CREDIT AGREEMENT
among
HARDINGE INC.
(the "Borrower")
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK
as Agent
Dated as of August 1, 1997
Table of Contents
TITLE PAGE
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS................................ 1
Section 1.01. Definitions........................................... 1
Section 1.02. Accounting Terms...................................... 9
ARTICLE 2. THE CREDIT................................................... 9
Section 2.01. The Loans............................................. 9
Section 2.02. The Notes............................................. 10
Section 2.03. Purpose............................................... 10
Section 2.04. Borrowing Procedures.................................. 10
Section 2.05. Prepayments........................................... 10
Section 2.06. Interest Periods...................................... 11
Section 2.07. Interest.............................................. 11
Section 2.08. Certain Notices....................................... 12
Section 2.09. Changes in Commitment................................. 12
Section 2.10. Minimum Amounts....................................... 12
Section 2.11. Fees.................................................. 12
Section 2.12. Payments Generally.................................... 13
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC............................ 14
Section 3.01. Additional Costs...................................... 14
Section 3.02. Limitation on Types of Loans.......................... 15
Section 3.03. Illegality............................................ 15
Section 3.04. Certain Variable Rate Loans pursuant to Sections
3.01 and 3.03........................................ 16
Section 3.05. Certain Compensation.................................. 16
ARTICLE 4. CONDITIONS PRECEDENT......................................... 16
Section 4.01. Documentary Conditions Precedent...................... 16
Section 4.02. Additional Conditions Precedent....................... 17
Section 4.03. Deemed Representations................................ 17
ARTICLE 5. REPRESENTATIONS AND WARRANTIES............................... 18
Section 5.01. Incorporation, Good Standing and Due Qualification.... 18
Section 5.02. Corporate Power and Authority: No Conflicts........... 18
Section 5.03. Governmental Approval................................. 18
Section 5.04. Legally Enforceable Agreements........................ 18
Section 5.05. Financial Statements.................................. 18
Section 5.06. Litigation............................................ 18
Section 5.07. Margin Stock.......................................... 19
Section 5.08. Use of Loan Proceeds.................................. 19
Section 5.09. Tax Returns........................................... 19
Section 5.10. ERISA................................................. 19
Section 5.11. Subsidiaries.......................................... 19
Section 5.12. Ownership and Liens................................... 19
Section 5.13. Hazardous Materials................................... 19
Section 5.14. No Default on Other Agreements........................ 20
Section 5.15. Partnerships.......................................... 20
Section 5.16. No Forfeiture......................................... 20
Section 5.17. Solvency.............................................. 20
ARTICLE 6. AFFIRMATIVE COVENANTS........................................ 21
Section 6.01. Compliance with Laws, Corporate Existence............. 21
Section 6.02. Reporting Requirements................................ 21
Section 6.03. Notice of Proceedings................................. 23
Section 6.04. Insurance............................................. 23
Section 6.05. Environmental Laws.................................... 23
Section 6.06. Access to Premises and Records........................ 23
Section 6.07. Notice of Default..................................... 23
Section 6.08. Subsidiaries.......................................... 23
Section 6.09. Material Adverse Changes.............................. 24
ARTICLE 7. NEGATIVE COVENANTS........................................... 24
Section 7.01. Liens, Etc............................................ 24
Section 7.02. Lease Obligations..................................... 25
Section 7.03. Prohibited Transactions............................... 25
Section 7.04. Margin Stock.......................................... 25
Section 7.05. Consolidations, Mergers, Acquisitions and Sales of
Assets............................................... 25
Section 7.06. Affiliate Transactions................................ 26
Section 7.07. Loans and Advances.................................... 26
Section 7.08. Guaranties............................................ 26
Section 7.09. No Activities Leading to Forfeiture................... 27
ARTICLE 8. FINANCIAL COVENANTS.......................................... 27
Section 8.01. Working Capital....................................... 27
Section 8.02. Net Worth............................................. 27
Section 8.03. Funded Debt........................................... 27
Section 8.04. Earnings.............................................. 27
ARTICLE 9. EVENTS OF DEFAULT............................................ 28
Section 9.01. Events of Default..................................... 28
Section 9.02. Remedies.............................................. 29
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER............... 29
Section 10.01. Appointment, Powers and Immunities of Agent.......... 29
Section 10.02. Reliance by Agent.................................... 30
Section 10.03. Defaults............................................. 30
Section 10.04. Rights of Agent as a Bank............................ 31
Section 10.05. Indemnification of Agent............................. 31
Section 10.06. Documents............................................ 31
Section 10.07. Non-Reliance on Agent and Other Banks................ 32
Section 10.08. Failure of Agent to Act.............................. 32
Section 10.09. Resignation or Removal of Agent...................... 32
Section 10.10. Amendments Concerning Agency Function................ 33
Section 10.11. Liability of Agent................................... 33
Section 10.12. Transfer of Agency Function.......................... 33
Section 10.13. Non-Receipt of Funds by the Agent.................... 33
Section 10.14. Withholding Taxes.................................... 33
Section 10.15. Several Obligations and Rights of Banks.............. 34
Section 10.16. Pro Rata Treatment of Loans, Etc..................... 34
Section 10.17. Sharing of Payments Among Banks...................... 34
ARTICLE 11. MISCELLANEOUS............................................... 35
Section 11.01. Amendments and Waivers............................... 35
Section 11.02. Usury................................................ 35
Section 11.03. Expenses and Indemnification......................... 36
Section 11.04. Survival............................................. 36
Section 11.05. Assignment; Participations........................... 36
Section 11.06. Notices.............................................. 37
Section 11.07. Setoff............................................... 38
Section 11.08. Jurisdiction; Immunities............................. 38
Section 11.09. Table of Contents; Headings.......................... 39
Section 11.10. Severability......................................... 39
Section 11.11. Counterparts......................................... 39
Section 11.12. Integration.......................................... 39
Section 11.13. Governing Law........................................ 39
Section 11.14. Confidentiality...................................... 39
Section 11.15. Treatment of Certain Information..................... 40
Section 11.16. Currency............................................. 40
EXHIBITS
Exhibit A Form of Note
Exhibit B Authorization Letter
Exhibit C Opinion of Counsel for Borrower
Exhibit D Confidentiality Agreement
SCHEDULES
Schedule I Subsidiaries of Borrower
Schedule II Hazardous Materials
Schedule III Partnerships of Borrower
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of August 1, 1997 among HARDINGE INC., a
corporation organized under the laws of New York (the "Borrower"), each of the
banks which is a signatory hereto (individually a "Bank" and collectively the
"Banks") and THE CHASE MANHATTAN BANK, a New York banking corporation, as agent
for the Banks (in such capacity, together with its successors in such capacity,
the "Agent").
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"Affiliate" means any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with, the Borrower or any of its
Subsidiaries; (b) which directly or indirectly beneficially owns or holds 5% or
more of any class of voting stock of the Borrower or any such Subsidiary; (c) 5%
or more of the voting stock of which is directly or indirectly beneficially
owned or held by the Borrower or such Subsidiary; or (d) which is a partnership
in which the Borrower or any of its Subsidiaries is a general partner. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent's Account" means account number 000-0-00000 maintained by the Agent
and any other account designated by the Agent.
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, schedules and the like
refer to the Articles, Sections, Exhibits, schedules and the like of this
Agreement unless otherwise indicated.
"Alternative Currency" shall mean at any time any of Canadian Dollars,
Deutsche Marks, French Francs, Pounds Sterling, Swiss Francs and Yen, so long as
at such time as (a) such Currency is dealt with in the London interbank deposit
market, (b) such Currency is transferrable and convertible into Dollars in the
London Foreign Exchange Market, and (c) no central bank or other governmental
authorization in the country of issue of such Currency is required to permit use
of such Currency by any Bank for the making of any Loan hereunder and/or to
permit the Borrower to borrow and repay the principal amount thereof and to pay
the interest thereon, unless such authorization has been previously obtained.
"Authorization Letter" means the letter agreement executed by the Borrower
in the form of Exhibit B.
"Banking Day" means (a) any day on which commercial banks are not
authorized or required to close in New York City, and (b) whenever such day
relates to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a
day on which dealings in Dollar deposits are also carried out in the London
interbank market.
"Basis Point" means one one-hundredth of one percent.
"Canadian Dollars" and the sign "C$" means the lawful currency of Canada.
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee in accordance with GAAP.
"Change in Control" means (a) except as to (i) officers and directors in
office as of the date of this Agreement, (ii) the Hardinge Inc. Pension Plan,
Hardinge Inc. Savings Plan or other compensation plan of Borrower, and (iii)
Chemung Canal Trust Company, the acquisition of ownership, directly or
indirectly, beneficially or of record, of any Person or group (within the
meaning of the Securities Act of 1934 and Rule 13d-5 of the Securities and
Exchange Commission as in effect on the date hereof) of shares representing more
than twenty-five percent (25%) of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; or (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who are neither (i) nominated by the board
of directors of the Borrower nor (ii) appointed by the directors so nominated.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
The Chase Manhattan Bank $20,000,000.00
Fleet Bank 20,000,000.00
Manufacturers and Traders
Trust Company 10,000,000.00
Total: $50,000,000.00
"Consolidated Assets" means all assets of Borrower and its Consolidated
Subsidiaries treated as assets in accordance with GAAP.
"Consolidated Capital Expenditures" means for any period, the Dollar amount
of gross expenditures (including obligations under Capital Leases) made for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto, (but not repairs thereof) incurred during such period
for the Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Current Assets" means all assets of the Borrower and its
Consolidated Subsidiaries, treated as current assets in accordance with GAAP.
"Consolidated Current Liabilities" means all liabilities of the Borrower
and its Consolidated Subsidiaries, treated as current liabilities in accordance
with GAAP, including without limitation (a) all obligations payable on demand or
within one (1) year after the date in which the determination is made, and (b)
installment and sinking fund payments required to be made within one (1) year
after the date on which determination is made, but excluding any such
indebtedness renewable or extendable at the option of the obligor under, or
payable from the proceeds of other indebtedness which may be incurred pursuant
to the provisions of any revolving credit agreements (including this Agreement)
or other similar agreement.
"Consolidated Net Income" means for any period the net income of the
Borrower and its Consolidated Subsidiaries for such period determined on a
consolidated basis without duplication, in accordance with GAAP.
"Consolidated Tangible Net Worth" shall have the meaning assigned to such
term in Section 8.02 hereof.
"Consolidated Total Unsubordinated Liabilities" means all items on a
consolidated basis, in accordance with GAAP consistently applied, which would
properly be included (a) on the liability side of the balance sheet (other than
Subordinated Debt, capital stock, capital surplus and retained earnings), or (b)
as obligations under direct or indirect guarantees or obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise assure a creditor
against loss in respect of, indebtedness or obligations of others; provided,
however, excluded therefrom shall be all but 10% of the obligations resulting
from the sale, pledge or discount of customer notes by Borrower and its
Subsidiaries.
"Controlled Group" shall have the meaning assigned to such term in Section
6.02(e) hereof.
"Currency" means Dollars or any Alternative Currency.
"Debt" means, with respect to any Person: (a) indebtedness of such Person
for borrowed money; (b) obligations of such Person as lessee under Capital
Leases, (c) obligations under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (a) and (b) above, (not
otherwise reserved for) and (d) defined benefit pension liabilities in respect
of unfunded vested benefits under plans covered by ERISA calculated consistently
with GAAP. Excluded from the term Debt shall be an amount equal to 90% of the
obligations of the Borrower and its Subsidiaries arising from the sale, pledge,
or discounting of customer notes.
"Default" means any event which with the giving of notice or lapse of time,
or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to the
extent permitted by law, any other amount payable by the Borrower under this
Agreement or any Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to 2% above the Variable Rate as in effect from time to time plus
the Margin (if any) (provided that, if the amount so in default is principal of
a Eurodollar Loan and the due date thereof is a day other than the last day of
the Interest period therefor, the "Default Rate" for such principal shall be,
for the period from and including the due date and to but excluding the last day
of the Interest period therefor, 2% above the interest rate for such Loan as
provided in section 2.07 hereof and, thereafter, the rate provided for above in
this definition).
"Deutsche Marks" and the sign "DM" means the lawful currency of the Federal
Republic of Germany.
"Dollar Equivalent" means with respect to any Loan denominated in an
Alternative Currency as at any date of determination thereof, the amount of
Dollars that would be required to purchase the amount of the Alternative
Currency of such Loan on the date two (2) Banking Days prior to the date of such
Loan, based on the arithmetic mean (rounded upwards) if necessary, to the
nearest one one-hundredth of one percent), as determined by the Agent, of the
spot selling rate at which the Principal Reference Bank offers to sell such
Alternative Currency for Dollars in the London foreign exchange market at
approximately 11:00 a.m. London time for delivery on the date of such Loan.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Subsidiaries" means any Subsidiary formed and currently existing
under the laws of the United States of America or a State thereof.
"Earnings Before Interest, Taxes, Depreciation and Amortization" means
Consolidated Net Income prior to the deduction of interest expense, prior to the
deduction for federal, state or foreign corporate income and corporate franchise
taxes, and prior to the deduction for depreciation and amortization.
"Effective Date" means August 1, 1997 or, if later, the date on which the
conditions contained in Article 4 have been satisfied.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling-of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"Eurodollar Loan" means any Loan when and to the extent the interest rate
therefor is determined on the basis of the definition "LIBO Base Rate."
"Event of Default" has the meaning given such term in Section 9.01.
"Facility Documents" means this Agreement, the Notes and the Authoriza-
tion Letter.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions as
published by the Federal Reserve Bank of New York for such day (or for any day
that is not a Banking Day, for the immediately preceding Banking Day).
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.
"French Francs" and the sign "Ffr" means the lawful currency of the
Republic of France. "Funded Debt" means, with respect to any Person, all Debt of
such Person for borrowed money.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied on a basis consistent with
those used in the preparation of the financial statements referred to in Section
5.05 (except for changes concurred in by the Borrower's independent public
accountants).
"Hazardous Materials" means any substance regulated under any Environ-
mental Laws.
"Interest Period" means the period commencing on the date a Loan is made
and ending, as the Borrower may select pursuant to Section 2.06: (a) in the case
of Variable Rate Loans, the period commencing on the date such Variable Rate
Loan is made and ending on the Quarterly Date next succeeding such date; and (b)
in the case of Eurodollar Loans, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter, provided that each
such Interest Period which commences on the last Banking Day of a calendar month
(or any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate subsequent calendar month.
"Lending Office" means, for each Bank and for each type of Loan, the
lending office of such Bank (or of an affiliate of such Bank) designated as such
for such type of Loan on its signature page hereof or such other office of such
Bank (or of an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"LIBO Base Rate" means with respect to any Eurodollar Loan the arithmetic
mean, as calculated by the Agent, of the respective rates per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted at approximately 11:00
a.m. London time by the principal London branch of the Principal Reference Bank
two Banking Days prior to the first day of the Interest Period for such Loan for
the offering to leading banks in the London interbank market of Dollar deposits
in immediately available funds, for a period, and in an amount, comparable to
such Interest Period and principal amount of the Eurodollar Loan. If the
Principal Reference Bank is no longer quoting on the London interbank market,
the LIBO Base Rate shall be determined by the Agent on the basis of quotes from
a Reference Bank (other than the Agent) selected by the Agent.
"LIBO Rate" means, for any Eurodollar Loan, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the Agent to be
equal to the sum of the quotient of (a) the LIBO Base Rate for such Loan for the
Interest Period therefor, divided by (b) one minus the Reserve Requirement for
such Loan for such Interest Period.
"Liens" shall have the meaning assigned to such term in Section 7.01
hereof.
"Loans" means the loans made by the Banks pursuant to Section 2.01 (each a
"Loan).
"Margin" means for each Variable Rate Loan and Eurodollar Loan the lowest
applicable margin on the table next following, computed as of the date this
Agreement based upon Borrower's financial statements for the immediately
preceding four fiscal quarters for income statement items and the most recent
fiscal quarter for balance sheet items, and adjusted thereafter on the first day
of each Interest Period based on information for the immediately preceding four
fiscal quarters for income statement items and the immediately preceding fiscal
quarter for balance sheet items.
================================================================================
(a) Ratio of Funded Debt to Variable Rate Loans Eurodollar Loans
Earnings Before Interest,Taxes,
Depreciation & Amortization
================================================================================
Equal to less than 1.0 0 Basis Points 37.5 Basis Points
--------------------------------------------------------------------------------
Greater than 1.0 and less than or
equal to 2.0 0 Basis Points 50 Basis Points
--------------------------------------------------------------------------------
Greater than 2.0 0 Basis Points 75 Basis Points
================================================================================
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of ERISA
to which contributions have been made by the Borrower or any ERISA Affiliate and
which is covered by Title IV of ERISA.
"Net Worth" means, at any date of determination thereof, the sum for the
Borrower and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) of (a) the amount of common stock;
plus (b) the amount of any preferred stock that does not have any requirement
for the Borrower to purchase, redeem, retire or otherwise acquire the same; plus
(c) the amount of additional paid-in-capital and retained earnings (or, in the
case of an additional paid-in-capital or retained earnings deficit, minus the
amount of such deficit); plus (d) cumulative pension liability adjustments (or,
in the case of negative adjustments, minus the amount of such adjustments); plus
(e) cumulative foreign currency translation adjustments (or, in the case of
negative adjustments, minus the amount of such adjustments); plus (f) any other
items which under GAAP are included in shareholders equity (or, in the case of
items excluded from shareholders equity, minus such items); and minus (g) the
cost of treasury stock.
"Notes" mean the Promissory Notes of the Borrower to each of the Banks in
the principal amount of their respective commitment, in the form of Exhibit A
hereto evidencing the Loans made by the Banks hereunder (each a "Note").
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
"Plan" shall have the meaning assigned to such term in Section 6.02 (e)
hereof.
"Pounds Sterling" and the sign "(pound)" means the lawful currency of the
United Kingdom.
"Prime Rate" means that rate of interest from time to time announced by the
Principal Reference Bank at its principal office as its prime commercial lending
rate.
"Principal Office" means the principal office of the Agent, presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Principal Reference Bank" means The Chase Manhattan Bank, its successors
and assigns.
"Quarterly Dates" shall mean the last day of March, June, September, and
December in each year, the first of which shall be the first such day after the
date of this Agreement.
"Reference Banks" means The Chase Manhattan Bank and Fleet Bank.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Bank, any change after the
date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including without limitation Regulation D) or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including such Bank of or under any United States,
federal, state, municipal or foreign laws or regulations (whether or not having
the force of law) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
"Required Banks" means, at any time while no Loans are outstanding, Banks
having at least 75% of the aggregate amount of the Commitment and, at any time
while Loans are outstanding, Banks holding at least 75% of the aggregate
outstanding principal amount of the Loans.
"Reserve Requirement" means, for any Interest Period for any Eurodollar
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period for such Loan under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000.00
against in the case of Eurodollar Loans, "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall also reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (i)
any category of liabilities which includes deposits by reference to which the
LIBO Base Rate for Eurodollar Loans is to be determined as provided in the
definition of "LIBO Base Rate" in this Section 1.01 or (ii) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Subordinated Debt" means Debt subordinated to the Banks on terms and
conditions satisfactory to the Banks.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Swiss Francs" and the sign "Sfr" means the lawful currency of Xxxxxxx-
land.
"Termination Date" means August 1, 2002.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all benefit liabilities (within the
meaning of section 4001(a)(16) of ERISA) under the Plan exceeds the fair market
value of all Plan assets allocable to such benefit liabilities, as determined on
the most recent valuation date of the Plan and in accordance with the provisions
of ERISA for calculating the potential liability of the Borrower or any ERISA
Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus fifty (50) Basis Points, and (b) the Prime Rate for such
day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
"Yen" and the sign "(Y)" means the lawful currency of Japan.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. Subject to the terms and conditions of this
Agreement, the Borrower may borrow, repay and reborrow the aggregate amount of
each Bank's Commitment by means of Variable Rate Loans in Dollars and Eurodollar
Loans in any Currency and, each of the Banks severally agree to make Loans to
the Borrower from time to time from and including the date hereof but excluding
the Termination Date, up to but not exceeding the amount of its Commitment. The
Loans may be outstanding as Variable Rate Loans or Eurodollar Loans (each a
"type" of Loan). The Loan of each Bank shall be maintained as a Variable Rate
Loan and/or a Eurodollar Loan pro rata according to the amount of its respective
Commitment. The Loans of each type of each Bank shall be made and maintained at
such Bank's Lending Office for such type of Loan.
(b) Each Loan shall be due and payable on the last day of the Interest
Period thereof.
(c) For purposes of determining at the time of borrowing whether the amount
of the borrowing would, together with all other outstanding Loans, exceed the
aggregate amount of the Banks' Commitment, and for purposes of determining the
unused portion of the Commitment, the amount of each Eurodollar Loan in an
Alternative Currency shall be deemed to be the Dollar Equivalent of the amount
of the Alternative Currency of such Eurodollar Loan.
Section 2.02. The Notes. (a) The Loan of each Bank shall be evidenced by
the Borrower's Note in favor of such Bank substantially in the form of Exhibit A
hereto, dated the date of this Agreement, payable to the order of such Bank and
otherwise duly completed and executed by the Borrower.
(b) The date, amount, Currency (in the case of Eurodollar Loans) interest
rate and duration of Interest Period for the Loan made by each Bank to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Bank on its books and, on the schedule attached to each Note or
any continuation thereof; provided, however, that the failure of such Bank to
make, or any error in making, any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount owing hereunder
or under such Note in respect of the Loan evidenced by such Note.
Section 2.04. Borrowing Procedures. The Borrower shall give the Agent
notice of each borrowing to be made hereunder as provided in Section 2.08. Not
later than 2:00 p.m. New York time (in the case of Loans denominated in Dollars)
or 11:00 a.m. local time in the location of the Agent's Account (in the case of
Eurodollar Loans denominated in an Alternative Currency) on the date of such
borrowing, each Bank shall, through its Lending Office and subject to the
conditions of this Agreement, make the amount of the Loan to be made by it on
such day available to the Agent at the Principal Office and in immediately
available funds for the account of the Borrower. The amount so received by the
Agent shall, subject to the conditions of this Agreement, be made available to
the Borrower, in immediately available funds, by the Agent crediting an account
of the Borrower designated by the Borrower and maintained with the Agent at a
banking office designated by the Agent.
Section 2.05. Prepayments. The Borrower shall have the right to prepay the
Loans at any time or from time to time in multiples of One Hundred Fifty
Thousand Dollars ($150,000.00) to be applied to principal in inverse order of
maturity; provided that: (a) the Borrower shall give the Agent notice of each
such prepayment as provided in Section 2.08; (b) Eurodollar Loans may not be
prepaid, except that if after giving effect to any reduction or termination of
the Commitments pursuant to Section 2.09 hereof, the outstanding aggregate
principal amount of the Loans exceeds the aggregate amount of the Commitments,
the Borrower shall pay or repay the Loans on the date of such reduction or
termination in an aggregate principal amount equal to the excess, together with
interest thereon accrued to the date of such payment or repayment and any
amounts payable pursuant to Section 3.05 in connection therewith; and (c) in the
event the outstanding aggregate principal balance of the Loans payable in
Dollars and the Dollar Equivalent of all Loans payable in Alternative Currency
exceeds the aggregate amount of the Commitments, Borrower shall pay the Loans in
the aggregate principal amount equal to the excess, together with interest
thereon accrued to the date of payment and any amounts payable pursuant to
Section 3.05 in connection therewith.
Section 2.06. Interest Periods. In the case of each Loan, the Borrower
shall select an Interest Period of any duration in accordance with the
definition of Interest Period in Section 1.01 hereof, subject to the following
limitations: (a) no Interest Period may extend beyond the Termination Date; (b)
notwithstanding clause (a) above, no Interest Period for a Eurodollar Loan shall
have a duration less than one month and if any such proposed Interest Period
would otherwise be for a shorter period, such Interest Period shall not be
available; and (c) if an Interest Period would end on a day which is not a
Banking Day, such Interest Period shall be extended to the next Banking Day,
unless, in the case of a Eurodollar Loan, such Banking Day would fall in the
next calendar month in which event such Interest Period shall end on the
immediately preceding Banking Day.
Section 2.07. Interest. (a) Interest shall accrue on the outstanding and
unpaid principal amount of each Loan for the period from and including the date
of such Loan to but excluding the date such Loan is paid at the following rates
per annum: (i) for a Variable Rate Loan, at a variable rate per annum equal to
the Variable Rate plus any Margin, and (ii) for a Eurodollar Loan, at a fixed
rate equal to the LIBO Rate plus the Margin. If the principal amount of any Loan
and any other amount payable by the Borrower hereunder or under a Note shall not
be paid when due (at stated maturity, by acceleration or otherwise), interest
shall accrue at the Default Rate on such amount to the full extent permitted by
law from and including such due date to but excluding the date such amount is
paid in full.
(b) The interest rate on each Variable Rate Loan shall change when the
Variable Rate changes and interest on each such Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Eurodollar Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrower and the Banks thereof.
(c) Accrued interest shall be due and payable upon any payment of principal
and on the last day of the Interest Period with respect thereto, in the case of
an Interest Period greater than three (3) months at three month intervals after
the first day of such Interest Period; provided that interest accruing at the
Default Rate shall be due and payable from time to time on demand of the Agent.
Section 2.08. Certain Notices. Notices by the Borrower to the Agent of each
borrowing pursuant to Section 2.04, each prepayment pursuant to Section 2.05 and
each reduction or termination of the Commitments pursuant to Section 2.09(b)
shall be irrevocable and shall be effective only if received by the Agent (a) in
the case of borrowings and in the case of Variable Rate Loan prepayments (i)
before 10:00 a.m. New York time on the day of borrowing or prepayment for
Variable Rate Loans, (ii) before 12:00 noon New York time three (3) Banking Days
prior to the date of borrowing for Eurodollar Loans in Dollars, and (iii) before
12:00 noon New York time four (4) Banking Days prior to the date of Borrowing
for Eurodollar Loans in an Alternative Currency; and (b) in the case of
reductions or terminations of the Commitment, three (3) Banking Days prior
thereto. Each such notice shall specify the Loans to be borrowed or prepaid,
(subject to Section 2.10) the amount in Dollars (or in the case of Loans in
Alternative Currencies, the Dollar Equivalent) and the type of the Loans to be
borrowed or prepaid and the date of borrowing or prepayment (which shall be a
Banking Day), and in the case of Eurodollar Loans, the Currency or Currencies in
which such Loan are to be made and, if required by the Agent, the account of the
Borrower maintained with a commercial bank in the country in whose Currency such
Eurodollar Loans are denominated. Each such notice of reduction or termination
shall specify the amount of the Commitments to be reduced or terminated. The
Agent shall promptly notify the Banks of the contents of each such notice.
Section 2.09. Changes in Commitment. (a) The aggregate amount of each
Bank's Commitment shall automatically terminate at the open of business on the
Termination Date.
(b) The Borrower shall have the right to reduce or terminate the amount of
unused Commitments at any time or from time to time, provided that (i) the
Borrower shall give notice of each reduction or termination to the Agent as
provided in Section 2.08; and (ii) each partial reduction shall be in an
aggregate amount of at least One Million Dollars ($1,000,000.00).
(c) The Commitment once reduced or terminated may not be reinstated.
Section 2.10. Minimum Amounts. Except for borrowings which exhaust the full
remaining amount of the Commitment, and prepayments (in the case of Variable
Rate Loans) which result in the prepayment of all Loans, each borrowing and
prepayment of principal shall be in an amount of at least equal to One Million
Dollars ($1,000,000.00) and shall be in incremental multiples of Five Hundred
Thousand Dollars ($500,000.00).
Section 2.11. Fees. (a) The Borrower shall pay to the Agent for the account
of each Bank a commitment fee on the daily average unused Commitment of such
Bank for the period from and including the date hereof to the earlier of the
date the Commitments are terminated or the Termination Date at a rate per annum
equal to fifteen (15) Basis Points if the ratio of Total Funded Debt to Earnings
Before Interest, Taxes, Depreciation and Amortization is equal to or less than
1.0, twenty (20) Basis Points if the ratio of Funded Debt to Earnings Before
Interest, Taxes, Depreciation and Amortization is greater than 1.0 and less than
or equal to 2.0, and twenty-five (25) Basis Points if the ratio of Funded Debt
to Earnings Before Interest, Taxes, Depreciation and Amortization is greater
than 2.0. The accrued commitment fee shall be due and payable in arrears upon
any reduction or termination of the Commitments and on each Quarterly Due Date
commencing on the first such date after the Effective Date, and shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Computation shall be based upon Borrower's financial statements for the
immediately preceding four (4) fiscal quarters for income statement items and
the most recent fiscal quarter for balance sheet items.
(b) The Borrower shall pay directly to the Agent for its own account the
fees, in the amounts and at the times set forth in the Fee Letter between the
Borrower and the Agent dated June 30, 1997.
Section 2.12. Payments Generally. Except to the extent otherwise provided
herein, all payments of principal of and interest on Loans made in Dollars, and
other amounts (other than the principal of and interest on Eurodollar Loans made
in an Alternative Currency) payable by the Borrower under this Agreement and the
Note shall be made in Dollars, and all payments of principal and interest on
Eurodollar Loans made in an Alternative Currency shall be made in such
Alternative Currency in immediately available funds not later than 1:00 p.m. New
York time (in the case of Loans denominated in Dollars) or 11:00 a.m. local time
in the location of the Agent's Account (in the case of Eurodollar Loans
denominated in an alternative Currency) on the date on which such payments shall
become due (each such payment made after such time on such date to be deemed to
have been made on the next succeeding Banking Day); provided that, when a new
loan is to be made by each Bank on the date the Borrower is to repay any
principal of an outstanding Loan in the same Currency, such Bank shall apply the
proceeds thereof to the payment of the principal to be repaid and only an amount
equal to the difference between the principal to be borrowed and the principal
to be repaid shall be made available by the Bank to the Borrower as provided in
Section 2.04 or paid by the Borrower to such Bank pursuant to this Section 2.12,
as the case may be. The Agent, or any Bank for whose account such payment is to
be made, may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of the
Borrower with the Agent or such Bank, as the case may be, and any Bank so doing
shall promptly notify the Agent. The Borrower shall, at the time of making each
payment under this Agreement or the Note, specify to the Agent the principal or
other amount payable by the Borrower under this Agreement or the Notes to which
such payment is to be applied and in the event that it fails to so specify, or
if a Default or Event of Default has occurred and is continuing, the Agent may
apply such payment as it may elect in its sole and absolute discretion (subject
to Section 10.16). If the due date of any payment under this Agreement or the
Notes would otherwise fall on a day which is not a Banking Day, such date shall
be extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Each payment
received by the Agent hereunder or under the Notes for the account of a Bank
shall be paid promptly to such Bank, in immediately available funds, for the
account of such Bank's Lending Office.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) The Borrower shall pay directly to each
Bank from time to time on demand such amounts as such Bank may reasonably
determine to be necessary to compensate it for any costs which such Bank
determines are attributable to its making or maintaining any Eurodollar Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change, or any Reserve Requirement for any such
Loans which: (i) changes the basis of taxation of any amounts payable to such
Bank under this Agreement or its Note in respect of any of such Loans (other
than taxes imposed on the overall net income of such Bank or of its Lending
Office for any of such Loans by the jurisdiction in which such Bank has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or any deposits referred to in the definition of
"LIBO Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or its Note (or any of such extensions of credit or
liabilities). Each Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 3.01(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. The amount payable to any
such Bank shall be computed from the date of the occurrence giving rise to
Additional Cost, or the date that is 120 days prior to the date of demand by
such Bank, whichever is later. If any Bank requests compensation from the
Borrower under this section 3.01(a), or under section 3.01(c), the Borrower may,
by notice to such Bank (with a copy to the Agent), suspend the obligation of
such Bank to maintain Loans of the type with respect to which such compensation
is requested (in which case the provisions of section 3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this Section
3.01, in the event that, by reason of any Regulatory Change, any Bank either (i)
incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such Bank
which includes deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Bank which includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Bank so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Bank to make Loans
of such type hereunder shall be suspended until the date such Regulatory Change
ceases to be in effect (in which case the provisions of Section 3.04 shall be
applicable).
(c) Without limiting the effect of the foregoing provisions of this Section
3.01 (but without duplication), the Borrower shall pay directly to each Bank
from time to time on request such amounts as such Bank may reasonably determine
to be necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance of capital by it or any of its Affiliates
pursuant to any future law or regulation of any jurisdiction or any
interpretation, directive or request (whether or not having the force of law and
whether in effect on the date of this Agreement or thereafter) of any court or
governmental or monetary authority in respect of its Loan hereunder or its
obligation to make its Loan hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Bank to a level below that which it could have achieved but for such law,
regulation, interpretation, directive or request). Each Bank will notify the
Borrower if it is entitled to compensation pursuant to this Section 3.01(c) as
promptly as practicable after it determines to request such compensation. The
amount payable to any Bank shall be computed from the date of the occurrence
entitling such Bank to compensation, or the date that is one hundred twenty
(120) days prior to the date of demand by such Bank, whichever is later.
(d) Determinations and allocations by a Bank for purposes of this Section
3.01 of the effect of any Regulatory Change pursuant to subsections (a) or (b),
or of the effect of capital maintained pursuant to subsection (c), on its costs
of making or maintaining Loans or its obligation to make Loans, or on amounts
receivable by, or the rate of return to, it in respect of Loans or such
obligation, and of the additional amounts required to compensate such Bank under
this Section 3.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
Section 3.02. Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if:
(a) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "LIBO Rate" in Section 1.01 are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining the rate of
interest for any type of Eurodollar Loans as provided in this Agreement; or
(b) the Required Banks determine (which determination shall be conclusive)
and notify the Agent and the Borrower (which notice shall include each Bank's
respective calculation of cost) that the relevant rates of interest referred to
in the definition of "LIBO Base Rate" in Section 1.01 upon the basis of which
the rate of interest for any type of Eurodollar Loans is to be determined do not
adequately cover the cost to the Banks of making or maintaining such Loans;
then the Agent shall give the Borrower and each Bank prompt notice thereof, and
so long as such condition remains in effect, the Banks shall be under no
obligation to make or maintain a Loan of such type.
Section 3.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Bank or its Lending
Office to honor its obligation to make or maintain a Eurodollar Loan hereunder,
then such Bank shall promptly notify the Borrower thereof (with a copy to the
Agent) and such Bank's obligation to make or maintain a Eurodollar Loan
hereunder shall be suspended until such time as such Bank may again make and
maintain such affected Loan (in which case the provisions of Section 3.04 shall
be applicable).
Section 3.04. Certain Variable Rate Loans pursuant to Sections 3.01 and
3.03. If the obligations of any Bank to make a Loan of a particular type (Loans
of such type being herein called "Affected Loans" and such type being herein
called the "Affected Type") shall be suspended pursuant to Section 3.01 or 3.03,
a Loan which would otherwise be maintained by such Bank as a Loan of the
Affected Type shall be made instead as Variable Rate Loan and, if an event
referred to in Section 3.01(b) or 3.03 has occurred and such Bank so requests by
notice to the Borrower (with a copy to the Agent), the Affected Loan of such
Bank then outstanding shall be automatically converted into Variable Rate Loan
on the date specified by such Bank in such notice.
Section 3.05. Certain Compensation. The Borrower shall pay to the Agent for
the account of each Bank, upon the request of such Bank through the Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense which such Bank reasonably
determines is attributable to any payment to such Bank of a Eurodollar Loan made
by such Bank on a date other than the last day of an Interest Period for such
Loan (whether by reason of acceleration or otherwise).
Without limiting the foregoing, such compensation shall include an amount
equal to the excess, if any, of: (i) the amount of interest which otherwise
would have accrued on the principal amount so paid or not borrowed for the
period from and including the date of such payment or failure to borrow to but
excluding the last day of the Interest Period for such Loan (or, in the case of
a failure to borrow, to but excluding the last day of the Interest Period for
such Loan which would have commenced on the date specified therefor in the
relevant notice) at the applicable rate of interest for such Loan provided for
herein; over (ii) the amount of interest (as reasonably determined by such Bank)
such Bank would have bid in the London interbank market (if such Loan is a
Eurodollar Loan) for deposits in Dollars for amounts comparable to such
principal amount and maturities comparable to such period.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.01. Documentary Conditions Precedent. The obligations of the
Banks to make the Loans constituting the borrowing hereunder are subject to the
condition precedent that the Agent shall have received on or before the date of
such Loans each of the following, in form and substance satisfactory to the
Agent and its counsel:
(a) the Notes duly executed by the Borrower;
(b) the Authorization Letter duly executed by the Borrower;
(c) a certificate of the Secretary or Assistant Secretary of the Borrower,
dated the Effective Date, attesting to all corporate action taken by the
Borrower, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement;
(d) a certificate of the Secretary or Assistant Secretary of the Borrower,
dated the Effective Date, certifying the names and true signatures of the
officers of the Borrower authorized to sign the Facility Documents to which it
is a party and the other documents to be delivered by the Borrower under this
Agreement;
(e) a certificate of a duly authorized officer of the Borrower, dated the
Closing Date, stating that the representations and warranties in Article 5 are
true and correct on such date as though made on and as of such date and that no
event has occurred and is continuing which constitutes a Default or Event of
Default;
(f) a favorable opinion of counsel for the Borrower, dated the Closing
Date, in substantially the form of Exhibit C and as to such other matters as the
Agent or any Bank may reasonably request;
(g) a recently dated certificate of the Secretary of State of the State of
Borrower's formation as to its good standing.
Section 4.02. Additional Conditions Precedent. The obligations of the Banks
to make the Loans shall be subject to the further conditions precedent that on
the date of such Loan:
(a) the following statements shall be true: (i) the representations and
warranties contained in Article 5 are true and correct on and as of the
Effective Date as though made on and as of such date; and (ii) no Default or
Event of Default has occurred and is continuing, or would result from such Loan;
and
(b) the Agent shall have received such approvals, opinions or documents as
the Agent or any Bank may reasonably request.
Section 4.03. Deemed Representations. Each notice of a Loan and acceptance
by the Borrower of the proceeds thereof shall constitute a representation of
warranty that the statements contained in Section 4.02(a) hereof are true and
correct both on the date of such notice and, unless the Borrower otherwise
notifies the Agent prior to such Borrowing, as of the date of such Loan.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 5.01. Incorporation, Good Standing and Due Qualification. The
Borrower and each of its Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
formation, has all power and authority to carry on its business as now being
conducted and to own its properties and is duly licensed or qualified and in
good standing or a foreign corporation in each other jurisdiction in which its
properties are located or in which failure to qualify would materially and
adversely affect the conduct of its business or the enforceability of
contractual rights of the Borrower.
Section 5.02. Corporate Power and Authority: No Conflicts. The execution,
delivery and performance by the Borrower of the Facility Documents are within
the Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (a) the Borrower's charter or by-laws,or
(b) any law or any contractual restriction or provision binding on or affecting
the Borrower.
Section 5.03. Governmental Approval. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Borrower of the Facility Documents to which the Borrower is a party.
Section 5.04. Legally Enforceable Agreements. Each Facility Document to
which Borrower is a party is, or when delivered hereunder will be, legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
Section 5.05. Financial Statements. The balance sheets of the Borrower and
its Subsidiaries as at December 31, 1996, and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for the fiscal year
then ended, and the unaudited balance sheets of the Borrower and its
Subsidiaries as at June 30, 1997 and the related statements of income and
retained earnings, copies of which have been furnished to each Bank, fairly
present the financial condition of the Borrower and its Subsidiaries at such
date and the results of the operations of the Borrower and its subsidiaries for
the period ended on such date, all in accordance with GAAP, and since June 30,
1997, there has been no material adverse change in such condition or operations.
Section 5.06. Litigation. There is no pending or threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator, which may materially adversely affect the
financial condition or operations of the Borrower or any Subsidiary.
Section 5.07. Margin Stock. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System).
Section 5.08. Use of Loan Proceeds. No part of the proceeds of the Loans
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (a) to purchase or to carry margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock,
or to refund indebtedness originally incurred for such purpose, or (b) for any
purpose which violates or is inconsistent with the provisions of the Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
Section 5.09. Tax Returns. Each of the Borrower and its Subsidiaries has
filed (or has obtained extensions of the time by which it is required to file)
all United States federal income tax returns and all other material tax returns
required to be filed by it and has paid all taxes shown due on the returns so
filed as well as all other taxes, assessments and governmental charges which
have become due, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided.
Section 5.10. ERISA. Each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan subject to the provisions thereof and is in compliance in
all material respects with the presently applicable provisions of ERISA and the
Code, and has not incurred any liability to the PBGC or a Plan under Title IV of
ERISA.
Section 5.11. Subsidiaries. The Borrower has no Subsidiaries other than
those set forth on Schedule I attached hereto as amended from time to time.
Section 5.12. Ownership and Liens. Each of the Borrower and its
Subsidiaries has good and marketable title to its material properties and assets
reflected on the balance sheet referred to in Section 5.05 hereof, except for
such properties and assets as have been disposed of since the date of such
balance sheet as no longer used or useful in the conduct of its business or as
have been disposed of in the ordinary course of business, and all such
properties and facets are free and clear of mortgages, pledges, liens, charges
and other encumbrances, and liens incurred in the ordinary course of business,
any encumbrances that do not materially interfere with the use or operation of
such property or assets and except as required or permitted by the provisions
hereof or as disclosed in the balance sheet referred to in Section 5.05 hereof
or otherwise disclosed to the Banks.
Section 5.13. Hazardous Materials. Except as set forth in Schedule II
hereof, and qualified in each instance whereby a breach of this representation
set forth in this Section 5.13 would materially and adversely affect the
business, operations, assets or financial condition of the Borrower, the
Borrower is in compliance in all material respects with all Environmental Laws
governing Hazardous Materials and the Borrower has not used Hazardous Materials
on, from, or affecting any property now owned or occupied or hereafter owned or
occupied by the Borrower in any manner which violates Federal, state or local
laws, ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and that, to the best of the Borrower's
knowledge, no prior owner of any such property or any tenant, subtenant, prior
tenant or prior subtenant have used Hazardous Materials on, from, or affecting
such property in any manner which violates Federal, state or local laws,
ordinances, rules, regulations, or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials; without limiting the foregoing, the Borrower
shall not cause or permit any property owned or occupied by it to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable Federal, state and local laws or regulations, nor shall the Borrower
cause or permit, as a result of any intentional or unintentional act or omission
on its part or any tenant or subtenant, a release of Hazardous Materials onto
any property owned or occupied by the Borrower or onto any other property; the
Borrower shall comply with and ensure compliance by all tenants and subtenants
with all applicable Environmental Laws, whenever and by whomever triggered, and
shall obtain and comply with any and all approvals, registrations or permits
required thereunder.
Section 5.14. No Default on Other Agreements. Neither the Borrower or any
of its Subsidiaries is in default in any manner which would materially and
adversely affect the business, properties or assets, operations or condition
(financial or otherwise) of the Borrower in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party.
Section 5.15. Partnerships. Except as set forth on Schedule III, neither
the Borrower nor any of its Subsidiaries is a partner in any partnership.
Section 5.16. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened, which would individually or in the aggregate materially and
adversely affect the business, operations, assets or financial condition of the
Borrower or any of its Subsidiaries.
Section 5.17. Solvency. (a) The present fair saleable value of the assets
of the Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries as they mature.
(b) The property of the Borrower does not constitute unreasonably small
capital for the Borrower to carry out its business as now conducted and as
proposed to be conducted including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower when such amounts are required
to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages will be rendered at a time when, or in an amount such
that, the Borrower will be unable to satisfy any such judgments promptly in
accordance with their terms (taking into account the maximum reasonable amount
of such judgments in any such actions and the earliest reasonable time at which
such judgments might be rendered). The cash available to the Borrower after
taking into account all other anticipated uses of the cash of the Borrower
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section 5.17), is anticipated to be sufficient to pay all such judgments
promptly in accordance with their terms.
ARTICLE 6. AFFIRMATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement, the Borrower shall, unless the Banks shall
otherwise consent in writing:
Section 6.01. Compliance with Laws, Corporate Existence. (a) Comply, and
cause each of its Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority,
the breach of which would materially and adversely affect the business,
operations, prospects or assets or the financial condition or otherwise of the
Borrower. Such compliance shall include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental charges or levies
imposed upon it or on its income or profits or upon its property except to the
extent (i) such payment is being contested in good faith and by proper
proceedings, and (ii) adequate reserves are being maintained with respect
thereto; and (b) do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights, franchises, trade
names and preserve all of its property used or useful in the conduct of its
business and keep same in good repair and working condition except for property
it deems no longer useful.
Section 6.02. Reporting Requirements. Furnish directly to each of the
Banks:
(a) as soon as available and in any event within 45 days after the end of
each of the first three quarters of each fiscal year of the Borrower,
consolidated balance sheets of the Borrower and its Subsidiaries as of the end
of such quarter and statements of income and retained earnings and changes in
financial position of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, with a certification by the chief financial officer of the
Borrower that such financial statements fairly present the financial condition
and results of operations of the Borrower in accordance with GAAP, at the dates
and for the periods set forth therein;
(b) as soon as available and in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing consolidated and consolidating
financial statements for such year certified in a manner acceptable to the
Required Banks by Ernst & Young or other independent public accountants
acceptable to the Required Banks;
(c) with the statements submitted under subsections (a) and (b) above, a
certificate signed by the chief financial officer of the Borrower or the
certified public accountants, as the case may be, stating (i) the requirements
of Section 4.02 hereof and (ii) the calculation of all financial covenants and
ratios required under Article 8 hereof;
(d) promptly after the sending or filing thereof, copies of all reports
which the Borrower sends to any of its security holders, and copies of all
reports and registration statements which the Borrower or any Subsidiary files
with the Securities and Exchange Commission or any national securities exchange;
(e) promptly after the filing or receiving thereof, if and when the
Borrower or any member of the Controlled Group (as defined below) (i) gives or
is required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan (as defined below) under Title
IV of ERISA, or knows that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
promptly followed by a copy of such notice to the Bank; or (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate or appoint a
trustee to administer any Plan, promptly followed by a copy of such notice to
the Bank.
As used in this Subsection 6.02(e), "Controlled Group" means all members of
a control group of corporations and all trades or businesses (whether or not
incorporated) under common control, which together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code of 1954,
and "Plan" means at any time an employee pension benefit plan which is covered
by Title IV of ERISA or is subject to the minimum funding standards under
Section 412 of the Code and is either (x) maintained by the Borrower or any
member of the Controlled Group for employs of the Borrower or any member of the
Controlled Group, or (xx) maintained pursuant to a collective bargaining
agreement or similar arrangement under which more than one employer makes
contributions and to which the Borrower or any member of the Controlled Group is
then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions;
(f) prior to the end of each fiscal year of the Borrower, a budget (in
format satisfactory to the Banks) for the succeeding fiscal year of the
Borrower, plus from time to time any revisions or modifications to such budget
within 15 days of the adoption of such revision or modification; and
(g) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any of its subsidiaries as any Bank
through the Agent may from time to time reasonably request.
Section 6.03. Notice of Proceedings. Promptly give notice in writing to the
Agent and each of the Banks of all litigation, arbitral proceedings, regulatory
proceedings and Forfeiture Proceedings affecting the Borrower or any Subsidiary,
except litigation or proceedings which, if adversely determined, could not
materially and adversely affect the consolidated financial condition or the
business taken as a whole of the Borrower and its Subsidiaries.
Section 6.04. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain insurance with insurance companies or associations rated "A-" or
better by A.M. Best & Company or a comparable rating agency in such amounts and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the Borrower and its subsidiaries
operate.
Section 6.05. Environmental Laws. Comply in all material respects with all
Environmental Laws and provide to the Agent all documentation in connection with
such compliance that the Agent may reasonably request.
Section 6.06. Access to Premises and Records. At any reasonable time and
from time to time, but only to the extent relevant to the loan transaction
hereunder and the Borrower's ability to perform under the Credit Agreement, upon
reasonable notice and during normal business hours, the Borrower shall permit
the Agent and each of the Banks, or any agent or representative thereof to
examine the records and books of account and visit the properties of the
Borrower or its subsidiaries and to discuss the affairs, finances and accounts
of the Borrower and any Consolidated Subsidiary with any of the Borrower's
officers and directors.
Section 6.07. Notice of Default. In the event any financial officer of the
Borrower knows of any default or event of default under any agreement to which
the Borrower is a party or any Event of Default which shall have occurred or
knows of the occurrence of any event which, upon notice or lapse of time or
both, would constitute an Event of Default, promptly furnish to the Agent a
written statement as to such occurrence specifying the nature and extent thereof
and the action (if any) which is proposed to be taken with respect thereto.
Section 6.08 Subsidiaries. Give the Agent prompt written notice of the
creation, establishment or acquisition, in any manner, of any Subsidiary not
existing on the date hereof. Borrower will cause each newly formed or acquired
Domestic Subsidiary whose assets equal or exceed by amount ten percent (10%) of
the Borrower's Consolidated Assets to jointly, severally, and unconditionally
guarantee payment of the Loan and performance of all of the obligations of the
Borrower created by this Agreement.
Section 6.09. Material Adverse Changes. The Borrower shall promptly notify
the Bank of any litigation matter, investigation, audit, business development or
change in financial condition, which has resulted in, or which the Borrower or
its Subsidiaries reasonably believes will result in an Event of Default.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement, the Borrower shall not without the written
consent of the Banks:
Section 7.01. Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Liens, or any other type of
preferential arrangement, upon or with respect to any of its properties, whether
now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to
assign, any right to receive income, in each case to secure any Debt of any
person or entity, other than:
(a) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, carriers, warehousers,
landlords and other like Persons, provided that (i) they do not in the aggregate
materially reduce the value of any properties subject to the Liens or materially
interfere with their use in the ordinary conduct of the owning business, and
(ii) all claims which the Liens secure are being actively contested in good
faith and by appropriate proceedings;
(b) Liens incurred or deposits made in the ordinary course of business (i)
in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contract, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in each case not
incurred in connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of property;
(c) attachment, judgment and other similar Liens arising in connection with
court proceedings provided that (i) execution and other enforcement are
effectively stayed, and (ii) all claims which the Liens secure are being
actively contested in good faith and by appropriate proceedings;
(d) Liens on property of a Subsidiary provided that they secure only
obligations owing to the Borrower or another Subsidiary;
(e) Liens related to lease obligations, and within the limitations,
described in Section 7.02;
(f) Liens against customer notes, which are created in connection with the
sale, pledge or discounting of such customer notes, provided that immediately
after giving effect thereto the Borrower's aggregate liabilities on account of
such Debt secured by such Liens does not exceed $11,000,000.00; and
(g) Liens against property leased pursuant to Capital Leases, provided that
the aggregate amount of Debt secured by such Liens does not exceed
$3,000,000.00.
(h) Liens not exceeding $5,000,000.00 in the aggregate against property
other than inventory and receivables.
For the purposes of this Agreement, the term "Lien" shall mean any interest
in property securing any Debt or obligation owed to, or a claim by, a Person
other than the owner of the property, whether the interest is based on common
law, statute or contract (including the security interest or lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes). The term "Lien" shall not
include minor reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions and other minor title exceptions affecting
property, provided that they do not constitute security for a monetary
obligation. For the purposes of this Agreement, the Borrower or a Subsidiary
shall be deemed to be the owner of any property which it has acquired or holds
subject to a conditional sale agreement, Capital Lease or other arrangement
pursuant to which title to the property has been retained by or vested in some
other Person for security purposes, and such retention or vesting shall be
deemed to be a Lien. In connection with any sale, pledge or discounting of
Borrower's or its subsidiaries' customer notes, a "Lien" or "Liens" shall be
deemed to exist to the extent of (i) the amount of any sums withheld from the
Borrower or any Subsidiary in any such transaction, plus (ii) the amount of any
obligation of the Borrower or any Subsidiary resulting from the non-payment of
any customer notes involved in any such transaction.
Section 7.02. Lease Obligations. Create or suffer to exist, or permit any
of its Subsidiaries to create or suffer to exist, any obligations for the
payment of rental for any property under leases or agreements to lease, other
than Capital Leases, which would cause the liabilities of the Borrower and its
Subsidiaries, on a consolidated basis, in respect of all such obligations to
exceed $5,000,000.00 payable in any period of 12 months.
Section 7.03. Prohibited Transactions. Use the proceeds of any Loan to
acquire any security in any transaction which is subject to Sections 13 and 14
of the Securities Exchange Act of 1934 or use the proceeds of any Loan to
otherwise acquire any public company other than on a friendly basis.
Section 7.04. Margin Stock. Use the proceeds of any Loan to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
Section 7.05. Consolidations, Mergers, Acquisitions and Sales of Assets.
Consolidate or merge with or into, or sell, lease or otherwise dispose of any of
its assets to, any Person, or acquire all or any substantial portion of the
properties, assets or shares of stock of any other organization or permit any
Subsidiary to do any of the above, unless the Borrower is the surviving entity,
the transaction is on a friendly basis and immediately thereafter the Borrower
is in compliance with all terms and provisions of this Agreement and except
that:
(a) any Subsidiary may consolidate or merge with the Borrower or any
wholly-owned Subsidiary of the Borrower;
(b) the Borrower or any Subsidiary may sell, lease or otherwise dispose of
any of its inventory in the ordinary course of business and any of its assets
which are obsolete, excess or unserviceable;
(c) the Borrower or any Subsidiary may sell, pledge or discount customer
notes;
(d) the Borrower or any Subsidiary may sell, lease or otherwise dispose of
any of its assets (other than as permitted by clauses (a) to (c) inclusive),
provided that the aggregate net book value of all assets of the Borrower and its
Subsidiaries sold, leased or otherwise disposed of during any fiscal year of the
Borrower pursuant to this clause (d) shall not exceed 5% of the Consolidated
Tangible Net Worth of the Borrower and its Subsidiaries at the end of the
preceding fiscal year.
All sales, leases or dispositions of assets pursuant to clause (b), (c) or
(d) shall be at fair market value.
Notwithstanding the foregoing, the aggregate amount of acquisitions (net of
amounts paid for with the Borrower's stock) permitted under this section from
and after the Effective Date shall not be greater than $15,000,000.00 in any
consecutive 24 month period without the prior written consent of the Required
Banks.
Section 7.06. Affiliate Transactions. Enter into or permit any Subsidiary
to enter into any transaction (including the purchase, sale or exchange of
Property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms which are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arms-length transaction with a
non-Affiliate.
Section 7.07. Loans and Advances. Make or permit to exist any loans or
advances to any Person, except that loans or advances incurred in the normal
course of business (including employee advances and customer notes) are
permitted.
Section 7.08. Guaranties. Become or permit any Subsidiary to become liable
for or permit any of its Property to become subject to any guaranty except
guaranties given in connection with the sale, pledge or discounting of customer
notes, provided that immediately after giving effect thereto the Borrower's
aggregate liability under such guaranties (exclusive of guarantees to the
Hardinge Inc. Pension Plan) does not exceed $11,000,000.00. Each Guaranty
permitted by this Section 7.08 must comply with the requirements of Section 8.01
(if and to the extent it is included among Consolidated Current Liabilities) and
with the requirements of Section 8.03 (if and to the extent it is included in
Funded Debt).
Section 7.09. No Activities Leading to Forfeiture. Neither the Borrower nor
any of its Subsidiaries or Affiliates shall engage in or propose to be engaged
in the conduct of any business or activity which could result in a Forfeiture
Proceeding, which would, individually or in the aggregate, materially and
adversely affect the business, operations, assets or financial condition of the
Borrower or any of its Subsidiaries.
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have any
Commitment under this Agreement:
Section 8.01 Working Capital. The Borrower shall maintain at all times an
excess of Consolidated Current Assets over Consolidated Current Liabilities of
not less than $85,000,000.00.
Section 8.02. Net Worth. Borrower shall maintain a Consolidated Tangible
Net Worth, at all times during each fiscal year of not less than the amount set
forth below opposite such fiscal year:
Fiscal Year Ending
December 31 Amount
1997 135,000,000
1998 138,000,000
1999 141,000,000
2000 144,000,000
2001 147,000,000
2002 150,000,000
The term "Consolidated Tangible Net Worth" shall mean Net Worth prior to
any cumulative foreign currency translation adjustments minus intangible assets.
Section 8.03. Funded Debt. Borrower shall maintain a ratio of Funded Debt
to Earnings Before Interest, Taxes, Depreciation and Amortization of not greater
than 2.5 to 1, measured as of the last day of each fiscal quarter for the
immediately preceding twelve (12) months.
Section 8.04. Earnings. Borrower shall maintain a the ratio of Earnings
Before Interest, Taxes, Depreciation and Amortization to interest of not less
than 3.0 to 1, measured as of the last day of each fiscal quarter for the
immediately preceding twelve (12) months.
ARTICLE 9. EVENTS OF DEFAULT.
Section 9.01. Events of Default. Any of the following events shall be an
"Event of Default":
(a) The Borrower shall fail to pay when due any installment of principal
of, or interest on, any Note; or
(b) Any representation or warranty made by the Borrower herein or in any
other Facility Document, or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in any
material respect when made; or
(c) The Borrower shall fail to perform or observe any other term, covenant
or agreement contained in this Agreement or in any other Facility Document on
its part to be performed or observed and any such failure shall remain
unremedied for 10 days after written notice thereof shall have been given to the
Borrower by the Agent or any Bank; or
(d) The Borrower or any of its Subsidiaries shall fail to pay any Debt (but
excluding Debt evidenced by the Notes) of the Borrower or such Subsidiary as the
case may be, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Borrower or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property; or the
Borrower or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$2,500,000.00 shall be rendered against the Borrower or any of its Subsidiaries,
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(g) Any member of the Controlled Group shall fail to pay when due an amount
or amounts aggregating in excess of $250,000.00 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans having aggregate Unfunded Benefit
Liabilities in such amount or amounts which would at such time create a
liability in excess of liabilities of such Plan or Plans recognized prior
thereto on the Borrower's financial statements and which liability would cause a
violation of any of the covenants under Article 7 (collectively, a "Material
Plan") shall be filed under Title IV of ERISA by any member of the Controlled
Group, any plan administrator any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any Material Plan or a proceeding shall be
instituted by a fiduciary of any Material Plan against any member of the
Controlled Group to enforce Section 515 of ERISA and such proceeding shall not
have been dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Material Plan must be terminated;
(i) A Change in Control shall occur.
Section 9.02 Remedies. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Banks, by notice to
the Borrower, (a) declare the Commitments to be terminated, whereupon the same
shall forthwith terminate, and (b) declare the outstanding principal of the
Notes, all interest thereon and all other amounts payable under this Agreement
and the Notes to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that, in the case of an
Event of Default referred to in Section 9.01(e) or Section 9.01(h) above, the
Commitments shall be immediately terminated, and the Notes, all interest thereon
and all other amounts payable under this Agreement shall be immediately due and
payable without notice, presentment, demand protest or other formalities of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE 10. THE AGENT; RELATIONS AMONG BANKS AND BORROWER.
Section 10.01. Appointment, Powers and Immunities of Agent. Each Bank
hereby irrevocably (but subject to removal by the Required Banks pursuant to
Section 10.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Bank. The Agent shall not be responsible
to the Banks for any recitals, statements, representations or warranties made by
the Borrower or any officer or official of the Borrower or any other Person
contained in this Agreement or any other Facility Document, or in any
certificate or other document or instrument referred to or provided for in, or
received by any of them under, this Agreement or any other Facility Document, or
for the value, legality, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Facility Document or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible, except as to money or securities received by it or its authorized
agents, for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrower shall pay any fee agreed to
by the Borrower and the Agent with respect to the Agent's services hereunder.
Section 10.02. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent may deem and treat each Bank as
the holder of the Loan made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Agent signed by
such Bank shall have been furnished to the Agent together with the assignment
fee referred to in Section 11.05(b), but the Agent shall not be required to deal
with any Person who has acquired a participation in any Loan from a Bank. As to
any matters not expressly provided for by this Agreement or any other Facility
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action taken
or failure to act pursuant thereto shall be binding on all of the Banks and any
other holder of all or any portion of any Loan.
Section 10.03. Defaults. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loans to the extent the same is required to be
paid to the Agent for the account of the Banks) unless the Agent has received
notice from a Bank or the Borrower specifying such Default or Event of Default.
In the event that the Agent receives such a notice of the occurrence of a
Default or Event of Default, the Agent shall give prompt notice thereof to the
Banks (and shall give each Bank prompt notice of each such non-payment). The
Agent shall (subject to Section 10.08) take such action with respect to such
Default or Event of Default which is continuing as shall be directed by the
Required Banks; provided that, unless and until the Agent shall have received
such directions, the Agent may take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Banks; and provided further that the Agent
shall not be required to take any such action which it determines to be contrary
to law.
Section 10.04. Rights of Agent as a Bank. With respect to its Commitment
and the Loan made by it, the Agent in its capacity as a Bank hereunder shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not acting as the Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise indicates, include the Agent in its capacity
as a Bank. The Agent and its affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrower (and any of its affiliates) as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrower
for services in connection with this Agreement or otherwise without having to
account for the same to the Banks. Although the Agent and its affiliates may in
the course of such relationships and relationships with other Persons acquire
information about the Borrower, its Affiliates and such other Persons, the Agent
shall have no duty to disclose such information to the Banks.
Section 10.05. Indemnification of Agent. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 11.03 or under the applicable
provisions of any other Facility Document, but without limiting the obligations
of the Borrower under Section 11.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Loans made by the Banks
(without giving effect to any participations, in all or any portion of such
Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitment), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrower is obligated to pay under Section 11.03 or
under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Bank shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 10.06. Documents. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 10.07. Non-Reliance on Agent and Other Banks. Each Bank agrees that
it has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and its Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder, the Agent shall
not have any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any Subsidiary (or any of their Affiliates) which may come into the
possession of the Agent or any of its affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 10.08. Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 10.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 10.09. Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving written notice thereof to the Banks and the Borrower, and the
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York. The Required Banks or the retiring Agent, as
the case may be, shall upon the appointment of a successor Agent promptly so
notify the Borrower and the other Banks. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 10.10. Amendments Concerning Agency Function. The Agent shall not
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Facility Document which affects its duties hereunder or thereunder
unless it shall have given its prior consent thereto.
Section 10.11. Liability of Agent. The Agent shall not have any liabilities
or responsibilities to the Borrower on account of the failure of any Bank to
perform its obligations hereunder or to any Bank on account of the failure of
the Borrower to perform its obligations hereunder or under any other Facility
Document. This Section 10.11 shall not be construed to limit the Agent's
liability or responsibility where the Agent is acting as a Bank under this
Agreement.
Section 10.12. Transfer of Agency Function. Without the consent of the
Borrower or any Bank, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrower and the Banks
thereof.
Section 10.13. Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or the Borrower (either one as appropriate being
the "Payor") prior to the date on which such Bank is to make payment hereunder
to the Agent of the proceeds of a Loan or the Borrower is to make payment to the
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment (and, if such recipient is the Borrower and
the Payor Bank fails to pay the amount thereof to the Agent forthwith upon
demand, the Borrower) shall, on demand, repay to the Agent the amount made
available to it together with interest thereon for the period from the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to the average daily Federal Funds Rate for
such period.
Section 10.14. Withholding Taxes. (a) Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any U.S. tax and will furnish to the Agent such forms,
certifications, statements and other documents as the Agent may request from
time to time to evidence such Bank's exemption from the withholding of any U.S.
tax imposed by any domestic jurisdiction or to enable the Agent to comply with
any applicable laws or regulations relating thereto. Without limiting the effect
of the foregoing, if any Bank is not created or organized under the laws of the
United States of America or any state thereof, in the event that the payment of
interest by the Borrower is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Bank will furnish to
the Agent Form 4224 or Form 1001 of the Internal Revenue Service, or such other
forms, certifications, statements or documents, duly executed and completed by
such Bank as evidence of such Bank's exemption from the withholding of U.S. tax
with respect thereto. The Agent shall not be obligated to make any payments
hereunder to such Bank in respect of any Loan or such Bank's Commitment until
such Bank shall have furnished to the Agent the requested form, certification,
statement or document.
(b) The Borrower agrees to pay each Bank such additional amounts as are
necessary in order that the net payment of any amount payable by Borrower to
such Bank hereunder and under its Note, after deduction for or withholding in
respect of any future tax, assessment or other charge or levy imposed by or on
behalf of the government of the country of the Alternative Currency in which a
Eurodollar Loan is made ("Foreign Taxes") on or with respect to such payment,
will not be less than the amount stated herein and in such Note to be payable.
The amount payable to any Bank shall be computed from the date of the assessment
of the Foreign Taxes, or the date that is one hundred twenty (120) days prior to
the date of demand by the Bank, whichever is later. Without affecting Borrower's
obligations under this Section 10.14(b), if the Borrower is required by
applicable law or regulation to make any deduction or withholding of any Foreign
Taxes with respect of any payment hereunder to any Bank, Borrower agrees to
furnish such Bank (i) within forty-five (45) days of such payment the originals
or certified copies of all governmental tax receipts in respect of such Foreign
Taxes, and (ii) promptly at the request of such Bank, any other information,
documents and receipts that such Bank may reasonably require to establish to its
satisfaction the full and timely payment of such Foreign Taxes and to permit
such Bank to claim such Foreign Taxes as a credit or deduction in the
computation of income taxes imposed on such Bank.
Section 10.15. Several Obligations and Rights of Banks. The failure of any
Bank to make the Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but no
Bank shall be responsible for the failure of any other Bank to make the Loan to
be made by such other Bank. The amounts payable at any time hereunder to each
Bank shall be a separate and independent debt, and each Bank shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Bank to be joined as an additional party in any
proceeding for such purpose.
Section 10.16. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided (a) the borrowings under Section 2.01 and reductions under
Section 2.09(b) shall be made from the Banks pro rata according to the amounts
of their respective Commitment; and (b) each prepayment and payment of principal
of or interest on Loans of a particular type and a particular Interest Period
shall be made to the Agent for the account of the Banks pro rata in accordance
with the respective unpaid principal amounts of such Loans held by such Banks.
Section 10.17. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means (including any payment obtained from or charged against any Third Party),
it shall promptly purchase from the other Banks participations in (or, if and to
the extent specified by such Bank, direct interests in) the Loans made by the
other Banks in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Banks shall share the benefit of
such payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks may exercise all rights of
setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrower.
ARTICLE 11. MISCELLANEOUS.
Section 11.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be amended or
modified only by an instrument in writing signed by the Borrower, the Agent and
the Required Banks, or by the Borrower and the Agent acting with the consent of
the Required Banks and any provision of this Agreement may be waived by the
Required Banks or by the Agent acting with the consent of the Required Banks;
provided that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Banks or by the Agent acting with the consent of
all of the Banks: (a) increase or extend the term, or extend the time or waive
any requirement for the reduction or termination, of the Commitments, (b) extend
the date fixed for the payment of principal of or interest on any Loan or any
fee payable hereunder, (c) reduce the amount of any payment of principal thereof
or the rate at which interest is payable thereon or any fee payable hereunder,
(d) alter the terms of this Section 11.01, (e) amend the definition of the term
"Required Banks" or (f) waive any of the documentary conditions precedent set
forth in Section 4.01 hereof and provided, further, that any amendment of
Article 10 hereof or any amendment which increases the obligations of the Agent
hereunder shall require the consent of the Agent. No failure on the part of the
Agent or any Bank to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 11.02. Usury. Anything herein to the contrary notwithstanding, the
obligations of the Borrower under this Agreement and the Notes shall be subject
to the limitation that payments of interest shall not be required to the extent
that receipt thereof would be contrary to provisions of law applicable to a Bank
limiting rates of interest which may be charged or collected by such Bank.
Section 11.03. Expenses and Indemnification. The Borrower shall reimburse
the Agent and the Banks on demand for all costs, expenses, and charges
(including, without limitation, fees and charges of external legal counsel for
the Agent and each Bank and costs allocated by their respective internal legal
departments) incurred by the Agent or the Banks in connection with the
enforcement of this Agreement or the Notes by reason of any Event of Default or
any event which, after the giving of notice or passage of time, or both, would
constitute an Event of Default. The Borrower agrees to indemnify and hold
harmless the Agent and each Bank from and against any and all claims, damages,
liabilities and expenses (including, without limitation, fees and disbursements
of counsel) (each an "Indemnified Liability") which may be incurred by or
asserted against the Agent or such Bank in connection with or arising out of any
threatened or actual litigation, or proceeding related to any acquisition or
proposed acquisition by the Borrower, or by any Subsidiary, of all or any
portion of the stock of substantially all the assets of any Person whether or
not the Agent or such Bank is a party thereto. The Borrower agrees that any
Indemnified Liability will be promptly paid to the Person to be indemnified upon
the written demand of such Person.
Section 11.04. Survival. The obligations of the Borrower under Sections
3.01, 3.05 and 11.03 shall survive the repayment of the Loans and the
termination of the Commitments.
Section 11.05. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall inure to the benefit
of, the Borrower, the Agent, the Banks and their respective successors and
assigns, except that the Borrower may not assign or transfer its rights or
obligations hereunder.
(b) Each Bank may, with the consent of the Agent and the Borrower (which
consent will not be unreasonably withheld or delayed) assign all or any part of
its Commitments, its Note or Loans to another bank or other Person provided,
however, that (i) no such consent by the Borrower or the Agent shall be required
in the case of any assignment to another Bank; and (ii) any such partial
assignment shall be made in an amount of at least $5,000,000.00. Upon execution
and delivery by the assignee to the Borrower and the Agent of an instrument in
writing pursuant to which such assignee agrees to become a "Bank" hereunder (if
not already a Bank) having the Commitment and Loan specified in such instrument,
and upon consent thereto by the Borrower and the Agent, to the extent required
above, the assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment with the consent of the Borrower and the
Agent), the obligations, rights and benefits of a Bank hereunder holding the
Commitment and Loans (or portions thereof) assigned to it (in addition to the
Commitment and Loans, if any, theretofore held by such Assignee) and the
assigning Bank shall, to the extent of assignment, be released from the
Commitment (or portion thereof) so assigned. Upon each such assignment the
assignee shall pay the Agent an assignment fee of $3,500.00.
(c) A Bank may sell or agree to sell to one or more banks or other Persons
a participation in all or any part of any Loans held by it, or in its
Commitment, in which event each purchaser of a participation (a "Participant")
shall not, except as otherwise provided in Section 10.17 hereof, have any rights
or benefits under this Agreement or any Note (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreements executed by such Bank in favor of the Participant). All amounts
payable by the Borrower to any Bank under Article 2 hereof in respect of Loans
held by it and its Commitment, shall be determined as if such Bank had not sold
or agreed to sell any participations in such Loan and Commitment, and as if such
Bank were funding each of such Loan and Commitment in the same way that it is
funding the portion of such Loan and Commitment in which no participations have
been sold. The agreement executed by such Bank in favor of the Participant shall
not give the Participant the right to require such Bank to take or omit to take
any action hereunder except action directly relating to (i) the extension of the
Maturity Date, (ii) the extension of a payment date with respect to any fees
payable hereunder or any portion of the principal of or interest on any amount
outstanding hereunder allocated to such participant, (iii) the reduction of the
principal amount outstanding hereunder, or (iv) the reduction of the rate of
interest payable on such amount or any amount of fees payable hereunder to a
rate or amount, as the case may be, below that which the Participant is entitled
to receive under its agreement with such Bank.
(d) In addition to the assignments and participations permitted under
paragraphs (b) and (c) above, any Bank may assign and pledge all or any portion
of its Loan and Note to (i) any affiliate of such Bank, or (ii) any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
(e) A Bank may furnish any information concerning the Borrower or any of
its Subsidiaries in the possession of such Bank from time to time to assignees
and participants (including prospective assignees and participants), provided
that such Bank shall require any assignee or participant (prospective or
otherwise) to agree in writing to maintain the confidentiality of such
information.
Section 11.06. Notices. All notices, requests and other communications
provided for herein (including, and not by way of limitation, any modifications
of, or waivers, requests or consents under, this Agreement) shall be given or
made in writing (including and not by way of limitation by telecopy), or, with
respect to notices given pursuant to Section 2.04 hereof, by telephone confirmed
in writing by telecopier or other writing by the close of business on the day
notice is given, delivered (or telephoned, as the case may be) to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof); or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement, (a) notices shall be given to the Agent by telephone, confirmed
by telecopy or other writing by the close of business on the day notice is
given, and (b) notices to the Banks and to the Borrower by telecopy, commercial
overnight courier service, or ordinary mail, or addressed to such party at its
address on the signature page of this Agreement. Notices shall be effective: (i)
if given by mail, three (3) days after deposit in the mails with first class
postage prepaid, addressed as aforesaid; and (ii) in all other cases when
delivered or received. Provided, however, that notices to the Agent and the
Banks shall be effective upon receipt.
Section 11.07. Setoff. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim a Bank
may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of such Bank's offices, in Dollars or in
any other currency, against any amount payable by the Borrower to such Bank
under this Agreement or such Bank's Note which is not paid when due (regardless
of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower and the Agent thereof; provided that such Bank's
failure to give such notice shall not affect the validity thereof. Payments by
the Borrower hereunder shall be made without setoff or counterclaim.
SECTION 11.08. JURISDICTION; IMMUNITIES. (a) THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT ITS
ADDRESS SPECIFIED IN SECTION 11.06. THE BORROWER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
THE BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY
OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON
CONVENIENS. THE BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT
AGAINST THE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY. THE BORROWER WAIVES ANY RIGHT IT MAY
HAVE TO JURY TRIAL.
(b) Nothing in this Section 11.08 shall affect the right of the Agent or
any Bank to serve legal process in any other manner permitted by law or affect
the right of the Agent or any Bank to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement and the Notes.
Section 11.09. Table of Contents; Headings. Any table of contents and the
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
Section 11.10. Severability. The provisions of this Agreement are intended
to be severable. If for any reason 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.
Section 11.11. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
Section 11.12. Integration. The Facility Documents set forth the entire
agreement among the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
SECTION 11.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING
ALL OTHER CONFLICT-OF-LAW RULES.
Section 11.14. Confidentiality. Each Bank and the Agent agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement which is identified by
the Borrower as being confidential at the time the same is delivered to the
Banks or the Agent, provided that nothing herein shall limit the disclosure of
any such information (a) to the extent required by statute, rule, regulation or
judicial process, (b) to counsel for any of the Banks or the Agent, (c) to bank
examiners, auditors or accountants, (d) in connection with any litigation to
which any one or more of the Banks is a party, (e) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit D hereto; or (f) to the extent such information becomes publicly
available other than as a result of disclosure by a Bank; and provided further
that in no event shall any Bank or the Agent be obligated or required to return
any materials furnished by the Borrower.
Section 11.15. Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection with
this Agreement or otherwise) by each Bank or by one or more of their respective
subsidiaries or affiliates and (b) acknowledges that any information delivered
to each Bank or its subsidiaries or affiliates regarding the Borrower may be
shared among such Bank and such subsidiaries and affiliates. This Section 11.15
shall survive the repayment of the Loans and the termination of the Commitments.
Section 11.16. Currency. This is an international loan transaction in which
the specification of Dollars or an Alternative Currency, as the case may be (the
"Specified Currency"), any payment in the State of New York or the country of
the Specified Currency, as the case may be (the "Specified Place"), is of the
essence, and the Specified Currency shall be the Currency of account in all
events relating to the Loans denominated in the Specified Currency. The payment
obligations of the Borrower under this Agreement and the Notes shall not be
discharged by an amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the amount so paid on
conversion to Specified Currency and transferred to the Specified Place of
payment under normal banking procedures does not yield the amount of the
Specified Currency at the Specified Place due hereunder. If for the purpose of
obtaining a judgment in any court it is necessary to convert a sum due hereunder
in the Specified Currency into another Currency (the "Second Currency"), the
rate of exchange which shall be applied shall be that at which in accordance
with the normal banking procedures the Agent could purchase Dollars with the
Second Currency on the Business Day next preceding that on which such judgment
is rendered. The obligation of the Borrower in respect of any sum due from it to
the Agent or any Bank hereunder (an "Entitled Person") shall, notwithstanding
the rate of exchange actually applied in rendering such judgment, be discharged
only to the extent that on the Business Day following receipt by such Entitled
Person of any sum adjudged to be due hereunder or under the Notes in the Second
Currency, such Entitled Person may in accordance with normal banking procedures
purchase and transfer to the Specified Place, the Specified Currency with the
amount of the Second Currency so adjudged to be due; and the Borrower hereby, as
a separate obligation and notwithstanding any judgment, agrees to indemnify such
Entitled Person against, and to pay such Entitled Person on demand in Dollars,
any difference between the sum originally due to such Entitled Person in
Specified Currency in the amount of Specified Currency so purchase and
transferred.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
HARDINGE INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx, Chairman of the Board and
Chief Executive Officer
Address for Notices:
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
AGENT:
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxxxx X. XxXxxx
------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Address for Notices:
1 Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
BANKS:
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxxxx X. XxXxxx
-------------------------
Xxxxxxxxx X. XxXxxx, Vice President
Lending Offices:
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Address for Notices:
0000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. XxXxxx, Vice President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
FLEET BANK
By: /s/ Xxx X. Xxxxx
------------------------
Xxx X. Xxxxx, Assistant Vice President
Lending Offices:
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx, Assistant Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
Address for Notices:
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxx, Assistant Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx III
------------------------
Xxxxxx X. Xxxxx III
Administrative Vice President
Lending Offices:
00-00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx III
Administrative Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
Address for Notices:
00-00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx III
Administrative Vice President
Telephone No.: (000) 000-0000
Telecopier No.:(000) 000-0000
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$________________ _______________, 19__
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of (the
"Bank") at the principal office of The Chase Manhattan Bank at 0 Xxxxx Xxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as required by the Credit
Agreement referred to below, for the account of the appropriate Lending Office
of the Bank, the principal amount of $__________________ in lawful money of the
United States of America and in immediately available funds, on the date(s) and
in the manner provided in the Credit Agreement referred to below. The Borrower
also promises to pay interest on the unpaid principal balance of the Loan in
like money, for the period such balance is outstanding, at said principal office
for the account of said Lending Office, at the rates of interest as provided in
the Credit Agreement, on the dates and in the manner provided in said Credit
Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time the "Credit Agreement") dated as of August 1, 1997
among the Borrower, the Banks named therein (including the Bank) and the Agent
and evidences the Loan made by the Bank thereunder. All terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. The Borrower waives to the
full extent permitted by applicable law the right to trial by jury in any legal
proceeding arising out of or relating to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By
--------------------
Name:
Title:
SCHEDULE TO NOTE
Amount & Duration
Currency Interest of Interest Amount of Balance Notation
Date of Loan Rate Period Payment Outstanding By
EXHIBIT B
[Form of Authorization Letter]
_________________, 19__
The Chase Manhattan Bank
1 Chase Manhattan Xxxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn:
Re: Credit Agreement dated as of August 1, 1997 (the "Credit
Agreement") among Hardinge Inc. the Banks named therein, and The Chase Manhattan
Bank as Agent for said Banks
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby
designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess:
NAME (Typewritten)
===============================
===============================
Instructions may be honored on the oral, telephonic or
teleprocess instructions of anyone purporting to be any one of the above
designated persons even if the instructions are for the benefit of the person
delivering them. We will furnish you with confirmation of each such instruction
in writing signed by any person designated above (including any telecopy which
appears to bear the signature of any person designated above) on the same day
that the instruction is provided to you but your responsibility with respect to
any instruction shall not be affected by your failure to receive such
confirmation or by its contents.
You shall be fully protected in, and shall incur no liability
to us for, acting upon any instructions which you in good faith believe to have
been given by any person designated above, and in no event shall you be liable
for special, consequential or punitive damages. In addition, we agree to hold
you and your agents harmless from any and all liability, loss and expense
arising directly or indirectly out of instructions that we provide to you in
connection with the Credit Agreement except for liability, loss or expense
occasioned by the gross negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that we have agreed to in writing.
We will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
HARDINGE INC.
By
----------------------
Name:
Title:
EXHIBIT C
[Letterhead of counsel to the Borrower]
[Closing Date]
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
[other Banks]
Ladies and Gentlemen:
We have acted as counsel to Hardinge Inc. (the "Borrower") in
connection with the execution and delivery of that certain Credit Agreement (the
"Credit Agreement") dated as of August 1, 1997 among the Borrower, the Banks
signatory thereto and The Chase Manhattan Bank as Agent. Except as otherwise
defined herein, all terms used herein and defined in the Credit Agreement or any
agreement delivered thereunder shall have the meanings assigned to them therein.
In connection with the preparation of this Opinion, we have
examined originals or counterparts, executed on behalf of the Borrower, of the
Facility Documents and the exhibits attached thereto in originals or copies,
certified to our satisfaction, of such records, certificates and documents as we
deemed relevant and necessary as a basis for rendering this Opinion.
Based upon the foregoing, and having regard to such legal
considerations as we deem relevant, we are of the opinion that:
1. The Borrower and to the best of our knowledge, each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all power
and authority to carry on its business as presently being conducted and to own
its properties, and is duly licensed or qualified and in good standing as a
foreign corporation in each other jurisdiction in which its properties are
located or in which failure to qualify would materially and adversely affect
either the conduct or its business or the enforceability of contractual rights
of the Borrower.
2. The execution, delivery and performance by the Borrower of
the Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-laws; (c)
contravene any law or to the best of our knowledge contractual restriction or
provision binding on or affecting the Borrower.
3. No authorization or approval or other action by, and no
notice to or filing with any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower of the
Facility Documents.
4. The Credit Agreement is, and the other Facility Documents
when executed thereunder will be, legal, valid and binding obligations
enforceable in accordance with their respective terms, except that (a) the
availability of equitable remedies may be limited by principals of equity, and
(b) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of the rights of creditors generally.
5. Each Facility Document to which the Borrower is a party is,
or when delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
6. There is no pending, or to our knowledge threatened
actions, suits or proceedings against or affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition or operations of the Borrower or of any such Subsidiary, or the
ability of the Borrower to perform its obligations under the Facility Documents
to which it is a party.
Very truly yours,
EXHIBIT D
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of August 1, 1997 between
Hardinge Inc., the Banks party thereto, and The Chase
Manhattan Bank as Agent.
Dear ________________
As a Bank, party to the above-referenced Credit Agreement (the
"Credit Agreement"), we have agreed with Hardinge Inc. (the "Borrower") pursuant
to Section 11.14 of the Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-public information
identified by the Borrower as being confidential at the time the same is
delivered to us pursuant to the Credit Agreement.
As provided in said Section 11.14, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as defined in the
Credit Agreement)] [assignee Bank], with certain of such non-public information
subject to the execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to us of this
Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors, officers, employees
and representatives) that (A) such information will not be used by you except in
connection with the proposed [participation] [assignment] mentioned above and
(B) you shall use reasonable precautions, in accordance with your customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such information confidential, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to your
counsel or to counsel for any of the Banks or the Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which you or any one or more of the Banks is a party; or (v) to the extent such
information becomes publicly available other than as a result of disclosure
other than as a result of disclosure by a Bank. Provided further, that, unless
specifically prohibited by applicable law or court order, you agree, prior to
disclosure thereof, to notify the Borrower of any request for disclosure of any
such non-public information (x) by any governmental agency or representative
thereof (other than any such request in connection with an examination of your
financial condition by such governmental agency) or (y) pursuant to legal
process; and provided finally that in no event shall you be obligated to return
any materials furnished to you pursuant to this Confidentiality Agreement.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this Confidentiality
Agreement.
Very truly yours,
[Insert Name of Bank]
By: ________________________
The foregoing is agreed to
as of the date of this letter.
[Insert name of prospective
participant or assignee]
By: ___________________________
SCHEDULE I
Subsidiaries of Borrower
Jurisdiction Percentage
Name and Address of Incorporation of Ownership
Hardinge Credit Co., Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Hardinge Technologies Systems, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Xxxxxxxx Machine Products, Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000 New York 100%
Canadian Hardinge Machine Tools, Ltd.
Toronto, Canada Canada 100%
Hardinge Machine Tools, Ltd.
Exeter, England United Kingdom 100%
Hardinge Brothers GmbH Federal Republic
Krefield, West Germany of Germany 100%
X. Xxxxxxxxxxxx & Co., A.G.
St. Gallen, Switzerland Switzerland 100%
Xxxxxxxxxxxx, Inc.
Elmsford, New York New York 100%
Hansvedt Industries, Inc.
Urbana, Illinois Illinois 100%
Hardinge, Shanghai Company
China Limited
Shanghai, China Republic of China 100%
SCHEDULE II
Hazardous Materials
In December, 1992, Hardinge removed an underground waste oil tank at
its College Avenue facility. Environmental sampling following the removal of the
tank disclosed the presence of hydrocarbon contamination in surrounding soils.
An environmental consultant retained by Hardinge prepared a site assessment and
an action plan for on-site remediation which were adopted and approved by the
New York State Department of Environmental Conservation. Installation of the
remediation facility was completed during 1996. Operation of the system is
expected to continue for several years.
SCHEDULE III
Partnerships of Borrower
Egret Aviation Co. Ownership of airplane with three other companies.
Xxx 000
Xxxxxx, Xxx Xxxx 00000
PROMISSORY NOTE
$20,000,000.00 August 1, 1997
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of THE CHASE
MANHATTAN BANK (the "Bank") at the principal office of The Chase Manhattan Bank
at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as
required by the Credit Agreement referred to below, for the account of the
appropriate Lending Office of the Bank, the principal amount of Twenty Million
Dollars ($20,000,000.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Credit Agreement referred to below. The Borrower also promises to pay interest
on the unpaid principal balance of the Loan in like money, for the period such
balance is outstanding, at said principal office for the account of said Lending
Office, at the rates of interest as provided in the Credit Agreement, on the
dates and in the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time the "Credit Agreement") dated as of August 1, 1997
among the Borrower, the Banks named therein (including the Bank) and the Agent
and evidences the Loan made by the Bank thereunder. All terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. The Borrower waives to the
full extent permitted by applicable law the right to trial by jury in any legal
proceeding arising out of or relating to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By
/s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx, Chairman of the
Board and Chief Executive Officer
SCHEDULE TO NOTE
Amount & Duration
Currency Interest of Interest Amount of Balance Notation
Date of Loan Rate Period Payment Outstanding By
PROMISSORY NOTE
$20,000,000.00 August 1, 1997
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of FLEET BANK
(the "Bank") at the principal office of The Chase Manhattan Bank at 0 Xxxxx
Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other place as required by
the Credit Agreement referred to below, for the account of the appropriate
Lending Office of the Bank, the principal amount of Twenty Million Dollars
($20,000,000.00) in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in the
Credit Agreement referred to below. The Borrower also promises to pay interest
on the unpaid principal balance of the Loan in like money, for the period such
balance is outstanding, at said principal office for the account of said Lending
Office, at the rates of interest as provided in the Credit Agreement, on the
dates and in the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time the "Credit Agreement") dated as of August 1, 1997
among the Borrower, the Banks named therein (including the Bank) and the Agent
and evidences the Loan made by the Bank thereunder. All terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. The Borrower waives to the
full extent permitted by applicable law the right to trial by jury in any legal
proceeding arising out of or relating to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By
/s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx, Chairman of the
Board and Chief Executive Officer
SCHEDULE TO NOTE
Amount & Duration
Currency Interest of Interest Amount of Balance Notation
Date of Loan Rate Period Payment Outstanding By
PROMISSORY NOTE
$10,000,000.00 August 1, 1997
New York, New York
HARDINGE INC. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of
MANUFACTURERS AND TRADERS TRUST COMPANY (the "Bank") at the principal office of
The Chase Manhattan Bank at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
at such other place as required by the Credit Agreement referred to below, for
the account of the appropriate Lending Office of the Bank, the principal amount
of Ten Million Dollars ($10,000,000.00) in lawful money of the United States of
America and in immediately available funds, on the date(s) and in the manner
provided in the Credit Agreement referred to below. The Borrower also promises
to pay interest on the unpaid principal balance of the Loan in like money, for
the period such balance is outstanding, at said principal office for the account
of said Lending Office, at the rates of interest as provided in the Credit
Agreement, on the dates and in the manner provided in said Credit Agreement.
The date and amount of the Loan made by the Bank to the Borrower under
the Credit Agreement referred below, interest rate, Currency Interest Period,
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the discretion
of the Bank, at any other time), endorsed by the Bank on the schedule attached
hereto or any continuation thereof; provided, however, the failure of the Bank
to make any such recordation or endorsement shall not affect the obligations of
the Borrower to make payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Loans made by the Bank.
This is one of the Notes referred to in that certain Credit Agreement
(as amended from time to time the "Credit Agreement") dated as of August 1, 1997
among the Borrower, the Banks named therein (including the Bank) and the Agent
and evidences the Loan made by the Bank thereunder. All terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note. The Borrower waives to the
full extent permitted by applicable law the right to trial by jury in any legal
proceeding arising out of or relating to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law (or any similar successor provision
thereto) but excluding all other conflict-of-law rules.
HARDINGE INC.
By
/s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx, Chairman of the
Board and Chief Executive Officer
SCHEDULE TO NOTE
Amount & Duration
Currency Interest of Interest Amount of Balance Notation
Date of Loan Rate Period Payment Outstanding By
[Hardinge Logo]
From the Office of
Xxxxxx X. Xxxx
July 31, 1997
Re: Credit Agreement dated as of August 1, 1997 (the "Credit Agreement")
among Hardinge Inc. the Banks named therein, and The Chase Manhattan Bank as
Agent for said Banks
The Chase Manhattan Bank
1 Chase Xxxxxxxxx Xxxxx 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx, Vice President
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby
designate any one of the following persons to give to you instructions,
including notices required pursuant to the Agreement, orally or by telephone or
teleprocess:
Xxxxxx X. Xxxx
J. Xxxxx Xxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxx Xxxxx
Xxxxxxxxx Xxxxxxx
Instructions may be honored on the oral, telephonic or
teleprocess instructions of anyone purporting to be any one of the above
designated persons even if the instructions are for the benefit of the person
delivering them. We will furnish you with confirmation of each such instruction
in writing signed by any person designated above (including any telecopy which
appears to bear the signature of any person designated above) on the same day
that the instruction is provided to you but your responsibility with respect to
any instruction shall not be affected by your failure to receive such
confirmation or by its contents.
You shall be fully protected in, and shall incur no liability
to us for, acting upon any instructions which you in good faith believe to have
been given by any person designated above, and in no event shall you be liable
for special, consequential or punitive damages. In addition, we agree to hold
you and your agents harmless from any and all liability, loss and expense
arising directly or indirectly out of instructions that we provide to you in
connection with the Credit Agreement except for liability, loss or expense
occasioned by the gross negligence or willful misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute
any instruction, or part thereof, without incurring any responsibility for any
loss, liability or expense arising out of such refusal if you in good faith
believe that the person delivering the instruction is not one of the persons
designated above or if the instruction is not accompanied by an authentication
method that we have agreed to in writing.
We will promptly notify you in writing of any change in the
persons designated above and, until you have actually received such written
notice and have had a reasonable opportunity to act upon it, you are authorized
to act upon instructions, even though the person delivering them may no longer
be authorized.
Very truly yours,
HARDINGE INC.
By /s/ Xxxxxx X. Xxxx
----------------------
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board and
Chief Executive Officer
HARDINGE INC.
Certified Resolution.
THIS IS TO CERTIFY that I, J. Xxxxxx Xxxxxx, am the duly
elected and acting Secretary of Hardinge Inc., a New York corporation with
offices at Xxx Xxxxxxxx Xxxxx, X.X. Xxx 0000, Xxxxxx, Xxx Xxxx; that the
following resolution was duly adopted by the Board of Directors of said
corporation at a meeting held on July 22, 1997 by unanimous vote after due
deliberation and has not been amended or revoked to the date hereof:
RESOLVED that this Corporation borrow severally from The Chase
Manhattan Bank, Fleet Bank and Manufacturers and Traders Trust Company (the
"Banks")from time to time on a revolving credit basis and otherwise an aggregate
amount not to exceed at any time outstanding $50,000,000 under and pursuant to a
Commitment Letter from The Chase Manhattan dated June 30, 1997, copy of which
Commitment Letter shall be filed with the records of this meeting, and pursuant
further to a proposed Credit Agreement (the "Credit Agreement") in the form and
substance as presented to this meeting, as same may be modified as described
below, and a copy of which shall be filed with the records of this meeting, and
be it further
RESOLVED that the form, terms and provisions of:
(a) said proposed Credit Agreement among this Corporation
and The Chase Manhattan Bank, as Agent for the Banks,
and the Banks providing , among other things, for the
making by the Banks, severally, to this Corporation
from time to time of advances (the "Advances") in an
aggregate amount not to exceed at any time outstanding
$50,000,000 upon the terms and conditions therein set
forth, as contemplated by the next preceding resolution
and for the payment by this Corporation of the
commitment fee and other fees, costs and expenses as
therein provided; and
(b) promissory notes (the "Notes") to be issued by this
Corporation to the Banks pursuant to the terms and
conditions of said proposed Credit Agreement evidencing
the indebtedness of this Corporation to such Bank
resulting from each of the Advances made by such Bank
to this Corporation and providing, among other things,
for the repayment of such Advances, and payment of
interest thereon, as set forth above with respect
thereto;
be, and the same hereby are, in all respects approved, and that the Chairman of
the Board and Chief Executive Officer, President and Chief Operating Officer,
Executive Vice President and Chief Financial Officer, Vice President - Finance,
or Treasurer of this Corporation be, and each of them hereby is, authorized, in
the name and on behalf of this Corporation, to execute and deliver said Credit
Agreement with The Chase Manhattan Bank said Notes, each in the form or
substantially in the form thereof as above described, with such additional
changes, additions and modifications thereto as the officer of this Corporation
executing the same shall approve, such approval to be conclusively evidenced by
his execution and delivery thereof; and be it further
RESOLVED that said Credit Agreement with The Chase Manhattan Bank, as
the same is or may be amended or changed as above provided, together with a copy
of the Notes, be filed by the Secretary of this Corporation with the minutes of
the meetings of the Board of Directors of this Corporation; and be it further
RESOLVED that the Chairman of the Board and Chief Executive Officer,
President and Chief Operating Officer, Executive Vice President and Chief
Financial Officer, Vice President - Finance, Treasurer, the Secretary and
Assistant Secretary of this Corporation be, and each of them hereby is,
authorized and empowered (any one of them acting alone) to do or cause to be
done all such acts or things and to sign and deliver, or cause to be signed and
delivered, all such documents, instruments and certificates (including, without
limitation, all notices and certificates required or permitted to be given or
made under the terms of the Credit Agreement), in the name and on behalf of this
Corporation or otherwise, as such officer of this Corporation may deem necessary
advisable or appropriate to effectuate or carry out the purposes and intent of
the foregoing resolutions and to perform the obligations of this Corporation
under the agreements and instruments referred to therein.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of the Corporation this 31st day of July, 1997.
/s/ J. Xxxxxx Xxxxxx
-------------------
J. Xxxxxx Xxxxxx
Secretary
(SEAL)
HARDINGE INC.
I, J. Xxxxxx Xxxxxx, do hereby certify that I am the duly
elected and acting Secretary of Hardinge Inc., and that the following named
persons have been duly elected to the offices set forth opposite their
respective names and are now serving and acting as such officers and that the
signature opposite their respective names is the specimen signature of each such
person.
Xxxxxx X. Xxxx Chairman of the Board
Chief Executive Officer /s/ Xxxxxx X. Xxxx
------------------
J. Xxxxx Xxxx President
Chief Operating Officer /s/ J. Xxxxx Xxxx
------------------
Xxxxxxx X. Xxxxxx Executive Vice President,
Chief Financial Officer and
Assistant Secretary /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx Vice President, Finance /s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxx X. Xxxxxxxx Treasurer /s/ Xxxxxx X. Xxxxxxxx
----------------------
J. Xxxxxx Xxxxxx Secretary /s/ J. Xxxxxx Xxxxxx
--------------------
IN WITNESS WHEREOF, I have hereunto set my hand and
the seal of Hardinge Inc. this 31st day of July, 1997.
/s/ J. Xxxxxx Xxxxxx
--------------------
J.XXXXXX XXXXXX
(SEAL)
HARDINGE INC.
OFFICER'S CERTIFICATE
The undersigned, being the duly elected Chairman of the Board
and Chief Executive Officer of Hardinge Inc., a corporation duly organized and
existing under the laws of the State of New York (the "Company") does hereby
certify pursuant to Section 4.01 of the Credit Agreement between the Company,
the Bank's signatory thereto and The Chase Manhattan Bank as Agent, dated as of
August 1, 1997 (the "Credit Agreement") that the representations and warranties
contained in Article 5 of the Credit Agreement are true and correct on the date
hereof as though made on this date and that no event has occurred and is
continuing which constitutes a Default, or Event of Default, as defined under
the Credit Agreement.
IN WITNESS WHEREOF, this Certificate has been duly executed
this 31st day of July, 1997.
/s/ Xxxxxx X. Xxxx
---------------------
Xxxxxx X. Xxxx
Letterhead of Sayles, Evans, Xxxxxxx, Xxxxxx & Xxxxx]
July 31, 0000
Xxx Xxxxx Xxxxxxxxx Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fleet Bank
Xxx Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Manufacturers and Traders Trust Company
00-00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel to Hardinge Inc. (the "Borrower") in
connection with the execution and delivery of that certain Credit Agreement (the
"Credit Agreement") dated as of August 1, 1997 among the Borrower, the Banks
signatory thereto and The Chase Manhattan Bank as Agent. Except as otherwise
defined herein, all terms used herein and defined in the Credit Agreement or any
agreement delivered thereunder shall have the meanings assigned to them therein.
In connection with the preparation of this Opinion, we have
examined originals or counterparts, executed on behalf of the Borrower, of the
Facility Documents and the exhibits attached thereto in originals or copies,
certified to our satisfaction, of such records, certificates and documents as we
deemed relevant and necessary as a basis for rendering this Opinion.
Based upon the foregoing, and having regard to such legal
considerations as we deem relevant, we are of the opinion that:
1. The Borrower and to the best of our knowledge, each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all power
and authority to carry on its business as presently being conducted and to own
its properties, and is duly licensed or qualified and in good standing as a
foreign corporation in each other jurisdiction in which its properties are
located or in which failure to qualify would materially and adversely affect
either the conduct or its business or the enforceability of contractual rights
of the Borrower.
2. The execution, delivery and performance by the Borrower of
the Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of its stockholders; (b) contravene its charter or by-laws; (c)
contravene any law or to the best of our knowledge contractual restriction or
provision binding on or affecting the Borrower.
3. No authorization or approval or other action by, and no
notice to or filing with any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Borrower of the
Facility Documents.
4. The Credit Agreement is, and the other Facility Documents
when executed thereunder will be, legal, valid and binding obligations
enforceable in accordance with their respective terms, except that (a) the
availability of equitable remedies may be limited by principals of equity, and
(b) enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting the enforcement of the rights of creditors generally.
5. Each Facility Document to which the Borrower is a party is,
or when delivered under the Credit Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
6. There is no pending, or to our knowledge threatened
actions, suits or proceedings against or affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition or operations of the Borrower or of any such Subsidiary, or the
ability of the Borrower to perform its obligations under the Facility Documents
to which it is a party.
Very truly yours,
SAYLES, EVANS, XXXXXXX, XXXXXX & XXXXX
By /s/ J. Xxxxxx Xxxxxx
------------------------
J. Xxxxxx Xxxxxx, a Partner
State of New York
Department of State SS:
I hereby certify, that HARDINGE INC. was formed by consolidation on 12/24/1937,
under the name of HARDINGE BROTHERS, INC., fixing the duration as perpetual, and
that a diligent examination has been made of the index of corporation papers
filed in this Department for a certificate, order, or record of a dissolution,
and upon such examination, no such certificate, order or record has been found,
and that so far as indicated by the records of this Department, such corporation
is a subsisting corporation. I further certify the following:
A Certificate of Amendment HARDINGE BROTHERS, INC., changing name to HARDINGE
INC., was filed 05/19/1995.
Restated Certificate was filed on 05/24/1995.
I further certify, that no other certificates have been filed by such
corporation.
[Seal of New York Department of State]
Witness my hand and the official seal
of Department of State at the City
of Albany, this 29th day of July
one thousand nine hundred and
ninety seven
/S/ Special Deputy Secretary of State
-------------------------------------
Special Deputy Secretary of State
199707300043 64
