
Prepayments], or
(iii) default by the Borrower in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal interest Committed Fee or any other
amount due hereunder.
If any Lender sustains or incurs any such loss or expense,
it shall from time to time notify the Borrower of the amount determined in good
faith by such Lender (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as such
Lender shall deem reasonable) to be necessary to indemnify such Lender for such
loss or expense. Such notice shall set forth in reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrower to such
Lender ten (10) Business Days after such notice is given.
5.7 Settlement Date Procedures.
--------------------------
In order to minimize the transfer of funds between the Lenders and the
Agent, the Borrower may borrow, repay and reborrow Swing Loans and PNC may make
Swing Loans as provided in Section 2.1.2 hereof during the period between
Settlement Dates. Not later than _________ on each Settlement Date, the Agent
shall notify each Lender of its Ratable Share of the total of the Revolving
Credit Loans and the Swing Loans (each a "Required Share"). Prior to _________,
Pittsburgh time, on such Settlement Date, each Lender shall pay to the Agent the
amount equal to the difference between its Required Share and its Revolving
Credit Loans, and the Agent shall pay to each Lender its Ratable Share of all
payments made by the Borrower to the Agent with respect to the Revolving Credit
Loans. The Agent shall also effect settlement in accordance with the foregoing
sentence on the proposed Borrowing Dates for Revolving Credit Loans and on
Mandatory Prepayment Dates and may at its option effect settlement on any other
Business Day. These settlement procedures are established solely as a matter of
administrative convenience, and nothing contained in this Section 5.7 shall
relieve the Lenders of their obligations to fund Revolving Credit Loans on dates
other than a Settlement Date pursuant to Section 2.1.2. The Agent may at any
time at its option for any reason whatsoever require each Lender to pay
immediately to the Agent such Lender's Ratable Share of the outstanding
-38-
Revolving Credit Loans and each Lender may at any time require the Agent to pay
immediately to such Lender its Ratable Share of all payments made by the
borrower to the Agent with respect to the Revolving Credit Loans.
6. REPRESENTATIONS AND WARRANTIES
------------------------------
6.1 Representations and Warranties.
------------------------------
The Loan Parties, jointly and severally, represent and warrant to the Agent
and each of the Lenders as follows:
6.1.1 Organization and Qualification.
-------------------------------------
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary or the failure to do so does not constitute a Material Adverse Change.
6.1.2 Capitalization and Ownership.
------------------------------------
The authorized capital stock of the Borrower consists of
30,000,000 shares of common stock of which 6,990,151 shares as of August 8, 2000
(referred to herein as the "Shares") are issued and outstanding and are owned.
All of the Shares have been validly issued and are fully paid and nonassessable.
There are no options, warrants or other rights outstanding to purchase any such
shares except as indicated on Schedule 6.1.2.
---------------
6.1.3 Subsidiaries.
--------------------
Schedule 6.1.3 states the name of each of the Borrower's
--------------
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
Shares") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "Partnership Interests") if it is a partnership and
its outstanding limited liability company interests, interests assigned to
managers thereof and the voting rights associated therewith (the "LLC
Interests") if it is a limited liability company. The Borrower and each
Subsidiary of the Borrower has good and marketable title (or the substantial
equivalent for the law of the relevant jurisdiction) to all of the Subsidiary
Shares, Partnership Interests and LLC Interests it purports to own, free and
clear in each case of any Lien. All Subsidiary Shares, Partnership Interests and
LLC Interests that the Borrower and its Subsidiaries purport to own have been
validly issued, and all Subsidiary Shares are fully paid and nonassessable (or
the substantial equivalent for the law of the relevant jurisdiction for Foreign
Subsidiaries). All capital contributions and other consideration required to be
made or
-39-
paid in connection with the issuance of the Partnership Interests and LLC
Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated on Schedule 6.1.3.
--------------
6.1.4 Power and Authority.
---------------------------
Each Loan Party has full power to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents to which it is
a party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
6.1.5 Validity and Binding Effect.
-----------------------------------
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
6.1.6 No Conflict.
-------------------
Neither the execution and delivery of this Agreement or the
other Loan Documents by any Loan Party nor the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof by any of them will conflict with, constitute a default under
or result in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of any Loan Party or (ii) any Law or any material
agreement or instrument or order, writ, judgment, injunction or decree to which
any Loan Party or any of its Subsidiaries is a party or by which it or any of
its Subsidiaries is bound or to which it is subject, or result in the creation
or enforcement of any Lien, charge or encumbrance whatsoever upon any property
(now or hereafter acquired) of any Loan Party or any of its Subsidiaries (other
than Liens granted under the Loan Documents).
6.1.7 Litigation.
------------------
Except as set forth in Schedule 6.1.7, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened against such Loan Party or any Subsidiary of such Loan Party
at law or equity before any Official Body which individually or in the aggregate
may result in any Material Adverse Change. None of the
-40-
Loan Parties or any of the Domestic Subsidiaries of any Loan Party is in
violation of any order, writ, injunction or any decree of any Official Body
which may result in any Material Adverse Change. To the Loan Parties' knowledge,
none of the Foreign Subsidiaries of any Loan Party is in violation of any order,
writ, injunction or any decree of any Official Body which may result in any
Material Adverse Change.
6.1.8 Title to Properties.
---------------------------
The real property owned or leased by each Loan Party and each
Domestic Subsidiary of each Loan Party is described on Schedule 6.1.8. Each Loan
Party and each Domestic Subsidiary of each Loan Party has good and marketable
title to or valid leasehold interest in all properties, assets and other rights
which it purports to own or lease or which are reflected as owned or leased on
its books and records, free and clear of all Liens and encumbrances except
Permitted Liens, subject to the terms and conditions of the applicable leases.
Each Foreign Subsidiary of each Loan Party has good and marketable title to or
valid leasehold interest in (or the substantially equivalent interest under the
law of the relevant jurisdiction) all properties, assets and other rights which
it purports to own or lease or which are reflected as owned or leased on its
books and records, free and clear of all Liens and encumbrances except (1)
Permitted Liens, (2) the terms and conditions of the applicable leases, and (3)
Liens and encumbrances which would not individually, or in the aggregate, result
in a Material Adverse Change. All leases of property, each Loan Party and each
Domestic Subsidiaries of each Party are in full force and effect without the
necessity for any consent which has not previously been obtained upon
consummation of the transactions contemplated hereby. To the extent that the
leases of property of the Foreign Subsidiaries of each Loan Party are not in
full force and effect or require consent, such failure will not result in any
Material Adverse Change.
6.1.9 Financial Statements.
----------------------------
(i) Historical Statements. The Borrower has delivered to
---------------------
the Agent copies of its audited consolidated year-end financial statements for
and as of the end of the 1999 fiscal year ended June 30, 1999 (the "Annual
Statements"). In addition, the Borrower has delivered to the Agent copies of its
unaudited consolidated interim financial statements for the fiscal year to date
and as of the end of the fiscal quarter ended March 31, 2000 (the "Interim
Statements") (the Annual and Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were compiled from
the books and records maintained by the Borrower's management, are correct and
complete and fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the Interim Statements) to normal
year-end audit adjustments.
(ii) Financial Projections. The Borrower has delivered to
---------------------
the Agent financial projections of the Borrower and its Subsidiaries for the
period from July 1, 1999 through June 30, 2005 derived from various assumptions
of the Borrower's management (the "Financial Projections"). The Financial
Projections represent a reasonable range of
-41-
possible results in light of the history of the business, present and
foreseeable conditions and the intentions of the Borrower's management. The
Financial Projections accurately reflect the liabilities of the Borrower and its
Subsidiaries upon consummation of the transactions contemplated hereby as of the
Closing Date.
(iii) Accuracy of Financial Statements. Neither the
--------------------------------
Borrower nor any Subsidiary of the Borrower has any liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as disclosed therein
there are no unrealized or anticipated losses from any commitments of the
Borrower or any Subsidiary of the Borrower which may cause a Material Adverse
Change. Since June 30, 1999, no Material Adverse Change has occurred.
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
--------------------------------------------------------------
6.1.10.1 Permitted Uses.
--------------
Up to $35,000,000 in aggregate of the Revolving Credit
Facility may be used on or after the Closing Date and until and including the
Acquisition Date (i) to fund the cash portion of and the fees and expenses
associated with the Acquisition of LPC, (ii) to refinance existing indebtedness
of the Borrower and, after the Tender Date, of LPC, (iii) to pay fees and
expenses associated with the Credit Facilities, and (iv) for working capital
purposes of the Loan Parties. After the Acquisition Date, the Revolving Credit
Facility may be used for working capital purposes of the Loan Parties.
6.1.10.2 Margin Stock.
------------
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock in violation
of Regulation U. The Borrower does not intend to request Loans in an aggregate
amount more than the sum of (i) 50% of the fair market value of the margin stock
of the Loan Parties plus (ii) 100% of the good faith loan value (as defined in
Regulation U) of all other Collateral. No part of the proceeds of any Loan has
been or will be used, immediately, incidentally or ultimately, to purchase or
carry any margin stock to an extent that would violate Regulation U or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
to refund Indebtedness originally incurred for such purpose, or for any purpose
which entails a violation of or which is inconsistent with the provisions of the
regulations of the Board of Governors of the Federal Reserve System. None of the
Loan Parties or any Subsidiary of any Loan Party holds or intends to hold margin
stock in such amounts that more than 50% of the reasonable value of the assets
of any Loan Party or Subsidiary of any Loan Party are or will be represented by
margin stock.
6.1.10.3 Section 20 Subsidiaries.
-----------------------
The Loan Parties do not intend to use and shall not use any
portion of the proceeds of the Loans, directly or indirectly (i) knowingly to
purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20
-42-
Subsidiary makes a market in such Ineligible Securities, (ii) knowingly to
purchase during the underwriting or placement period Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (iii) to make
payments of principal or interest on Ineligible Securities underwritten or
privately placed by as Section 20 Subsidiary and issued by or for the benefit of
any Loan Party or any Affiliate of any Loan Party.
6.1.11 Full Disclosure.
------------------------
Neither this Agreement nor any other Loan Document, nor
any certificate, statement, agreement or other documents furnished to the Agent
or any Lender in connection herewith or therewith, contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
which materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Lenders prior to or at the date hereof in connection with the
transactions contemplated hereby.
6.1.12 Taxes.
--------------
All federal, state, local and other tax returns
required to have been filed with respect to each Loan Party and each Domestic
Subsidiary of each Loan Party have been filed, and payment or adequate provision
has been made for the payment of all taxes, fees, assessments and other
governmental charges which have or may become due pursuant to said returns or to
assessments received, except to the extent that such taxes, fees, assessments
and other charges are being contested in good faith by appropriate proceedings
diligently conducted and for which such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made. All tax
returns required to have been filed with respect to each Foreign Subsidiary of
each Loan Party have been filed, and payment or adequate provision has been made
for the payment of all taxes, fees, assessments and other governmental charges
which have or may become due pursuant to said returns or to assessments
received, except to the extent that such taxes, fees, assessments and other
charges are being contested in good faith by appropriate proceedings diligently
conducted and for which such reserves or other appropriate provisions, if any,
as shall be required by GAAP (or the substantial equivalent in the relevant
jurisdiction) shall have been made, except to the extent that any Foreign
Subsidiary has failed to satisfy these condition such a failure will not result
in any Material Adverse Change. There are no agreements or waivers extending the
statutory period of limitations applicable to any federal income tax return of
any Loan Party or Subsidiary of any Loan Party for any period.
6.1.13 Consents and Approvals.
-------------------------------
Except for the filing of financing statements in the
state and county filing offices, no material consent, approval, exemption, order
or authorization of, or a registration or filing with, any Official Body or any
other Person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement and the
-43-
other Loan Documents by any Loan Party, except as listed on Schedule 6.1.13, all
---------------
of which shall have been obtained or made on or prior to the Closing Date except
as otherwise indicated on Schedule 6.1.13.
---------------
6.1.14 No Event of Default; Compliance with Instruments.
---------------------------------------------------------
No event has occurred and is continuing and no
condition exists or will exist after giving effect to the borrowings or other
extensions of credit to be made on the Closing Date under or pursuant to the
Loan Documents which constitutes an Event of Default or Potential Default. None
of the Loan Parties or any Subsidiaries of any Loan Party is in violation of (i)
any term of its certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would constitute a
Material Adverse Change.
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
-------------------------------------------------------
Each Loan Party and each Subsidiary of each Loan Party
owns or possesses all the material patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises, permits and rights
necessary to own and operate its properties and to carry on its business as
presently conducted and planned to be conducted by such Loan Party or
Subsidiary, without known possible, alleged or actual conflict with the rights
of others.
6.1.16 Security Interests.
---------------------------
The Liens and security interests granted to the Agent
for the benefit of the Lenders pursuant to the Pledge Agreements and the
Security Agreements constitute and will continue to constitute Prior Security
Interests (or, in the jurisdiction of the Foreign Subsidiaries, the reasonably
equivalent benefit) under the Uniform Commercial Code as in effect in each
applicable jurisdiction (the "Uniform Commercial Code") or other applicable Law
entitled to all the rights, benefits and priorities provided by the Uniform
Commercial Code or such Law. Upon the filing of financing statements relating to
said security interests in each office and in each jurisdiction where required
in order to perfect the security interests described above or upon taking
possession of any stock certificates or other certificates evidencing the
Pledged Collateral, all such action as is necessary or advisable to establish
such rights of the Agent will have been taken, and upon execution and delivery
of the Pledge Agreements and the Security Agreements, such filings and such
taking of possession, there will be no necessity for any further action in order
to preserve, protect and continue such rights, except (i) the filing of
continuation statements with respect to such financing statements within six
months prior to each five-year anniversary of the filing of such financing
statements, and (ii) filing additional financing statements if, as provided in
this Agreement, additional locations or names are used. All filing fees and
other expenses in connection with each such action have been or will be paid by
the Borrower.
-44-
6.1.17 Status of the Pledged Collateral.
-----------------------------------------
All the shares of capital stock, Partnership Interests
or LLC Interests included in the Pledged Collateral to be pledged pursuant to
the Pledge Agreements are or will be upon issuance validly issued and
nonassessable (or the substantial equivalent for the law of the relevant
jurisdiction) and owned beneficially and of record by the pledgor free and clear
of any Lien or restriction on transfer, except as otherwise provided by the
Pledge Agreement and except as the right of the Lenders to dispose of the
Shares, Partnership Interests of LLC Interests may be limited by the Securities
Act of 1933, as amended, and the regulations promulgated by the Securities and
Exchange Commission thereunder and by applicable state securities laws (or, in
the case of Foreign Subsidiaries, the substantial equivalent for the law of the
relevant jurisdiction). There are no shareholder, partnership, limited liability
company or other agreements or understandings with respect to the shares of
capital stock, Partnership Interests or LLC Interests included in the Pledged
Collateral except for the partnership agreements and limited liability company
agreements described on Schedule 6.1.17. The Loan Parties have delivered true
---------------
and correct copies of such partnership agreements and limited liability company
agreements to the Agent.
6.1.18 Insurance.
------------------
No notice has been given or claim made and no grounds
exist to cancel or avoid any of such policies or bonds or to reduce the coverage
provided thereby. Such policies and bonds provide adequate coverage from
reputable and financially sound insurers in amounts sufficient to insure the
assets and risks of each Loan Party and each Subsidiary of each Loan Party in
accordance with prudent business practice in the industry of the Loan Parties
and their Subsidiaries.
6.1.19 Compliance with Laws.
-----------------------------
The Loan Parties and their Subsidiaries are in
compliance in all material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in Section 6.1.24
[Environmental Matters]) in all jurisdictions in which any Loan Party or
Subsidiary of any Loan Party is presently or will be doing business except where
the failure to do so would not constitute a Material Adverse Change.
6.1.20 Material Contracts; Burdensome Restrictions.
----------------------------------------------------
All material contracts relating to the business
operations of each Loan Party and each Subsidiary of any Loan Party, including
all employee benefit plans and Labor Contracts are valid, binding and
enforceable upon such Loan Party or Subsidiary and each of the other parties
thereto in accordance with their respective terms, and there is no default
claimed thereunder that would enable the non-defaulting party to terminate the
contract. None of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which could result in a Material Adverse
Change.
-45-
6.1.21 Investment Companies; Regulated Entities.
-------------------------------------------------
None of the Loan Parties or any Subsidiaries of any Loan Party is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940 or under the "control" of an "investment company" as such terms are
defined in the Investment Company Act of 1940 and shall not become such an
"investment company" or under such "control." None of the Loan Parties is a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" within the meaning the Public Utility Holding
Company Act of 1935, as amended from time to time. The Borrower is not subject
to any Law of any Official Body (in each case whether United States federal,
state or local, or other) having jurisdiction over the Borrower, which purports
to restrict or regulate its ability to borrow money, or to extend or obtain
credit, or to pledge its interests in the Loan Disbursement Account. No other
Loan Party is subject to any Law of any Official Body (in each case whether
United States federal, state or local, or other) having jurisdiction over such
Loan Party which purports to restrict or regulate its ability to borrow money or
to extend or obtain credit.
6.1.22 Plans and Benefit Arrangements.
---------------------------------------
Except as set forth on Schedule 6.1.22:
(i) The Borrower and each other member of the ERISA
Group are in compliance in all material respects with any applicable provisions
of ERISA with respect to all Benefit Arrangements, Plans and Multiemployer
Plans. There has been no Prohibited Transaction with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of the Borrower, with respect
to any Multiemployer Plan or Multiple Employer Plan, which could result in any
material liability of the Borrower or any other member of the ERISA Group. The
Borrower and all other members of the ERISA Group have made when due any and all
payments required to be made under any agreement relating to a Multiemployer
Plan or a Multiple Employer Plan or any Law pertaining thereto. With respect to
each Plan and Multiemployer Plan, the Borrower and each other member of the
ERISA Group (i) have fulfilled in all material respects their obligations under
the minimum funding standards of ERISA, (ii) have not incurred any liability to
the PBGC, and (iii) have not had asserted against them any penalty for failure
to fulfill the minimum funding requirements of ERISA. All Plans, Benefit
Arrangements and Multiemployer Plans have been administered in accordance with
their terms and applicable Law.
(ii) To the best of the Borrower's knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.
(iii) Neither the Borrower nor any other member of the
ERISA Group has instituted or intends to institute proceedings to terminate any
Plan.
(iv) No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which security is
required under Section 307 of ERISA has been made or is reasonably expected to
be made to any Plan.
-46-
(v) Neither the Borrower nor any other member of the
ERISA Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrower nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
(vi) To the extent that any Benefit Arrangement is
insured, the Borrower and all other members of the ERISA Group have paid when
due all premiums required to be paid for all periods through the Closing Date.
To the extent that any Benefit Arrangement is funded other than with insurance,
the Borrower and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
6.1.23 Employment Matters.
---------------------------
Each of the Loan Parties and each of their Subsidiaries is
in compliance with the Labor Contracts and all applicable federal, state and
local labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change. The Borrower has delivered to the Agent true and correct copies of each
of the Labor Contracts.
6.1.24 Environmental Matters.
------------------------------
Except as disclosed in the Merger Agreement or on Schedule
6.1.24:
(i) None of the Loan Parties or any Subsidiaries of
any Loan Party has in the past five years received any Environmental Complaint
from any Official Body or private Person alleging that such Loan Party or
Subsidiary or any prior or subsequent owner of any of the Property is a
potentially responsible party under the Comprehensive Environmental Response,
Cleanup and Liability Act, 42 U.S.C. (S) 9601, et seq., and none of the Loan
-- ----
Parties has any reason to believe that such an Environmental Complaint might be
received. There are no pending or, to any Loan Party's knowledge, threatened
Environmental Complaints relating to any Loan Party or Subsidiary of any Loan
Party or, to any Loan Party's knowledge, any prior or subsequent owner of any of
the Property pertaining to, or arising out of, any Environmental Conditions.
-47-
(ii) There are no circumstances at, on or under any of
the Property that constitute a breach of or non-compliance with any of the
Environmental Laws, and there are no past or present Environmental Conditions
at, on or under any of the Property or, to any Loan Party's knowledge, at, on or
under adjacent property, that prevent compliance with the Environmental Laws at
any of the Property.
(iii) Neither any of the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon or
thereunder contain or use Regulated Substances except in compliance with
Environmental Laws. There are no processes, facilities, operations, equipment or
other activities at, on or under any of the Property, or, to any Loan Party's
knowledge, at, on or under adjacent property, that currently result in the
release or threatened release of Regulated Substances onto any of the Property,
except to the extent that such releases or threatened releases are not a breach
of or otherwise not a violation of the Environmental Laws.
(iv) There are no aboveground storage tanks,
underground storage tanks or underground piping associated with such tanks, used
for the management of Regulated Substances at, on or under any of the Property
that (a) do not have, to the extent required by Environmental Laws, a full
operational secondary containment system in place, and (b) are not otherwise in
compliance with all Environmental Laws. There are no abandoned underground
storage tanks or underground piping associated with such tanks, previously used
for the management of Regulated Substances at, on or under any of the Property
that have not either been closed in place in accordance with Environmental Laws
or removed in compliance with all applicable Environmental Laws and no
contamination associated with the use of such tanks exists on any of the
Property that is not in compliance with Environmental Laws.
(v) Each Loan Party and each Subsidiary of any Loan
Party has all material permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of the business of such
Loan Party or Subsidiary as presently conducted. Each Loan Party and each
Subsidiary of any Loan Party has submitted all material notices, reports and
other filings required by the Environmental Laws to be submitted to an Official
Body which pertain to past and current operations on any of the Property.
(vi) All past and present on site generation, storage,
processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances at, on, or under any of the Property and all
off-site transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances have been done in
accordance with the Environmental Laws.
6.1.25 Senior Debt Status.
---------------------------
The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
---- -----
all other Indebtedness of such Loan Party except Indebtedness of such Loan Party
to the extent secured by Permitted Liens.
-48-
There is no Lien upon or with respect to any of the properties or income of any
Loan Party or Subsidiary of any Loan Party which secures indebtedness or other
obligations of any Person except for Permitted Liens.
6.1.26 Employment Matters. The Loan Parties and their
---------------------------
Subsidiaries are in compliance with all employment agreements, collective
bargaining agreements and labor contracts (the "Labor Contracts"), except where
the failure to comply would not result in a Material Adverse Change. There are
no outstanding grievances, arbitration awards or appeals therefrom arising out
of the Labor Contracts or current or, to the knowledge of the Loan Parties,
threatened strikes, picketing, handbilling or other work stoppages or slowdowns
at facilities of the Loan Parties or any Subsidiary of the Loan Parties which in
any case would result in a Material Adverse Change.
6.1.27 Solvency. On the date hereof, and as of the date of
-----------------
each advance of the Loan and issuance or renewal of a Letter of Credit, as the
case may be, and after giving effect to such advance or the issuance or renewal
of a Letter of Credit, each Loan Party is, and shall be, Solvent.
6.1.28 Year 2000 Problem. Each of the Loan Parties has
--------------------------
reviewed areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the risk that certain computer applications used by the Loan
Parties (or any of their respective material suppliers, customers or vendors)
may be unable to recognize and perform properly date-sensitive functions
involving dates prior to and after December 31, 1999 (the "Year 2000 Problem").
The rollover to calendar year 2000 has not resulted in, and the Year 2000
Problem will not result in, any Material Adverse Change.
6.1.29 No Material Adverse Change.
-----------------------------------
No event has occurred since March 31, 2000 and is
continuing which has had or would reasonably be expected to result in a Material
Adverse Change.
6.1.30 Acquisition of LPC.
---------------------------
(i) the Borrower intends to complete the Tender
only after satisfaction of all of the "Conditions of Our Offer" described in the
Form S-4 filed with the SEC on July 13, 2000 as amended on August 2, 2000 and on
August 4, 2000.
(ii) after completion of the Tender, the Borrower
intends to acquire all remaining shares, if any, of LPC.
(iii) the Tender, the completion of the Tender and
the acquisition of any remaining shares of LPC:
(a) will comply with all federal and state
securities laws and all other applicable laws;
-49-
(b) has been approved by the Board of LPC,
which approval has not been rescinded;
(c) are not projected to result in a
Potential Default or Event of Default;
(d) are not projected to require a cash
component in excess of $35,000,000.
6.2 Continuation of Representations.
-------------------------------
The Loan Parties make the representations and warranties in this
Section 6 on the date hereof and on the Closing Date and each date thereafter on
which a Loan is made or a Letter of Credit is issued as provided in and subject
to Sections 7.1 and 7.3.
6.3 Updates to Schedules.
--------------------
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the Borrower shall provide the Agent in writing, no later than the date that the
next quarterly financial statements of the Borrower are due pursuant to Section
8.3.1, with such revisions or updates to such Schedule as may be necessary or
appropriate to update or correct same; provided, however, that no Schedule shall
-------- -------
be deemed to have been amended, modified or superseded by any such correction or
update, nor shall any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule be deemed to have been cured
thereby, unless and until the Required Lenders, in their sole and absolute
discretion, shall have accepted in writing such revisions or updates to such
Schedule.
6.4 Post Closing Matters.
--------------------
The Borrower will deliver or cause to be delivered to the Agent:
(i) within 30 days of the Closing Date, a payoff letter for the
Xxxxx Fargo Credit Facility, a Guaranty, Security Agreement and Pledge Agreement
executed by LPC, which shall be limited in amount to a guaranty to $4,000,000
until December 14, 2000, upon which time such agreements will be unlimited;
(ii) immediately after the Closing Date, certificates evidencing
all Pledged Shares of LPC owned by Borrower on the Closing Date, together with
undated, unexecuted stock powers. Borrower shall immediately, upon obtaining any
additional Pledged Shares, deliver to the Agent for the benefit of the Lenders
such additional certificates evidencing the additional Pledged Shares of LPC
acquired by the Borrower, together with undated, unexecuted stock powers until
100% of the capital stock of LPC has been so delivered;
(iii) within 45 days of the Closing Date, landlord waivers in
number, form, and substance satisfactory to the Agent from locations where the
Borrower or any of the Domestic Subsidiaries of the Borrower leases real
property;
-50-
(iv) within 60 days of the Closing Date, Pledged Shares for the
Foreign Subsidiaries of the Borrower, together with undated, unexecuted stock
powers; and
(v) within 90 days of the Closing Date, opinions of counsel for
the Foreign Subsidiaries of the Borrower organized in Japan and Singapore in
form and substance acceptable to the Agent and its counsel.
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
-------------------------------------------------------
The obligation of each Lender to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
7.1 First Loans and Letters of Credit.
---------------------------------
On the Closing Date:
7.1.1 Officer's Certificate.
-----------------------------
The representations and warranties of each of the
Loan Parties contained in Section 5.7 and in each of the other Loan Documents
shall be true and accurate on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such date
(except representations and warranties which relate solely to an earlier date or
time, which representations and warranties shall be true and correct on and as
of the specific dates or times referred to therein), and each of the Loan
Parties shall have performed and complied with all covenants and conditions
hereof and thereof, no Event of Default or Potential Default shall have occurred
and be continuing or shall exist; and there shall be delivered to the Agent for
the benefit of each Lender a certificate of each of the Loan Parties, dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of each of the Loan Parties, to each such effect.
7.1.2 Secretary's Certificate.
-------------------------------
There shall be delivered to the Agent for the
benefit of each Lender a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of each of the Loan Parties, certifying as
appropriate as to:
(i) all action taken by each Loan Party in
connection with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the Authorized Officers
permitted to act on behalf of each Loan Party for purposes of this Agreement and
the true signatures of such officers, on which the Agent and each Lender may
conclusively rely; and
-51-
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business and a bring-down certificate by facsimile dated the Closing Date.
7.1.3 Delivery of Loan Documents.
--------------------------
The Guaranty Agreement, Notes, Pledge Agreements and Security
Agreements shall have been duly executed and delivered to the Agent for the
benefit of the Lenders, together with all appropriate financing statements and
appropriate stock powers and certificates evidencing the Shares, the Partnership
Interests and the LLC Interests.
7.1.4 Opinion of Counsel.
------------------
There shall be delivered to the Agent for the benefit of each
Lender a written opinion of Xxxxxxxx, German & Xxxxx, P.C. and Xxxxxxxx
Xxxxxxxxx Professional Corporation, counsel for the Loan Parties (who may rely
on the opinions of such other counsel as may be acceptable to the Agent), dated
the Closing Date and in form and substance satisfactory to the Agent and its
counsel:
(i) as to the matters set forth in Exhibit J; and
---------
(ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
7.1.5 Legal Details.
-------------
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent and said
counsel, as the Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
---------------
The Borrower shall have paid or caused to be paid to the Agent
for itself and for the account of the Lenders to the extent not previously paid
the Facility Fees, all other commitment and other fees accrued through the
Closing Date and the costs and expenses for which the Agent and the Lenders are
entitled to be reimbursed.
-52-
7.1.7 Appraisals.
----------
The Agent shall have received appraisals or valuations of the
Loan Parties' and their Subsidiaries' assets as the Agent may require in form
and substance satisfactory to the Agent in all respects.]
7.1.8 Consents.
--------
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 7.1.8 shall have been obtained.
--------------
7.1.9 Officer's Certificate Regarding MACs.
------------------------------------
Since June 30, 1999, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the management of any Loan Party or Subsidiary of any Loan Party; and there
shall have been delivered to the Agent for the benefit of each Lender a
certificate dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of each Loan Party to each such effect.
7.1.10 No Violation of Laws.
--------------------
The making of the Loans and the issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party or any of the Lenders.
7.1.11 No Actions or Proceedings.
-------------------------
No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.
7.1.12 Insurance Policies; Certificates of Insurance; Endorsements.
-----------------------------------------------------------
The Loan Parties shall have delivered evidence acceptable to the
Agent that adequate insurance in compliance with Section 8.13 [Maintenance of
Insurance] is in full force and effect and that all premiums then due thereon
have been paid, together with a certified copy of each Loan Party's casualty
insurance policy or policies evidencing coverage satisfactory to the Agent, with
additional insured, mortgages and lender loss payable special endorsements
attached hereto in form and substance satisfactory to the Agent and its counsel
naming the Agent as additional insured, mortgagee and lender loss payee.
-53-
7.1.13 Landlord's Waiver
-----------------
The Loan Parties shall have delivered an executed Landlord's
Waiver in substantially the form of Exhibit L from the lessor for each leased
---------
Collateral location, as listed on Schedule ___ to the Security Agreement.
7.1.14 Administrative Questionnaire.
----------------------------
Each of the Lenders and the Borrower shall have completed and
delivered to the Agent the Agent's form of administrative questionnaire.
7.1.15 Refinancing.
-----------
All outstanding indebtedness of the Borrower shall have been, or
contemporaneously shall be, refinanced under the Credit Facilities, except a
Y237MM loan, an XXX term note due 2011 and a SING$800,000 line of credit with a
Singapore bank.
7.1.16 LPC Matters.
-----------
(a) The aggregate cash portion of the purchase price paid for
shares tendered pursuant to the Tender or acquired after the completion of
the Tender shall not be projected to exceed $35,000,000.
(b) All documents and materials filed publicly by the Borrower
in connection with the Tender shall have been furnished to the Agent and
shall be reasonably satisfactory to the Agent.
(c) (i) The Borrower shall not have modified the Tender and/or
the disclosure statement filed in connection with the Tender unless such
modification was satisfactory to the Agent; no provision thereof shall have
been waived, amended, supplemented or otherwise modified in a manner which
could, in the opinion of the Agent, reasonably be expected to be materially
adverse to the rights or interest of the Agent or the Lenders; and (ii) the
Board of Directors of the Borrower and LPC shall have approved the Tender
and such approval shall not have been withdrawn.
(d) All required actions shall have been taken so that (a) any
applicable state anti-takeover law(s) shall be inapplicable to the Tender
and the Acquisition and (b) any preferred stock purchase rights or other
"poison pill" arrangements shall not have become, and shall not have any
potential to become, exercisable.
(e) The Agent shall be satisfied (a) that the Tender and the
financing thereof do not violate Regulations T, U or X of the Board of
Governors of the Federal Reserve System and (b) with all other matters
relating to Regulation U. Without limiting the generality of the foregoing,
the Agent shall
-54-
have received from the Borrower a completed and duly executed Form FRU-1 in
form and substance satisfactory to the Agent.
(f) All necessary or required government and third party
approvals in connection with the Tender, the Acquisition and the financing
contemplated hereby shall have been obtained and shall be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the Tender, the
Acquisition or the financing thereof. There shall be in effect no
injunction or other prohibition on the Tender, the Acquisition or the
financing contemplated hereby, and no litigation or proceeding pending or
threatened which seeks to enjoin the Tender, the Acquisition or other
transaction contemplated hereby or which could reasonably be expected to
have a material adverse affect on the Borrower and its subsidiaries as a
whole.
(g) The Agent and Lenders shall have received a satisfactory
consolidated pro forma balance sheet of the Borrower giving effect to the
Acquisition.
(h) The Agent and the Lenders shall have received a five-year
pro forma consolidated balance sheet, consolidated statements of income,
retained earnings and cash flow with assumptions used in preparing the
statements for the Borrower satisfactory to the Agent and Lenders.
(i) The Agent and Lenders shall have received the results of a
recent lien search in each relevant jurisdiction with respect to the Loan
Parties and LPC, and such search shall reveal no liens on any of their
assets, except for liens permitted by the Credit Documentation or liens to
be discharged on or prior to the closing of the Credit Facilities pursuant
to documentation satisfactory to the Agent.
(j) The Agent and Lenders shall have received a satisfactory
solvency certificate from the Chief Financial Officer of the Loan Parties
that shall document the solvency of the Loan Parties and their respective
Subsidiaries and its subsidiaries after giving effect to the Acquisition
and the other transactions contemplated hereby.
(k) All conditions to the Tender, as reflected in the
documentation initially filed with the Securities and Exchange Commission,
shall have been satisfied without material amendment, waiver or change
thereof.
(l) The Borrower shall have conducted due diligence with respect
to LPC, with results acceptable to the Agent and the Lenders, including
those matters addressed by the representations, warranties and covenants in
the Loan Documents that would apply to LPC as a Guarantor.
-55-
7.2 Term Loan.
---------
On the Conversion Date and the date the Term Loan is made, the Agent shall
have received satisfactory evidence that the Tender has been completed and no
provision thereof shall have been waived, amended as supplemental or otherwise
modified in a manner which could, in the opinion of the Agent, reasonably be
expected to be adverse to the interest of the Agent or the Lenders.
7.3 Each Additional Loan or Letter of Credit.
----------------------------------------
At the time of making any Loans or issuing any Letters of Credit other than
Loans made or Letters of Credit issued on the Closing Date and after giving
effect to the proposed extensions of credit: the representations and warranties
of the Loan Parties contained in Section 5.7 and in the other Loan Documents
shall be true on and as of the date of such additional Loan or Letter of Credit
with the same effect as though such representations and warranties had been made
on and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein) and the Loan Parties shall have performed and complied with all
covenants and conditions hereof; no Event of Default or Potential Default shall
have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Lenders; and the
Borrower shall have delivered to the Agent a duly executed and completed Loan
Request or application for a Letter of Credit as the case may be.
8. COVENANTS
---------
8.1 Affirmative Covenants.
---------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings, and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations under the
Loan Documents and termination of the Commitments, the Loan Parties shall comply
at all times with the following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation, limited
partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership or lease of property
or the nature of its business makes such license or qualification necessary,
except as otherwise expressly permitted in Section 8.2.6 [Liquidations, Mergers,
Etc.].
-56-
8.1.2 Payment of Liabilities, Including Taxes, Etc.
--------------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges upon it
or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities, including
taxes, assessments or charges, are being contested in good faith and by
appropriate and lawful proceedings diligently conducted and for which such
reserve or other appropriate provisions, if any, as shall be required by GAAP
shall have been made, but only to the extent that failure to discharge any such
liabilities would not result in any additional liability which would adversely
affect to a material extent the financial condition of any Loan Party or
Subsidiary of any Loan Party or which would affect the Collateral, provided that
--------
the Loan Parties and their Subsidiaries will pay all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
8.1.3 Maintenance of Insurance.
------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, workers' compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Agent.
8.1.4 Maintenance of Properties and Leases.
------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful or
necessary to its business, and from time to time, such Loan Party will make or
cause to be made all appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
---------------------------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
8.1.6 Visitation Rights.
-----------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the
-57-
Lenders to visit and inspect any of its properties and to examine and make
excerpts from its books and records and discuss its business affairs, finances
and accounts with its officers, all in such detail and at such times and as
often as any of the Lenders may reasonably request, provided that each Lender
--------
shall provide the Borrower and the Agent with reasonable notice prior to any
visit or inspection. In the event any Lender desires to conduct an audit of any
Loan Party, such Lender shall make a reasonable effort to conduct such audit
contemporaneously with any audit to be performed by the Agent.
8.1.7 Keeping of Records and Books of Account.
---------------------------------------
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
------------------------------
The Borrower shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
8.1.9 Compliance with Laws.
--------------------
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation of
--------
this Section credit 8.1.9 if any failure to comply with any Law would not result
in fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
8.1.10 Further Assurances.
------------------
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
-58-
8.2 Negative Covenants.
------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations hereunder and
termination of the Commitments, the Loan Parties shall comply with the following
negative covenants:
8.2.1 Indebtedness.
------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule 8.2.1
--------------
(including any extensions or renewals thereof, provided there is no increase in
--------
the amount thereof or other significant change in the terms thereof unless
otherwise specified on Schedule 8.2.1;
---------------
(iii) Indebtedness secured by Purchase Money Security
Interests not exceeding $1,000,000;
(iv) Indebtedness of a Loan Party to another Loan
Party;
(v) transactions for Derivatives with Lenders;
(vi) Indebtedness of LPC to Xxxxx Fargo Bank under the
Xxxxx Fargo Credit Agreement existing on the date of this Agreement, provided
that the principal of the indebtedness thereunder shall not exceed [$2,500,000]
at any time and provided that such Xxxxx Fargo Credit Agreement shall be
terminated by December 14, 2000; and
(vii) other Indebtedness not exceeding in the aggregate of
any time $1,000,000.
8.2.2 Liens and Agreements Not to Grant Liens
---------------------------------------
(a) Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
(b) Each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, at any time, enter
into any agreement with any Person (other than with the Lenders pursuant to the
Loan Documents), that prohibits or limits the ability of such Loan Party or
Subsidiary to create, incur, assume, or suffer to exist, directly or indirectly,
-59-
any Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired.
8.2.3 Guaranties.
----------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties of Indebtedness of the Loan Parties permitted hereunder.
8.2.4 Loans and Investments.
---------------------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds, notes or
securities of, or any partnership interest (whether general or limited) or
limited liability company interest in, or any other investment or interest in,
or make any capital contribution to, any other Person, or agree, become or
remain liable to do any of the foregoing, except:
(i) trade credit extended on usual and customary terms
in the ordinary course of business;
(ii) advances to employees to meet expenses incurred by
such employees in the ordinary course of business;
(iii) Permitted Investments; and
(iv) loans, advances and investments in other Loan
Parties.
8.2.5 Dividends and Related Distributions.
-----------------------------------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, make or pay, or agree to become or remain liable to make
or pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except dividends or other distributions
payable to another Loan Party.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
---------------------------------------------------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or otherwise
all or substantially all of the assets or capital stock of any other Person,
provided that
--------
-60-
(i) any Loan Party other than the Borrower may
consolidate or merge into another Loan Party which is wholly-owned by one or
more of the other Loan Parties, and
(ii) Any Loan Party may acquire, whether by purchase or by
merger, (A) all of the ownership interests of another Person or (B)
substantially all of assets of another Person or of a business or division of
another Person (each a "Permitted Acquisition"), provided that each of the
--------
following requirements is met:
(a) if the Loan Parties are acquiring the ownership
interests in such Person, such Person shall execute a Guarantor Joinder and join
this Agreement as a Guarantor pursuant to Section 11.18 [Joinder of Guarantors]
on or before the date of such Permitted Acquisition;
(b) the Loan Parties, such Person and its owners, as
applicable, shall grant Liens in the assets of or acquired from and stock or
other ownership interests in such Person and otherwise comply with Section 11.18
[Joinder of Guarantors] on or before the date of such Permitted Acquisition
(c) the board of directors or other equivalent
governing body of such Person shall have approved such Permitted Acquisition
and, if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties also shall have delivered to the Lenders
written evidence of the approval of the board of directors (or equivalent body)
of such Person for such Permitted Acquisition;
(d) the business acquired, or the business conducted
by the Person whose ownership interests are being acquired, as applicable, shall
be substantially the same as one or more line or lines of business conducted by
the Loan Parties and shall comply with Section 8.2.10 [Continuation of or Change
in Business];
(e) no Potential Default or Event of Default shall
exist immediately prior to and after giving effect to such Permitted
Acquisition;
(f) the Borrower shall demonstrate that it shall be
in compliance with the covenants contained in Sections 6 and 8 after giving
effect to such Permitted Acquisition (including in such computation Indebtedness
or other liabilities assumed or incurred in connection with such Permitted
Acquisition but excluding income earned or expenses incurred by the Person,
business or assets to be acquired prior to the date of such Permitted
Acquisition) by delivering at least five (5) Business Days prior to such
Permitted Acquisition a certificate in the form of Exhibit F evidencing such
---------
compliance.
(g) the Consideration paid by the Loan Parties for
all Permitted Acquisitions made during the current fiscal year of the Loan
Parties shall not exceed [$5,000,000] and the aggregate of the Consideration
paid by the Loan Parties for such Permitted Acquisition and all other Permitted
Acquisitions made between the Closing Date and the date of such Permitted
Acquisition shall not exceed $20,000,000; and
-61-
(h) the Loan Parties shall deliver to the Agent at least
five (5) Business Days before such Permitted Acquisition copies of any
agreements entered into or proposed to be entered into by such Loan Parties in
connection with such Permitted Acquisition and shall deliver to the Agent such
other information about such Person or its assets as any Loan Party may
reasonably require.
8.2.7 Dispositions of Assets or Subsidiaries.
--------------------------------------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise
transfer or dispose of, voluntarily or involuntarily, any of its properties or
assets, tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the
ordinary course of business which are no longer necessary or required in the
conduct of such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any wholly
owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the
ordinary course of business which are replaced by substitute assets acquired or
leased within the parameters of Section 8.2.1 [Indebtedness]; Expenditures and
Leases]; provided such substitute assets are subject to the Lenders' Prior
Security Interest;
(v) any disposition of assets with fair market values
aggregating not more than $1,500,000; or
(vi) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (v) above, which is
approved by the Required Lenders so long as the after-tax proceeds (as
reasonably estimated by the Borrower) are applied as a mandatory prepayment of
the Term Loans.
8.2.8 Affiliate Transactions.
----------------------
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, enter into or carry out any material transaction
(including purchasing property or services from or selling property or services)
with an Affiliate that is not a Loan Party unless such transaction is not
otherwise prohibited by this Agreement, is entered into in the ordinary course
of business upon fair and reasonable arm's length terms and conditions which are
fully disclosed to the Agent and is in accordance with all applicable Law.
-62-
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
----------------------------------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, own or create directly or indirectly any Subsidiaries other
than (i) any Subsidiary which has joined this Agreement as Guarantor on the
Closing Date; and (ii) any Subsidiary formed after the Closing Date which joins
this Agreement as a Guarantor pursuant to Section 11.18 [Joinder of Guarantors]
provided that the Required Lenders shall have consented to such formation and
joinder and that such Subsidiary and the Loan Parties, as applicable, shall
grant and cause to be perfected first priority Liens to the Agent for the
benefit of the Lenders in the assets held by, and stock of or other ownership
interests in, such Subsidiary. Each of the Loan Parties shall not become or
agree to (1) become a general or limited partner in any general or limited
partnership, except that the Loan Parties may be general or limited partners in
other Loan Parties, (2) become a member or manager of, or hold a limited
liability company interest in, a limited liability company, except that the Loan
Parties may be members or managers of, or hold limited liability company
interests in, other Loan Parties, or (3) become a joint venturer or hold a joint
venture interest in any joint venture.
8.2.10 Continuation of or Change in Business.
--------------------------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, engage in any lines of business other than ones complementary
to those of the Loan Parties substantially as conducted and operated by such
Loan Party or Subsidiary during the present fiscal year, and such Loan Party or
Subsidiary shall not permit any material change in such business.
8.2.11 Plans and Benefit Arrangements.
-------------------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA or
otherwise violate ERISA:
(a) fail to satisfy the minimum funding requirements of ERISA and
the Internal Revenue Code with respect to any Plan;
(b) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(c) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA, would
constitute a Material Adverse Change;
(d) permit the aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in the most recent actuarial report completed
with respect to such Plan, to exceed, as of any actuarial valuation date, the
fair market value of the assets of such Plan;
-63-
(e) fail to make when due any contribution to any Multiemployer
Plan that the Borrower or any member of the ERISA Group may be required to make
under any agreement relating to such Multiemployer Plan, or any Law pertaining
thereto;
(f) withdraw (completely or partially) from any Multiemployer Plan
or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from any
Multiple Employer Plan, where any such withdrawal is likely to result in a
material liability of the Borrower or any member of the ERISA Group;
(g) terminate, or institute proceedings to terminate, any Plan,
where such termination is likely to result in a material liability to the
Borrower or any member of the ERISA Group;
(h) make any amendment to any Plan with respect to which security
is required under Section 307 of ERISA; or
(i) fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code, where
such failure is likely to result in a Material Adverse Change.
8.2.12 Fiscal Year.
------------
The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, change its fiscal year from the twelve-month period beginning July
1 and ending June 30.
8.2.13 Changes in Organizational Documents.
------------------------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, amend in any material respect its certificate of incorporation
(including any provisions or resolutions relating to capital stock), bylaws,
certificate of limited partnership, partnership agreement, certificate of
formation, limited liability company agreement or other organizational documents
without providing at least ten (10) calendar days' prior written notice to the
Agent and the Lenders and, in the event such change would be adverse to the
Lenders as determined by the Agent in its sole discretion, obtaining the prior
written consent of the Required Lenders.
8.2.14 Minimum Consolidated Fixed Charge Coverage Ratio.
-------------------------------------------------
The Loan Parties shall not permit the Consolidated Fixed Charge
Coverage Ratio, calculated as of the end of each fiscal quarter for the previous
four fiscal quarters to be less than the ratio set forth below for the periods
set forth below:
Period Ratio
------ -----
From the Closing Date
through and including 1.25:1.0
-64-
June 30, 2002
After June 30, 2002 1.5:1.0
8.2.15 Maximum Consolidated Leverage Ratio.
------------------------------------
The Loan Parties shall not at the end of any fiscal quarter permit
the Consolidated Leverage Ratio for the previous four fiscal quarters to exceed
the ratio set forth below for the periods specified below:
Period Ratio
------ -----
From the Closing Date 2.5:1.0
through and including
June 30, 2002
July 1, 2002 through and 2.0:1.0
including June 30, 2003
July 1, 2003 and thereafter 1.5:1.0
8.2.16 Minimum Net Worth.
------------------
The Borrower shall not at any time permit Consolidated Net Worth to
be less than $57,000,000 plus 50% of positive quarterly net income plus 50% of
----
the Net Cash proceeds of any Offering plus 100% of the increase in the
----
Borrower's Consolidated Net Worth from the stock portion of the purchase price
for the Acquisition.
8.3 Reporting Requirements.
----------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations hereunder and
under the other Loan Documents and termination of the Commitments, the Loan
Parties will furnish or cause to be furnished to the Agent and each of the
Lenders:
8.3.1 Quarterly Financial Statements.
-------------------------------
As soon as available and in any event within forty-five (45)
calendar days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrower, consisting of a consolidated
and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income,
-65-
stockholders' equity and cash flows for the fiscal quarter then ended and the
fiscal year through that date, all in reasonable detail and certified (subject
to normal year-end audit adjustments) by the Chief Executive Officer, President
or Chief Financial Officer of the Borrower as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year.
8.3.2 Annual Financial Statements.
----------------------------
As soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Borrower, financial statements of the
Borrower consisting of a consolidated balance sheet as of the end of such fiscal
year, and related consolidated statements of income, stockholders' equity and
cash flows for the fiscal year then ended, all in reasonable detail and setting
forth in comparative form the financial statements as of the end of and for the
preceding fiscal year, and certified by independent certified public accountants
of nationally recognized standing satisfactory to the Agent. The certificate or
report of accountants shall be free of qualifications (other than any
consistency qualification that may result from a change in the method used to
prepare the financial statements as to which such accountants concur) and shall
not indicate the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of any Loan Party under any of the Loan Documents.
The Loan Parties shall deliver with such financial statements and certification
by their accountants copies of any management letters of such accountants
addressed to the Borrower.
8.3.3 Certificate of the Borrower.
----------------------------
Concurrently with the financial statements of the Borrower
furnished to the Agent and to the Lenders pursuant to Sections 8.3.1 [Quarterly
Financial Statements] and 8.3.2 [Annual Financial Statements], a certificate of
the Borrower signed by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower, in the form of Exhibit F, to the effect that, except as
---------
described pursuant to Section 8.3.4 [Notice of Default], (i) the representations
and warranties of the Borrower contained in Section 5.7 and in the other Loan
Documents are true on and as of the date of such certificate with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate solely
to an earlier date or time) and the Loan Parties have performed and complied
with all covenants and conditions hereof, (ii) no Event of Default or Potential
Default exists and is continuing on the date of such certificate and (iii)
containing calculations in sufficient detail to demonstrate compliance as of the
date of such financial statements with all financial covenants contained in
Section 8.2 [Negative Covenants].
8.3.4 Notice of Default.
------------------
Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
the Chief Executive Officer, President or Chief Financial Officer of such Loan
Party setting forth the
-66-
details of such Event of Default or Potential Default and the action which the
such Loan Party proposes to take with respect thereto.
8.3.5 Notice of Litigation.
---------------------
Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party, which relate to
the Collateral, involve a claim or series of claims estimated to be in excess of
$50,000 or which if adversely determined would constitute a Material Adverse
Change.
8.3.6 Sale of Assets.
---------------
Written notice to the Agent:
(i) At least ten (10) calendar days prior thereto, with respect to
any proposed sale or transfer of assets pursuant to Section 8.2.7(iv) or (vi),
(ii) At lease thirty (30) calendar days prior thereto, with respect
to any change in any Loan Party's locations from the locations set forth in
Schedule 6.1.8 to the Security Agreement.
8.3.7 Budgets, Forecasts, Other Reports and Information.
--------------------------------------------------
Promptly upon their becoming available to the Borrower:
(i) the annual budget and any forecasts or projections of the
Borrower, to be supplied not later than thirty (30) days prior to commencement
of the fiscal year to which any of the foregoing may be applicable,
(ii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than the date
supplied to such stockholders,
(iii) regular or periodic reports, including Forms 10-K, 10-Q
and 8-K, registration statements and prospectuses, filed by the Borrower with
the SEC,
(iv) a copy of any order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any Official Body, and
(v) such other reports and information as any of the Lenders
may from time to time reasonably request. The Borrower shall also notify the
Lenders promptly of the enactment or adoption of any Law which may result in a
Material Adverse Change.
-67-
8.3.8 Notices Regarding Plans and Benefit Arrangements.
-------------------------------------------------
8.3.8.1 Certain Events.
--------------
Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the Borrower or any
other member of the ERISA Group (regardless of whether the obligation to report
said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the
Borrower or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, any Benefit Arrangement or
any trust created thereunder,
(iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer
Plan by the Borrower or any other member of the ERISA Group under Title IV of
ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
(v) any cessation of operations (by the Borrower or any
other member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the
ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of the
ERISA Group to make a payment to a Plan required to avoid imposition of a Lien
under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
-68-
8.3.8.2 Notices of Involuntary Termination and Annual Reports.
-----------------------------------------------------
Promptly after receipt thereof, copies of (a) all notices received
by the Borrower or any other member of the ERISA Group of the PBGC's intent to
terminate any Plan administered or maintained by the Borrower or any member of
the ERISA Group, or to have a trustee appointed to administer any such Plan; and
(b) at the request of the Agent or any Lender each annual report (IRS Form 5500
series) and all accompanying schedules, the most recent actuarial reports, the
most recent financial information concerning the financial status of each Plan
administered or maintained by the Borrower or any other member of the ERISA
Group, and schedules showing the amounts contributed to each such Plan by or on
behalf of the Borrower or any other member of the ERISA Group in which any of
their personnel participate or from which such personnel may derive a benefit,
and each Schedule(Actuarial Information) to the annual report filed by the
Borrower or any other member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
8.3.8.3 Notice of Voluntary Termination.
-------------------------------
Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.
9. DEFAULT
-------
9.1 Events of Default.
-----------------
An Event of Default shall mean the occurrence or existence of any one or
more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
------------------------------
The Borrower shall fail to pay (i) any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing or shall fail
to pay (ii) any interest on any Loan, Reimbursement Obligation or Letter of
Credit Borrowing or any other amount owing hereunder or under the other Loan
Documents after such interest or other amount becomes due in accordance with the
terms hereof or thereof;
9.1.2 Breach of Warranty.
-------------------
Any representation or warranty made at any time by any of the Loan
Parties herein or by any of the Loan Parties in any other Loan Document, or in
any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;
-69-
9.1.3 Breach of Negative Covenants or Visitation Rights.
--------------------------------------------------
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.1.6 [Visitation Rights] or
Section 8.2 [Negative Covenants];
9.1.4 Breach of Other Covenants.
--------------------------
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of ten
(10) Business Days after any officer of any Loan Party becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Agent in its sole discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
---------------------------------------------
A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension of credit
or any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $1,000,000 in the
aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether
waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
--------------------------
Any final judgments or orders for the payment of money in excess of
$500,000 in the aggregate shall be entered against any Loan Party by a court
having jurisdiction in the premises, which judgment is not discharged, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the
date of entry;
9.1.7 Loan Document Unenforceable.
----------------------------
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
-70-
9.1.8 Uninsured Losses; Proceedings Against Assets.
---------------------------------------------
There shall occur any material uninsured damage to or loss, theft
or destruction of any of the Collateral in excess of $500,000 or the Collateral
or any other of the Loan Parties' or any of their Subsidiaries' assets are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not cured or stayed pending the
outcome of a good faith contest within thirty (30) days thereafter;
9.1.9 Notice of Lien or Assessment.
----------------------------
A notice of Lien or assessment in excess of $500,000 which is not a
Permitted Lien is filed of record with respect to all or any part of any of the
Loan Parties' or any of their Subsidiaries' assets by the United States, or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, or any taxes or
debts owing at any time or times hereafter to any one of these becomes payable
and the same is not paid or otherwise removed of record within thirty (30) days
after the same becomes payable;
9.1.10 Insolvency.
-----------
Any Loan Party or any Subsidiary of a Loan Party ceases to be
solvent or admits in writing its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
--------------------------------------------------
Any of the following occurs: (i) any Reportable Event, which the
Agent determines in good faith constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of the Borrower's liability is likely to exceed 10% of its
Consolidated Tangible Net Worth; (v) the Borrower or any member of the ERISA
Group shall fail to make any contributions when due to a Plan or a Multiemployer
Plan; (vi) the Borrower or any other member of the ERISA Group shall make any
amendment to a Plan with respect to which security is required under Section 307
of ERISA; (vii) the Borrower or any other member of the ERISA Group shall
withdraw completely or partially from a Multiemployer Plan; (viii) the Borrower
or any other member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that
-71-
any such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the other members of
the ERISA Group;
9.1.12 Cessation of Business.
----------------------
Any Loan Party or Subsidiary of a Loan Party ceases to conduct its
business as contemplated, except as expressly permitted under Section 8.2.6
[Liquidations, Mergers, Etc.] or 8.2.7, or any Loan Party or Subsidiary of a
Loan Party is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business and such injunction,
restraint or other preventive order is not dismissed or stayed pending the
outcome of a good faith contest within thirty (30) days after the entry thereof;
9.1.13 Change of Control.
------------------
(i) Any person or group of persons (within the meaning of
Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership of (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) 10% or more of the voting capital stock
of the Borrower; or (ii) within a period of twelve (12) consecutive calendar
months, individuals who were directors of the Borrower on the first day of such
period shall cease to constitute a majority of the board of directors of the
Borrower;
9.1.14 Material Adverse Change.
-------------------------
A Material Adverse Change shall occur and be continuing.
9.1.15 Involuntary Proceedings.
------------------------
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Subsidiary of a Loan Party in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of any Loan
Party or Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of sixty (60)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or
9.1.16 Voluntary Proceedings.
----------------------
Any Loan Party or Subsidiary of a Loan Party shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of its property or shall make a general
assignment for the benefit
-72-
of creditors, or shall fail generally to pay its debts as they become due, or
shall take any action in furtherance of any of the foregoing.
9.2 Consequences of Event of Default.
--------------------------------
9.2.1 Events of Default Other Than Bankruptcy,
-------------------------------------------------
Insolvency or Reorganization Proceedings.
----------------------------------------
If an Event of Default specified under Sections 9.1.1
through 9.1.16 shall occur and be continuing, the Lenders and the Agent shall be
under no further obligation to make Loans or issue Letters of Credit, as the
case may be, and the Agent may, and upon the request of the Required Lenders,
shall by written notice to the Borrower, declare the unpaid principal amount of
the Notes then outstanding and all interest accrued thereon, any unpaid fees and
all other Indebtedness of the Borrower to the Lenders hereunder and thereunder
to be forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Lender without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest-bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Lenders, and grants to the Agent and the Lenders a security interest in,
all such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Lenders, the Agent shall
return such cash collateral to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization
--------------------------------------------------
Proceedings.
-----------
If an Event of Default specified under Section 9.1.15
[Involuntary Proceedings] or 9.1.16 [Voluntary Proceedings] shall occur, the
Lenders shall be under no further obligations to make Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the
Lenders hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
9.2.3 Set-off.
------------------
If an Event of Default shall occur and be continuing,
any Lender to whom any Obligation is owed by any Loan Party hereunder or under
any other Loan Document or any participant of such Lender which has agreed in
writing to be bound by the provisions of Section 10.13 [Equalization of Lenders]
and any branch, Subsidiary or Affiliate of such Lender or participant anywhere
in the world shall have the right, in addition to all other rights and remedies
available to it, without notice to such Loan Party, to set-off against and apply
to the then unpaid balance of all the Loans and all other Obligations of the
Borrower and the other Loan Parties hereunder or under any other Loan Document
any debt owing to, and any other funds held in any manner for the account of,
the Borrower or such other Loan Party by such
-73-
Lender or participant or by such branch, Subsidiary or Affiliate, including all
funds in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by the Borrower or such other Loan Party for its own account (but not
including funds held in custodian or trust accounts) with such Lender or
participant or such branch, Subsidiary or Affiliate. Such right shall exist, if
an Event of Default has occurred and is continuing, whether or not any Lender or
the Agent shall have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the account of the
Borrower or such other Loan Party is or are matured or unmatured and regardless
of the existence or adequacy of any Collateral Guaranty or any other security,
right or remedy available to any Lender or the Agent; and
9.2.4 Suits, Actions, Proceedings.
-------------------------------------
If an Event of Default shall occur and be continuing,
and whether or not the Agent shall have accelerated the maturity of Loans
pursuant to any of the foregoing provisions of this Section 9.2, the Agent or
any Lender, if owed any amount with respect to the Loans, may proceed to protect
and enforce its rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement or the other Loan Documents, including if permitted
by applicable Law the obtaining of the ex parte appointment of a receiver, and,
-- -----
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Agent
or such Lender; and
9.2.5 Application of Proceeds.
---------------------------------
From and after the date on which the Agent has taken
any action pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the
Lenders for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, incurred by the
Agent or the Lenders in connection with realizing on the Collateral or
collection of any Obligations of any of the Loan Parties under any of the Loan
Documents including advances made by the Lenders or any one of them or the Agent
for the reasonable maintenance, preservation, protection or enforcement of, or
realization upon, the Collateral, including advances for taxes, insurance,
repairs and the like and reasonable expenses incurred to sell or otherwise
realize on, or prepare for sale or other realization on, any of the Collateral;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Loan Parties to the Lenders incurred
under this Agreement or any of the other Loan Documents, whether of principal,
interest, fees, expenses or otherwise, in such manner as the Agent may determine
in its discretion; and
-74-
(iii) the balance, if any, to the Borrower or as
otherwise required by Law.
9.2.6 Other Rights and Remedies.
------------------------------------
In addition to all of the rights and remedies contained
in this Agreement or in any of the other Loan Documents, the Agent shall have
all of the rights and remedies of a secured party under the Uniform Commercial
Code or other applicable Law, all of which rights and remedies shall be
cumulative and non-exclusive, to the extent permitted by Law. The Agent may, and
upon the request of the Required Lenders shall, exercise all post-default rights
granted to the Agent and the Lenders under the Loan Documents or applicable Law.
10. THE AGENT
---------
10.1 Appointment.
-----------
Each Lender hereby irrevocably designates, appoints and authorizes PNC
Bank to act as Agent for such Lender under this Agreement and to execute and
deliver or accept on behalf of each of the Lenders the other Loan Documents.
Each Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to act as the
Agent on behalf of the Lenders to the extent provided in this Agreement.
10.2 Delegation of Duties.
--------------------
The Agent may perform any of its duties hereunder by or through agents
or employees (provided such delegation does not constitute a relinquishment of
--------
its duties as Agent) and, subject to Sections 10.5 [Reimbursement of Agent by
Borrower, Etc.] and 10.6, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants or other experts concerning all matters
pertaining to its duties hereunder and to rely upon any advice so obtained.
10.3 Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of
-75-
the foregoing, the use of the term "agent" in this Agreement with reference to
the Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties. Each Lender expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of any of the Loan Parties, shall be
deemed to constitute any representation or warranty by the Agent to any Lender;
(ii) that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of the Loan Parties in
connection with this Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter.
10.4 Actions in Discretion of Agent; Instructions From the Lenders.
-------------------------------------------------------------
The Agent agrees, upon the written request of the Required Lenders, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
--------
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Lenders, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Lenders
or all of the Lenders. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Lenders, subject to Section
10.6 [Exculpatory Provisions, Etc.]. Subject to the provisions of Section 10.6,
no Lender shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder in accordance
with the instructions of the Required Lenders, or in the absence of such
instructions, in the absolute discretion of the Agent.
10.5 Reimbursement and Indemnification of Agent by the Borrower.
----------------------------------------------------------
The Borrower unconditionally agrees to pay or reimburse the Agent and
hold the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel, appraisers and environmental consultants, incurred by the Agent (i) in
connection with the development, negotiation, preparation, execution,
syndication, interpretation and performance of this Agreement and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
-76-
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that the Borrower shall not be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Agent's gross negligence or willful misconduct, or if the Borrower was not given
notice of the subject claim and the opportunity to participate in the defense
thereof, at its expense (except that the Borrower shall remain liable to the
extent such failure to give notice does not result in a loss to the Borrower),
or if the same results from a compromise or settlement agreement entered into
without the consent of the Borrower, which shall not be unreasonably withheld.
In addition, the Borrower agrees to reimburse and pay all reasonable out-of-
pocket expenses of the Agent's regular employees and agents engaged periodically
to perform audits of the Loan Parties' books, records and business properties.
10.6 Exculpatory Provisions; Limitation of Liability.
-----------------------------------------------
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Lender for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (b) be responsible in any manner to any of the
Lenders for the effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Lenders to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the financial
condition of the Loan Parties, or the existence or possible existence of any
Event of Default or Potential Default. No claim may be made by any of the Loan
Parties, any Lender, the Agent or any of their respective Subsidiaries against
the Agent, any Lender or any of their respective directors, officers, employees,
agents, attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and each
of the Loan Parties, (for itself and on behalf of each of its Subsidiaries), the
Agent and each Lender hereby waive, releases and agree never to xxx upon any
claim for any such damages, whether such claim now exists or hereafter arises
and whether or not it is now known or suspected to exist in its favor. Each
Lender agrees that, except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder or given to the
Agent for the account of or with copies for the Lenders, the Agent and each of
its directors, officers, employees, agents, attorneys or Affiliates shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Loan Parties
-77-
which may come into the possession of the Agent or any of its directors,
officers, employees, agents, attorneys or Affiliates.
10.7 Reimbursement and Indemnification of Agent by Lenders.
-----------------------------------------------------
Each Lender agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrower and without limiting the Obligation of the
Borrower to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including attorneys' fees and disbursements,
and costs of appraisers and environmental consultants, of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that no Lender shall be liable for any portion
--------
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the Agent's gross negligence or willful misconduct, or (b) if such Lender was
not given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that such Lender shall remain liable to
the extent such failure to give notice does not result in a loss to the Lender),
or (c) if the same results from a compromise and settlement agreement entered
into without the consent of such Lender, which shall not be unreasonably
withheld. In addition, each Lender agrees promptly upon demand to reimburse the
Agent (to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share for all
amounts due and payable by the Borrower to the Agent in connection with the
Agent's periodic audit of the Loan Parties' books, records and business
properties.
10.8 Reliance by Agent.
-----------------
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.9 Notice of Default.
-----------------
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Potential Default or Event of Default and stating
that such notice is a "notice of default."
10.10 Notices.
-------
The Agent shall promptly send to each Lender a copy of all notices
received from the Borrower pursuant to the provisions of this Agreement or the
other Loan Documents
-78-
promptly upon receipt thereof. The Agent shall promptly notify the Borrower and
the other Lenders of each change in the Base Rate and the effective date
thereof.
10.11 Lenders in Their Individual Capacities.
--------------------------------------
With respect to its Revolving Credit Commitment, the Revolving Credit
Loans, the Term Loan Commitment and the Term Loan made by it and any other
rights and powers given to it as a Lender hereunder or under any of the other
Loan Documents, the Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not the Agent, and the
term "Lenders" shall, unless the context otherwise indicates, include the Agent
in its individual capacity. PNC and its Affiliates and each of the Lenders and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, accept deposits from, discount drafts for, act
as trustee under indentures of, and generally engage in any kind of banking or
trust business with, the Loan Parties and their Affiliates, in the case of the
Agent, as though it were not acting as Agent hereunder and in the case of each
Lender, as though such Lender were not a Lender hereunder. The Lenders
acknowledge that, pursuant to such activities, the Agent or its Affiliates may
(i) receive information regarding the Loan Parties (including information that
may be subject to confidentiality obligations in favor of the Loan Parties) and
acknowledge that the Agent shall be under no obligation to provide such
information to them, and (ii) accept fees and other consideration from the Loan
Parties for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
10.12 Holders of Notes.
----------------
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Lenders.
-----------------------
The Lenders and the holders of any participations in any Commitments
or Loans or other rights or obligations of a Lender hereunder agree among
themselves that, with respect to all amounts received by any Lender or any such
holder for application on any Obligation hereunder or under any Note or under
any such participation, whether received by voluntary payment, by realization
upon security, by the exercise of the right of set-off or banker's lien, by
counterclaim or by any other non-pro rata source, equitable adjustment will be
made in the manner stated in the following sentence so that, in effect, all such
excess amounts will be shared ratably among the Lenders and such holders in
proportion to their interests in payments, under the Notes, except as otherwise
provided in Section 4.4.3 [Agent's and Lender's Rights], 5.4.2 [Replacement of a
Lender] or 5.6 [Additional Compensation in Certain Circumstances]. The Lenders
or any such holder receiving any such amount shall purchase for cash from each
of the other Lenders an interest in such Lender's Loans in such amount as shall
result in a ratable
-79-
participation by the Lenders and each such holder in the aggregate unpaid amount
under the Notes, provided that if all or any portion of such excess amount is
--------
thereafter recovered from the Lender or the holder making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by law
(including court order) to be paid by the Lender or the holder making such
purchase.
10.14 Successor Agent.
---------------
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Lenders (if the Agent is a Lender, the
Agent's Loans and its Commitment shall be considered in determining whether the
Required Lenders have requested such resignation) or required by Section 5.4.2
[Replacement of a Lender], in either case of (i) or (ii) by giving not less than
thirty (30) days' prior written notice to the Borrower. If the Agent shall
resign under this Agreement, then either (a) the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, subject to the consent
of the Borrower, such consent not to be unreasonably withheld, or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following the Agent's notice to the Lenders of its resignation, then
the Agent shall appoint, with the consent of the Borrower, such consent not to
be unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Lenders appoint and the Borrower consents to the
appointment of a successor agent. Upon its appointment pursuant to either clause
(a) or (b) above, such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent,
effective upon its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement. After the
resignation of any Agent hereunder, the provisions of this Section 10 shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.
10.15 Agent's Fee.
-----------
The Borrower shall pay to the Agent a nonrefundable fee (the "Agent's
Fee") under the terms of a letter (the "Agent's Letter") between the Borrower
and Agent, as amended from time to time.
10.16 Availability of Funds.
---------------------
The Agent may assume that each Lender has made or will make the
proceeds of a Loan available to the Agent unless the Agent shall have been
notified by such Lender on or before the later of (1) the close of Business on
the Business Day preceding the Borrowing Date with respect to such Loan or two
(2) hours before the time on which the Agent actually funds the proceeds of such
Loan to the Borrower (whether using its own funds pursuant to this Section 10.16
or using proceeds deposited with the Agent by the Lenders and whether such
funding occurs before or after the time on which Lenders are required to deposit
the proceeds of such Loan with the Agent). The Agent may, in reliance upon such
assumption (but shall not be
-80-
required to), make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Lender,
the Agent shall be entitled to recover such amount on demand from such Lender
(or, if such Lender fails to pay such amount forthwith upon such demand from the
Borrower) together with interest thereon, in respect of each day during the
period commencing on the date such amount was made available to the Borrower and
ending on the date the Agent recovers such amount, at a rate per annum equal to
(i) the Federal Funds Effective Rate during the first three (3) days after such
interest shall begin to accrue and (ii) the applicable interest rate in respect
of such Loan after the end of such three-day period.
10.17 Calculations.
------------
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Lender
whether in respect of the Loans, fees or any other amounts due to the Lenders
under this Agreement. In the event an error in computing any amount payable to
any Lender is made, the Agent, the Borrower and each affected Lender shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
10.18 Beneficiaries.
-------------
Except as expressly provided herein, the provisions of this Section 10
are solely for the benefit of the Agent and the Lenders, and the Loan Parties
shall not have any rights to rely on or enforce any of the provisions hereof.
In performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for any of the Loan Parties.
11. MISCELLANEOUS
-------------
11.1 Modifications, Amendments or Waivers.
------------------------------------
With the written consent of the Required Lenders, the Agent, acting on
behalf of all the Lenders, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Lenders or the Loan Parties hereunder or thereunder, or may grant written
waivers or consents to a departure from the due performance of the Obligations
of the Loan Parties hereunder or thereunder. Any such agreement, waiver or
consent made with such written consent shall be effective to bind all the
Lenders and the Loan Parties; provided, that, without the written consent of all
--------
the Lenders, no such agreement, waiver or consent may be made which will:
-81-
11.1.1 Increase of Commitment; Extension or Expiration Date.
-------------------------------------------------------------
Increase the amount of the Revolving Credit Commitment or
Term Loan Commitment of any Lender hereunder or extend the Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal Interest or
-----------------------------------------------------------------
Fees; Modification of Terms of Payment.
--------------------------------------
Whether or not any Loans are outstanding, extend the time
for payment of principal or interest of any Loan (excluding the due date of any
mandatory prepayment of a Loan or any mandatory Commitment reduction in
connection with such a mandatory prepayment hereunder except for mandatory
reductions of the Commitments on the Expiration Date), the Commitment Fee or any
other fee payable to any Lender, or reduce the principal amount of or the rate
of interest borne by any Loan or reduce the Commitment Fee or any other fee
payable to any Lender, or otherwise affect the terms of payment of the
principal of or interest of any Loan, the Commitment Fee or any other fee
payable to any Lender;
11.1.3 Release of Collateral or Guarantor.
-------------------------------------------
Except for sales of assets permitted by Section 8.2.7
[Disposition of Assets or Subsidiaries], release any Collateral consisting of
capital stock or other ownership interests of any Loan Party or its Subsidiary
or substantially all of the assets of any Loan Party, any Guarantor from its
Obligations under the Guaranty Agreement or any other security for any of the
Loan Parties' Obligations; or
11.1.4 Miscellaneous
----------------------
Amend Section 5.2 [Pro Rata Treatment of Lenders], 10.6
[Exculpatory Provisions, Etc.] or 10.13 [Equalization of Lenders] or this
Section 11.1, alter any provision regarding the pro rata treatment of the
Lenders, change the definition of Required Lenders, or change any requirement
providing for the Lenders or the Required Lenders to authorize the taking of any
action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
--------
interests, rights or obligations of the Agent in its capacity as Agent or as the
issuer of Letters of Credit shall be effective without the written consent of
the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
---------------------------------------------------------
No course of dealing and no delay or failure of the Agent or any
Lender in exercising any right, power, remedy or privilege under this Agreement
or any other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Lenders
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of
-82-
any kind or character on the part of any Lender of any breach or default under
this Agreement or any such waiver of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Lenders by the Borrower;
-------------------------------------------------------------
Taxes.
-----
The Borrower agrees unconditionally upon demand to pay or reimburse to
each Lender (other than the Agent, as to which the Borrower's Obligations are
set forth in Section 10.5 [Reimbursement of Agent By Borrower, Etc.]) and to
save such Lender harmless against (i) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements (including fees and
expenses of counsel for each Lender except with respect to (a) and (b) below),
incurred by such Lender (a) in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Lender,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by such Lender
hereunder or thereunder, provided that the Borrower shall not be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (A) if the same results from
such Lender's gross negligence or willful misconduct, or (B) if the Borrower was
not given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that the Borrower shall remain liable to
the extent such failure to give notice does not result in a loss to the
Borrower), or (C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not be
unreasonably withheld. The Lenders will attempt to minimize the fees and
expenses of legal counsel for the Lenders which are subject to reimbursement by
the Borrower hereunder by considering the usage of one law firm to represent the
Lenders and the Agent if appropriate under the circumstances. The Borrower
agrees unconditionally to pay all stamp, document, transfer, recording or filing
taxes or fees and similar impositions now or hereafter determined by the Agent
or any Lender to be payable in connection with this Agreement or any other Loan
Document, and the Borrower agrees unconditionally to save the Agent and the
Lenders harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
11.4 Holidays.
--------
Whenever payment of a Loan to be made or taken hereunder shall be due
on a day which is not a Business Day such payment shall be due on the next
Business Day and such
-83-
extension of time shall be included in computing interest and fees, except that
the Loans shall be due on the Business Day preceding the Expiration Date if the
Expiration Date is not a Business Day. Whenever any payment or action to be made
or taken hereunder (other than payment of the Loans) shall be stated to be due
on a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day (except as provided in Section 4.1.4
[Interest Periods] with respect to Interest Periods under the Euro-Rate Option),
and such extension of time shall not be included in computing interest or fees,
if any, in connection with such payment or action.
11.5 Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
11.5.1 Notional Funding.
------------------------
Each Lender shall have the right from time to time,
without notice to the Borrower, to deem any branch, Subsidiary or Affiliate
(which for the purposes of this Section 11.5 shall mean any corporation or
association which is directly or indirectly controlled by or is under direct or
indirect common control with any corporation or association which directly or
indirectly controls such Lender) of such Lender to have made, maintained or
funded any Loan to which the Euro-Rate Option applies at any time, provided that
--------
immediately following (on the assumption that a payment were then due from the
Borrower to such other office), and as a result of such change, the Borrower
would not be under any greater financial obligation pursuant to Section 5.6
[Additional Compensation in Certain Circumstances] than it would have been in
the absence of such change. Notional funding offices may be selected by each
Lender without regard to such Lender's actual methods of making, maintaining or
funding the Loans or any sources of funding actually used by or available to
such Lender.
11.5.2 Actual Funding.
----------------------
Each Lender shall have the right from time to time to
make or maintain any Loan by arranging for a branch, Subsidiary or Affiliate of
such Lender to make or maintain such Loan subject to the last sentence of this
Section 11.5.2. If any Lender causes a branch, Subsidiary or Affiliate to make
or maintain any part of the Loans hereunder, all terms and conditions of this
Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Loans to the same extent as if such Loans were
made or maintained by such Lender, but in no event shall any Lender's use of
such a branch, Subsidiary or Affiliate to make or maintain any part of the Loans
hereunder cause such Lender or such branch, Subsidiary or Affiliate to incur any
cost or expenses payable by the Borrower hereunder or require the Borrower to
pay any other compensation to any Lender (including any expenses incurred or
payable pursuant to Section 5.6 [Additional Compensation in Certain
Circumstances]) which would otherwise not be incurred.
11.6 Notices.
-------
Any notice, request, demand, direction or other
communication (for purposes of this Section 11.6 only, a "Notice") to be given
to or made upon any party hereto under any provision of this Agreement shall be
given or made by telephone or in writing (which includes
-84-
by means of electronic transmission (i.e. "e-mail") or facsimile transmission
or, if consented to in writing by the Borrower, by setting forth such Notice on
a site on the World Wide Web (a "Website Posting") if Notice of such Website
Posting (including the information necessary to access such site) has previously
been delivered to the applicable parties hereto by another means set forth in
this Section 11.6) in accordance with this Section 11.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on Schedule 11.6 hereof or in accordance with
-------------
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 11.6. Any Notice shall be effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited
with the United States Postal Service, with first-class postage prepaid, return
receipt requested;
(c) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by hand delivery, a facsimile or electronic
transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
(e) In the case of electronic transmission, when actually
received;
(f) In the case of a Website Posting, upon delivery of the
Notice of such posting (including the information necessary to access such site)
by another means set forth in this Section 11.6; and
(g) If given by any other means (including overnight courier),
when actually received.
Any Lender giving a Notice to a Loan Party shall concurrently send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lender of
its receipt of such Notice.
11.7 Severability.
------------
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
-85-
11.8 Governing Law.
-------------
Each Letter of Credit and Section 2.9 [Letter of Credit Subfacility]
shall be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be revised or amended from time to time, and to the extent not
inconsistent therewith, the internal laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws principles, and the balance of this
Agreement shall be deemed to be a contract under the Laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to its conflict of laws principles.
11.9 Prior Understanding.
-------------------
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
11.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Lenders, the
making of Loans, issuance of Letters of Credit, or payment in full of the Loans.
All covenants and agreements of the Loan Parties contained in Sections 8.1
[Affirmative Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting
Requirements] herein shall continue in full force and effect from and after the
date hereof so long as the Borrower may borrow or request Letters of Credit
hereunder and until termination of the Commitments and payment in full of the
Loans and expiration or termination of all Letters of Credit. All covenants and
agreements of the Borrower contained herein relating to the payment of
principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Notes, Section 5 [Payments]
and Sections 10.5 [Reimbursement of Agent by Borrower, Etc.], 10.7
[Reimbursement of Agent by Lenders, Etc.] and 11.3 [Reimbursement of Lenders by
Borrower; Etc.], shall survive payment in full of the Loans, expiration or
termination of the Letters of Credit and termination of the Commitments.
11.11 Successors and Assigns.
----------------------
(i) This Agreement shall be binding upon and
shall inure to the benefit of the Lenders, the Agent, the Loan Parties and their
respective successors and assigns, except that none of the Loan Parties may
assign or transfer any of its rights and Obligations hereunder or any interest
herein. Each Lender may, at its own cost, make assignments of or sell
participations in all or any part of its Commitments and the Loans made by it to
one or more lenders or other entities, subject to the consent of the Borrower
and the Agent with respect to any assignee, such consent not to be unreasonably
withheld, provided that (1) no
--------
-86-
consent of the Borrower shall be required (A) if an Event of Default exists and
is continuing, or (B) in the case of an assignment by a Lender to an Affiliate
of such Lender, (2) any assignment by a Lender to a Person other than an
Affiliate of such Lender may not be made in amounts less than the lesser of
[$5,000,000] or the amount of the assigning Lender's Commitment. In the case of
an assignment, upon receipt by the Agent of the Assignment and Assumption
Agreement, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it had been a signatory Lender hereunder, the Commitments shall be
adjusted accordingly, and upon surrender of any Note subject to such assignment,
the Borrower shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Revolving Credit Commitment or Term Loan assumed by
it and a new Revolving Credit Note or Term Note to the assigning Lender, in an
amount equal to the Revolving Credit Commitment or Term Loan retained by it
hereunder. Any Lender which assigns any or all of its Commitment or Loans to a
Person other than an Affiliate of such Lender shall pay to the Agent a service
fee in the amount of $3,500 for each assignment. In the case of a participation,
the participant shall only have the rights specified in Section 9.2.3 [Set-off]
(the participant's rights against such Lender in respect of such participation
to be those set forth in the agreement executed by such Lender in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Sections 11.1.1 [Increase of
Commitment, Etc.], 11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of
Collateral or Guarantor], all of such Lender's obligations under this Agreement
or any other Loan Document shall remain unchanged, and all amounts payable by
any Loan Party hereunder or thereunder shall be determined as if such Lender had
not sold such participation.
(ii) Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrower and the Agent the form of certificate described in
Section 11.17 [Tax Withholding Clause] relating to federal income tax
withholding. Each Lender may furnish any publicly available information
concerning any Loan Party or its Subsidiaries and any other information
concerning any Loan Party or its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective assignees
or participants), provided that such assignees and participants agree to be
--------
bound by the provisions of Section 11.12 [Confidentiality].
(iii) Notwithstanding any other provision in this
Agreement, any Lender may at any time pledge or grant a security interest in all
or any portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Lender in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or
consent of the Borrower or the Agent. No such pledge or grant of a security
interest shall release the transferor Lender of its obligations hereunder or
under any other Loan Document.
11.12 Confidentiality.
---------------
11.12.1 General.
----------------
The Agent and the Lenders each agree to keep
confidential all information obtained from any Loan Party or its Subsidiaries
which is nonpublic and confidential
-87-
or proprietary in nature (including any information the Borrower specifically
designates as confidential), except as provided below, and to use such
information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Lenders
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement, subject to
agreement of such Persons to maintain the confidentiality, (ii) to assignees and
participants as contemplated by Section 11.11, (iii) to the extent requested by
any lender regulatory authority or, with notice to the Borrower, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available other than
as a result of a breach of this Agreement or becomes available from a source not
known to be subject to confidentiality restrictions, or (v) if the Borrower
shall have consented to such disclosure.
11.12.2 Sharing Information With Affiliates of the Lenders.
-----------------------------------------------------------
Each Loan Party acknowledges that from time to time
financial advisory, investment banking and other services may be offered or
provided to the Borrower or one or more of its Affiliates (in connection with
this Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each of the Loan Parties hereby authorizes each
Lender to share any information delivered to such Lender by such Loan Party and
its Subsidiaries pursuant to this Agreement, or in connection with the decision
of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate
of such Lender, it being understood that any such Subsidiary or affiliate of any
Lender receiving such information shall be bound by the provisions of Section
11.12.1 as if it were a Lender hereunder. Such Authorization shall survive the
repayment of the Loans and other Obligations and the termination of the
Commitments.
11.13 Counterparts.
------------
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
11.14 Agent's or Lender's Consent.
---------------------------
Whenever the Agent's or any Lender's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Lender shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
11.15 Exceptions.
----------
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein
-88-
unless expressly provided, nor shall any such exceptions be deemed to permit any
action or omission that would be in contravention of applicable Law.
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
--------------------------------------
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE LENDERS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
11.17 Tax Withholding Clause.
----------------------
Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form X-0, X-0XXX
or W-8ECI or other applicable form prescribed by the Internal Revenue Service,
certifying that such Lender, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Lender,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Lender, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Lender which is a party hereto on the Closing Date shall deliver such form
or certificate at least five (5) Business Days prior to the first date on which
any interest or fees are payable by the Borrower hereunder for the account of
such Lender; (B) each assignee or participant shall deliver such form or
certificate at least five (5) Business Days before the effective date of such
assignment or participation (unless the Agent in its sole discretion shall
permit such assignee or participant to deliver such form or certificate less
than five (5) Business Days before such date in which case it shall be due on
the date specified by the Agent). Each Lender, assignee or participant which so
delivers a Form X-0, X-0, X-0XXX or W-8ECI further undertakes to deliver to each
of the Borrower and the Agent two (2) additional copies of such form (or a
successor form) on or before the date that such form expires or becomes obsolete
or after the occurrence of any event requiring a change in the most recent form
so delivered by it, and such amendments thereto or extensions or
-89-
renewals thereof as may be reasonably requested by the Borrower or the Agent,
either certifying that such Lender, assignee or participant is entitled to
receive payments under this Agreement and the other Loan Documents without
deduction or withholding of any United States federal income taxes or is subject
to such tax at a reduced rate under an applicable tax treaty or stating that no
such exemption or reduced rate is allowable. The Agent shall be entitled to
withhold United States federal income taxes at the full withholding rate unless
the Lender, assignee or participant establishes an exemption or that it is
subject to a reduced rate as established pursuant to the above provisions.
11.18 Joinder of Guarantors.
---------------------
Any Subsidiary of the Borrower which is required to join this
Agreement as a Guarantor pursuant to Section 8.2.9 [Subsidiaries, Partnerships
and Joint Ventures] shall execute and deliver to the Agent (i) a Guarantor
Joinder in substantially the form attached hereto as Exhibit K pursuant to which
---------
it shall join as a Guarantor each of the documents to which the Guarantors are
parties; and (ii) documents in the forms described in Section 7.1 [First Loans]
modified as appropriate to relate to such Subsidiary; and (iii) documents
necessary to grant and perfect Prior Security Interests to the Agent for the
benefit of the Lenders in all Collateral held by such Subsidiary. The Loan
Parties shall deliver such Guarantor Joinder and related documents to the Agent
within five (5) Business Days after the date of the filing of such Subsidiary's
articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership
or the date of its organization if it is an entity other than a limited
partnership or corporation.
-90-
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
WITNESS: II-VI INCORPORTED
/s/ Xxxxxx X. German By: /s/ Xxxxxxx X. Xxxxxx
____________________________________ _____________________________________
Title: President and Chief Operating
Officer
__________________________________
[Seal]
WITNESS: II-VI ACQUISITION CORP.
/s/ Xxxxxx X. German By: /s/ Xxxxxxx X. Xxxxxx
____________________________________ _____________________________________
Title: President
__________________________________
[Seal]
WITNESS: II-VI DELAWARE, INC.
/s/ Xxxxxx X. German By: /s/ Xxxxxxx X. Xxxxxx
____________________________________ _____________________________________
Title: President
__________________________________
[Seal]
WITNESS: VLOC INCORPORTED
/s/ Xxxxxx X. German By: /s/ Xxxxxxx X. Xxxxxx
____________________________________ _____________________________________
Title: Vice President
__________________________________
[Seal]
WITNESS: PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
/s/ Xxxx X. Xxxxxxxx By: /s/ Enrico Xxxxx Xxxxx
____________________________________ _____________________________________
Title: Vice President
__________________________________
[Seal]
