Exhibit 10
CREDIT AGREEMENT
dated as of February 26, 2002
by and among
X-XXX.XXX CORP.
(formerly known as C-Cor Electronics, Inc.) and
BROADBAND CAPITAL CORPORATION
as Borrowers
and
CITIZENS BANK OF PENNSYLVANIA
Table of Contents
Article I - Definitions; Construction.........................................1
1.01. Certain Definitions...........................................1
1.02. Construction.................................................11
1.03. Accounting Principles........................................11
Article II - The Credits.....................................................13
2.01. Revolving Credit Loans.......................................13
2.02. Interest Rates...............................................14
2.03. Payments and Prepayments.....................................16
2.04. Conversion or Renewal of Interest Rate Options; Prime Rate
Fallback.....................................................16
2.05. Interest Payment Dates.......................................18
2.06. Pro Rata Treatment and Payments..............................18
2.07. Additional Compensation in Certain Circumstances.............18
2.08. Funding by Branch, Subsidiary or Affiliate...................21
2.09. Taxes........................................................22
2.10. Payments Under Loan Documents................................22
Article III - The Letters of Credit..........................................23
3.01. Letter of Credit Subfacility.................................23
3.02 Procedure for Issuance and Amendment of Letters of Credit.....24
3.03 Letter of Credit Drawings and Reimbursements..................24
3.04 Obligations Absolute..........................................24
3.05 Further Assurances............................................25
3.06 Cash Collateral for Letters of Credit.......................25
Article IV - Representations And Warranties..................................26
4.01. Organization and Qualification...............................26
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4.02. Authority and Authorization..................................26
4.03. Execution and Binding Effect.................................26
4.04. Authorizations and Filings...................................26
4.05. Absence of Conflicts.........................................27
4.06. Financial Statements.........................................27
4.07. No Event of Default; Compliance with Instruments.............27
4.08. Litigation...................................................27
4.09. Subsidiaries.................................................28
4.10. Pension-Related Matters......................................28
4.11. Title to Property............................................28
4.12. Contracts....................................................29
4.13. Taxes........................................................29
4.14. Financial Accounting Practices...............................29
4.15. Power To Carry On Business...................................30
4.16. No Material Adverse Change...................................30
4.17. Regulation U.................................................30
4.18. Compliance with Laws.........................................30
4.19. Patents, Licenses, Franchises................................30
4.20. Ownership and Control........................................31
4.21. Accurate and Complete Disclosure.............................31
4.22. Investment Company...........................................31
4.23. Public Utility Holding Company...............................31
4.24. Business.....................................................31
4.25. Proceeds.....................................................31
4.26. Regulation O.................................................31
4.27. Burdensome Obligations.......................................32
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4.28. Insurance....................................................32
4.29. Hazardous Materials..........................................32
4.30. Solvency.....................................................32
Article V - Conditions Precedent.............................................32
5.01. Closing Date Conditions......................................32
5.02. Conditions to Loans and to Letters of Credit.................35
Article VI - Affirmative Covenants...........................................35
6.01. Reporting and Information Requirements.......................35
6.02. Preservation of Existence and Franchises.....................40
6.03. Insurance....................................................40
6.04. Maintenance of Properties....................................40
6.05. Payment of Taxes and Other Potential Charges and Priority
Claims; Payment of Other Current Liabilities.................41
6.06. Financial Accounting Practices...............................41
6.07. Compliance with Laws.........................................41
6.08. Use of Proceeds..............................................42
6.09. Government Authorizations, etc...............................42
6.10. Contracts....................................................42
6.11. Environmental Matters........................................42
6.12 Matters Concerning Acquisitions, Mergers and Investments......43
Article VII - Negative Covenants.............................................43
7.01. Financial Covenants..........................................43
7.02. Liens........................................................43
7.03. Indebtedness.................................................44
7.04. Guarantees and Similar Liabilities...........................45
7.05. Loans and Investments........................................45
7.06. Distributions to Shareholders................................46
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7.07. Sale-Leasebacks..............................................46
7.08. Acquisitions; Mergers, Etc...................................46
7.09. Dispositions of Assets.......................................47
7.10. Transactions with Affiliates.................................47
7.11. Continuation of or Change in Business........................47
7.12. Regulation U.................................................47
7.13. State of Organization........................................48
Article VIII - Defaults......................................................48
8.01. Events of Default............................................48
8.02. Consequences of an Event of Default..........................51
8.03. Set-Off......................................................51
Article IX - Miscellaneous...................................................51
9.01. Holidays.....................................................51
9.02. Records......................................................52
9.03. Amendments or Waivers........................................52
9.04. No Implied Waiver; Cumulative Remedies.......................52
9.05. Notices......................................................52
9.06. Expenses; Taxes; Attorneys' Fees.............................52
9.07. Severability.................................................53
9.08. Governing Law................................................53
9.09. Prior Understandings.........................................54
9.10. Duration; Survival...........................................54
9.11. Counterparts.................................................54
9.12. Successors and Assigns; Participations; Assignments..........54
9.13. Personal Liability of Officers...............................54
9.14. Confession of Judgment.......................................54
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9.15. Additional Legal Matters.....................................55
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Standard Notice (Borrowing)
Exhibit C Form of Standard Notice (Prepayment)
Exhibit D Form of Standard Notice (Conversion/Renewal)
Exhibit E Form of Guaranty
Exhibit F Form of Officer's Compliance Certificate
Exhibit G Form of Opinion Letter
SCHEDULES
Schedule 4.01 Organization and Qualification
Schedule 4.04 Authorizations and Filings
Schedule 4.05 Absence of Conflicts
Schedule 4.06 Financial Statements
Schedule 4.08 Litigation
Schedule 4.09 Subsidiaries
Schedule 4.10 Pension-Related Matters
Schedule 4.11 Title to Property
Schedule 4.12 Contracts
Schedule 4.18 Compliance with Laws
Schedule 4.19 Patents, Licenses, Franchises
Schedule 4.20 Ownership and Control
Schedule 4.24 Business
Schedule 4.26 Partnerships and Other Affiliated Entities
Schedule 4.29 Insurance
Schedule 4.30 Hazardous Materials
Schedule 7.02 Liens
Schedule 7.03 Indebtedness
Schedule 7.04 Guarantees and Contingent Liabilities
Schedule 7.05 Loans and Investments
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CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT, dated as of February 26, 2002, by and
among X-XXX.XXX CORP., f/k/a C-Cor Electronics, Inc., a Pennsylvania corporation
("C-Cor"), BROADBAND CAPITAL CORPORATION, a Delaware corporation ("Broadband"
and together with C-Cor, the "Borrowers"), and CITIZENS BANK OF PENNSYLVANIA, a
Pennsylvania state-chartered bank (the "Bank").
Recitals:
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WHEREAS, the Borrowers and Mellon Bank, N.A., as agent
("Mellon") are parties to that certain Credit Agreement dated as of August 9,
1999 (the "Existing Credit Agreement") pursuant to which certain credit
facilities were made available to the Borrowers (the "Existing Loans");
WHEREAS, the Borrowers have requested the Bank to enter into
this Agreement to refinance the Existing Loans and to extend credit as provided
for herein; and
WHEREAS, on the terms and subject to the conditions set forth
in this Agreement, the Bank is willing to extend credit to the Borrowers and the
Bank is willing to issue Letters of Credit;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
Article I
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Definitions; Construction
-------------------------
1.01. Certain Definitions. In addition to other words and
-------------------------
terms defined elsewhere in this Agreement, as used herein the following words
and terms shall have the following meanings, respectively:
"Affiliate" of a Person shall mean any Person which directly
or indirectly controls, or is controlled by, or is under common control with,
such Person, any Person which owns beneficially or of record 5% or more of any
class of capital stock of such Person or a Subsidiary of such Person or of which
5% or more of any class of capital stock (or in the case of a Person that is not
a corporation, 5% or more of the equity interest) is owned beneficially or of
record by such Person or a Subsidiary of such Person, and for each individual
who is an Affiliate within the meaning of the foregoing, any other individual
related to such Affiliate by consanguinity within the third degree or in a step
or adoptive relationship within such third degree or related by affinity with
such Affiliate or any such individual, and any Person directly or indirectly
controlled by any of the foregoing. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Affiliated Entity" shall mean any Person as to which the
Borrowers (i) are or have agreed or otherwise have a duty to become a general
partner of such Person or are otherwise generally liable for or on account of
the liabilities, acts or omissions of such Person, (ii) have agreed or otherwise
have a duty to acquire securities or other interests in or to make capital
contributions, loans or other investments to or on account of such Person, or
(iii) have an interest in such Person or have or may have a liability to or on
account of such Person that, in any case described in this clause (iii), would
reasonably be expected to be material to the business, operations, condition,
financial or otherwise, or prospects of the Borrowers or to the Borrowers'
ability to perform its obligations under this Agreement, the Notes or any Loan
Document, or an Affiliated Entity of any such Person.
"Agreement" shall mean this Credit Agreement, as the same may
be amended, modified or supplemented from time to time.
"Applicable Margin" shall have the meaning assigned to that
term in Section 2.02(a).
"Bank" shall have the meaning assigned to that term in the
first paragraph of this Agreement.
"Base Rate Option" shall have the meaning assigned to that
term in Section 2.02(a).
"Base Rate Portion" of any Set of Loans shall mean at any time
the portion, including the whole, of such Set of Loans bearing interest at such
time under the Base Rate Option or under Section 2.02(f). If no Set of Loans is
specified, "Base Rate Portion" shall refer to the Base Rate Portion of all Loans
outstanding at such time.
"Borrowers" shall mean, collectively, X-XXX.xxx Corp., f/k/a
C-Cor Electronics, Inc., a Pennsylvania corporation, and Broadband Capital
Corporation, a Delaware corporation, and "Borrower" shall mean either one of the
Borrowers, individually.
"Business Day" shall mean
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which commercial banks are authorized or required to be
closed in the Commonwealth of Pennsylvania or Philadelphia,
Pennsylvania;
(b) when such term is used to describe a day on which a
borrowing, payment, prepaying, or repaying is to be made in respect of
any LIBOR Rate Portion of any Set of Loans, any day which is: (i)
neither a Saturday or Sunday nor a legal holiday on which commercial
banks are authorized or required to be closed in New York City; and
(ii) a London Banking Day; and
(c) when such term is used to describe a day on which an
interest rate determination is to be made in respect of any LIBOR Rate
Portion of any Set of Loans, any day which is a London Banking Day.
"Capitalized Lease" shall mean at any time any lease which is
required to be capitalized on the balance sheet of the lessee at such time, and
"Capitalized Lease Obligation" of the Borrowers and their consolidated
Subsidiaries at any time shall mean the aggregate amount which is required to be
reported as a liability on the Borrowers' consolidated balance sheet at such
time as lessee under a Capitalized Lease.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be amended
from time to time.
"Change of Control" shall mean the occurrence of any of the
following: (i) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended), other than any
employee benefit plan or plans (within the meaning of Section 3(3) of ERISA),
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 25% or
more in voting power of the outstanding voting stock of the Borrowers, or (ii)
during any period of twelve (12) consecutive calendar months, individuals who
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were directors of a Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of such Borrower other than
because of the replacement as a result of death or disability of one or more
such directors.
"Closing Date" shall mean February 26, 2002.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall be
construed also to refer to any successor sections.
"Commitment" shall mean the Revolving Credit Commitment
(including as subfacilities the Letter of Credit Commitment), and "Commitments"
shall mean all such Commitments, collectively.
"Committed Amount" shall mean the Revolving Credit Committed
Amount (which includes the Letter of Credit Limit).
"Controlled Group Member" means each trade or business
(whether or not incorporated) which together with the Borrowers is treated as a
single employer under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or
(o) of the Code.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of any LIBOR Rate Portion, the proceeds of hypothetical receipts
by a Notional LIBOR Rate Funding Office or by a Bank through a Notional LIBOR
Rate Funding Office of one or more Dollar deposits in the interbank Eurodollar
market at the beginning of the Interest Period corresponding to such Funding
Segment, having maturities approximately equal to such Interest Period and in an
aggregate amount approximately equal to such Funding Segment.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"Event of Default" shall mean any of the Events of Default
described in Section 8.01 hereof.
"Existing Credit Agreement" shall have the meaning assigned to
that term in the Recitals Section hereof.
"Existing Loans" shall have the meaning assigned to that term
in the Recital Section hereof.
"Fed Funds Rate" for any day is the rate per annum (rounded
upward to the nearest 1/100 of 1%) determined by the Bank (which determination
shall be conclusive) to be the rate per annum announced by the Federal Reserve
Bank of New York (or any successor) on such day as being the weighted average of
the rates on overnight Federal funds transactions arranged by Federal funds
brokers on the previous trading day, as computed and announced by such Federal
Reserve Bank (or any successor) in substantially the same manner as such Federal
Reserve Bank computes and announces the weighted average it refers to as the
"Federal Funds Effective Rate" as of the date of this Agreement; provided, that
if such Federal Reserve Bank (or its successor) does not announce such rate on
any day, the "Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective Rate for the last day on which such rate was announced.
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"Funding Segment" of the LIBOR Rate Portion, at any time shall
mean the entire principal amount of such Portion to which at such time there is
applicable a particular Interest Period beginning on a particular day and ending
on another particular day.
"GAAP" shall mean generally accepted accounting principles, as
such principles shall be in effect at the Relevant Date, subject to Section 1.03
hereof.
"Guarantor" shall mean each entity that executes and delivers
a Guaranty.
"Guaranty" shall have the meaning assigned to such term in
Section 5.01(b) hereof.
"Hazardous Substances" shall mean hazardous wastes, hazardous
substances, hazardous materials, toxic substances, hazardous air pollutants or
toxic pollutants, as those terms are used in the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Clean Air Act,
42 U.S.C. Section 7401 et seq., and the Clean Water Act, 33 U.S.C. Section 1251
et seq., or in any regulations promulgated pursuant thereto or in any other
applicable state, federal or local Law.
"Hedging Contracts" shall mean, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, or any other
agreements or arrangements entered into between the Borrowers and the Bank and
designed to protect the Borrower against fluctuations in interest rates or
currency exchange rates.
"Hedging Obligations" means, with respect to the Borrowers,
all liabilities of the Borrowers to the Bank under Hedging Contracts.
"Income Tax Expense" for any period shall mean the charges
against income of the Borrowers and their Subsidiaries for federal, state, local
and foreign income taxes for such period, determined on a consolidated basis in
accordance with GAAP.
"Indebtedness" of the Borrowers and their consolidated
Subsidiaries shall mean:
(a) all indebtedness or liability for or on account of money
borrowed by, or for or on account of deposits with or advances to, the
Borrowers and their consolidated Subsidiaries;
(b) all obligations of the Borrowers and their consolidated
Subsidiaries which obligations are evidenced by bonds, debentures,
notes or similar instruments;
(c) all indebtedness or liability for or on account of
property or services purchased or acquired by the Borrowers and their
consolidated Subsidiaries;
(d) any amount secured by a Lien on property owned by the
Borrowers and their consolidated Subsidiaries (whether or not assumed)
and Capitalized Lease Obligations of the Borrowers and their
consolidated Subsidiaries (without regard to any limitation of the
rights and remedies of the holder of such Lien or the lessor under such
Capitalized Lease to repossession or sale of such property);
(e) the face amount of all letters of credit issued for the
account of the Borrowers and their consolidated Subsidiaries and,
without duplication, the unreimbursed amount of all drafts drawn
thereunder;
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(f) obligations (in the nature of principal or interest) of
the Borrowers and their consolidated Subsidiaries in respect of
acceptances or similar obligations issued or created for the account of
the Borrowers and their consolidated Subsidiaries; and
(g) the aggregate amount which is required to be reported as a
liability on the balance sheet of the Borrowers and their consolidated
Subsidiaries under a product financing or similar arrangement pursuant
to paragraph 8 of FASB Statement of Financial Accounting Standards No.
49 or any similar requirement of GAAP.
"Indirect Guarantee" shall mean any liability of any Borrower
or a consolidated Subsidiary upon, or with respect to, any obligation or
liability of any other Person, including but not limited to an agreement,
contingent or otherwise:
(a) to reimburse banks, surety companies and other Persons in
respect of drawings and other payments under letters of credit,
guarantees, surety bonds and similar documents opened or issued by such
other Persons for the account of any Borrower or a consolidated
Subsidiary;
(b) to purchase an obligation or assume a liability of such
Person or to supply funds for the payment or purchase of such
obligation or satisfaction of such liability;
(c) to make any loan, advance, capital contribution or other
investment in, or to purchase any property, services or securities
from, such Person so as to enable such Person to meet a minimum equity,
net worth, working capital or other financial condition or to enable
such Person to satisfy any obligation or liability or pay any dividend
or stock liquidation payment, or otherwise to supply funds to or in any
manner invest in such Person;
(d) to purchase, sell or lease (as lessee or lessor) property
or assets or to purchase or sell services (i) primarily for the purpose
of enabling such Person to satisfy such obligation or liability or of
assuring the owner of such Indebtedness or liability against loss, or
(ii) regardless of the nondelivery of such property or assets or the
failure to furnish such services, or (iii) in a transaction otherwise
having the characteristics of a take-or-pay or through put contract or
as described in paragraph 6 of FASB Statement of Financial Accounting
Standards No. 47; or
(e) which is substantially equivalent in economic effect to
any of the foregoing or otherwise substantially equivalent in economic
effect to an assumption, guarantee, endorsement or other direct or
contingent liability upon or with respect to any obligation or
liability of such Person.
"Initial Revolving Credit Committed Amount" shall mean
$7,500,000.
"Interest Expense" for any period shall mean the amount of
cash interest (including any penalties for late payment) paid by any Borrower or
its consolidated Subsidiaries on Indebtedness during such period, determined in
accordance with GAAP.
"Interest Payment Date" means relative to any LIBOR Rate Loan,
having an Interest Period of three months or less, the last Business Day of such
Interest Period, and as to any LIBOR Rate Loan having an Interest Period longer
than three months, each Business Day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period" means:
relative to any LIBOR Rate Loan
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(i) initially, the period beginning on (and
including) the date on which such LIBOR Rate Loan is made or
continued as, or converted into, a LIBOR Rate Loan pursuant to
Section 2.02 and ending on (but excluding) the day which
numerically corresponds to such date one, two, three or six
months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in
each case as the Borrower may select in its notice pursuant to
Section 2.01(d); and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
LIBOR Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrowers by irrevocable notice
to the Bank not less than two Business Days prior to the last
day of the then current Interest Period with respect thereto;
provided, however, that
(a) the Borrowers shall not be permitted to select
Interest Periods to be in effect at any one time
which have expiration dates occurring on more
than eight different dates;
(b) Interest periods commencing on the same date for
LIBOR Rate Loans comprising part of the same
advance under this agreement shall be of the same
duration;
(c) Interest Periods for LIBOR Rate Loans in
connection with which Borrowers have or may incur
Hedging Obligations with the Bank shall be of the
same duration as the relevant periods set under
the applicable Hedging Contracts;
(d) if such Interest Period would otherwise end on a
day which is not a Business Day, such Interest
Period shall end on the next following Business
Day unless such day falls in the next calendar
month, in which case such Interest period shall
end on the first preceding Business Day; and
(e) no Interest Period may end later than the
Revolving Credit Expiration Date.
"Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, order, injunction,
writ, decree or award of any Official Body.
"Letter of Credit Application" shall have the meaning given in
Section 3.02(a).
"Letter of Credit Collateral Account" shall have the meaning
given that term in Section 3.07.
"Letter of Credit Commitment" shall have the meaning given
that term in Section 3.01(a).
"Letter of Credit Expiration Date" for any Letter of Credit
shall mean the date set forth in the Letter of Credit Application for such
Letter of Credit, but in no event shall the Letter of Credit Expiration Date for
any Letter of Credit extend beyond the date which is one year from the issuance
of such Letter of Credit.
"Letter of Credit Exposure" of the Bank at any time shall mean
the sum of (a) the aggregate Letter of Credit Unreimbursed Draws and (b) the
aggregate Letter of Credit Undrawn Availability.
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"Letter of Credit Fee" shall have the meaning given that term
in Section 3.01(d).
"Letter of Credit Limit " shall mean $5,000,000.
"Letter of Credit Reimbursement Obligation" with respect to a
Letter of Credit means the obligation of the Borrowers to reimburse the Bank for
Letter of Credit Unreimbursed Draws, together with interest thereon.
"Letter of Credit Undrawn Availability" with respect to a
Letter of Credit issued by the Bank at any time shall mean the maximum amount
available to be drawn under such Letter of Credit at such time or thereafter,
regardless of the existence or satisfaction of any conditions or limitations on
drawing.
"Letter of Credit Unreimbursed Draws" with respect to a Letter
of Credit issued by the Bank at any time shall mean the aggregate amount at such
time of all payments made by the Bank under such Letter of Credit, to the extent
not repaid by the Borrowers.
"Letters of Credit" shall have the meaning assigned to that
term in Section 3.01(a), and "Letter of Credit" shall mean any one of them.
"LIBOR Lending Rate" shall mean, relative to any LIBOR Rate
Loan to be made, continued or maintained as, or converted into, a LIBOR Rate
Loan for any Interest Period, a rate per annum determined pursuant to the
following formula:
LIBOR Lending Rate = LIBOR Rate
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(1.00 - LIBOR Reserve Percentage)
"LIBOR Rate" shall mean relative to any Interest Period for
LIBOR Rate Loans, the offered rate for deposits of U.S. Dollars in an amount
approximately equal to the amount of the requested LIBOR Rate Loan for a term
coextensive with the designated Interest Period which the British Bankers'
Association fixes as its LIBOR rate and which appears on the Telerate Page 3750
as of 11:00 a.m. London time on the day which is two London Banking Days prior
to the beginning of such Interest Period.
"LIBOR Rate Loan" shall mean any Loan or Set of Loans bearing
interest at such time under the LIBOR Rate Option or at a rate calculated by
reference to the LIBOR Lending Rate under Section 2.03(a).
"LIBOR Rate Loan Prepayment Fee" shall have the meaning given
that term in Section 2.07.
"LIBOR Rate Option" shall have the meaning assigned to that
term in Section 2.02(a) hereof.
"LIBOR Rate Portion" shall mean at any time the part,
including the whole, of any Set of Loans bearing interest at such time under the
LIBOR Rate Option or at a rate calculated by reference to the LIBOR Lending Rate
under Section 2.02(a). If no Set of Loans is specified, "LIBOR Rate Portion"
shall refer to the LIBOR Rate Portion of all Loans outstanding at such time.
"LIBOR Rate Reserve Percentage" shall have the meaning
assigned to that term in Section 2.02(a) hereof.
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"LIBOR Reserve Percentage" shall mean, relative to any day of
any Interest Period for LIBOR Rate Loans, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) under any regulations of the Board of Governors
of the Federal Reserve System (the "Board") or other governmental authority
having jurisdiction with respect thereto as issued from time to time and then
applicable to assets or liabilities consisting of "Eurocurrency Liabilities", as
currently defined in Regulation D of the Board, having a term approximately
equal or comparable to such Interest Period.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security.
"Loan" shall mean any loan made by the Bank to the Borrowers
under this Agreement, and "Loans" shall mean all Loans made by the Bank under
this Agreement.
"Loan Documents" shall mean collectively any and all
instruments and documents delivered by or on behalf of the Borrowers in
connection with or otherwise related to this Agreement, the Note, the Letters of
Credit, any Guaranty, and all other agreements and instruments extending,
renewing, refinancing or refunding any indebtedness, obligation or liability
arising under any of the foregoing, in each case as the same may be amended,
modified or supplemented from time to time hereafter.
"London Banking Day" shall mean a day on which dealings in
U.S. Dollar deposits are transacted in the London interbank market.
"Material Adverse Effect" shall mean: (a) a material adverse
effect on the business, operations, condition (financial or otherwise) or
prospects of the Borrowers, (b) a material adverse effect on the ability of the
Borrowers to perform or comply with any of the terms and conditions of any Loan
Document, or (c) an adverse effect on the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document, or the
ability of the Bank to enforce any rights or remedies under or in connection
with any Loan Document.
"Minority Investment" or "Minority Investments" shall have the
meanings assigned to such terms in Section 7.08 hereof.
"Multiemployer Plan" means any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which a Borrower or any Controlled Group Member has or had an obligation to
contribute.
"Net Income" for any period shall mean the net earning (or
loss) after taxes of the Borrowers and their consolidated Subsidiaries,
exclusive of extraordinary items, for such period, determined in accordance with
GAAP.
"Net Worth" shall mean the value of all assets of the
Borrowers and their Consolidated Subsidiaries minus the aggregate amount of all
liabilities of the Borrowers and their Consolidated Subsidiaries, all calculated
in accordance with GAAP.
"Note" shall mean the Revolving Credit Note of the Borrowers,
executed and delivered under this Agreement, together with all extensions,
renewals, refinancings or refundings thereof in whole or in part.
-8-
"Notional LIBOR Rate Funding Office" shall have the meaning
given to that term in Section 2.08(a).
"Office," when used in connection with the Bank, shall mean
its office located at 0 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, XX
00000-0000, or such other office or offices of the Bank or any branch,
subsidiary or affiliate thereof as may be designated in writing from time to
time by the Bank to the Borrowers.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator in each case whether foreign or domestic.
"Option" shall mean the Base Rate Option or the LIBOR Rate
Option, as the case may be.
"Participants" shall have the meaning assigned to that term in
Section 10.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency, department
or instrumentality succeeding to the functions of said corporation.
"Permitted Indebtedness" shall have the meaning assigned to
that term in Section 7.03 hereof.
"Permitted Liens" shall have the meaning assigned to that term
in Section 7.02 hereof.
"Person" shall mean an individual, corporation, partnership,
trust, unincorporated association, joint venture, joint-stock company,
government (including political subdivisions), governmental authority or agency,
or any other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) to which Section 4021 of ERISA applies and (i) which is
maintained for employees of a Borrower or any Controlled Group Member with
respect to said employees' employment with a Borrower or Controlled Group
Member; or (ii) to which a Borrower or any Controlled Group Member made, or was
required to make, contributions at any time within the preceding five (5) years.
"Portion" shall mean the Base Rate Portion or the LIBOR Rate
Portion, as the case may be.
"Potential Default" shall mean any event or condition which
with notice, passage of time, a determination by the Bank, or any combination of
the foregoing, would constitute an Event of Default.
"Prime Rate," as used herein, shall mean the interest rate per
annum announced from time to time by the Bank as its prime rate (computed on the
basis of a year of 365 or 366 days as the case may be) such interest rate to
change automatically from time to time effective as of the effective date of
each change in the Prime Rate.
"Relevant Date" shall mean the date a relevant computation or
determination is to be made or the date of relevant financial statements.
"Reportable Event" means (i) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by a
substantial employer from a Plan to which more than one employer contributes, as
referred to in Section 4063(b) of ERISA, (iii) a cessation of operations at a
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facility causing more than twenty percent (20%) of Plan participants to be
separated from employment, as referred to in Section 4068(f) of ERISA or (iv) a
failure to make a required installment or other payment with respect to a Plan
when due in accordance with Section 412 of the Code or Section 302 of ERISA
which causes the total unpaid balance of missed installments and payments
(including unpaid interest) to exceed $750,000.
"Revolving Credit Commitment" shall have the meaning assigned
to that term in Section 2.01(a).
"Revolving Credit Committed Amount" shall mean $7,500,000.
"Revolving Credit Exposure" of the Bank at any time shall mean
the sum at such time of the outstanding principal amount of the Bank's Revolving
Credit Loans plus the aggregate Letter of Credit Exposure of the Bank.
"Revolving Credit Expiration Date" shall mean June 30, 2002.
"Revolving Credit Loans" shall have the meaning assigned to
that term in Section 2.01(a).
"Revolving Credit Notes" shall mean the promissory note of
the Borrowers executed and delivered under Section 2.01(c), any promissory note
issued in substitution therefor pursuant to Section 2.08(b), together with all
extensions, renewals, refinancings or refundings thereof in whole or in part.
"Set of Loans" shall mean all Revolving Credit Loans the
interest rate Option applicable to which is converted from, converted to or
renewed at the same time.
"Site Assessment" shall have the meaning set forth in Section
6.01(n).
"Site Reviewers" shall mean such Persons as the Bank may
designate pursuant to Section 6.01(n).
"Standard Notice" shall mean an irrevocable notice provided to
the Bank on a Business Day which is
(i) at least one Business Day in advance in the case of
selection of, conversion to or renewal of the Base Rate Option or
prepayment of any Base Rate Portion; and
(ii) at least three London Banking Days in advance in the case
of selection of, conversion to or renewal of the LIBOR Rate Option or
prepayment of any LIBOR Rate Portion.
Standard Notice must be provided no later than 10:00 a.m., Philadelphia time, on
the last day permitted for such notice.
"Stock" shall mean the issued and outstanding stock of the
Borrowers.
"Subset of Loans" shall mean the Portion of a particular Set
of Loans which are either a Base Rate Portion or LIBOR Rate Portion and having
the same Interest Period, or the Portion of a particular Set of Loans made at
the Base Rate Option or the Funding Segment of a Portion made at the LIBOR Rate
Option and having the same Interest Period.
-10-
"Subsidiary" or "Subsidiaries" of a Person at any time shall
mean any Person (or Persons) of which such Person at such time controls a
majority of the securities having voting power. In the application of this
definition, "securities" means shares of stock or other securities, "control"
with respect to any securities means to own directly or indirectly (through one
or more Subsidiaries), or to have voting power with respect to, such securities;
"voting power" means the ability or authority at the time in question to vote
for the election, appointment or other determination of who shall fill the
position of director (whether or not such power exists at the time by reason of
the happening of a contingency); and "director" of a Person means one of the
directors or comparable officials possessing the power to direct the management
and policies of the Person; provided, that, if the directors of a Person do not
all have equal voting power on a per capita basis, a "majority of the securities
having voting power" shall mean at least such number of securities as shall have
voting power to elect such number of directors as shall possess the power to
direct the management and policies of the Person.
"Taxes" shall have the meaning assigned in Section 2.09
hereof.
"Transferee" shall have the meaning assigned to that term in
Section 10.12(e).
"Workers' Compensation Letters of Credit" shall mean the
standby letters of credit in the face amount of $1,700,000 issued by the Bank
and $450,000 and $360,000, each issued by Mellon Bank, N.A., for the benefit of
the Borrowers, in favor of the Self-Insurance Division of the Pennsylvania
Bureau of Workers' Compensation, which letters of credit expire on July 1, 2002,
June 30, 2002 and September 30, 2002, respectively.
1.02. Construction. Unless the context of this Agreement
------------------
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, and "or" has the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determinations" by the Bank mean good faith determinations or good faith
estimates by the Bank (in the case of quantitative determinations) and good
faith determinations or good faith beliefs by the Bank (in the case of
qualitative determinations). The words "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
1.03. Accounting Principles.
----------------------------
(a) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP.
(b) If any change in GAAP after the date of this Agreement is
or shall be required to be applied to transactions then or thereafter in
existence, and a violation of one or more provisions of this Agreement shall
have occurred or in the reasonable judgment of the Bank or the Borrowers would
likely occur which would not have occurred or be likely to occur if no change in
accounting principles had taken place,
(i) The parties agree that such violation shall not
be considered to constitute an Event of Default or a Potential
Default for a period of thirty (30) days from the date either
the Borrowers notify the Bank or the Bank notifies the
Borrowers of the application of this subsection 1.03(b);
-11-
(ii) The parties agree in such event to negotiate in
good faith an amendment of this Agreement which shall
approximate to the extent possible the economic effect of the
original financial covenants after taking into account such
change in GAAP; and
(iii) If the parties are unable to negotiate such an
amendment within such thirty (30) day period, the Borrowers
shall have the option of (A) prepaying the Loans (pursuant to
applicable provisions hereof) and the Letter of Credit
Reimbursement Obligations and terminating the Letters of
Credit or providing cash collateral therefor as provided in
Section 3.07 or (B) submitting the drafting of such an
amendment to a firm of independent certified public
accountants of nationally recognized standing acceptable to
the parties, which shall complete its draft of such amendment
within 60 days of submission; if the parties cannot agree, the
firm shall be selected by binding arbitration in the City of
Philadelphia, Pennsylvania in accordance with the rules then
obtaining of the American Arbitration Association. If the
Borrowers do not exercise either such option within said
period, then, as used in this Agreement, "GAAP" shall mean
generally accepted accounting principles in effect at the
Relevant Date. The parties agree that if the Borrowers elect
the option in clause (B) above, until such firm has been
selected and completes drafting such amendment, no such
violation shall constitute an Event of Default or a Potential
Default.
(c) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter in
existence, and the Bank shall assert that the effect of such change is or likely
shall be to distort materially the effect of any of the definitions of financial
terms in Article I or any of the covenants of the Borrowers in Section 7.01 (the
"Financial Provisions"), so that the intended economic effect of any of the
Financial Provisions will not in fact be accomplished in any material respect,
(i) The Bank shall notify the Borrowers of such
assertion, specifying the change in GAAP which is objected to,
and, until otherwise determined as provided below, the
specified change in GAAP shall not be made by the Borrowers in
their financial statements for the purpose of applying the
Financial Provisions; and
(ii) The parties shall follow the procedures set
forth in subsection (ii) and the first sentence of subsection
(iii) of subsection (b) of this Section. If the parties are
unable to agree on an amendment as provided in said subsection
(ii) and if the Borrowers do not exercise either option set
forth in the first sentence of said subsection (iii) within
the specified period, then, as used in this Agreement, "GAAP"
shall mean generally accepted accounting principles in effect
at the Relevant Date, except that the specified change in GAAP
which is objected to by the Bank shall not be made in applying
the Financial Provisions. The parties agree that if the
Borrowers elect the option in clause (B) of the first sentence
of said paragraph (iii), until such independent firm has been
selected and completes drafting such amendment, the specified
change in GAAP shall not be made in applying the Financial
Provisions.
(d) All expenses of compliance with this Section 1.03 shall be
paid by the Borrowers.
-12-
Article II
----------
The Credits
-----------
2.01. Revolving Credit Loans.
-----------------------------
(a) The Revolving Credit Commitments. Subject to the terms and
------------------------------------
conditions and relying upon the representations and warranties herein set forth,
the Bank agrees (such agreement being herein collectively called the "Revolving
Credit Commitment") to make loans to the Borrowers (the "Revolving Credit
Loans") at any time or from time to time on or after the date hereof to but not
including the Revolving Credit Expiration Date except for those Revolving Credit
Loans deemed to be made under Section 3.04(a) which may occur subsequent to the
Revolving Credit Expiration Date. The Bank shall have no obligation to make any
Revolving Credit Loan to the extent that the Bank's Revolving Credit Exposure at
any time would exceed the Revolving Credit Committed Amount. If at any time, the
aggregate outstanding Revolving Credit Exposure exceeds the Revolving Credit
Committed Amount, then, without any requirement for demand or notice from the
Bank, the Borrowers shall immediately pay to the Bank the amount of such excess.
The Borrowers hereby covenant and agree that they shall not request, and the
Bank shall not be obligated to make, any Revolving Credit Loan (i) to the extent
that the aggregate Revolving Credit Exposure of the Bank at any time exceeds the
Revolving Credit Committed Amounts, or (ii) on or after the Revolving Credit
Expiration Date.
(b) Nature of Revolving Credit. Within the limits of time and
------------------------------
amount set forth in this Section 2.01, and subject to the provisions of this
Agreement, the Borrowers may borrow, repay and reborrow Revolving Credit Loans
made hereunder.
(c) Revolving Credit Notes. The obligation of the Borrowers to
--------------------------
repay the unpaid principal amount of the Revolving Credit Loans made to them by
the Bank and to pay interest thereon shall be evidenced in part by promissory
note of the Borrowers to the Bank, dated the date hereof (the "Revolving Credit
Note"), in substantially the form attached hereto as Exhibit A, with the blanks
appropriately filled, payable to the order of the Bank in a face amount equal to
the Initial Revolving Credit Committed Amount. The executed Revolving Credit
Note shall be delivered by the Borrowers to the Bank on the date hereof.
(d) Making of Revolving Credit Loans. Whenever the Borrowers
------------------------------------
desire that the Bank make a Revolving Credit Loan, the Borrowers shall provide
Standard Notice to the Bank, in the form attached hereto as Exhibit B, not later
than (A) 2:00 p.m. on the Business Day which the proposed borrowing is requested
to be made for Revolving Credit Loans that will accrue interest at the Base Rate
Option and (B) by or before 10:00 a.m. New York time on a day which is not less
than two nor more than five Business Days prior to the date of the requested
borrowing of Revolving Credit Loans that will accrue interest at the LIBOR Rate
Option. The standard notice shall set forth the following information:
(i) The date, which shall be a Business Day, on which
such Set of Loans are to be made;
(ii) The interest rate Option or options selected in
accordance with Section 2.02(a) and the principal amounts
selected in accordance with Section 2.02(c) of the Base Rate
Portion and each Funding Segment of the LIBOR Rate Portion, as
the case may be, of such Loans;
(iii) The Interest Period for each Funding Segment of
each proposed Loan selected in accordance with Section
2.02(b);
-13-
(iv) The aggregate principal amount of the Loan
selected in accordance with Sections 2.02(c) and (d), which
shall be the sum of the principal amounts selected pursuant to
this Section 2.01.
Standard Notice having been so provided to the Bank, unless any applicable
condition specified in Article V has not been satisfied, on the date specified
in such Standard Notice the Bank shall make the proceeds of its Revolving Credit
Loan available no later than 12:00 o'clock noon, Philadelphia time on the date
of the requested borrowing in funds immediately available at such Office, and
the Bank will make the funds immediately available to the Borrowers at such
Office.
(e) Maturity. To the extent not due and payable earlier,
-----------------
the Revolving Credit Loans shall be due and payable on the Revolving Credit
Expiration Date.
2.02. Interest Rates.
---------------------
(a) Optional Bases of Borrowing. The unpaid principal amount
---------------------------
of the Loans shall bear interest for each day until due on one or more bases
selected by the Borrowers from the interest rate Options set forth below, it
being understood that, subject to the provisions of this Agreement, the
Borrowers may select different options to apply simultaneously to different
Subsets of Loans and may select different Funding Segments to apply
simultaneously to different Subsets of the LIBOR Rate Portion:
(i) Base Rate Option: shall mean the Applicable
----------------
Margin plus either (i) the Prime Rate or (ii) the Fed Funds
Rate as selected by the Borrowers; provided, however, that
upon the occurrence and during the continuance of an Event of
Default, the Bank shall determine whether the Base Rate is
based upon the Prime Rate or the Fed Funds Rate.
(ii) LIBOR Rate Option: A rate per annum (computed on
-----------------
the basis of a year of 360 days and actual days elapsed) for
each day equal to the LIBOR Lending Rate for such day plus the
Applicable Margin.
The Bank shall give prompt notice to the Borrowers of the LIBOR Lending
Rate so determined or adjusted, which determination or adjustment, if
made in good faith, shall be conclusive absent manifest error.
With respect to each Loan, if the Borrowers fail to request the LIBOR
Rate Option, such principal amount shall be deemed to earn interest at
the Base Rate Option.
"Applicable Margin" for any day shall mean the following: (i) 0% for the Loans
bearing interest at the Base Rate Option if the Base Rate Option is based upon
the Prime Rate; and (ii) 1.5% for the Loans bearing interest at the LIBOR
Option; and (iii) 1.5% for the Loans bearing interest at the Base Rate Option if
the Base Rate Option is based on the Fed Funds Rate.
(b) Interest Periods. At any time that the Borrowers shall
select the LIBOR Rate Option to apply to any Loans, the Borrowers shall specify
an Interest Period during which each such Option shall apply.
(c) Transactional Amounts. Every selection of, conversion
---------------------
from, conversion to or renewal of an interest rate Option and every payment or
prepayment of any Loans shall be in a principal amount such that after giving
effect thereto the aggregate principal amount of the Base Rate Portion of the
Revolving Credit Loans, or the aggregate principal amount of each Funding
Segment of the LIBOR Rate Portion of the Revolving Credit Loans as the case may
be, shall be as set forth below:
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------------------------------------------------------ ---------------------------------------------------
Portion or Funding Segment Allowable Principal Amounts
-------------------------- ---------------------------
------------------------------------------------------ ---------------------------------------------------
Base Rate Portion No minimum amount.
------------------------------------------------------ ---------------------------------------------------
Each Funding Segment of a LIBOR Rate Portion $1,000,000 and $500,000 increments in excess
thereof.
------------------------------------------------------ ---------------------------------------------------
(d) Maximum Funding Segments. With respect to the LIBOR Rate
------------------------
Portion of the Revolving Credit Loans there shall be no more than six (6)
Funding Segments outstanding at any one time.
(e) Interest After Maturity. After the principal amount of any
-----------------------
Subset of the Base Rate Portion shall have become due (by acceleration or
otherwise), such Subset shall bear interest for each day until paid (before and
after judgment) at a rate per annum (based on a year of 365 or 366 days, as the
case may be) which shall be two percent (2.0%) above the rate otherwise
applicable to such Subset, such interest rate to change automatically from time
to time effective as of the effective date of each change in the Base Rate.
After the principal amount of any Subset of the LIBOR Rate Portion shall have
become due (by acceleration or otherwise), such Subset shall bear interest for
each day until paid (before and after judgment) at a rate per annum two percent
(2.0%) above the rate otherwise applicable to such Subset until the end of the
applicable then current Interest Period and thereafter at a per annum rate two
percent (2.0%) above the Base Rate Option rate. Letter of Credit Unreimbursed
Draws shall bear interest for each day until paid (before and after judgment) at
a rate per annum two percent (2.0%) above the Base Rate Option rate.
(f) LIBOR Lending Rate or Fed Funds Rate Unascertainable;
-----------------------------------------------------
Impracticability. If
----------------
(i) on any date on which a LIBOR Lending Rate or Fed
Funds Rate would otherwise be set the Bank shall have in good
faith determined (which determination shall be conclusive)
that:
(A) adequate and reasonable means do not
exist for ascertaining such LIBOR Lending Rate or Fed
Funds Rate, as the case may be, or
(B) U.S. Dollar deposits in the relevant
amount and for the relevant Interest Period are not
available to a Bank in the London interbank market,
or
(C) a contingency has occurred which
materially and adversely affects the London interbank
market, or
(D) the effective cost to the Bank of
funding a proposed Funding Segment of any LIBOR Rate
Portion from a Corresponding Source of Funds shall
exceed the LIBOR Lending Rate applicable to such
Funding Segment, or
(ii) at any time the Bank shall have determined in
good faith (which determination shall be conclusive) that the
making, maintenance or funding of the LIBOR Rate Portion or
any Fed Funds Rate Loan has been made impracticable or
unlawful by compliance by the Bank or a Notional LIBOR Rate
Funding Office, as the case may be, in good faith with any Law
or guideline or interpretation or administration thereof by
any Official Body charged with the interpretation or
administration thereof or with any request or directive of any
such Official Body (whether or not having the force of law);
-15-
then, and in any such event, the Bank may notify the Borrowers of such
determination. Upon such date as shall be specified in any such notice (which
shall not be earlier than the date such notice is given) the obligation of the
Bank to allow the Borrowers to select the LIBOR Rate Option or a Base Rate
Option based upon the Fed Funds Rate shall be suspended until the Bank later
shall have notified the Borrowers of its determination in good faith (which
determination shall be conclusive) that the circumstances giving rise to such
previous determination no longer exist. If the Bank shall notify the Borrowers
of a determination under subsection (ii) of this Section 2.02(f), the Borrowers
shall, as to such Loan, on the date specified in such notice, either prepay such
part in accordance with Section 2.03 or convert such Loan to the Base Rate
Option.
If at the time the Bank makes a determination under subsection
(i) or (ii) of this Section 2.02(f), the Borrowers previously have notified the
Bank that they wish to select the LIBOR Rate Option but such Option has not yet
gone into effect, such notification shall be deemed to provide for selection of
the Base Rate Option instead of the LIBOR Rate Option, with respect to such
Loan.
2.03. Payments and Prepayments.
-------------------------------
(a) Subject to the provisions of Section 2.07(b) hereof, the
Borrowers shall have the right at their option at any time or from time to time
to prepay the Loans in whole or part without premium or penalty:
(i) at any time with respect to any Base Rate
Portion,
(ii) at the expiration of any Interest Period with
respect to prepayment of the LIBOR Rate Portion, as the case
may be, with respect to any part of the Funding Segment
corresponding to such expiring Interest Period, or
(iii) on the date specified in a notice by the Bank
pursuant to Section 2.02(f) with respect to any Subset of the
LIBOR Rate Portion.
(b) Whenever the Borrowers desire to prepay any part of any
Loan, they shall provide Standard Notice to the Bank (in the form attached
hereto as Exhibit C) setting forth the following information:
(i) The date, which shall be a Business Day, on which
the proposed prepayment is to be made;
(ii) The principal amounts selected in accordance
with Section 2.02(c) of the Base Rate Portion and each Subset
of the LIBOR Rate Portion to which such payment is to apply;
and
(iii) The total principal amount of such prepayment,
selected in accordance with Section 2.02(c), which shall be
the sum of the principal amounts of the Portions to be
prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice the principal amounts of the Base Rate Portion and each Subset of the
LIBOR Rate Portion specified in such notice shall be due and payable.
2.04. Conversion or Renewal of Interest Rate Options; Base
-----------------------------------------------------------
Rate Fallback.
-------------
(a) Subject to the provisions of Section 2.07(b), if no Event
of Default or Potential Default shall have occurred and be continuing or shall
exist, the Borrowers may convert any Subset of the Loans from any interest rate
-16-
Option or options to a different interest rate Option and may renew the LIBOR
Rate Option if such Option is offered at such time as to any Subset:
(i) at any time with respect to conversion from the
Base Rate Option,
(ii) at the expiration of any Interest Period with
respect to conversions from or renewals of the LIBOR Rate
Option, as to the Funding Segment corresponding to such
expiring Interest Period, or
(iii) on the date specified in a notice by the Bank
pursuant to Section 2.02(f) with respect to conversions from
the LIBOR Rate Option;
provided, however, with respect to the conversion of any Subset of the Loans to
the LIBOR Rate Option, by delivering a continuation/conversion notice to the
Bank on or before 10:00 a.m., New York time, on a Business Day, the Borrowers
may from time to time irrevocably elect, on not less than two nor more than five
Business Days' notice, that all, or any portion in an aggregate minimum amount
of $1,000,000 and integral multiples of $500,000, of any Loan be converted: (i)
with respect to Loans bearing interest at the LIBOR Rate Option, on the last day
of an Interest Period into a LIBOR Rate Loan with a different Interest Period,
or continued on the last day of an Interest Period as a LIBOR Rate Loan with a
similar Interest Period; and (ii) with respect to Loans bearing interest at the
Base Rate Option, at any time, provided further, however, that no portion of the
---------------- -------
outstanding principal amount of any Loan may be converted to, or continued as,
LIBOR Rate Loans when any Potential Default or Event of Default has occurred and
is continuing as, and no portion of the outstanding principal amount of any
LIBOR Rate Loans may be converted to LIBOR Rate Loans of a different duration if
such LIBOR Rate Loans relate to any Hedging Obligations.
(b) Whenever the Borrowers desire to convert or renew any
interest rate Option or options the Borrowers shall provide to the Bank Standard
Notice (in the form attached hereto as Exhibit D) setting forth the following
information:
(i) The date, which shall be a Business Day, on which
the proposed conversion or renewal is to be made;
(ii) The interest rate Option or options selected in
accordance with Section 2.02(a) and the principal amounts
selected in accordance with Section 2.02(c) and (d) of the
Base Rate Portion and each Funding Segment of the LIBOR Rate
Portion, as the case may be, to be converted to;
(iii) The Interest Period for each Funding Segment of
each Subset of Loans selected in accordance with Section
2.02(b); and
(iv) The principal amounts selected in accordance
with Section 2.02(c) and (d) of the Base Rate Portion and each
Funding Segment of the LIBOR Rate Portion, as the case may be,
to be converted from or renewed.
Standard Notice having been so provided, on the date specified in such Standard
Notice interest shall be calculated upon the principal amount of the Portions as
so converted or renewed.
(c) After expiration of any Interest Period, the principal
amount of any Loan corresponding to such Interest Period which has not been
converted or renewed in accordance with Section 2.04(a) and (b) shall earn
interest automatically at the Base Rate Option from the date of expiration of
such Interest Period until paid in full, unless and until the Borrowers request
and the Bank approves a conversion to the LIBOR Rate Option, in accordance
herewith.
-17-
2.05. Interest Payment Dates. Interest on the Base Rate
----------------------------
Portion of each Loan shall be due and payable on the last day of each month,
commencing on the last day of the first full calendar month following the
Closing Date. Interest on the LIBOR Rate Portion of each Loan shall be due and
payable on the Interest Payment Date. After maturity of any Subset of Loans (by
acceleration or otherwise) interest on such Subset shall be due and payable on
demand.
2.06. Payments. All payments and prepayments to be made in
--------------
respect of principal, interest, fees or other amounts due from the Borrowers
hereunder or under any Note shall be payable at 12:00 o'clock Noon, Philadelphia
time, on the day when due without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, and an action therefor shall
immediately accrue. Such payments shall be made to the Bank at its Office in
Dollars in funds immediately available at such Office without setoff,
counterclaim or other deduction of any nature. To the extent permitted by law,
after there shall have become due (by acceleration or otherwise) interest, fees
or any other amounts due from the Borrowers hereunder or under the Notes
(excluding overdue principal, which shall bear interest as described in Section
2.02(e), but including interest payable under this Section 2.06), such amounts
shall bear interest for each day until paid (before and after judgment), payable
on demand, at a rate per annum (based on a year of 365 or 366 days, as the case
may be) 2% above the then current Base Rate Option rate (in which case, the Bank
shall determine whether the Base Rate is based upon the Prime Rate or the Fed
Funds Rate), such interest rate to change automatically from time to time
effective as of the effective date of each change in the Prime Rate or the Fed
Funds Rate, as applicable.
2.07. Additional Compensation in Certain Circumstances.
-------------------------------------------------------
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or not having the force of law) now
existing or hereafter adopted:
(i) subjects the Bank or any Notional LIBOR Rate
Funding Office to any tax, duty or other charge or changes the
basis of taxation with respect to this Agreement, the Notes,
the Loans or payments by the Borrowers of principal, interest,
fees or other amounts due from the Borrowers hereunder or
under the Notes (except for taxes on the overall net income of
the Bank or such Notional LIBOR Rate Funding Office imposed by
the jurisdiction in which the Bank's principal office or
Notional LIBOR Rate Funding Office is located),
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against
credits (funded or contingent) of, assets of, deposits with or
for the account of, or other acquisition of funds by, the Bank
or any Notional LIBOR Rate Funding Office (other than
requirements expressly included herein in the determination of
the LIBOR Lending Rate hereunder),
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets
(funded or contingent) of, or credits or commitments to extend
credit extended by, the Bank or any Notional LIBOR Rate
Funding Office, or (B) otherwise applicable to the obligations
of the Bank or any Notional LIBOR Rate Funding Office under
this Agreement, or
(iv) imposes upon the Bank or any Notional LIBOR Rate
Funding Office any other condition or expense with respect to
this Agreement, the Notes or its making, maintenance or
funding of any part of the Loans or any security therefor,
-18-
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon the
Bank or any Notional LIBOR Rate Funding Office with respect to this Agreement,
the Notes or the making, maintenance or funding of any part of any Loan (or, in
the case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on the Bank's capital, taking into consideration the
Bank's policies with respect to capital adequacy) by an amount which the Bank
deems to be material (the Bank being deemed for this purpose to have made,
maintained or funded each Funding Segment of each LIBOR Rate Portion from a
Corresponding Source of Funds), the Bank shall from time to time notify the
Borrowers of the amount determined in good faith (using any averaging and
attribution methods) by the Bank (which determination shall be conclusive) to be
necessary to compensate the Bank or such Notional LIBOR Rate Funding office for
such increase, reduction or imposition. Such amount shall be due and payable by
the Borrowers to the Bank three (3) Business Days after such notice is given by
the Bank to the Borrowers.
If any change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority affects or would affect
the amount of capital required or expected to be maintained by the Bank, or
person controlling the Bank, and the Bank determines (in its sole and absolute
discretion) that the rate of return on its or such controlling person's capital
as a consequence of its commitments or the loans made by the Bank is reduced to
a level below that which the Bank or such controlling person could have achieved
but for the occurrence of any such circumstance, then, in any such case upon
notice from time to time by the Bank to the Borrowers, the Borrowers shall
immediately pay directly to the Bank additional amounts sufficient to compensate
the Bank or such controlling person for such reduction in rate of return. A
statement of the Bank as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on the Borrowers. In determining such amount,
the Bank may use any method of averaging and attribution that it (in its sole
and absolute discretion) shall deem applicable.
(b) Indemnity. In addition to the compensation required by
---------
subsection (a) of this Section 2.07, the Borrowers shall indemnify the Bank
against any loss or expense (including loss of margin) which the Bank has
sustained or incurred as a consequence of any:
(i) payment, prepayment or conversion of any part of
any Funding Segment of the LIBOR Rate Portion on a day other
than the last day of the corresponding Interest Period
(whether or not such payment, prepayment or conversion is
mandatory or automatic and whether or not such payment or
prepayment is then due),
(ii) attempt by the Borrowers to revoke (expressly,
by later inconsistent notices or otherwise) in whole or part
any notice stated herein to be irrevocable (the Bank having in
its sole discretion the options (A) to give effect to such
attempted revocation and obtain indemnity under this Section
2.07(b) or (B) to treat such attempted revocation as having no
force or effect, as if never made), or
(iii) default by the Borrowers in the performance or
observance of any covenant or condition contained in this
Agreement, the Notes or the Loan Documents, including, without
limitation, any failure of the Borrowers to pay when due (by
acceleration or otherwise) any principal, interest, fee or any
other amount due hereunder or under any Note or the Loan
Documents.
If the Bank sustains or incurs any such loss or expense it shall from time to
time notify the Borrowers of the amount determined in good faith by the Bank
(which determination shall be conclusive) to be necessary to indemnify the Bank
for such loss or expense (the Bank being deemed for this purpose to have made,
maintained or funded each Funding Segment of the LIBOR Rate Portion from a
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Corresponding Source of Funds). Such amount shall be due and payable by the
Borrowers to the Bank three (3) Business Days after such notice is given.
The Borrowers shall give the Bank no later than 10:00 a.m., New York City time,
at least four (4) Business Days notice of any proposed prepayment of any LIBOR
Rate Loans, specifying the proposed date of payment of such LIBOR Rate Loans,
and the principal amount to be paid. Each partial prepayment of the principal
amount of LIBOR Rate Loans shall be in an integral multiple of $500,000 and
accompanied by the payment of all charges outstanding on such LIBOR Rate Loans
and of all accrued interest on the principal repaid to the date of payment.
Borrowers acknowledge that prepayment or acceleration of a LIBOR Rate Loan
during an Interest Period shall result in the Bank incurring additional costs,
expenses and/or liabilities and that it is extremely difficult and impractical
to ascertain the extent of such costs, expenses and/or liabilities. Therefore,
and without intending to limit the generality of any other provisions contained
herein, all full or partial prepayments of LIBOR Rate Loans shall be accompanied
by, and the Borrowers hereby promise to pay, on each date a LIBOR Rate Loan is
prepaid or the date all sums payable hereunder become due and payable, by
acceleration or otherwise, in addition to all other sums then owing, an amount
("LIBOR Rate Loan Prepayment Fee") determined by the Bank pursuant to the
following formula:
(1) the then current rate for United States Treasury securities (bills on a
discounted basis shall be converted to a bond equivalent) with a maturity date
closest to the end of the Interest Period as to which prepayment is made,
subtracted from
---------------
(2) the LIBOR Lending Rate plus the Applicable Margin applicable to the LIBOR
Rate Loan being prepaid.
If the result of this calculation is zero or a negative number, then there shall
be no LIBOR Rate Loan Prepayment Fee. If the result of this calculation is a
positive number, then the resulting percentage shall be multiplied by:
(3) the amount of the LIBOR Rate Loan being prepaid.
The resulting amount shall be divided by:
(4) 360
and multiplied by:
(5) the number of days remaining in the Interest Period as to which the
prepayment is being made.
Said amount shall be reduced to present value calculated by using the referenced
United States Treasury securities rate and the number of days remaining on the
Interest Period for the LIBOR Rate Loan being prepaid.
The resulting amount of these calculations shall be the LIBOR Rate Loan
Prepayment Fee. For LIBOR Rate Loans in connection with which the Borrowers have
or may incur Hedging Obligations, additional obligations may be associated with
prepayment, in accordance with the terms and conditions of the applicable
Hedging Contracts.
In addition to the LIBOR Rate Loan Prepayment Fee, the Borrowers agree to
reimburse the Bank (without duplication) for any increase in the cost of the
Bank, or reduction in the amount of any sum receivable by the Bank, in respect,
or as a result of:
-20-
(A) any conversation or repayment or prepayment of the principal amount
of any LIBOR Rate Loans on a date other than the scheduled last day of
the Interest Period applicable thereto, whether pursuant to Section
-------
2.04 or otherwise;
----
(B) any loans not being made as LIBOR Rate Loans in accordance with the
borrowing request thereof;
(C) any LIBOR Rate Loans not being continued as, or converted into,
LIBOR Rate Loans in accordance with the continuation/conversion notice
thereof; or
(D) any costs associate with marking to market any Hedging Obligations
that (in the reasonable determination of the Bank) are required to be
terminated as a result of any conversion, repayment or prepayment of
the principal amount of any LIBOR Rate Loan on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 2.04 or otherwise.
------------
The Bank shall promptly notify the Borrowers in writing of the occurrence of any
such event, such notice to state, in reasonable detail, the reasons therefor and
the additional amount required fully to compensate the Bank for such increased
cost or reduced amount. Such additional amounts shall be payable by the
Borrowers to the Bank within five days of its receipt of such notice, and such
notice shall, in the absence of manifest error, be conclusive and binding on the
Borrowers. The Borrowers understand, agree and acknowledge the following: (i)
the Bank does not have any obligation to purchase, sell and/or match funds in
connection with the use of LIBOR Rate as a basis for calculating the rate of
interest on a LIBOR Rate Loan, (ii) the LIBOR Rate may be used merely as a
reference in determining such rate, and (iii) the Borrowers have accepted the
LIBOR Rate as a reasonable and fair basis for calculating such rate, the LIBOR
Rate Prepayment Fee, and other funding losses incurred by the Bank. Borrowers
further agree to pay the LIBOR Rate Prepayment Fee and other funding losses, if
any, whether or not the Bank elects to purchase, sell and/or match funds.
2.08. Funding by Branch, Subsidiary or Affiliate.
-------------------------------------------------
(a) Notional Funding. The Bank shall have the right from time
----------------
to time, prospectively or retrospectively, without notice to the Borrowers, to
deem any branch, subsidiary or affiliate of the Bank to have made, maintained or
funded any LIBOR Rate Portion at any time, provided, however, that the Bank
shall not have such right if such transfer would cause an event or condition
described in Section 2.02(f)(ii) or increase the compensation payable by the
Borrowers pursuant to Section 2.07(a). Any branch, subsidiary or affiliate so
deemed shall be known as a "Notional LIBOR Rate Funding Office." The Bank shall
deem any part of the LIBOR Rate Portion of its Loans or the funding therefor to
have been transferred to a different Notional LIBOR Rate Funding Office if such
transfer would avoid or cure an event or condition described in Section
2.02(f)(ii) or would lessen compensation payable by the Borrowers under Section
2.07(a), and if the Bank determines in its sole discretion that such transfer
would be practicable and would not have a material adverse effect on such part
of its Loans, the Bank or any Notional LIBOR Rate Funding Office (it being
assumed for purposes of such determination that each part of the LIBOR Rate
Portion is actually made or maintained by or funded through the corresponding
Notional LIBOR Rate Funding Office). Notional LIBOR Rate Funding Offices may be
selected by the Bank without regard to the Bank's actual methods of making,
maintaining or funding its Loans or any sources of funding actually used by or
available to the Bank.
(b) Actual Funding. The Bank shall have the right from time to
--------------
time to make or maintain any part of any LIBOR Rate Portion by arranging for a
branch, subsidiary or affiliate of the Bank to make or maintain such part of the
LIBOR Rate Portion of the Loans, provided, however, that the Bank shall not have
such right if such transfer would cause an event or condition described in
-21-
Section 2.02(f)(ii) or increase the compensation payable by the Borrowers
pursuant to Section 2.07(a). The Bank shall have the right to (i) hold any
applicable Note payable to its order for the benefit and account of such branch,
subsidiary or affiliate or (ii) request the Borrowers to issue one or more
promissory notes in the principal amount of such part of the LIBOR Rate Portion,
in substantially the form attached hereto as Exhibit A, with the blanks
appropriately filled payable to such branch, subsidiary or affiliate and with
appropriate changes reflecting that the holder thereof is not obligated to make
any additional Loans. The Borrowers agree to comply promptly with any request
under subsection (ii) of this Section 2.08(b). If the Bank causes a branch,
subsidiary or affiliate to make or maintain any part of any Loan hereunder, all
terms and conditions of this Agreement shall, except where the context clearly
requires otherwise, be applicable to such Loans and to any note payable to the
order of such branch, subsidiary or affiliate to the same extent as if such part
of such LIBOR Rate Portion were made or maintained and such note were a
Revolving Credit Note payable to the Bank's order.
2.09. Taxes. All payments by the Borrowers of principal of,
-----------
and interest on, the LIBOR Rate Loans and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by the
Bank's net income or receipts (such non-excluded items being called "Taxes"). In
the event that any withholding or deduction from any payment to be made by the
Borrowers hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrowers will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment to such
authority; and
(c) pay to the Bank such additional amount or amounts as is
necessary to ensure that the net amount actually received by the Bank
will equal the full amount the Bank would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Bank with respect to
any payment received by the Bank hereunder, the Bank may pay such Taxes and the
Borrowers will promptly pay such additional amount (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
the Bank after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount the Bank would have received had not such Taxes
been asserted.
If the Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fail to remit to the Bank the required receipts or other required
documentary evidence, the Borrowers shall indemnify the Bank for any incremental
Taxes, interest or penalties that may become payable by the Bank as a result of
any such failure.
2.10. Payments Under Loan Documents. Subject to amounts owing
-----------------------------------
pursuant to Section 2.09, any amount received by the Bank under any of the Loan
Documents which, shall be applied:
(a) first, to payment of all fees and expenses due to the Bank
hereunder or under the Loan Documents;
(b) second, to payment in full of interest on outstanding
Loans and Letter of Credit Reimbursement Obligations commencing with
the interest accruing at the lowest rate;
-22-
(c) third, to payment in full of principal of all outstanding
Loans and to make deposits to the Letter of Credit Collateral Account
commencing with the principal earning interest at the lowest rate;
(d) fourth, to payment in full of any and all other amounts
due hereunder or under the Notes or the Loan Documents in respect of
the Loans, the Letter of Credit Reimbursement Obligations or the
Commitments or otherwise; and
(e) fifth, to the Borrowers or their order or as otherwise
required by law.
Article III
-----------
The Letters of Credit
---------------------
3.01. Letter of Credit Subfacility.
-----------------------------------
(a) General. Subject to the terms and conditions of this
-------
Agreement, and relying upon the representations and warranties herein set forth
and upon the agreements of the Bank set forth in Sections 3.03, 3.04 and
3.08(c), the Bank agrees (such agreement being herein called the "Letter of
Credit Commitment") to issue for the account of the Borrowers letters of credit
(each, as amended, modified or supplemented from time to time, a "Letter of
Credit") at any time or from time to time on or after the date hereof. The
Borrowers shall not request any Letter of Credit to be issued except within the
following limitations: (i) no Letter of Credit shall be issued later than ninety
(90) days before the Revolving Credit Expiration Date, (ii) no Letter of Credit
shall be issued if an Event of Default or a Potential Default exists, (iii) at
the time any Letter of Credit is issued (and after giving effect to issuance of
the requested Letter of Credit), the aggregate Revolving Credit Exposure of the
Bank shall not exceed the Revolving Credit Committed Amount of the Bank, (iv) on
the date of issuance of any Letter of Credit (and after giving effect to such
issuance) the aggregate Letter of Credit Exposure shall not exceed the Letter of
Credit Limit; and (v) the Letter of Credit Expiration Date shall not extend
beyond the date which is one year from the issuance of such Letter of Credit.
(b) Terms of Letters of Credit. The Bank and Mellon Bank, N.A.
--------------------------
have previously issued the Workers' Compensation Letters of Credit. As of the
Closing Date, the Workers' Compensation Letters of Credit shall be deemed to be
Letters of Credit issued pursuant to the terms of this Article III for all
purposes including calculation of the Letter of Credit Limit. The Borrowers
shall not request any additional Letter of Credit to be issued except within the
following limitations: each Letter of Credit (i) shall have an expiration date
no later than the earlier of twelve (12) months after the date of issuance
thereof, (ii) shall be denominated in Dollars, and (iii) shall be payable only
against sight drafts (and not time drafts).
(c) Purposes of Letters of Credit. Each Letter of Credit shall
-----------------------------
be satisfactory in form and substance to the Bank. Each Letter of Credit shall
be a trade or standby letter of credit used to support trade or financial
obligations of the Borrowers. The provisions of this Section 3.01(c) represent
only an obligation of the Borrowers to the Bank.
(d) Letter of Credit Fee. On the date of issuance (and
--------------------
annually thereafter), the Borrowers shall pay to the Bank a fee (the "Letter of
Credit Fee") for each Letter of Credit equal to (i) the face amount of each
issued and outstanding Letter of Credit times (ii) 1.5%.
-----
(e) Administration Fees. The Borrowers shall pay to the Bank
-------------------
such other administration, maintenance, amendment, drawing and negotiation fees
as may be customarily charged by the Bank from time to time in connection with
letters of credit.
-23-
3.02 Procedure for Issuance and Amendment of Letters of
-------------------------------------------------------
Credit.
------
(a) Request for Issuance. The Borrowers may from time to time
--------------------
request, upon at least three (3) Business Days' notice, the Bank to issue a
Letter of Credit by (i) delivering to the Bank a written request to such effect,
specifying the date on which such Letter of Credit is to be issued, the
expiration date thereof, and the stated amount thereof, and (ii) delivering to
the Bank an application, in such form as the Bank may from time to time require
(each, a "Letter of Credit Application"), completed to the satisfaction of the
Bank, together with such other certificates, documents and other items as such
Bank may request. The Bank shall determine, as of the close of business on the
day before such proposed issuance, whether such proposed Letter of Credit
complies with the limitations set forth in Sections 3.01(a) and 3.01(b). If the
Bank issues a Letter of Credit, it shall deliver the original of such Letter of
Credit to the beneficiary thereof or as the Borrowers shall otherwise direct.
(b) Extension or Increase. The Borrowers may from time to time
---------------------
request the Bank to extend the expiration date of an outstanding Letter of
Credit issued by the Bank or to increase the Letter of Credit Undrawn
Availability of such Letter of Credit. Such extension or increase shall for all
purposes hereunder (including Sections 3.01, 3.02(a) and 5.02) be treated as
though the Borrowers had requested issuance of a replacement Letter of Credit;
provided, that the Bank may, if it elects, issue an amendment to the Letter of
Credit providing for such an extension or increase in lieu of issuing a new
Letter of Credit in substitution therefor.
(c) Limitations on Issuance, Extension and Amendment. As
------------------------------------------------
between the Borrowers, on the one hand, and the Bank, on the other hand, the
issuance or extension of any Letter of Credit (including any deemed issuance
arising from increase or extension of a Letter of Credit as provided in Section
3.02(b)) is subject to the applicable conditions precedent set forth or referred
to in this Article III and Articles V and VIII. In addition, the Bank shall be
justified and fully protected in declining to issue or extend any Letter of
Credit (including any deemed issuance) if the Bank determines that such
conditions precedent have not been satisfied.
(d) Amendments. The Borrowers may from time to time, upon at
----------
least three Business Days' notice, request the Bank to amend, modify or
supplement Letters of Credit. At the request of the Borrowers, and subject to
satisfaction of such conditions as the Bank may require, the Bank may amend,
modify or supplement Letters of Credit, or waive compliance with any condition
of issuance or payment, provided, that any such amendment, modification or
supplement that extends the expiration date or increases the Letter of Credit
Undrawn Availability of an outstanding Letter of Credit shall be subject to
Section 3.02(b).
3.03 Letter of Credit Drawings and Reimbursements. The
-------------------------------------------------
Borrowers hereby agree to reimburse the Bank, by making payment to the Bank for
the account of the Bank in accordance with Section 2.06, on the date and in the
amount of each payment made by the Bank under any Letter of Credit, upon notice
(which may be by telephone) by the Bank to the Borrowers of such payment,
without further notice, protest or demand, all of which are hereby waived, and
an action therefor shall thereupon immediately accrue. To the extent such
payment is not timely made, the Borrowers hereby agree to pay to the Bank, on
demand, interest on any Letter of Credit Unreimbursed Draws for each day from
and including the date of such payment by the Bank until reimbursed in full
(before and after judgment), in accordance with Section 2.02(e), at the rate per
annum set forth therein. Unless the Borrowers notify the Bank that the Borrowers
intend to make immediate payment to the Bank, in accordance with the preceding
sentence, a notice of drawing by a beneficiary under a Letter of Credit shall be
deemed to be a notice by the Borrowers for Revolving Credit Loans under the Base
Rate Option in an aggregate amount equal to the amount of such drawing.
3.04 Obligations Absolute. The payment obligations of the
-------------------------
Borrowers under Section 3.03(a) shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all
-24-
circumstances, including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of this Agreement,
any Letter of Credit, any other Loan Documents or any documents,
instruments or agreements evidencing or otherwise relating to any
obligation of the Borrowers secured or supported by any Letter of
Credit;
(b) the existence of any claim, set-off, defense or other
right which the Borrowers or any other Person may have at any time
against any beneficiary or transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or transferee may be acting), the
Bank, or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or any unrelated transaction;
(c) any draft, certificate, statement or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(d) payment by the Bank under any Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit, or payment by the Bank under the Letter
of Credit in any other circumstances in which conditions to payment are
not met, except any such payment resulting solely from the gross
negligence or willful misconduct of the Bank; or
(e) any other event, condition or circumstance whatever,
whether or not similar to any of the foregoing.
The Borrowers bear the risk of, and neither the Bank, any of its directors,
officers, employees or agents, shall be liable or responsible for the use which
may be made of any Letter of Credit, or acts or omissions of the beneficiary or
any transferee in connection therewith.
3.05 Further Assurances. The Borrowers hereby agree, from time
-----------------------
to time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Bank more fully to effect the purposes
of this Agreement and the issuance of the Letters of Credit hereunder. The
representations, warranties and covenants by the Borrowers under, and rights and
remedies of the Bank under, any Letter of Credit Application relating to any
Letter of Credit are in addition to, and not in limitation or derogation of,
representations, warranties and covenants by the Borrowers under, and rights and
remedies of the Bank under, this Agreement, the other Loan Documents, and
applicable Law. In the event of any inconsistency between the terms of this
Agreement and any Letter of Credit Application, this Agreement shall prevail.
The terms of this Agreement shall be deemed to be incorporated by reference into
each such agreement or instrument (whether or not such agreement or instrument
so states).
3.06 Cash Collateral for Letters of Credit. To the extent that
------------------------------------------
any provision of this Agreement or any other Loan Document requires a payment,
prepayment or other application of funds to be made with respect to the
Revolving Credit Loans, such provision shall be applied as follows: after
payment in full of the outstanding Revolving Credit Loans (whether or not such
payment would require the Borrowers to pay any amount under Section 2.07(b)),
and the payment in full of all outstanding Letter of Credit Unreimbursed Draws,
then, to the extent of the excess, if any, of the aggregate Letter of Credit
Exposure at such time over the balance in any Letter of Credit Collateral
Account (as hereinafter defined), an amount equal to the remainder of the amount
so required to be paid by the Borrowers shall immediately be paid by the
Borrowers to the Bank for deposit in an account (the "Letter of Credit
Collateral Account") to be held as collateral for the Borrowers' Letter of
Credit Reimbursement Obligation. In addition, the Borrowers agree that, without
-25-
limitation of the foregoing or of any other provisions of this Agreement or Loan
Documents requiring collateral for the Letters of Credit or other Loans in whole
or in part, and without limitation of other rights and remedies under this
Agreement or the Loan Documents or at law or in equity, if the Revolving Credit
Loans become due and payable pursuant to Article VIII or upon the Revolving
Credit Expiration Date, the Borrowers shall immediately pay to the Bank, for
deposit in the Letter of Credit Collateral Account, an amount equal to the
excess, if any, of the aggregate Letter of Credit Exposure at such time over the
balance in the Letter of Credit Collateral Account. The Bank shall apply funds
in the Letter of Credit Collateral Account to payment of Letter of Credit
Reimbursement Obligations constituting Letter of Credit Unreimbursed Draws, as
and when the same become due and payable if and to the extent the Borrowers fail
to pay the same.
Article IV
----------
Representations And Warranties
------------------------------
The Borrowers hereby represent and warrant to the Bank as
follows:
4.01. Organization and Qualification. Each Borrower and each
------------------------------------
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each Borrower and
each Subsidiary is duly qualified to do business as a foreign corporation and is
in good standing in all jurisdictions in which the ownership of its properties
or the nature of its activities or both makes such qualification necessary,
except to the extent that failure to be so qualified would not reasonably be
expected to have a material adverse effect on the business, operations,
condition, financial or otherwise, or prospects of each Borrower and each
Subsidiary or on the ability of each Borrower and each Subsidiary to perform its
obligations under this Agreement, the Notes or the Loan Documents. Schedule 4.01
states as of the date hereof the jurisdiction of incorporation of each Borrower
and each Subsidiary and the jurisdictions in which each Borrower and each
Guarantor is qualified to do business as a foreign corporation.
4.02. Authority and Authorization. Each Borrower and each
---------------------------------
Subsidiary has corporate power and authority to execute and deliver this
Agreement, the Notes and the Loan Documents to which it is a party, to make the
borrowings and incur the other obligations provided for herein and to perform
its obligations hereunder and under the Notes and the Loan Documents, and all
such action has been duly and validly authorized by all necessary corporate
proceedings on its part.
4.03. Execution and Binding Effect. This Agreement, the Notes
----------------------------------
and the Loan Documents to which each Borrower and each Subsidiary is a party
have been duly and validly executed and delivered by each Borrower and each
Subsidiary and constitute legal, valid and binding obligations of each Borrower
and each Subsidiary enforceable in accordance with the terms hereof and thereof
except, in each case, as enforceability may be limited by bankruptcy, insolvency
or other similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity limiting the availability
of equitable remedies.
4.04. Authorizations and Filings. No authorization, consent,
--------------------------------
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in connection with the execution and delivery of
this Agreement, the Notes or any Loan Document, consummation of the transactions
herein or therein contemplated, performance of or compliance with the terms and
conditions hereof or thereof or to ensure the legality, validity, enforceability
and admissibility in evidence hereof or thereof, except as set forth on Schedule
4.04. True, correct and complete copies of all instruments and documents
evidencing each authorization, consent, approval, license, exemption or other
action by, or registration, qualification, designation, declaration or filing
with, any Official Body, referred to on Schedule 4.04, together with true,
correct and complete copies of all applications therefor and exhibits thereto
have been delivered to the Bank. Each authorization, consent, approval, license,
exemption or other action by, or registration, qualification, designation,
-26-
declaration or filing with, any Official Body, referred to on Schedule 4.04, has
been duly obtained, has not been modified or amended and is in full force and
effect, and there is no proceeding pending or, to the Borrowers' knowledge after
due inquiry, threatened, which seeks or may result in the reversal, rescission,
termination, modification of any thereof.
4.05. Absence of Conflicts. Neither the execution and delivery
--------------------------
of this Agreement, the Notes or any Loan Document nor consummation of the
transactions herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof by the Borrowers or their
Subsidiaries will:
(a) violate any Law;
(b) conflict with or result in a breach of or a default under
(i) the articles of incorporation or by-laws of the Borrowers or their
Subsidiaries or (ii) any agreement or instrument to which a Borrower or a
Subsidiary is a party or by which it or any of its properties (now owned or
hereafter acquired) may be subject or bound the consequences of which would
reasonably be expected to be material to the business, operations, condition,
financial or otherwise, or prospects of a Borrower or a Subsidiary or to the
ability of a Borrower or a Subsidiary to perform its obligations under this
Agreement, the Notes or any Loan Document; or
(c) result in the creation or imposition of any Lien upon any
property (now owned or hereafter acquired) of the Borrowers or their
Subsidiaries.
Schedule 4.05 sets forth each consent, waiver, amendment or agreement which has
been obtained by or on behalf of the Borrowers or their Subsidiaries in respect
of any matter which would, absent such consent, waiver, amendment or agreement,
be within the scope of the foregoing Subsection 4.05(b)(ii).
4.06. Financial Statements. The Borrowers have heretofore
--------------------------
furnished to the Bank balance sheets of the Borrowers and their Subsidiaries for
each of the fiscal year ended June 29, 2001 and related statements of income,
retained earnings and cash flow, and has also furnished to the Bank parallel
interim financial statements or financial statements for and as of the end of
the first fiscal quarter of the fiscal year ending June 28, 2002. Such financial
statements (including the notes thereto) present fairly the financial condition
of the Borrowers and their Subsidiaries as of the end of such fiscal years and
as of the end of such fiscal quarters and the results of their operations for
the fiscal years and fiscal quarters then ended, all in conformity with GAAP,
subject (in the case of the interim financial statements) to year-end audit
adjustments. To the Borrowers' knowledge after due inquiry, except as disclosed
in the financial statements referred to in this Section 4.06 or as disclosed in
Schedule 4.06, neither the Borrowers nor their Subsidiaries have material
contingent liabilities (including liabilities for taxes), unusual forward or
long-term commitments or unrealized or anticipated material losses from
unfavorable commitments.
4.07. No Event of Default; Compliance with Instruments. No
------------------------------------------------------
event has occurred and is continuing and no condition exists which constitutes
an Event of Default or Potential Default. Neither the Borrowers nor any
Subsidiary is in violation of any term of (i) any charter instrument or bylaw or
(ii) agreement or instrument to which it is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or bound the
consequences of which would reasonably be expected to be material to the
business, operations, condition, financial or otherwise, or prospects of any
Borrower or any of its Subsidiaries or on the ability of any Borrower or any of
its Subsidiaries to perform its obligations under this Agreement, the Notes or
any Loan Document.
4.08. Litigation. Except as set forth on Schedule 4.08, as of
----------------
the date hereof there is no pending or, to the Borrowers' knowledge after due
inquiry, threatened proceeding by or before any Official Body against or
affecting the Borrowers or any Subsidiary (including, without limitation, any
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proceeding seeking to challenge, prevent or declare illegal any of the
transactions contemplated by this Agreement, the Notes or any Loan Document).
None of the matters set forth on Schedule 4.08, if adversely decided, would
reasonably be expected to have a material adverse effect on the business,
operations, condition, financial or otherwise, or prospects of the Borrowers or
any Subsidiary or on the ability of the Borrowers or any Subsidiary to perform
their obligations under the Agreement, the Notes or any Loan Document.
4.09. Subsidiaries. Schedule 4.09 states as of the date hereof
------------------
the authorized capitalization of each Subsidiary of the Borrowers, the number of
shares of each class of capital stock issued and outstanding of each such
Subsidiary, and the number and percentage of outstanding shares of each such
class of capital stock owned by the Borrowers and by each Subsidiary. The
outstanding shares of each Subsidiary of the Borrowers have been duly authorized
and validly issued and are fully paid and nonassessable. The Borrowers and each
Subsidiary of the Borrowers owns beneficially and of record and has good title
to all of the shares it is listed as owning in such Schedule 4.09, free and
clear of any Lien. There are no options, warrants, calls, subscriptions,
conversion rights, exchange rights, preemptive rights or other rights,
agreements or arrangements (contingent or otherwise) which may in any
circumstances now or hereafter obligate any Subsidiary to issue any shares of
its capital stock.
4.10. Pension-Related Matters. A copy of the most recent
-----------------------------
Annual Report (5500 Series Form) including all attachments thereto as filed with
the Internal Revenue Service for each Plan has been made available to the Bank
and fairly presents the funding status of each Plan as of the date hereof. There
has been no deterioration in any Plan's funding status since the date of such
Annual Report. Schedule 4.10 sets forth as of the date hereof a list of all
Plans and Multiemployer Plans and all available information with respect to the
Borrowers' or any Controlled Group Member's direct, indirect or potential
withdrawal liability to any Multiemployer Plan. Except as set forth on Schedule
4.10, the Borrowers have no material liability (contingent or otherwise) for,
and none of the Borrowers' respective assets are encumbered in connection with,
(i) the minimum funding requirements under ERISA or the Code with respect to a
Plan (including, without limitation, joint and several liability with a
Controlled Group Member for the minimum funding requirement and the excise tax
for failure to meet such requirement, any lien for contributions with respect to
a Plan which are due and unpaid by any Borrower or a Controlled Group Member,
and any security posted by any Borrower to obtain a waiver of the minimum
funding requirement), (ii) any amendment to a Plan, (iii) any PBGC premiums with
respect to a Plan which are due and unpaid by any Borrower or a Controlled Group
Member, or (iv) the termination of a Plan or withdrawal by any Borrower or a
Controlled Group Member from any Multiemployer Plan. The PBGC premiums and
contributions required to meet the minimum funding requirements of ERISA and the
Code for all Plans have not exceeded $500,000 on an annual basis for any of the
past three fiscal years. The amount of unfunded benefit liabilities (as defined
in Section 4001(a)(18) of ERISA), as determined by the Plan's actuary, for any
Plan do not exceed $1,000,000 and for all Plans do not exceed $1,500,000 as of
the end of the most recent Plan year.
4.11. Title to Property. Schedule 4.11 sets forth a summary
-----------------------
description of all real property owned by or leased (if such lease is a material
lease) to a Borrower or any Subsidiary. Each Borrower and Subsidiary has good
and marketable title in fee simple to all real property purported to be owned by
it and good and marketable title to all other property purported to be owned by
it, including that reflected in the most recent audited balance sheets referred
to in Section 4.06 or submitted pursuant to Section 6.01(a) (except as sold or
otherwise disposed of in the ordinary course of business), subject only to
Permitted Liens. Such property as is material to the business, operations,
condition, financial or otherwise, or prospects of any Borrower or any of its
Subsidiaries or to the ability of any Borrower or any of its Subsidiaries to
perform its obligations under this Agreement, the Notes or any Loan Document is
in good operating condition and repair, ordinary wear and tear alone excepted,
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and the Borrowers' or Subsidiaries' use thereof conforms, in all material
respects, to all Laws applicable thereto. Each Borrower and Subsidiary has full
and complete right to use and possession of all properties purported to be
leased by it. Each Borrower and Subsidiary is in compliance, in all material
respects, with all leases applicable thereto.
4.12. Contracts. Except as set forth in Schedule 4.12, as of
---------------
the date hereof neither Borrower nor any Subsidiary is a party to or subject to
any agreement or instrument of any kind (including, but not limited to,
agreements to repay borrowed money, guarantees, leases of real or personal
property as lessor or lessee, contracts for future purchase or delivery of goods
or rendering of services, powers of attorney, distribution arrangements, patent
license agreements, collective bargaining agreements, employment agreements,
bonus, pension or retirement plans, or vacation pay, insurance or welfare
agreements) other than purchase and sale agreements entered into by the
Borrowers or their Subsidiaries in the ordinary course of business or agreements
or instruments which are terminable at will by the Borrowers or their
Subsidiaries without penalty or which are not, singly or in the aggregate,
material to the business, operations, condition, financial or otherwise, or
prospects of the Borrowers or their Subsidiaries or to the ability of the
Borrowers or their Subsidiaries to perform their respective obligations under
this Agreement, the Notes or any Loan Document. The Borrowers and their
Subsidiaries are and, to the Borrowers' knowledge after due inquiry, all other
parties to all agreements and instruments set forth on Schedule 4.12 are in
substantial compliance with the terms thereof. The Borrowers and their
Subsidiaries are not and, to the Borrowers' knowledge after due inquiry, no
other party to any agreement or instrument set forth on Schedule 4.12 is in
default thereunder, and (to the Borrowers' knowledge after due inquiry in the
case of any party other than itself) no event has occurred which, but for the
giving of notice or the passage of time or both, would constitute such a
default, which default, in any case, would reasonably be expected to be material
and adverse to the business, operations, condition, financial or otherwise, or
prospects of the Borrowers or their Subsidiaries or to the ability of the
Borrowers or their Subsidiaries to perform their respective obligations under
this Agreement, the Notes or any Loan Document.
4.13. Taxes. All tax returns required to be filed by the
-----------
Borrowers have been properly prepared, executed and filed. All taxes,
assessments, fees and other governmental charges upon the Borrowers and their
Subsidiaries or upon any of their respective properties, incomes, sales or
franchises which are due and payable have been paid, except for any nonpayment
permitted by Section 6.05. The reserves and provisions for taxes on the books of
the Borrowers and their consolidated Subsidiaries are adequate for all open
years and for the current fiscal period. The Borrowers know of no proposed
additional assessment or basis for any material assessment for additional taxes
(whether or not reserved against). The federal income tax liabilities of the
Borrowers and their consolidated Subsidiaries have been finally determined by
the Internal Revenue Service, or the time for audit has expired, for all fiscal
periods ending on or prior to June 30, 2000 and all such liabilities (including
all deficiencies assessed following audit) have been satisfied.
4.14. Financial Accounting Practices. Each Borrower and
------------------------------------
Subsidiary (a) makes and keeps books, records and accounts which, in reasonable
detail, accurately and fairly reflect its material transactions and the
dispositions of its material assets, and (b) maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
material transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary (A) to
permit preparation of financial statements in conformity with GAAP and (B) to
maintain accountability for material assets, (iii) access to material assets is
permitted only in accordance with management's general or specific authorization
and (iv) the recorded accountability for assets is compared with the existing
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assets at reasonable intervals and appropriate action is taken with respect to
any differences.
4.15. Power To Carry On Business. Each Borrower and Subsidiary
--------------------------------
has all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as presently
planned to be conducted.
4.16. No Material Adverse Change. Since June 30, 2001, there
--------------------------------
has been no material adverse change in the business, operations, condition,
financial or otherwise, or prospects of the Borrowers or their Subsidiaries or
on the ability of the Borrowers or their Subsidiaries to perform their
respective obligations under this Agreement, the Notes or any Loan Document.
4.17. Regulation U. Neither the Borrowers nor their
------------------
Subsidiaries will make borrowings hereunder or use a Letter of Credit issued
hereunder for the purpose of buying or carrying any "margin stock," as such term
is used in Regulation U of the Board of Governors of the Federal Reserve System,
as amended from time to time. Neither the Borrowers nor their Subsidiaries own
"margin stock." Neither the Borrowers nor their Subsidiaries are engaged in the
business of extending credit to others for such purpose, and no part of the
proceeds of any borrowing hereunder or a Letter of Credit will be used to
purchase or carry any "margin stock" or to extend credit to others for the
purpose of purchasing or carrying any "margin stock".
4.18. Compliance with Laws. Except as set forth on Schedule
--------------------------
4.18, neither the Borrowers nor any Subsidiary is in violation of or to its
knowledge after due inquiry subject to any contingent liability on account of
any Law (including but not limited to ERISA, the Code, any applicable
occupational and health or safety Law, environmental protection Law, or
Hazardous Substances management, handling or disposal Law and including but not
limited to (i) any restrictions, specifications or requirements pertaining to
products that the Borrower manufactures, processes or sells or pertaining to the
services it performs, (ii) the conduct of its businesses and (iii) the use,
maintenance or operation of the real and personal properties owned or possessed
by it), except for violations which, singly or in the aggregate, would not
reasonably be expected to have a material adverse effect on the business,
operations, condition, financial or otherwise, or prospects of the Borrowers or
their Subsidiaries or on the ability of the Borrowers or their Subsidiaries to
perform their respective obligations under this Agreement, the Notes or any Loan
Document.
4.19. Patents, Licenses, Franchises. The Borrowers and their
-----------------------------------
Subsidiaries own or possess all the patents, inventions, technology, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and rights
with respect to the foregoing necessary to own and operate their respective
properties and to carry on their respective businesses as presently conducted
and presently planned to be conducted without conflict with the rights of
others. Schedule 4.19 sets forth as of the date hereof all patents, patent
applications, trademarks, service marks and applications therefor and inventions
and copyrights of the Borrowers and their Subsidiaries which are material to
their businesses. There are no claims of infringement or misappropriation of
proprietary rights of others pending or, to the knowledge of the Borrowers'
after due inquiry, threatened by or against the Borrowers or their Subsidiaries,
except for any such claims which, if adversely decided, would not reasonably be
expected to have a material adverse effect on the business, operations,
condition, financial or otherwise, or prospects of the Borrowers or their
Subsidiaries or on the ability of the Borrowers or their Subsidiaries to perform
their respective obligations under this Agreement, the Notes or any Loan
Document.
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4.20. Ownership and Control. Schedule 4.20 states as of the
---------------------------
date hereof the authorized capitalization of the Borrowers and their
Subsidiaries, the number of shares of each class of capital stock thereof issued
and outstanding and the number and percentage of outstanding shares of each such
class of capital stock and the names of the record owners of such shares and, to
the Borrower's knowledge after due inquiry, the direct or indirect beneficial
owners of such shares (except that, as to C-Cor, only the record and beneficial
owners which hold more than five percent (5%) of the issued and outstanding
shares as of the Closing Date are listed on Schedule 4.20). The outstanding
shares of the Borrowers and their Subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable. Schedule 4.20 describes as
of the date hereof all outstanding options, rights and warrants issued by the
Borrowers and their Subsidiaries for the acquisition of shares of the capital
stock of the Borrowers or their Subsidiaries, all outstanding securities or
obligations convertible into such shares and all agreements by the Borrowers or
their Subsidiaries to issue or sell such shares. Schedule 4.20 describes as of
the date hereof all options, sale agreements, pledges, proxies, voting trusts,
powers of attorney and other agreements or instruments to the Borrowers'
knowledge after due inquiry binding upon any of its shareholders with respect to
beneficial or record ownership of or voting rights with respect to shares of the
capital stock of the Borrowers.
4.21. Accurate and Complete Disclosure. No representation or
--------------------------------------
warranty made by the Borrowers under or in connection with this Agreement, the
Notes or any Loan Document, and no statement made by the Borrowers in any
financial statement (furnished pursuant to Section 4.06 or 6.01(a) hereof or
otherwise), certificate, report, exhibit or document furnished by or on behalf
of the Borrowers and their Subsidiaries to the Bank pursuant to or in connection
with this Agreement, the Notes or any Loan Document is false or misleading in
any material respect, including by omission of material information necessary to
make such representation, warranty or statement, in light of the circumstances
under which they were made, not misleading in any material respect. The
Borrowers have disclosed to the Bank in writing every fact which materially and
adversely affects, or which so far as the Borrowers can now foresee is
reasonably possible in the future and would reasonably be expected to materially
and adversely affect, the business, operations, condition, financial or
otherwise, or prospects of the Borrowers or their Subsidiaries or the ability of
the Borrowers or their Subsidiaries to perform their respective obligations
under this Agreement, the Notes or any Loan Document.
4.22. Investment Company. Neither the Borrowers nor any
------------------------
Subsidiary is an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended.
4.23. Public Utility Holding Company. Neither the Borrowers
------------------------------------
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.24. Business. Schedule 4.24 correctly describes the business
--------------
of the Borrowers and their Subsidiaries as presently conducted and as presently
planned to be conducted.
4.25. Proceeds. The Borrowers and their Subsidiaries shall use
--------------
the proceeds of all Revolving Credit Loans for general corporate purposes. The
Borrowers and their Subsidiaries shall use Letters of Credit for standby or
trade letters of credit in the ordinary course of business.
4.26. Regulation O. No director, executive officer or
------------------
principal shareholder of the Borrowers or their Subsidiaries is a "director,"
"executive officer" or "principal shareholder" of any Bank, as such terms are
used in Regulation O of the Board of Governors of the Federal Reserve System, as
amended from time to time.
-31-
4.27. Burdensome Obligations. As of the date hereof neither
----------------------------
the Borrowers, their Subsidiaries, nor any of their respective properties, is
subject to any Law or, to the Borrowers' knowledge after due inquiry, any
pending or threatened change of Law, or is subject to any restriction under its
respective articles of incorporation or bylaws or under any agreement or
instrument to which it is a party or by which it or any of its properties (now
owned or hereafter acquired) may be subject or bound, which is so unusual and
burdensome as to be reasonably likely in the foreseeable future to have a
material adverse effect on the business, operations or condition, financial or
otherwise, of the Borrowers or their Subsidiaries or on the ability of the
Borrowers or their Subsidiaries to perform their respective obligations under
this Agreement, the Notes or any Loan Document.
4.28. Insurance. The Borrower maintains with financially sound
---------------
and reputable insurers insurance with respect to its properties and businesses
and against at least such liabilities, casualties and contingencies and in at
least such types and amounts as is customary in the case of corporations engaged
in the same or a similar business or having similar properties similarly
situated. Schedule 4.29 to this Agreement sets forth a list of all insurance
maintained by the Borrower on the date hereof.
4.29. Hazardous Materials. Except as set forth on Schedule
-------------------------
4.30, as of the date hereof the Borrowers and their Subsidiaries have
substantially complied with, are currently in substantial compliance with, have
not been charged with, have not received any notice of, and, to the knowledge of
the Borrowers' after due inquiry, are not under investigation for, the failure
substantially to comply with any Laws relating to environmental protection
matters, and, specifically, relating to Hazardous Substances. None of the
Borrowers' or the Subsidiaries' properties is (a) presently listed or proposed
for listing on the National Priorities List or (b) presently listed on the
CERCLIS list.
4.30. Solvency. On the Closing Date, (a) the amount of the
--------------
"fair value" (as defined below) of the assets of the Borrowers and their
consolidated Subsidiaries will, as of such date, exceed the amount of all
liabilities of the Borrowers and their consolidated Subsidiaries, contingent or
otherwise, as of such date, (b) the debts of the Borrowers and their
consolidated Subsidiaries will not be beyond their ability to pay as such debts
mature, and (c) neither Borrower nor any Subsidiary will have, as of such date,
an unreasonably small amount of capital with which to conduct business or an
unreasonably small amount of assets in relation to their future business. For
purposes of this Section 4.31, "fair value" means the amount for which the
assets of the Borrowers and their consolidated Subsidiaries might be expected to
be sold to a willing buyer by a willing seller, neither being under compulsion,
each having reasonable knowledge of all relevant facts, with equity to both,
with no definite time period required to consummate the sale, and with buyer and
seller contemplating the retention of the facilities at their present location
for continuation of current operations; "debt" means "liability on a claim", and
"claim" means (i) any right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured and (ii) any right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, secured or
unsecured.
Article V
----------
Conditions Precedent
--------------------
5.01. Closing Date Conditions. The obligations of the Bank to
-----------------------------
make any Loans hereunder and to issue a Letter of Credit are subject to the
satisfaction of the following conditions precedent on or before the Closing
Date:
(a) Agreement; Notes. The Bank shall have received this
----------------
Agreement, duly executed by the Borrowers and a Revolving Credit Note
duly executed by the Borrowers.
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(b) Loan Documents. The Bank shall have received all other
--------------
Loan Documents conforming to the requirements of this Agreement and
duly executed by the Borrowers, including, without limitation, a
Guaranty and Suretyship Agreement (a "Guaranty") in the form attached
hereto as Exhibit E, executed by certain Subsidiaries in favor of the
Bank.
(c) Corporate Proceedings. The Bank shall have received (i), a
---------------------
true, correct and complete copy of the articles of incorporation and
bylaws of the Borrowers and the Guarantors as in effect on the Closing
Date and (ii), with a certificate of the Secretary or Assistant
Secretary of the Borrowers and the Guarantors, dated the Closing Date,
certifying as to true copies of all corporate action taken by the
Borrowers and the Guarantors relative to this Agreement, the Notes and
the Loan Documents, including but not limited to that authorizing the
execution, delivery and performance of this Agreement, the Notes, the
Guaranties and the other Loan Documents, which certificate shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded and are in full force and effect as of the date
thereof.
(d) Incumbency Certificates. The Bank shall have received a
-----------------------
certificate of the Secretary or Assistant Secretary of the Borrowers,
dated the Closing Date, as to the names, true signatures and incumbency
of its officer or officers authorized to execute and executing this
Agreement, the Notes, the Guaranties and the other Loan Documents
together with evidence satisfactory to the Bank in its reasonable
discretion of the incumbency of such Secretary or Assistant Secretary.
The Bank may conclusively rely on such certificate unless and until a
later certificate revising the prior certificate has been furnished to
the Bank.
(e) Insurance. The Bank shall have received a certificate
---------
from a Person satisfactory to the Bank in its reasonable discretion,
dated a date satisfactory to the Bank in its reasonable discretion,
that the insurance policies required by this Agreement and the Loan
Documents have been obtained and are in full force and effect.
(f) Environmental Matters. The Bank shall have received such
---------------------
information with respect to environmental matters relating to any
properties owned or operated or previously owner operated by the
Borrowers and their Subsidiaries, which the Bank may have requested,
and all such materials shall have been found to be satisfactory in form
and substance to the Bank.
(g) Authorizations and Filings; Litigation. All
--------------------------------------
authorizations, consents, approvals, licenses, exemptions or other
actions by, and all registrations, qualifications, designations,
declarations or filings with, all Official Bodies necessary or
advisable in connection with the execution and delivery of this
Agreement, the Notes, the Guaranties or any Loan Document, consummation
of the transactions herein or therein contemplated, performance of or
compliance with the terms and conditions hereof or thereof or to ensure
the legality, validity, enforceability and admissibility in evidence
hereof or thereof shall have been obtained and shall be in full force
and effect. No suit, action, investigation, inquiry or other proceeding
(including, without limitation, the enactment or promulgation of a
statute or rule) by or before any arbitrator or any Official Body shall
be pending or threatened, and no preliminary or permanent injunction or
order by a state or federal court shall have been entered in connection
with the transactions contemplated by this Agreement, the Notes, the
Guaranties or any Loan Document or any of the transactions contemplated
hereby or thereby which might reasonably be expected to have a material
adverse effect on (i) the transactions contemplated by this Agreement,
the Notes, the Guaranties or any Loan Document, or (ii) the business,
operations, condition (financial or otherwise) or prospects of the
Borrowers or the ability of the Borrowers to perform their obligations
under this Agreement, the Notes, the Guaranties or any Loan Document.
The Bank shall have received a certificate of a duly authorized officer
of the Borrowers as to the matters set forth in this Section 5.01(g);
-33-
provided, however, that such officer's certification as to any
threatened suit, action, investigation, inquiry or other proceeding may
be limited to such officer's knowledge after due inquiry.
(h) No Material Adverse Change. No material adverse change
--------------------------
shall have occurred in the business, operations or condition (financial
or otherwise) of the Borrowers or their Subsidiaries or in the
business, operations, condition (financial or otherwise) or prospects
of the Borrowers or their Subsidiaries since June 30, 2001, and the
Bank shall have received a certificate of a duly authorized officer of
the Borrowers to such effect. For purposes of this Section 5.01(h), no
change which shall have occurred in the business, operations or
condition (financial or otherwise) of the Borrowers or their
Subsidiaries shall be deemed to be "materially adverse", unless such
change, singly or in the aggregate, would reasonably be expected to
have a material adverse effect on the business, operations or condition
(financial or otherwise) or prospects of the Borrowers or their
Subsidiaries or on the ability of the Borrowers or their Subsidiaries
to perform their respective obligations under this Agreement, the Notes
or any Loan Document.
(i) Legal Opinion of Counsel to the Borrowers. The Bank shall
-----------------------------------------
have received an opinion of McQuaide, Blasko, Xxxxxxxx, Xxxxxxx &
Xxxxxxxx, counsel to the Borrowers, dated the Closing Date,
substantially in the form attached hereto as Exhibit G.
(j) Additional Matters. All corporate and other proceedings,
------------------
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the Notes and the
Loan Documents shall have been reviewed and found to be satisfactory in
form and substance to the Bank in its reasonable discretion, and the
Bank shall have received all such other counterpart original or
certified or other copies of all such other documents and instruments
in connection with such transactions as the Bank reasonably shall have
requested.
(k) Other Indebtedness. Payment in full by the Borrowers of
------------------
all other Indebtedness except Permitted Indebtedness and loans owing to
the Pennsylvania Industrial Development Authority.
(l) Structures. The Bank shall be satisfied with the tax,
----------
ownership, capital, corporate organizational and legal structures of
the Borrowers and the Borrowers' wholly-owned subsidiaries and with the
condition (financial, pro-forma financial and others), operations,
assets, nature of assets, liabilities and prospects of the Borrowers
and their subsidiaries, including the fact that there has been no
material adverse change.
(m) Pro-Forma Financial Statements. The Bank shall have
------------------------------
received pro-forma financial statements from the Borrowers and the
Borrowers' wholly-owned subsidiaries, in form and substance acceptable
to the Bank, setting forth financial information for the period from
the Closing Date through the Revolving Credit Termination Date.
(n) Dividends. The Bank shall have received evidence, in form
---------
and substance satisfactory to the Bank, that there are no limitations
on the ability of the Borrowers' wholly-owned subsidiaries to pay
dividends or otherwise make certain distributions to the Borrowers.
(o) Facility Fee; Compensation. The Borrowers shall pay to the
--------------------------
Bank a fee in an amount equal to $10,000.
(p) Fees and Costs. Receipt by the Bank of all fees and costs,
--------------
including legal fees and costs, incurred by the Bank through the date
hereof in connection with the Existing Loans and the Loans hereunder.
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5.02. Conditions to Loans and to Letters of Credit. The
--------------------------------------------------
obligations of the Bank to make any Loans hereunder (including, without
limitation, on the Closing Date) and to issue a Letter of Credit, are subject to
the satisfaction of the following further conditions precedent as of the date
such Loans are requested to be made or such Letter of Credit is requested to be
issued, and as of the date each such Loan is made or such Letter of Credit is
issued:
(a) Representations and Warranties. Each of the
------------------------------
representations and warranties by the Borrowers in or pursuant to this
Agreement, the Notes or any Loan Document shall have been true and
correct in all material respects on and as of the date hereof or
thereof or on and as of the date made, as the case may be, and shall be
true and correct in all material respects on and as of each such date
with the same effect as though made on and as of each such date.
(b) Performance of Obligations. The Borrowers shall have
--------------------------
performed all their obligations required to be performed hereunder and
under the Notes and the Loan Documents on or before each such date.
(c) No Default. No Event of Default or Potential Default shall
----------
have occurred and be continuing or shall exist on each such date or
shall occur or exist after giving effect to the Loans requested to be
made or a Letter of Credit requested to be issued on each such date.
(d) Limitations on Availability of Commitments. The Borrowers
------------------------------------------
shall be in compliance with the covenants and conditions set forth in
Section 2.01 or 3.01, as applicable.
Any request by the Borrowers for any Loan hereunder or for the issuance of a
Letter of Credit hereunder shall constitute a representation and warranty by the
Borrowers that the conditions precedent described in this Section 5.02 have been
satisfied on and as of the date of such request. Failure of the Bank to receive
notice from the Borrowers to the contrary before any Loan is made or a Letter of
Credit is issued shall constitute a further representation and warranty by the
Borrowers that the conditions precedent described in this Section 5.02 have been
satisfied on and as of the date of such Loan or the issuance of a Letter of
Credit.
Article VI
----------
Affirmative Covenants
---------------------
The Borrowers covenant to the Bank as follows:
6.01. Reporting and Information Requirements.
---------------------------------------------
(a) Annual Audit Reports. As soon as practicable, and in any
--------------------
event within one hundred twenty (120) days after the close of each fiscal year
of the Borrowers, commencing with the fiscal year ending June 30, 2002, the
Borrowers shall furnish to the Bank, consolidated statements of income, retained
earnings and cash flow of the Borrowers and their consolidated Subsidiaries for
such fiscal year and a consolidated balance sheet of the Borrowers and their
consolidated Subsidiaries as of the close of such fiscal year, and notes to
each, all in reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year, with such statements and
balance sheet to be audited and certified by independent certified public
accountants of recognized standing selected by the Borrowers and satisfactory to
the Bank in its reasonable discretion. The certificate or report of such
accountants shall be free of exceptions or qualifications not acceptable to the
Bank in its reasonable discretion, a copy of such certificate or report shall be
addressed to the Bank and signed by such independent public accountants, and
such certificate or report shall in any event contain a written statement of
such accountants substantially to the effect that (i) such accountants examined
such statements and balance sheet in accordance with generally accepted auditing
-35-
standards and accordingly made such tests of accounting records and such other
auditing procedures as such accountants considered necessary in the
circumstances and (ii) in the opinion of such accountants such statements and
balance sheet present fairly the financial position of the Borrowers as of the
end of such fiscal year and the results of its operations and its cash flow for
such fiscal year, in conformity with GAAP applied on a basis consistent with
that of the preceding fiscal year (except for changes in application in which
such accountants concur).
(b) Quarterly Reports. As soon as practicable, and in any
-----------------
event within forty-five (45) days after the close of each fiscal quarter of the
Borrowers, commencing with the fiscal quarter ending December 31, 2001, the
Borrowers shall furnish to the Bank, unaudited consolidated (and combining)
statements of income, retained earnings and cash flow for the Borrowers and
their consolidated Subsidiaries for such fiscal quarter and for the period from
the beginning of such fiscal year to the end of such fiscal quarter, and an
unaudited consolidated balance sheet of the Borrowers and their consolidated
Subsidiaries as of the close of such fiscal quarter, and notes to each, all in
reasonable detail, setting forth in comparative form the corresponding figures
for the same period or as of the same date during the preceding fiscal year, and
certified by the President, Treasurer or Chief Financial Officer of the
Borrowers as presenting fairly the financial position of the Borrowers and their
consolidated Subsidiaries as of the end of such fiscal quarter and the results
of their operations and their cash flow for such fiscal quarter, in conformity
with GAAP applied in a manner consistent with that of the most recent audited
financial statements furnished to the Bank, subject to year-end audit
adjustments.
(c) Accountants' Certificate. Each set of statements and
------------------------
balance sheet delivered pursuant to Section 6.01(a) shall be accompanied by a
certificate or report, dated the Relevant Date, of the accountants who certified
such statements and balance sheet, stating in substance that they have reviewed
this Agreement and that in making the examination necessary for their
certification of such statements and balance sheet they did not become aware of
any Event of Default or Potential Default, or, if they did become so aware, such
certificate or report shall state the nature and period of existence thereof.
(d) Officer's Compliance Certificates. On or before the
---------------------------------
forty-fifth (45th) day following the last day of each fiscal quarter, the
Borrowers shall deliver to the Bank a certificate, in the form attached hereto
as Exhibit F, dated as of the Relevant Date, signed on behalf of the Borrowers
by their President, Treasurer or Chief Financial Officer, (i) stating that as of
the date thereof no Event of Default or Potential Default has occurred and is
continuing or exists, or, if an Event of Default or Potential Default has
occurred and is continuing or exists, specifying in detail the nature and period
of existence thereof and any action with respect thereto taken or contemplated
to be taken by the Borrowers and (ii) stating in reasonable detail the
information and calculations necessary to establish compliance with the
provisions of Section 7.01 and (iii) stating that the signer personally has
reviewed this Agreement and that such certificate is based on an examination
made by or under the supervision of the signer sufficient to assure that such
certificate is accurate (such signer to have no personal liability on account of
such certificate in the absence of gross negligence or willful misconduct).
(e) Annual Budget. As soon as practicable, and in any event
-------------
within ninety (90) days after the start of each fiscal year, the Borrowers shall
deliver to the Bank an annual budget for the Borrowers and their consolidated
Subsidiaries, which shall include monthly projections of profit and loss
statements, balance sheets and cash flow reports (prepared on an annual basis)
for the then current fiscal year (including projections as to capital
expenditures), together with a statement of the assumptions and estimates upon
which such projections are based. The projections shall be accompanied by a
cover letter stating that such projections, estimates and assumptions, as of the
date of preparation thereof, are reasonable, made in good faith, are consistent
with this Agreement and the Loan Documents, and represent the Borrowers' best
judgment as to such matters.
-36-
(f) Other Reports and Information. Promptly upon their
-----------------------------
becoming available, the Borrowers shall deliver to the Bank, a copy of (i) all
regular or special reports or effective registration statements which the
Borrowers shall file with the Securities and Exchange Commission (or any
successor thereto) or any securities exchange, (ii) all reports, proxy
statements, financial statements and other information distributed by the
Borrowers to its stockholders, debtholders or the financial community in
general, and (iii) any reports (including, without limitation, management
letters) submitted to the Borrowers by independent accountants in connection
with any annual, interim or special audit of the Borrowers.
(g) Further Information. The Borrowers promptly will furnish
-------------------
to the Bank such other information and in such form as the Bank reasonably may
request.
(i) Notice of Event of Default. Promptly upon becoming aware
--------------------------
of any Event of Default or Potential Default, the Borrowers shall give the Bank
notice thereof, together with a written statement of the President, Treasurer or
Chief Financial Officer of the Borrowers setting forth the details thereof and
any action with respect thereto taken or contemplated to be taken by the
Borrowers.
(j) Notice of Material Adverse Change. Promptly upon becoming
---------------------------------
aware thereof, the Borrowers shall give the Bank notice of any material adverse
change in the business, operations, condition, financial or otherwise, or
prospects of the Borrowers or their Subsidiaries or in the ability of the
Borrowers or their Subsidiaries to perform their respective obligations under
this Agreement, the Notes or any Loan Document.
(k) Notice of Material Proceedings. Promptly upon becoming
------------------------------
aware thereof, the Borrower shall give the Bank notice of the commencement,
existence or threat of any proceeding by or before any Official Body against or
affecting the Borrower which, if adversely decided, would reasonably be expected
to have a material adverse effect on the business, operations, condition,
financial or otherwise, or prospects of the Borrower or on the ability of the
Borrower to perform its obligations under this Agreement, the Notes or any Loan
Document.
(l) Notice of Other Material Defaults. Promptly upon becoming
---------------------------------
aware of any material default by any Borrower or any Subsidiary under any
agreement or instrument to which any Borrower or any Subsidiary or by which any
Borrower, any Subsidiary or any of their properties are or may be bound, the
Borrowers shall give the Bank notice thereof, together with a written statement
of the President, Treasurer or Chief Financial Officer of the Borrowers setting
forth the details thereof, if such agreement or instrument or the consequences
of such default would reasonably be expected to be material to the business,
operations, condition, financial or otherwise, or prospects of the Borrowers or
their Subsidiaries or to the ability of the Borrowers or their Subsidiaries to
perform their respective obligations under this Agreement, the Notes or any Loan
Document.
(m) Notice of Pension-Related Events. Promptly after the
--------------------------------
Borrowers, any Controlled Group Member or any administrator of a Plan:
(i) receives the notification referred to in
subsection (i), (iv) or (vii) of Section 8.01(f);
(ii) has knowledge of (A) the occurrence of a
Reportable Event with respect to a Plan, and within seven (7)
days thereafter if the Reportable Event is a failure to meet
the minimum funding requirement with respect to a Plan,
including failure to pay any contribution when due, and the
total unpaid balance of contributions due to such Plan exceeds
$1,000,000; (B) any event which has occurred or any action
which has been taken to amend or terminate a Plan as referred
to in subsections (ii) and (vi) of Section 8.01(f); (C) any
event which has occurred or any action which has been taken
-37-
which could result in complete withdrawal, partial withdrawal
or secondary liability for withdrawal liability payments with
respect to a Multiemployer Plan as referred to in subsection
(vii) of Section 8.01(f); (D) any action which has been taken
in furtherance of, any agreement which has been entered into
for or any petition which has been filed with a United States
district court for, the appointment of a trustee for a Plan as
referred to in subsection (iii) of Section 8.01(f); (E) any
action to amend a Plan which requires security to be provided
to the Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA or (F) any failure to pay the PBGC
premium with respect to a Plan when due; or
(iii) files (A) any notice or application with a
participant in a Plan, the Internal Revenue Service or the
PBGC in connection with the termination of a Plan; (B) a
request with the Internal Revenue Service pursuant to Section
412(d) or 412(e) of the Code for a variance from the minimum
funding standard or an extension of the period for amortizing
unfunded liabilities, respectively, for a Plan; or (C) a
return with the Internal Revenue Service with respect to the
tax imposed under Section 4971(a) of the Code for failure to
meet the minimum funding standards established under Section
412 of the Code for a Plan;
the Borrowers will furnish to the Bank (i) a copy of any notice received,
request or petition filed and agreement entered into; (ii) the most recent
Annual Report (Form 5500 Series) and attachments thereto for the Plan; (iii) the
most recent actuarial report for the Plan; (iv) any notice, return or materials
required to be filed with the Internal Revenue Service, the PBGC or Plan
participants and beneficiaries in connection with the event, action or filing;
and (v) a written statement of the President, Treasurer or chief financial
officer of the Borrower describing the event or the action taken and the reasons
therefor.
(n) Visitation. The Borrowers shall permit such Persons as
----------
the Bank may designate to visit and inspect any of the properties of the
Borrowers and of any Subsidiary, to examine their books and records and to take
copies and extracts therefrom and to discuss their affairs with their officers
and employees and independent accountants, engineers, consultants and
contractors (each of whom is hereby authorized to discuss with the Bank the
affairs of the Borrowers and of any Subsidiary) at such times and as often as
the Bank reasonably may request.
(o) Environmental Matters.
---------------------
(i) On the date hereof and within ninety (90) days
following the close of each year, commencing with the fiscal
year ending June 30, 2001, the Borrowers shall deliver to the
Bank, a certificate, signed on behalf of the Borrowers by a
duly authorized officer, stating that, (A) as of the date
thereof, the Borrowers and their Subsidiaries are in
compliance with all applicable environmental protection and
pollution control Laws and hazardous waste and toxic
substances management, handling and disposal Laws, except for
violations which, singly or in the aggregate, would not
reasonably be expected to have a material adverse effect on
the business, operations, condition, financial or otherwise,
or prospects of the Borrowers or their Subsidiaries or on the
Borrowers' or their Subsidiaries' ability to perform their
respective obligations under this Agreement, the Notes or any
Loan Document, or, (B) if the Borrowers and their Subsidiaries
are not so in compliance, specifying in detail the nature and
period of existence of such noncompliance and any action taken
or contemplated to be taken by any Borrower or any Subsidiary
with respect to such noncompliance.
(ii) Promptly upon becoming aware of the occurrence
or existence of any material environmental event, circumstance
or condition relating to any of the Borrowers' or
Subsidiaries' properties, the Borrowers shall give the Bank
notice thereof and shall deliver to the Bank a written
-38-
description of such event, circumstance or condition,
specifying in detail the nature and period of existence
thereof and any action taken or contemplated to be taken by
any Borrower or any Subsidiary with respect thereto.
(iii) Without limitation of Section 6.01(o)(i), upon
receipt by the Bank of a notice pursuant to Section
6.01(o)(i)(B), or upon the occurrence of an Event of Default,
the Bank shall have the right to designate such Persons ("Site
Reviewers") as the Bank may elect, to visit and inspect any of
the properties of the Borrowers or their Subsidiaries and to
perform such reasonable environmental site investigations and
assessments ("Site Assessments") on their properties for the
purpose of determining whether there exists on their
properties any environmental condition which could result in
any liability, cost or expense to the owner or occupier
thereof relating to Hazardous Substances or any other
environmental condition which could materially adversely
affect the business, operations, condition, financial or
otherwise or prospects of the Borrowers or their Subsidiaries
or on the Borrowers' or their Subsidiaries' ability to perform
their respective obligations under this Agreement, the Notes
or any Loan Document. Such Site Assessments may include both
above and below the ground testing for environmental damage or
the presence of Hazardous Substances and such other tests as
may be necessary to conduct the Site Assessments in the
opinion of the Site Reviewers. The Borrowers shall, and shall
cause each Subsidiary to, supply to the Site Reviewers such
historical and operational information, including the results
of all samples sent for analysis, correspondence with Official
Bodies and previous environmental audits or environmental
reviews regarding its properties as are within its possession,
custody or control, or which are reasonably available to it
and which reasonably may be requested by the Site Reviewers to
facilitate the Site Assessments, and will make available for
meetings with the Site Reviewers appropriate Personnel
employed by any Borrower or any of its Subsidiaries having
knowledge of such matters. The cost of performing all Site
Assessments shall be paid by the Borrowers upon demand by the
Bank.
(iv) At such other times and as often as the Bank
reasonably may request, the Borrowers will, and shall cause
each Subsidiary to, make available at its offices to the Bank
or its designees such historical and operational information
including the results of all samples sent for analysis,
correspondence with Official Bodies and environmental reviews
regarding its properties as are in its possession, custody or
control, or which are reasonably available to it and which
reasonably may be requested by the Bank or its designees, and
will make available for meetings with the Bank or such
designees appropriate Personnel employed by any Borrower or
any of its Subsidiaries having knowledge of such matters.
(p) Information Package. Upon the reasonable request of the
-------------------
Bank, the Borrowers shall, and shall cause each Subsidiary to, deliver to the
Bank an information package containing relevant information about the Borrowers,
and such other information as the Bank reasonably may request, which information
package shall be in form and substance satisfactory to the Bank in its
reasonable discretion. The Borrowers hereby expressly authorize the Bank to
distribute such package (and any and all other information and materials
respecting the Borrowers or their Subsidiaries) as from time to time delivered
to or in the possession of the Bank to any Participant or prospective
Participant; provided, however, that, prior to delivering any such information
package or other information or materials, the Bank shall consult with the
Borrowers (it being expressly understood that the Bank shall not distribute any
information package provided by the Borrowers pursuant to this Section 6.01(p)
without the prior written consent of the Borrowers; it being further understood,
however, that the Borrowers' consent to delivery of any other information or
materials shall not be required), and provided, further, that the Bank first
shall cause the Participant or prospective Participant receiving such
information package or other information or materials to execute and deliver to
the Bank such confidentiality agreement or agreements as the Borrowers may
-39-
reasonably request (unless such Bank or Participant or prospective Bank or
Participant previously has signed such an agreement). The Bank shall not be
liable to the Borrowers, any Subsidiary, or to any other Person for any breach
of any such confidentiality agreement or agreements by any Participant or any
prospective Participant to whom it may have delivered such information package
or other information or materials.
6.02. Preservation of Existence and Franchises. Each Borrower
----------------------------------------------
shall, and shall cause each of its Subsidiaries to, maintain its corporate
existence, rights and franchises in full force and effect in its jurisdiction of
incorporation. Each Borrower shall, and shall cause each of its Subsidiaries to,
qualify and remain qualified as a foreign corporation in each jurisdiction in
which failure to receive or retain such qualification would reasonably be
expected to have a material adverse effect on the business, operations,
condition, financial or otherwise, or prospects of any Borrower or any
Subsidiary or on the ability of the Borrowers or their Subsidiaries to perform
their respective obligations under this Agreement, the Notes or any Loan
Document.
6.03. Insurance. Each Borrower shall, and shall cause each of
---------------
its Subsidiaries to, maintain insurance against fire, flood, casualty and such
other hazards as may be reasonably acceptable to the Bank in such amounts, with
such deductibles and with such insurers as may be reasonably acceptable to the
Bank. Such policies shall expressly provide that the requisite insurance cannot
be altered or canceled without thirty (30) days prior written notice to the Bank
and shall insure the Bank notwithstanding the act or neglect of the insured. In
the event any Borrower or any Subsidiary fails to procure or cause to be
procured any such insurance or to timely pay or cause to be paid the premium(s)
on any such insurance, the Bank may do so for any Borrower or any Subsidiary but
the Borrowers shall continue to be liable for the cost of such insurance. The
Borrowers hereby appoint the Bank as their attorney-in-fact, exercisable at the
Bank's option, to endorse any check which may be payable to either Borrower or
any Subsidiary in order to collect the proceeds of such insurance. Any and all
amount or amounts received or collected by the Bank pursuant to the provisions
of this paragraph, in excess of $100,000 per year in the aggregate, may be
applied by the Bank to any obligations or to repair, reconstruct or replace the
loss of or damage to property as the Bank in its sole judgment may from time to
time determine. Each Borrower shall, and shall cause each of its Subsidiaries
to, furnish to the Bank from time to time upon request the policies under which
such insurance is issued, certificates of insurance and such other information
relating to such insurance as the Bank may request, and provide such other
insurance and endorsements as are required by this Agreement, the Notes and the
other Loan Documents.
6.04. Maintenance of Properties.
--------------------------------
(a) Each Borrower shall, and shall cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear alone excepted, the properties now
or hereafter owned, leased or otherwise possessed by it which are material to
the business, operations, condition, financial or otherwise, or prospects of any
Borrower or any Subsidiary or to the ability of the Borrowers and the
Subsidiaries to perform their respective obligations under this Agreement, the
Notes or any Loan Document, and shall make or cause to be made all needful and
proper repairs, renewals, replacements and improvements thereto which shall be
reasonable, necessary and consistent with sound business judgment so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
(b) Each Borrower shall, and shall cause each of its
Subsidiaries to, maintain or cause to be maintained in full force and effect all
patents, patent applications, trademarks, service marks and applications
therefor, trade names, copyrights and all other intellectual property rights now
or hereafter owned, or otherwise possessed by it which are material to the
business, operations, condition, financial or otherwise, or prospects of any
Borrower or any Subsidiary or to the ability of the Borrowers or their
-40-
Subsidiaries to perform their respective obligations under this Agreement, the
Notes or any Loan Document.
6.05. Payment of Taxes and Other Potential Charges and
------------------------------------------------------
Priority Claims; Payment of Other Current Liabilities. Each Borrower shall, and
-----------------------------------------------------
shall cause each of its Subsidiaries to, pay or discharge
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income (including such as may arise
under Section 4062, Section 4063 or Section 4064 of ERISA, or any
similar provision of law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons which, if unpaid, might result in the creation of a Lien
upon any such property;
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property (other than Permitted Liens) or which, if unpaid, might give
rise to a claim entitled to priority over general creditors of any
Borrower or any of its Subsidiaries in a case under Title 11
(Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving any
Borrower or any of its Subsidiaries; and
(d) all other current liabilities so that none is overdue more
than forty-five (45) days;
provided, that, unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, neither the Borrowers nor any Subsidiary
need pay or discharge any such tax, assessment, charge, levy, claim or current
liability so long as the validity thereof is contested in good faith and by
appropriate proceedings diligently conducted, and so long as such reserves or
other appropriate provisions as may be required by GAAP shall have been made
therefor, and so long as such failure to pay or discharge does not have a
material adverse effect on the business, operations, condition, financial or
otherwise, or prospects of the Borrowers or any Subsidiary or on the ability of
the Borrowers or their Subsidiaries to perform their respective obligations
under this Agreement, the Notes or any Loan Document.
6.06. Financial Accounting Practices. Each Borrower shall, and
------------------------------------
shall cause each of its Subsidiaries to, (a) make and keep books, records an
accounts which, in reasonable detail, accurately and fairly reflect its material
transactions and dispositions of its material assets and (b) maintain a system
of internal accounting controls sufficient to provide reasonable assurances that
(i) material transactions are executed in accordance with management's general
or specific authorization, (ii) transactions are recorded as necessary (A) to
permit preparation of financial statements in conformity with GAAP and (B) to
maintain accountability for material assets, (c) access to material assets is
permitted only in accordance with management's general or specific authorization
and (d) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
6.07. Compliance with Laws. Each Borrower shall, and shall
--------------------------
cause each of its Subsidiaries to, comply with all applicable Laws (including
but not limited to ERISA, the Code and any applicable tax Law, product safety
Law, occupational safety or health Law, environmental protection or pollution
control Law, Hazardous Substances management, handling or disposal Law) in all
respects (including but not limited to compliance in respect of products that it
manufactures, processes or sells or services it performs, conduct of its
business or use, maintenance or operation of real and personal properties owned
or possessed by it), provided that neither the Borrowers nor any Subsidiary
-41-
shall be deemed to be in violation of this Section 6.07 as a result of any
failures to comply which would not result in fines, penalties, injunctive relief
or other civil or criminal liabilities which, singly or in the aggregate, would
reasonably be expected to materially adversely affect the business, operations,
condition, financial or otherwise, or prospects of the Borrowers or their
Subsidiaries or the ability of the Borrowers or their Subsidiaries to perform
their respective obligations under this Agreement, the Notes or the Loan
Documents.
6.08. Use of Proceeds. Each Borrower shall, and shall cause
---------------------
each of its Subsidiaries to, use the proceeds of all Loans and Letters of Credit
hereunder only as set forth in Section 4.25.
6.09. Government Authorizations, etc. Each Borrower shall, and
------------------------------------
shall cause each of its Subsidiaries to, obtain and maintain in full force and
effect all authorizations, consents, approvals, licenses, exemptions and other
actions by, and all registrations, qualifications, designations, declarations
and other filings with, any Official Body necessary or advisable in connection
with the execution and delivery of this Agreement, the Notes or any Loan
Document, consummation of the transactions herein or therein contemplated,
performance of or compliance with the terms and conditions hereof or thereof or
to ensure the legality, validity, enforceability and admissibility in evidence
hereof or thereof.
6.10. Contracts. Each Borrower shall, and shall cause each of
---------------
its Subsidiaries to, comply with all agreements or instruments to which it is a
party or by which it or any of its properties (now owned or hereafter acquired)
may be subject or bound, provided that neither the Borrowers nor any Subsidiary
shall be deemed to be in violation of this Section 6.10 as a result of any
failure to comply which, singly or in the aggregate, would not reasonably be
expected to have a material adverse effect on the business, operations,
condition, financial or otherwise, or prospects of the Borrowers or their
Subsidiaries or on the ability of the Borrowers or their Subsidiaries to perform
their respective obligations under this Agreement, the Notes or any Loan
Document.
6.11. Environmental Matters.
----------------------------
(a) Hazardous Substances. Each Borrower shall, and shall cause
--------------------
each of its Subsidiaries to, use its best efforts to prevent the deposit,
emission, discharge or release of any Hazardous Substances or residual wastes on
the properties owned or operated by it, unless such deposit, emission, discharge
or release is authorized by, and in full compliance with applicable Law
(including by the giving of all necessary financial assurances). Each Borrower
shall, and shall cause each of its Subsidiaries to, use its best efforts to
handle, store, transport and dispose of all Hazardous Substances or residual
wastes generated on properties owned or operated by it in compliance with all
applicable Laws now or hereafter enacted, and shall use its best efforts
promptly to clean up any accidental deposit, emission, discharge or release of
Hazardous Substances, pollutants or contaminants from or on any of the
properties owned or operated by it in accordance with applicable Law. Each
Borrower shall, and shall cause each of its Subsidiaries to, pay, collect or
remit, as appropriate, in a timely manner, all fees, taxes or other impositions
imposed by any Official Body as a result of the handling, storage, collection,
treatment or disposal of solid wastes or Hazardous Substances on any of the
properties owned or operated by it.
(b) Financial Assurances. Each Borrower shall, and shall cause
--------------------
each of its Subsidiaries to, at all times maintain and keep in effect
appropriate financial assurances, bonds or other financial security or liability
insurance required by any Official Body to be kept as conditions of any permits,
licenses, authorizations or other approvals necessary: to permit any Borrower or
any Subsidiary to operate pollution control equipment; to close facilities which
handled, stored, treated or disposed of Hazardous Substances or residual wastes
and to provide for post-closure care of the same; to undertake any cleanup or
remediation of areas on any of the properties owned or operated by it in or on
which Hazardous Substances or residual wastes were or are generated, handled,
-42-
stored, treated or disposed of; or otherwise required by any Official Body as a
condition of any Borrowers' or any Subsidiary's operation of all or any part of
the properties owned or operated by it.
(c) Indemnification. The Borrowers hereby agree to indemnify
---------------
and hold the Bank harmless from and against any and all liability, loss or
damage which the Bank may or might incur under the Loan Documents arising from
or relating to the existence of Hazardous Substances or residual wastes on the
Borrowers' or any Subsidiaries' properties.
6.12 Matters Concerning Acquisitions, Mergers and Investments.
-------------------------------------------------------------
(a) Consolidation of Financial Information. To the extent that
--------------------------------------
a transaction allowed pursuant to Section 7.08 or 7.09 hereof results in the
formation and continued existence of a Subsidiary of any Borrower, (a) the
consolidated financial statements required by Section 6.01 hereof shall include
such Subsidiary, and (b) the financial covenants set forth in Section 7.01 shall
be measured on a consolidated basis including such Subsidiary.
(b) Delivery of Guaranty. To the extent that a transaction
--------------------
allowed pursuant to Section 7.08 or 7.09 hereof results in the formation and
continued existence of a Subsidiary of any Borrower, within ten (10) Business
Days of the closing of such transaction, such Borrower shall deliver to the Bank
a Guaranty fully executed by such newly formed Subsidiary in favor of the Bank.
Article VII
-----------
Negative Covenants
------------------
The Borrowers covenant to the Bank as follows:
7.01. Financial Covenants.
--------------------------
(a) Minimum Net Worth. As of the last day of each fiscal
-----------------
quarter, commencing with the quarter ending on March 31, 2002, the Net Worth of
the Borrowers shall be an amount equal to at least $237,000,000 plus sixty-five
percent (65%) of the net income after taxes of the Borrowers for such quarter
provided that no deduction for losses will be permitted.
(b) Minimum Liquidity. The Borrowers shall at all times
-----------------
maintain cash and marketable securities with an aggregate fair market value of
at least $10,000,000.
7.02. Liens. Each Borrower shall not, and shall not permit any
-----------
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except for the following
("Permitted Liens"):
(a) Liens existing on the date hereof and listed in Schedule
7.02;
(b) Liens arising from taxes, assessments, charges, levies or
claims described in Section 6.05 that are not yet due or that remain
payable without penalty or to the extent permitted to remain unpaid
under the proviso to such Section 6.05;
(c) Deposits or pledges to secure workmen's compensation,
unemployment insurance, old age benefits or other social security
obligations, or in connection with or to secure the performance of
bids, tenders, trade contracts or leases, or to secure statutory
obligations, or stay, surety or appeal bonds, or other pledges or
deposits of like nature and all in the ordinary course of business;
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(d) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is stayed on
all judgments resulting from any such proceedings; and
(e) Zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in title thereto and other
minor Liens that do not secure the payment of money or the performance
of an obligation and that do not, singly or in the aggregate,
materially detract from the value of a property or asset to, or
materially impair its use in the business of, the Borrowers or their
Subsidiaries.
(f) Liens (whether or not assumed) existing on property at the
time of purchase thereof by any Borrower or any of its Subsidiaries or
to secure payment of the purchase price thereof, provided, that:
(i) such Lien is created before or substantially
simultaneously with the purchase of such property in the
ordinary course of business by any Borrower or any of its
Subsidiaries;
(ii) such Lien is confined solely to the property so
purchased, improvements thereto and proceeds thereof;
(iii) the aggregate amount secured by all such Liens
on any particular property at the time purchased by any
Borrower or any of its Subsidiaries, as the case may be, shall
not exceed the lesser of the purchase price of such property
or the fair market value of such property at the time of
purchase thereof ("purchase price" for this purpose including
the amount secured by each such Lien thereon whether or not
assumed);
(iv) the obligation secured by such Lien is
Indebtedness permitted under Section 7.03(d); and
(v) the total Indebtedness secured by such Liens
shall not exceed $2,500,000 in the aggregate on a per annum
basis.
7.03. Indebtedness. Each Borrower shall not, and shall not
------------------
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Indebtedness, except for the following ("Permitted Indebtedness"):
(a) Indebtedness under this Agreement, the Notes or any Loan
Document;
(b) Indebtedness appearing on the Borrowers' financial
statements dated as June 30, 2001 (excluding the debts to be satisfied
or refinanced under this Agreement) and listed in Schedule 7.03;
(c) Current accounts payable now existing or hereafter arising
out of transactions (other than borrowings) in the ordinary course of
business of the Borrowers and their Subsidiaries; and
(d) Purchase money indebtedness and Capitalized Lease
Obligations of the Borrowers and their Subsidiaries in an amount not to
exceed $2,500,000 in the aggregate on a per annum basis.
7.04. Guarantees and Similar Liabilities. Each Borrower shall
----------------------------------------
not, and shall not permit any of its Subsidiaries to, at any time directly or
-44-
indirectly assume, guarantee, become surety for, endorse or otherwise agree,
become or remain liable upon or with respect to any Indirect Guarantee, except:
(a) Obligations under or in respect of this Agreement, the
Notes and the Loan Documents;
(b) Guarantees and contingent liabilities existing on the date
hereof and listed in Schedule 7.04;
(d) Obligations to pay the purchase price of goods or services
on usual and customary terms in the ordinary course of business;
(e) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business; and
(f) Indemnities of the liabilities of directors or officers
pursuant to provisions contained in its articles of incorporation or
by-laws or as otherwise permitted by applicable law.
7.05. Loans and Investments. Each Borrower shall not, and
---------------------------
shall not permit any of its Subsidiaries to, at any time make or suffer to
remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited) in, or any other interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any
of the foregoing, except:
(a) Loans and investments existing on the date hereof and
listed in Schedule 7.05;
(b) Trade credit extended, and loans and advances extended to
subcontractors or suppliers, under usual and customary terms in the
ordinary course of business;
(c) Advances to employees of any Borrower or any of its
Subsidiaries to allow such employees to meet expenses incurred by such
employees in the ordinary course of business or advances to employees
or prospective employees of any Borrower or any of its Subsidiaries for
the purpose of attracting or recruiting such employees or prospective
employees, provided that the aggregate amount of all advances pursuant
to this Section 7.05(c) shall not exceed $200,000 at any time
outstanding;
(d) Demand deposits, time deposits or certificates of deposit
in United States commercial banks having shareholders' equity of at
least $100,000,000 and maturing not in excess of one year from the date
of acquisition;
(e) Obligations backed by the full faith and credit of the
United States of America maturing not in excess of one year from the
date of acquisition;
(f) Institutional money market funds with a rating of AAA and
minimum of $1 billion in total fund assets;
(g) Repurchase agreements issued by domestic banks and bank
holding companies having a Bank Watch rating of B/C or better and that
are at least 102% collateralized;
(h) Up to twenty percent (20%) of cash and marketable
securities in municipal notes and bonds, tax free and tax advantaged
auction rate securities of any single issuer with minimum credit
ratings of Aa2/AA;
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(i) Up to twenty percent (20%) of cash and marketable
securities in commercial paper or loan participations of any single
issuer maturing not in excess of one year from the date of acquisition
and rated at least P-2 by Xxxxx'x Investors Service, Inc. or A-2 by
Standard & Poor's Corporation on the date of acquisition;
(j) Notes or securities received in good faith settlement of
loans or investments described in this Section 7.05, if such loan or
investment was not made in the expectation of such settlement; and
(k) Investments allowed under Section 7.08 hereof.
7.06. Distributions to Shareholders. Except with the prior
-----------------------------------
written approval of the Bank, each Borrower shall not, and shall not permit any
of its Subsidiaries to, declare, make, pay or set apart assets for a fund to
pay, or agree, become or remain liable to make or pay, or set apart assets for a
fund to pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of, or in respect of, any shares
of the capital stock of the Borrowers or their Subsidiaries or for or on account
of the purchase, redemption, defeasance, retirement or acquisition of any shares
of any class of the capital stock (or warrants, options or rights therefor) of
the Borrowers or their Subsidiaries, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrowers or their
Subsidiaries, or permit any Affiliate to make any payment on account of, or
purchase or otherwise acquire, any equity interest in the Borrowers or their
Subsidiaries from any Person; provided, however, that
--------
(a) the Borrowers and their Subsidiaries may declare, make and
pay dividends or distributions on account of their capital stock or on account
of the purchase, redemption, retirement or acquisition of such capital stock if
such dividend or distribution is payable solely in shares of capital stock (or
warrants, options or rights therefor) of the Borrowers or their Subsidiaries, so
long as no Event of Default or Potential Default exists;
(b) any Subsidiary of the Borrowers may declare, make and pay
dividends or distributions on account of its capital stock to a Borrower so long
as such payments do not exceed the Net Income of such Subsidiary and no Event of
Default or Potential Default exists; and
(c) C-Cor may purchase its own capital stock, so long as such
purchases do not exceed $5,000,000 in the aggregate during any fiscal year and
so long as no Event of Default or Potential Default exists; except however that
during the time period from May 17, 2001 through December 31, 2002 and provided
no Event of Default or Potential Default exists, C-Cor may acquire up to an
aggregate of two million shares of its own capital stock for an aggregate amount
not to exceed $12,000,000.
7.07. Sale-Leasebacks. Each Borrower shall not, and shall not
---------------------
permit any of its Subsidiaries to, at any time enter into or suffer to remain in
effect any transaction involving the sale, transfer or other disposition by any
Borrower or any of their Subsidiaries of any property, real or personal, now
owned or hereafter acquired, with a view directly or indirectly to the leasing
back of any part of the same property or any other property used for the same or
a similar purpose or purposes.; provided, that the Borrowers may enter into
sale-leaseback transactions with equipment so long as (a) the cash received in
such transaction is greater than or equal to the fair market value of the
equipment subject to the sale-leaseback, (b) no Event of Default or Potential
Default exists, and (c) such sale-leaseback transactions do not exceed
$3,000,000 in the aggregate at all times.
7.08. Acquisitions; Mergers, Etc.. Each Borrower shall not,
---------------------------------
and shall not permit any of its Subsidiaries to, enter into any transaction of
acquisition or merger or consolidation or amalgamation or division, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
-46-
dissolution), except that the Borrowers may merge with, consolidate with or
acquire all or substantially all of the operating assets of a Person, or
purchase, acquire or own any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or any other interest in,
or make any capital contribution to, any other Person, so long as:
(a) The sole legal consideration is the Stock of a Borrower or
cash of a Borrower (excluding borrowings under the Revolving Credit);
(b) The Person must be engaged in a business substantially the
same as, or complimentary to, the business conducted and operated by
the Borrowers ("substantially" and "complimentary" to be determined by
the Bank in its sole discretion);
(c) Each Borrower, after giving effect to the acquisition,
consolidation or merger, is in compliance with the financial covenants
set forth in Section 7.01 hereof, on an historical and pro forma basis;
(d) No Event of Default or Potential Default exists; and
(e) C-Cor is the surviving legal entity (except for
transactions which are Minority Investments).
7.09. Dispositions of Assets. Each Borrower shall not, and
----------------------------
shall not permit any of its Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily (any
of the foregoing being referred to in this Section 7.09 as a "transaction" and
any series of related transactions constituting but a single transaction), a
substantial part ("substantial" to be determined by the Bank, in its sole
discretion) of its properties or assets, tangible or intangible (including but
not limited to sale, assignment, discount or other disposition of accounts,
contract rights, chattel paper or general intangibles with or without recourse),
except in transactions in the ordinary course of business.
7.10. Transactions with Affiliates. Each Borrower shall not,
----------------------------------
and shall not permit any of its Subsidiaries to, enter into or carry out any
transaction with (including, without limitation, purchasing property or services
from or selling property or services to) any Affiliate except:
(a) Directors, officers and employees of the Borrowers may
render services to the Borrowers for compensation at the same rates
generally paid by corporations engaged in the same or similar
businesses for the same or similar services;
(b) The Borrowers may enter into and carry out other
transactions with its Affiliates if in the ordinary course of business,
pursuant to the reasonable requirements of the Borrowers' business, and
upon terms which are fair and reasonable and no less favorable to the
Borrowers than would obtain in a comparable arm's-length transaction;
and
(c) This provision shall not apply to transactions between a
Borrower, on the one hand, and one or more of its wholly-owned
Subsidiaries, on the other hand.
7.11. Continuation of or Change in Business. Each Borrower
-------------------------------------------
shall, and shall cause each of its Subsidiaries to, continue to engage in the
business substantially as conducted and operated by the Borrowers and their
Subsidiaries during the present and preceding fiscal years of such Persons, and
each Borrower will not, and will not permit any of its Subsidiaries to, engage
in any other business.
7.12. Regulation U. Each Borrower shall not, and shall not
------------------
permit any of its Subsidiaries to, use the proceeds of any Loans hereunder or
use a Letter of Credit directly or indirectly to purchase or carry any "margin
-47-
stock" (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying, directly or indirectly, any such margin stock.
7.13. State of Organization. No Borrower or wholly-owned
----------------------------
subsidiary of a Borrower shall change the state or jurisdiction of their
incorporation or organization.
Article VIII
------------
Defaults
--------
8.01. Events of Default. An Event of Default shall mean the
-----------------------
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary,
involuntary or effected by operation of Law):
(a) The Borrowers shall fail to pay when due the principal of
or interest on any Note or Letter of Credit Reimbursement Obligation,
any fee or any other amount due hereunder or under any Note; or
(b) Any representation or warranty made by the Borrowers under
this Agreement or under any of the Loan Documents or any statement made
by the Borrowers in any financial statement, certificate, report,
exhibit or document furnished by the Borrowers to the Bank pursuant to
this Agreement or any Loan Document shall prove to have been false or
misleading in any material respect as of the time when made (including
by omission of material information necessary to make such
representation, warranty or statement in light of the circumstances
under which it was made, not misleading); or
(c) The Borrowers shall default in the performance or
observance of any covenant contained in Article VI or Article VII
hereof or under any Note or Loan Document; or
(d) (i) Any Guarantor shall default in the performance or
observance of any covenant under its respective Guaranty or shall fail
to pay when due any amount due under the Guaranty or any other Loan
Document; (ii) any representation or warranty made by any Guarantor
under its Guaranty shall prove to have been false or misleading in any
material respect as of the time when made (including by omission of
material information necessary to make such representation, warranty or
statement in light of the circumstances under which it was made, not
misleading); or
(e) Any Borrower or any of its Subsidiaries (i) shall default
(as principal or as guarantor or other surety) in any payment of any
obligation (or set of related obligations) in respect of Indebtedness
owing to the Bank or any other Indebtedness in excess of $100,000 in
aggregate amount beyond any period of grace with respect thereto or, if
such obligation or obligations is or are payable or repayable on
demand, shall fail to pay or repay such obligation or obligations when
demanded or (ii) shall default in the observance of any covenant, term
or condition contained in any agreement or instrument by which such
obligation or obligations is or are created, secured or evidenced if
the effect of such default is to cause, or to permit the holder or
holders of such obligation or obligations (or a trustee or agent on
behalf of such holder or holders) to cause, all or part of such
obligation or obligations to become due before its or their otherwise
stated maturity; provided that if an event or condition described in
subsection (i) or (ii) of this Section 8.01(e) would have occurred or
existed but for the grant of a waiver or similar indulgence to any
Borrower or any of its Subsidiaries, no such waiver or indulgence shall
be deemed to exist if any Borrower or any of its Subsidiaries pays or
agrees to pay any consideration for such waiver or indulgence
(including but not limited to a reduction in maturity, an increase in
rates or the granting of collateral); or
-48-
(f) If the Bank shall make a determination that the potential
liabilities associated with the events set forth in subsections (i)
through (ix) below, individually or in the aggregate, would reasonably
be expected to have a material adverse effect on the business,
operations, condition, financial or otherwise, or prospects of any
Borrower or any of its Subsidiaries or on the ability of any Borrower
or any of its Subsidiaries to perform their respective obligations
under this Agreement, the Notes or any Loan Document:
(i) The PBGC notifies a Plan pursuant to Section 4042
of ERISA by service of a complaint, threat of filing a law
suit or otherwise of its determination that an event
described in Section 4042(a) of ERISA has occurred, a Plan
should be terminated, or a trustee should be appointed for a
Plan; or
(ii) Any action is taken to terminate a Plan pursuant
to its provisions or the plan administrator files with the
PBGC any notice in connection with the termination of a Plan
in accordance with Section 4041 of ERISA; or
(iii) Any action is taken by a plan administrator to
have a trustee appointed for a Plan pursuant to Section 4042
of ERISA; or
(iv) A return is filed with the Internal Revenue
Service, or a Plan is notified by the Secretary of the
Treasury that a notice of deficiency under Section 6212 of the
Code has been mailed, with respect to the tax imposed under
Section 4971(a) of the Code for failure to meet the minimum
funding standards established under Section 412 of the Code;
or
(v) A Reportable Event occurs with respect to a Plan
other than a Reportable Event described in 29 C.F.R. Part
2615.13 or 2615.19 that occurs solely as a result of an
amendment to or merger of a Plan made solely for the purpose
of complying with the Tax Reform Act of 1986, as amended,
provided that the representations in Section 4.10 continue to
be true immediately after such amendment or merger becomes
effective; or
(vi) Any action is taken to amend a Plan to become an
employee benefit plan described in Section 4021(b)(1) of
ERISA, causing a Plan termination under Section 4041(e) of
ERISA; or
(vii) Any Borrower or any Controlled Group Member
receives a notice of liability or demand for payment on
account of complete withdrawal under Section 4203 of ERISA,
partial withdrawal under Section 4205 of ERISA or on account
of becoming secondarily liable for withdrawal liability
payments under Section 4204 of ERISA (sale of assets); or
(viii) The assets of any Borrower or any Controlled
Group Member are encumbered as a result of security provided
to a Plan pursuant to Section 412 of the Code or Section 306
of ERISA in connection with a request for a minimum funding
waiver or extension of the amortization period, or pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA as a
result of a Plan amendment; or
(ix) Any Borrower or a Controlled Group Member fails
to pay the PBGC premium with respect to a Plan when due and it
remains unpaid for more than thirty (30) days thereafter; or
(g) One or more judgments for the payment of money shall have
been entered against a Borrower or any of its Subsidiaries, which
-49-
judgment or judgments exceed $100,000 in the aggregate, and such
judgment or judgments shall have become final and nonappealable or
shall have remained undischarged and unstayed for a period of sixty
consecutive days; or
(h) A writ or warrant of attachment, garnishment, execution,
distraint or similar process shall have been issued against a Borrower
or any of its properties which shall have remained undischarged and
unstayed for a period of thirty consecutive days; or
(i) Any authorization, consent, approval, license, exemption,
registration, qualification, designation, declaration, filing or other
action or undertaking now or hereafter made by or with any Official
Body in connection with this Agreement, the Notes or any Loan Document
or any such action or undertaking now or hereafter necessary or
advisable to make this Agreement, the Notes or any Loan Document legal,
valid, enforceable and admissible in evidence is not obtained or shall
have ceased to be in full force and effect or shall have been modified
or amended or shall have been held to be illegal or invalid, and the
Bank shall have determined in good faith (which determination shall be
conclusive) that such event or occurrence would reasonably be expected
to have a material adverse effect on the Bank's rights under this
Agreement, any Note or any Loan Document; or
(j) If the Bank shall have determined in good faith that a
material adverse change has occurred in the business, operations,
condition, financial or otherwise, or prospects of any Borrower or any
of its Subsidiaries or that the prospect of payment or of performance
of any material covenant, agreement or duty under this Agreement, the
Notes or any Loan Document is impaired in any material respect and, in
the judgment of the Bank, is not reasonably capable of being cured
within a reasonable period of time; or
(k) A proceeding shall have been instituted in respect of any
Borrower or any Subsidiary:
(i) seeking to have an order for relief entered in
respect of such Person or seeking a declaration or entailing a
finding that such Person is insolvent or a similar declaration
or finding, or seeking dissolution, winding-up, charter
revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief
with respect to such Person, its assets or its debts under any
law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any
other similar law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other similar
official for such Person or for all or any substantial part of
its property,
and such proceeding shall result in the entry, making or grant of any
such order for relief, declaration, finding, relief or appointment, or
such proceeding shall remain undismissed and unstayed for a period of
thirty consecutive days; or
(l) Any Borrower or any of its Subsidiaries shall become
insolvent, shall become generally unable to pay its debts as they
become due, shall voluntarily suspend transaction of its business,
shall make a general assignment for the benefit of creditors, shall
institute a proceeding described in Section 8.01(k)(i) or shall consent
to any such order for relief, declaration, finding or relief described
therein, shall institute a proceeding described in Section 8.01(k)(ii)
or shall consent to any such appointment or to the taking of possession
by any such official of all or any substantial part of its property
whether or not any such proceeding is instituted, shall dissolve, wind
up or liquidate itself or any substantial part of its property, or
shall take any action in furtherance of any of the foregoing; or
-50-
(m) The occurrence of a Change of Control.
8.02. Consequences of an Event of Default.
------------------------------------------
(a) If an Event of Default specified in subsections (a)
through (j) or (m) of Section 8.01 shall occur and be continuing or shall exist
the Bank shall be under no further obligation to make Loans or to issue Letters
of Credit hereunder, the Bank may terminate the Commitments, and the Bank may
declare the unpaid principal amount of the Notes, all Letter of Credit
Reimbursement Obligations, interest accrued thereon and all other amounts owing
by the Borrowers hereunder or under the Notes to be immediately due and payable
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue.
(b) If an Event of Default specified in subsection (k) or (l)
of Section 8.01 hereof shall occur or exist, the Bank shall be under no further
obligation to make Loans or to issue Letters of Credit hereunder, the
Commitments automatically shall be terminated, and the unpaid principal amount
of the Notes, all Letter of Credit Reimbursement Obligations, interest accrued
thereon and all other amounts owing by the Borrowers hereunder or under the
Notes shall become immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived, and an
action therefor shall immediately accrue.
8.03. Set-Off. If the unpaid principal amount of any Note or
-------------
Letter of Credit Reimbursement Obligation, interest accrued thereon or other
amount owing by the Borrowers hereunder or under any Note shall have become due
and payable (by acceleration or otherwise), the Bank and any branch, subsidiary
or affiliate of the Bank anywhere in the world each shall have the right, in
addition to all other rights and remedies available to it, without notice to the
Borrowers, to set-off against and to appropriate and apply to such due and
payable amounts any debt owing to, and any other funds held in any manner for
the account of, the Borrowers by the Bank or by such branch, subsidiary or
affiliate, including, without limitation, all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by the Borrowers with the
Bank or such branch, subsidiary or affiliate. Such right shall exist whether or
not the Bank shall have given notice or made any demand hereunder or under any
Note, whether or not such debt owing to or funds held for the account of the
Borrowers is or are matured or unmatured and regardless of the existence or
adequacy of any collateral, guaranty or any other security, right or remedy
available to the Bank. Such right shall exist regardless of the currency in
which is expressed such debt owing to or such funds held for the account of the
Borrowers, and if such a debt is or such funds are expressed in a currency (the
"Set-off Currency") other than the currency payable hereunder (the "Contractual
Currency"), for purposes of effecting set-off the rate of exchange used shall be
that at which in accordance with normal banking procedures the Bank or such
branch, subsidiary or affiliate could purchase the Contractual Currency with the
Set-off Currency on the Business Day following such set-off. The Borrowers
hereby consent to and confirm the foregoing arrangements and confirm the Bank's
rights and each such branch's, subsidiary's and affiliate's rights of banker's
lien and set-off. Nothing in this Agreement shall be deemed a waiver or
prohibition of or restriction on the Bank's rights or any such branch's,
subsidiary's or affiliate's rights of banker's lien or set-off.
Article IX
----------
Miscellaneous
-------------
9.01. Holidays. Except as otherwise provided herein, whenever
--------------
any payment or action to be made or taken hereunder or under the Notes or any
Loan Document shall be stated to be due on a day which is not a Business Day,
such payment or action shall be made or taken on the next following Business
Day, and such extension of time shall be included in computing interest or fees,
if any, in connection with such payment or action.
-51-
9.02. Records. The unpaid principal amount of the Notes and
-------------
Letter of Credit Reimbursement Obligations, the unpaid interest accrued thereon,
the interest rate or rates applicable to such unpaid principal amounts, the
duration of such applicability, the Bank's Commitment and accrued and unpaid
fees shall at all times be ascertained from the records of the Bank, which shall
be conclusive absent manifest error.
9.03. Amendments or Waivers. The Borrowers and the Bank may
---------------------------
from time to time enter into agreements amending, modifying or supplementing
this Agreement, the Notes or any Loan Document or changing the rights or
obligations of the Borrowers or the Bank hereunder or thereunder. Any such
agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. In the case of any waiver or consent
relating to any Event of Default or Potential Default hereunder, such Event of
Default or Potential Default so waived or consented to shall be deemed to be
cured and not continuing, but no such waiver or consent shall extend to any
other or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
9.04. No Implied Waiver; Cumulative Remedies. No course of
--------------------------------------------
dealing and no delay or failure of the Bank in exercising any right, power or
privilege under this Agreement, the Notes or any Loan Document shall affect any
other or future exercise thereof or the exercise of any other right, power or
privilege; nor shall any single or partial exercise of any such right, power or
privilege or any abandonment or discontinuance of steps to enforce such a right,
power or privilege preclude any further exercise thereof or of any other right,
power or privilege. The rights and remedies of the Bank under this Agreement,
the Notes and the Loan Documents are cumulative and not exclusive of any rights
or remedies which the Bank otherwise would have.
9.05. Notices. All notices under Sections 2.01, 2.02, 2.03, or
-------------
2.04 shall be sent to the Bank by telex (which shall be effective when received)
or by telephone confirmed by telex or first-class mail (which shall be effective
when telephoned), in all cases with charges prepaid. All notices under Sections
2.02(a) and (f), and 2.07 shall be sent to the Borrowers by telex (which shall
be effective when received), by telephone confirmed by telex or first-class mail
(which shall be effective when telephoned) or by first-class or first-class
express mail (which shall be effective when received), in all cases with charges
prepaid. All other notices, requests, demands, directions and other
communications (collectively "notices") under the provisions of this Agreement,
the Notes or any Loan Document shall be in writing (including telexed
communication) unless otherwise expressly provided hereunder or thereunder and
shall be sent by first-class or first-class express mail, or by telex with
confirmation in writing mailed first-class, in all cases with charges prepaid,
and any such properly given notice shall be effective when received. All notices
shall be sent to the applicable party at the address stated on the signature
page hereof or in accordance with the last unrevoked written direction from such
party to the other parties hereto.
9.06. Expenses; Taxes; Attorneys' Fees.
---------------------------------------
(a) The Borrowers agree to pay or cause to be paid and to save
the Bank harmless against liability for the payment of all reasonable
out-of-pocket expenses, including but not limited to fees and expenses of
counsel for the Bank, incurred by the Bank from time to time and (a) arising in
connection with the preparation, execution, delivery and performance of this
Agreement, the Notes, a Letter of Credit and the Loan Documents, (b) relating to
any requested amendments, waivers or consents to this Agreement, the Notes, a
Letter of Credit or any Loan Document, (c) arising in connection with the Bank's
enforcement or preservation of rights under this Agreement, the Notes, a Letter
of Credit or any Loan Document, including but not limited to such expenses as
may be incurred by the Bank in the collection of the outstanding Notes and any
litigation, proceeding, dispute or so-called "workout" in any way related to the
Loans, a Letter of Credit or a Letter of Credit Reimbursement Obligations. The
Borrowers hereby agree to indemnify the Bank from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred by
-52-
any of them arising out of or by reason of any investigation, litigation or
other proceeding related to any use or proposed use of the proceeds of any Loans
or a Letter of Credit or the Borrowers' entry into and performance of this
Agreement, the Notes or any Loan Document (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified).
(b) The Borrowers further agree to and hereby do indemnify and
hold harmless the Bank, the Participants and each affiliate and each director,
officer, employee and agent of each thereof and the other banks and financial
institutions which may be offered to participate in the transactions
contemplated by this Agreement, the Notes and the Loan Documents and each
affiliate and each director, officer, employee and agent thereof (the
"Indemnified Parties") from and against any and all losses, claims, damages,
expenses or liabilities to which any thereof may become subject, insofar as such
losses, claims, damages, expenses or liabilities (or actions, suits or
proceedings, including any inquiry or investigation or claims in respect
thereof) arise out of, in any way relate to, or result from a claim made by any
third party in respect of the transactions described herein or the financing
contemplated hereby (whether or not any Indemnified Party is a party to any
action or proceeding out of which any such losses, claims, damages, expenses or
liabilities arise), and agrees to reimburse the Indemnified Parties for any
reasonable legal or other expenses incurred by any thereof in or in connection
with investigating, preparing to defend, defending or otherwise participating in
any such claim, action or proceeding related to any such loss, claim, damage or
liability, except that the Borrowers shall not be obligated to indemnify, hold
harmless or reimburse an Indemnified Party for any such losses, claims, damages,
expenses or liabilities to the extent that the same are determined in a final
judgment by a court of competent jurisdiction to have resulted primarily from
the gross negligence or willful misconduct of the Indemnified Party seeking such
indemnity. The Bank hereby agrees to give the Borrowers prompt written notice of
the incurrence of any loss, claim, damage, expense or liability (or the
institution of any action, suit or proceeding, including any inquiry or
investigation, or claim in respect thereof) which may give rise to an obligation
by the Borrowers to indemnify an Indemnified Party pursuant to this paragraph
promptly upon becoming aware thereof. The Borrowers hereby agree that the Bank's
failure to give any such notice shall not excuse their performance of their
obligations pursuant to this paragraph except to the extent that any such
failure shall be determined in a final judgment by a court of competent
jurisdiction to have resulted in material prejudice to the Borrowers.
(c) The Borrowers agree to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
determined by the Bank to be payable in connection with this Agreement, the
Notes, a Letter of Credit or any Loan Document, and the Borrowers agree to save
the Bank harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
(d) In the event of termination adversely to a Borrower of any
action at law or suit in equity in relation to this Agreement, the Notes, a
Letter of Credit or any Loan Document, the Borrowers will pay, in addition to
all other sums which the Borrowers may be required to pay, a reasonable sum for
attorneys' fees incurred by the Bank in connection with such action or suit.
9.07. Severability. The provisions of this Agreement are
------------------
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
9.08. Governing Law. This Agreement, the Notes and the Loan
-------------------
Documents shall be deemed to be contracts under the laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and
enforced in accordance with the laws of said Commonwealth.
-53-
9.09. Prior Understandings. This Agreement supersedes all
--------------------------
prior understandings and agreements, whether written or oral, among the parties
hereto relating to the transactions provided for herein.
9.10. Duration; Survival. All representations and warranties
------------------------
of the Borrowers contained herein or made in connection herewith shall survive
the making of and shall not be waived by the execution and delivery of this
Agreement, the Notes, a Letter of Credit or any Loan Document, any investigation
by the Bank or the making of any Loan or the issuance of a Letter of Credit
hereunder. All covenants and agreements of the Borrowers contained herein shall
continue in full force and effect from and after the date hereof so long as the
Borrowers may borrow hereunder, request the issuance of a Letter of Credit
hereunder or so long as any Letter of Credit shall be outstanding, and until
payment in full of the Notes, all Letter of Credit Reimbursement Obligations,
interest thereon, fees and all other obligations of the Borrowers under this
Agreement, the Notes and the Loan Documents. Without limitation, it is
understood that all obligations of the Borrowers to make payments to or
indemnify the Bank (including, without limitation, obligations arising under
Sections 2.07, 3.03 and 10.06 hereof) shall survive the payment in full of the
Notes and Letter of Credit Reimbursement Obligations and of all other
obligations of the Borrowers hereunder and thereunder.
9.11. Counterparts. This Agreement may be executed in any
------------------
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
9.12. Successors and Assigns; Participations; Assignments.
---------------------------------------------------------
(a) Successors and Assigns. This Agreement shall be binding
----------------------
upon and inure to the benefit of the Borrowers, the Bank and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of their rights hereunder without the prior written consent of the Bank.
(b) Participations. The Bank may, in the ordinary course of
--------------
its commercial banking business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan or Letter of Credit Reimbursement Obligation owing to the
Bank, any Note held by the Bank, any Commitment of the Bank or any other
interest of the Bank hereunder. The Borrowers hereby consent to and confirm the
Bank's right without notice to or consent of the Borrowers to create or dispose
of participations as contemplated by this Section 10.12(b) and agrees that each
Participant shall be entitled to the benefits of Sections 2.06, 2.07, 3.03(c)
and 8.03 with respect to its participation in the Commitments or a Letter of
Credit and the Loans, a Letter of Credit and a Letter of Credit Reimbursement
Obligations outstanding from time to time.
9.13. Personal Liability of Officers. Notwithstanding anything
------------------------------------
to the contrary set forth herein, no officer of any Borrower delivering any
certification under or pursuant to this Agreement, the Notes or any Loan
Document shall have any personal liability to the Bank, based thereon in the
absence of gross negligence or willful misconduct of such Person in connection
with the preparation, execution and delivery thereof.
9.14. Confession of Judgment. THE BORROWERS HEREBY AUTHORIZE
----------------------------
AND EMPOWER THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR
FOR THE BORROWERS AND TO CONFESS JUDGMENT AS OFTEN AS NECESSARY AGAINST THE
BORROWERS IN FAVOR OF THE BANK, AS OF ANY TERM OR TIME, FOR ALL SUMS DUE
HEREUNDER PLUS INTEREST DUE, TOGETHER WITH COSTS AND OTHER EXPENSES OF LEGAL
PROCEEDINGS AND AN ATTORNEY'S COMMISSION EQUAL TO FIVE PERCENT OF THE AGGREGATE
AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN $500.00 WITH RELEASE OF
-54-
ALL ERRORS. THE BORROWERS WAIVE ALL LAWS EXEMPTING REAL OR PERSONAL PROPERTY
FROM EXECUTION.
THE BORROWERS ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY
COUNSEL IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT
THEY KNOWINGLY WAIVE THEIR RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT
AND UNDERSTAND THAT, UPON SUCH ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL
REAL PROPERTY OF ANY BORROWER IN THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.
NOTWITHSTANDING THE ATTORNEYS' COMMISSION PROVIDED FOR IN THE PRECEDING
PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM
CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY RECEIVE FROM THE
BORROWERS SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY THE BANK.
9.15. Additional Legal Matters.
-------------------------------
(a) Submission to Jurisdiction and Venue; Consent to Service
of Process; Waiver Of Jury Trial; Etc. THE BORROWERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREE THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT IN
CONNECTION WITH ANY OF THE FOREGOING (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN PHILADELPHIA COUNTY, PENNSYLVANIA, SUBMIT TO
THE JURISDICTION OF SUCH COURTS, AND AGREE NOT TO BRING ANY RELATED
LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE BANK TO BRING ANY RELATED LITIGATION IN ANY OTHER FORUM);
(ii) ACKNOWLEDGE THAT SUCH COURTS WILL BE THE MOST CONVENIENT
FORUM FOR ANY RELATED LITIGATION, WAIVE ANY OBJECTION TO THE LAYING OF
VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVE ANY
CLAIM THAT ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND WAIVE ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER IT;
(iii) CONSENT AND AGREE TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THEM AT THE ADDRESS FOR
NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENT AND AGREE THAT SUCH
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF
PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
-55-
(iv) WAIVE THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
(b) Limitation of Liability. NO CLAIM MAY BE MADE BY THE
BORROWERS AGAINST THE BANK OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE,
ATTORNEY OR AGENT OF THE BANK FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT,
OMISSION OR EVENT IN CONNECTION WITH ANY OF THE FOREGOING (WHETHER BASED ON
BREACH OF CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY); AND THE BORROWERS
HEREBY WAIVE, RELEASE AND AGREE NOT TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES,
WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST.
(c) Waiver of Jury Trial. THE BORROWERS WAIVE ANY RIGHT TO
TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT, THE NOTES AND THE LOAN DOCUMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWERS OR BANK WITH RESPECT
TO ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE. THE BORROWERS AGREE AND CONSENT THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THE CREDIT AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE BORROWERS TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY. THE
BORROWERS ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL
REGARDING THIS PARAGRAPH, THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND
EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS
PARAGRAPH.
-56-
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
ATTEST: X-XXX.XXX CORP.
/s/ Xxxxxx X. Xxxxxxx By /s/ W.T. Hannely
-------------------------- ----------------------------
By: Xxxxxx X.Xxxxxxx Name: W T Hannely
Title: Controller & Asst. Secretary Title: Chief Financial Officer
[CORPORATE SEAL]
Address for notices:
00 Xxxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
ATTEST: BROADBAND CAPITAL CORPORATION
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxx X. Xxxxxxxx
-------------------------- ----------------------------
By: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Controller & Asst Secretary Title: President
[CORPORATE SEAL]
Address for notices:
Xxxxx 0000
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
CITIZENS BANK OF PENNSYLVANIA
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address for notices:
X.X. Xxx 0000
00 Xxxxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
-57-
EXHIBIT A
---------
REVOLVING CREDIT NOTE
---------------------
$ Philadelphia, Pennsylvania
--------------------------
February 26, 2002
FOR VALUE RECEIVED, the undersigned X-XXX.XXX CORP, a
------------------ --------------
Pennsylvania corporation, and BROADBAND CAPITAL CORPORATION, a Delaware
-----------------------------
corporation (together, the "Borrowers"), promise to pay to the order of CITIZENS
--------
BANK OF PENNSYLVANIA (the "Bank") on or before the Revolving Credit Expiration
--------------------
Date, and at such earlier dates as may be required by the Credit Agreement (as
defined below), the lesser of (i) the principal sum of
_____________________________________________ Dollars ($______________) or (ii)
the aggregate unpaid principal amount of all Revolving Credit Loans made by the
Bank to the Borrowers from time to time pursuant to the Credit Agreement. The
Borrowers further promise to pay to the order of the Bank interest on the unpaid
principal amount hereof from time to time outstanding at the rate or rates per
annum determined pursuant to the Credit Agreement, payable on the dates set
forth in the Credit Agreement.
This Note is one of the "Revolving Credit Notes" as referred
to in, and entitled to the benefits of, the Credit Agreement, dated as of
February 26, 2002, by and among the Borrowers and the Bank (as the same may be
amended, modified or supplemented from time to time, the "Credit Agreement"),
which among other things provides for the acceleration of the maturity hereof
upon the occurrence of certain events and for prepayments in certain
circumstances and upon certain terms and conditions. Terms defined in the Credit
Agreement and not otherwise defined in this Note have the same meanings herein
as specified in the Credit Agreement.
The Borrowers hereby expressly waive presentment, demand,
notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Credit Agreement, and an action for amounts due hereunder or thereunder shall
immediately accrue.
This Note shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
principles of choice of law.
THE BORROWERS HEREBY AUTHORIZE AND EMPOWER THE PROTHONOTARY OR
ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR THE BORROWERS AND TO CONFESS
JUDGMENT AS OFTEN AS NECESSARY AGAINST THE BORROWERS IN FAVOR OF THE HOLDER
HEREOF, AS OF ANY TERM OR TIME, FOR THE ABOVE SUM PLUS INTEREST DUE UNDER THE
TERMS HEREOF, TOGETHER WITH COSTS AND OTHER EXPENSES OF LEGAL PROCEEDINGS AND AN
ATTORNEY'S COMMISSION EQUAL TO FIFTEEN PERCENT OF THE AGGREGATE AMOUNT OF THE
FOREGOING SUMS, BUT IN NO EVENT LESS THAN $500.00 WITH RELEASE OF ALL ERRORS.
THE BORROWERS WAIVE ALL LAWS EXEMPTING REAL OR PERSONAL PROPERTY FROM EXECUTION.
THE BORROWERS ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY
COUNSEL IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS NOTE AND THAT THEY
KNOWINGLY WAIVE THEIR RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT AND
UNDERSTAND THAT, UPON SUCH ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL REAL
PROPERTY OF BORROWERS IN THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.
NOTWITHSTANDING THE ATTORNEYS' COMMISSION PROVIDED FOR IN THE PRECEDING
PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM
CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY RECEIVE FROM THE
BORROWERS SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY THE BANK.
IN WITNESS WHEREOF, the Borrowers, intending to be legally
bound hereby, have caused this Note to be duly executed the day and year first
above written.
X-XXX.XXX CORP.
-----------------------------------
By:
Title:
BROADBAND CAPITAL CORPORATION
-----------------------------------
By:
Title:
EXHIBIT B
---------
STANDARD NOTICE OF BORROWING
----------------------------
Dated as of:
------------------------
Citizens Bank of Pennsylvania
Attn: Xxxxxx X. Xxxxx
00 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you under
Section 2.01(d) of the Credit Agreement dated as of February 26, 2002 (as the
same may be amended, modified or supplemented from time to time, the "Credit
Agreement"), by and among X-XXX.xxx Corp. ("C-Cor"), Broadband Capital
Corporation ("Broadband" and together with C-Cor, the "Borrowers") and Citizens
Bank of Pennsylvania, ("Bank").
1. The Borrowers hereby request a Revolving Credit Loan in the
aggregate principal amount of $ ________.1 ----------------------
2. The Borrowers hereby request that such Loan be made on the
following Business Day: .2 -------------------
3. The Borrowers hereby request that the Revolving Credit Loan
bear interest at the following interest rate, plus the Applicable Margin, as set
forth below:
Interest Period
Subset (LIBOR
of Loans Interest Rate Rate only)
-------- ------------- ----------
[Base Rate (Prime or Fed
Funds) or LIBOR Lending
Rate]
4. The principal amount of all Loans and Letter of Credit
Reimbursement Obligations outstanding as of the date hereof (including the
requested Loan) does not exceed the maximum amount permitted to be outstanding
pursuant to the terms of the Credit Agreement.
---------------------
(1) Requests for any Loan accruing interest at the LIBOR Rate shall be in
amounts equal to $1,000,000 or $500,000 increments in excess thereof.
(2) Requests for Revolving Credit Loans accruing interest at the Prime
Rate, may be made on the same Business Day. Requests for Revolving
Credit Loans accruing interest at the LIBOR Rate must be made three
(3) Business Days in advance.
5. All of the conditions applicable to the Loan(s) requested
herein as set forth in the Credit Agreement have been satisfied as of the date
hereof and will remain satisfied to the date of such Loan.
6. The representations and warranties contained in Article IV
of the Credit Agreement are true and correct in all material respects on and as
of the date hereof, with the same effect as if made on such date, except for any
representation or warranty made as of an earlier date, which representation and
warranty shall remain true and correct as of such earlier date.
7. No Potential Default or Event of Default has occurred or is
continuing under the Credit Agreement, either on the date hereof or after giving
effect to the Loan(s) requested hereunder.
8. The Bank has received the most recent Officer's Compliance
Certificate required to be delivered under the Credit Agreement and each
additional document, instrument, legal opinion or other item of information
reasonably requested by it.
9. Capitalized terms used herein and not defined herein shall
have the meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice
of Borrowing on behalf of the Borrowers this day of , .
--- ------------ -----
X-XXX.XXX CORP., for itself and on behalf of the Borrowers
By:
--------------------------------------------------------
Name:
Title: [Responsible Officer]
-2-
EXHIBIT C
---------
STANDARD NOTICE OF PREPAYMENT
-----------------------------
Dated as of:
----------------------------
Citizens Bank of Pennsylvania
Attn: Xxxxxx X. Xxxxx
00 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you
under Section 2.03 of the Credit Agreement dated as of February 26, 2002 (as the
same may be amended, modified or supplemented from time to time, the "Credit
Agreement"), by and among X-XXX.xxx Corp. ("C-Cor"), Broadband Capital
Corporation ("Broadband" and together with C-Cor, the "Borrowers") and Citizens
Bank of Pennsylvania ("Bank").
1. The Borrowers hereby provide notice to the Bank that they
shall repay the [Base Rate Portion] and/or [LIBOR Rate Portion] of the following
Loan.(1): $______________________.
2. The Borrowers shall repay the above-referenced Loan on the
following Business Day:____________________________. (Complete with a Business
Day no later than the same Business Day with respect to the Base Rate Portion of
any Loan and three (3) Business Days subsequent to the date of this Notice of
Prepayment with respect to the LIBOR Rate Loan Portion of any Loan.)
3. Capitalized terms used herein and not defined herein shall
have the meanings assigned thereto in the Credit Agreement.
---------------------
(1) Repayment of the LIBOR Rate Portion of any Loan shall be equal to
$500,000 or $1,000,000 or $500,000 increments in excess thereof.
IN WITNESS WHEREOF, the undersigned has executed this Notice
of Prepayment this day of , .
-------------- ----------------- ----
X-XXX.XXX CORP., for itself and on behalf of the Borrowers
By:
--------------------------------------------------------
Name:
Title: [Responsible Officer]
-2-
EXHIBIT D
---------
STANDARD NOTICE OF CONVERSION/RENEWAL
-------------------------------------
Dated as of:
----------------------------
Citizens Bank of Pennsylvania
Attn: Xxxxxx X. Xxxxx
00 Xxxxx Xxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Renewal (the "Notice") is
delivered to you under Section 2.04 of the Credit Agreement dated as of February
26, 2002 (as the same may be amended, modified or supplemented from time to
time, the "Credit Agreement"), by and among X-XXX.xxx Corp. ("C-Cor"), Broadband
Capital Corporation ("Broadband" and together with C-Cor, the "Borrowers") and
Citizens Bank of Pennsylvania ("Bank").
1. This Notice is submitted for the purpose of: (Check one and
complete applicable information in accordance with the Credit Agreement.)
Converting all or a portion of a Loan from the Base Rate to the
---------------------------------------------------------------
LIBOR Lending Rate.(1)
------------------
(a) The aggregate outstanding principal balance of such
Revolving Credit Loan is $ .
---------------
(b) The principal amount of such Loan to be converted is
[circle one] $500,000 or $1,000,000
(c) The requested effective date of the conversion of such
Loan is .
---------------
(d) The requested Interest Period applicable to the converted
Loan is .
-----------------
----------------------------------
(1) The maximum number of Funding Segments of the LIBOR Rate Portion of
Revolving Credit Loans shall be six (6) at $1,000,000 or $500,000
increments in excess thereof.
Converting all or a portion of a Loan from the LIBOR Lending Rate
-----------------------------------------------------------------
to the Base Rate.
----------------
(a) The aggregate outstanding principal balance of such
Revolving Credit Loan is $ .
------------
(b) The last day of the current Interest Period for such Loan
is .
-------------
(c) The principal amount of such Loan to be converted is
$ .
---------------
(d) The requested effective date of the conversion of such
Loan is .
-----------
Renewing all or a portion of a Loan with the LIBOR Lending
----------------------------------------------------------
Rate.
----
(a) The aggregate outstanding principal balance of such
Revolving Credit Loan is $ .
--------------
(b) The last day of the current Interest Period for such Loan
is .
-------------
(c) The principal amount of such Loan to be renewed is [circle
one] $500,000 or $1,000,000.
(d) The requested effective date of the renewal of such Loan
is .
---------------
(e) The requested Funding Period applicable to the renewed
Loan is .
-------------
2. The principal amount of all Loans and Letter of Credit
Reimbursement Obligations outstanding as of the date hereof does not exceed the
maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.
3. All of the conditions applicable to the conversion or renewal
of the Set of Loans requested herein as set forth in the Credit Agreement have
been satisfied or waived as of the date hereof and will remain satisfied or
waived to the date of such Set of Loans.
4. No Potential Default or Event of Default has occurred or is
continuing under the Credit Agreement.
5. Capitalized terms used herein and not defined herein shall
have the meanings assigned thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Renewal this day of , .
----- ----------- ----
-2-
X-XXX.XXX CORP., for itself and on behalf of the Borrowers
By:
--------------------------------------------------------
Name:
Title: [Responsible Officer]
-3-
EXHIBIT E
---------
GUARANTY AND SURETYSHIP AGREEMENT
---------------------------------
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Agreement"), dated as
of _____________, 2001, made by ___________________, a ___________ corporation
(the "Guarantor"), in favor of Citizens Bank of Pennsylvania, a Pennsylvania
state chartered bank, or its successors (the "Bank") under the terms of the
Credit Agreement, as hereinafter defined.
Recitals:
---------
A. X-XXX.xxx Corp., a Pennsylvania corporation ("C-Cor"), and
Broadband Capital Corporation, a Delaware corporation ("Broadband" and together
with C-Cor, the "Borrowers") have entered into a Credit Agreement dated as of
February 26, 2002 (as amended from time to time, the "Credit Agreement") with
the Bank. The Guarantor, a wholly-owned subsidiary of C-Cor, will derive
substantial direct and indirect benefit from the transactions set forth in the
Credit Agreement, and the Guarantor may receive a portion of the proceeds of
extensions of credit under the Credit Agreement from time to time.
B. Pursuant to Sections 5.01(b) and 6.12(c) of the Credit Agreement,
all wholly-owned subsidiaries of the Borrowers, whether in existence at the time
of Closing or formed thereafter, must execute and deliver a Guaranty in form and
substance satisfactory to the Bank.
C. The Guarantor acknowledges that the Bank has relied and will rely
on this Agreement in entering into the Loan Documents and extending credit under
the Credit Agreement. The Guarantor further acknowledges that it has,
independently and without reliance upon the Bank or any representation by or
other information from the Bank, made its own credit analysis and decision to
enter into this Agreement.
NOW, THEREFORE, in consideration of the premises, and intending to
be legally bound, the Guarantor hereby agrees as follows:
Article I
---------
Definitions
-----------
1.1. Definitions.
----------------
(a) Certain Definitions. Capitalized terms not otherwise defined
-------------------
herein shall have the meanings given in the Credit Agreement. In addition to the
other terms defined elsewhere in this Agreement, as used herein the following
terms shall have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time to
time of the Borrowers to the Bank under or in connection with any Loan
Document, including all obligations to pay principal, interest, fees,
indemnities or other amounts, in each case whether such obligations are
direct or indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising (including interest and other obligations
arising or accruing after the commencement of any bankruptcy, insolvency,
reorganization, dissolution or similar proceeding with respect to the
Borrowers or any other Person, or which would have arisen or accrued but
for the commencement of such proceeding, even if such obligation or the
claim therefor is not enforceable or allowable in such proceeding).
"Loan Documents" shall mean the Credit Agreement, this Agreement,
and all agreements and instruments from time to time delivered under or in
connection with any of the foregoing, in each case as the same may be
amended from time to time.
(b) Certain Cross-References. The following terms are defined in
this Agreement in the Section or other place indicated:
"Bank" Preamble
"Borrowers" Recitals
"Credit Agreement" Recitals
"direct or indirect security" 2.2(d)
"Guarantor" Preamble
"notices" 5.3
"Related Litigation" 5.11(b)
Article II
----------
Guaranty and Suretyship
-----------------------
2.1. Guaranty and Suretyship. The Guarantor hereby absolutely,
----------------------------
unconditionally and irrevocably guarantees and becomes surety for the full and
punctual payment and performance of the Guaranteed Obligations as and when such
payment or performance shall become due (at scheduled maturity, by acceleration
or otherwise) in accordance with the terms of the Loan Documents. This Agreement
is an agreement of suretyship as well as of guaranty, is a guarantee of payment
and performance and not merely of collectibility, and is in no way conditioned
upon any attempt to collect from or proceed against the Borrowers or any other
Person or any other event or circumstance. The obligations of the Guarantor
under this Agreement are direct and primary obligations of the Guarantor and are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought against the Guarantor regardless of whether action is brought against
the Borrowers or any other Person or whether the Borrowers or any other Person
is joined in any such action or actions.
2.2. Obligations Absolute. The Guarantor agrees that the Guaranteed
-------------------------
Obligations will be paid and performed strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting the Guaranteed Obligations, any of the
terms of the Loan Documents or the rights of the Bank or any other Person with
respect thereto. The obligations of the Guarantor under this Agreement shall be
absolute, unconditional and irrevocable, irrespective of any of the following:
(a) any lack of legality, validity, enforceability, allowability (in
a bankruptcy, insolvency, reorganization, dissolution or similar
proceeding, or otherwise), or any avoidance or subordination, in whole or
in part, of any Loan Document or any of the Guaranteed Obligations;
(b) any change in the amount, nature, time, place or manner of
payment or performance of, or in any other term of, any of the Guaranteed
Obligations (whether or not such change is contemplated by the Loan
Documents as presently constituted, and specifically including any
increase in the Guaranteed Obligations, whether resulting from the
extension of additional credit to the Borrowers or otherwise), any
execution of any additional Loan Documents, or any amendment or waiver of
or any consent to departure from any Loan Document;
-2-
(c) any taking, exchange, release, impairment or nonperfection of
any collateral, or any taking, release, impairment or amendment or waiver
of or consent to departure from any other guaranty or other direct or
indirect security for any of the Guaranteed Obligations;
(d) any manner of application of collateral or other direct or
indirect security for any of the Guaranteed Obligations, or proceeds
thereof, to any of the Guaranteed Obligations or to other obligations
secured thereby, or any manner of sale or other disposition of any
collateral for any of the Guaranteed Obligations or any other assets of
the Borrowers;
(e) any impairment by the Bank or any other Person of any recourse
of the Guarantor against the Borrowers or any other Person, or any other
impairment by the Bank or any other Person of the suretyship status of the
Guarantor;
(f) any bankruptcy, insolvency, reorganization, dissolution or
similar proceedings with respect to, or any change, restructuring or
termination of the corporate structure or existence of, the Borrowers, the
Guarantor or any other Person;
(g) any failure of the Bank or any other Person to disclose to the
Guarantor any information pertaining to the business, operations,
condition (financial or other) or prospects of the Borrowers or any other
Person, or to give any other notice, disclosure or demand; or
(h) any other event or circumstance (including any defense of
failure of consideration, breach of representation or warranty, statute of
frauds, bankruptcy, lack of capacity, statute of limitations, release,
accord and satisfaction or usury, and excluding only the defense of full,
strict and indefeasible payment and performance) that might otherwise
constitute a defense available to, a discharge of, or a limitation on the
obligations of, the Borrowers, the Guarantor or a guarantor or surety.
2.3. Waivers, etc. The Guarantor hereby irrevocably waives any
-----------------
defense to or limitation on its obligations under this Agreement arising out of
or based upon any matter referred to in Section 2.2 and, without limiting the
generality of the foregoing, any requirement of promptness, diligence or notice
of acceptance, any other notice, disclosure or demand with respect to any of the
Guaranteed Obligations and this Agreement, any requirement of acceptance hereof,
reliance hereon or knowledge hereof by the Bank, and any requirement that the
Bank protects, secures, perfects or insures any lien or any property subject
thereto or exhausts any right or takes any action against the Borrowers or any
other Person or any collateral or other direct or indirect security for any of
the Guaranteed Obligations.
2.4. Reinstatement. This Agreement shall continue to be effective,
------------------
or be automatically reinstated, as the case may be, if at any time payment of
any of the Guaranteed Obligations is avoided, rescinded or must otherwise be
returned by the Bank for any reason, all as though such payment had not been
made.
2.5. No Stay. Without limiting the generality of any other provision
------------
of this Agreement, if any acceleration of the time for payment or performance of
any Guaranteed Obligation, or any condition to any such acceleration, shall at
any time be stayed, enjoined or prevented for any reason (including stay or
injunction resulting from the pendency against the Borrowers or any other Person
of a bankruptcy, insolvency, reorganization, dissolution or similar proceeding),
-3-
the Guarantor agrees that, for purposes of this Agreement and its obligations
hereunder, at the option of the Bank such Guaranteed Obligation shall be deemed
to have been accelerated and such condition to acceleration shall be deemed to
have been met.
2.6. Payments. All payments made by the Guarantor pursuant to this
-------------
Agreement may in the discretion of the Bank be held by the Bank as collateral
for Guaranteed Obligations, or then or at any time thereafter applied in whole
or part by the Bank to the Guaranteed Obligations and all other amounts payable
under this Agreement in such order as the Bank may elect.
2.7. Subrogation, etc. The Guarantor hereby irrevocably waives and
---------------------
releases any and all rights it now has or hereafter may have (known and unknown,
whether arising by operation of law, by agreement or otherwise) against the
Borrowers or any other Person arising from the existence, payment, performance
or enforcement of any of the obligations of the Guarantor under or in connection
with this Agreement or any other Loan Document, including any and all rights of
subrogation, reimbursement, restitution, exoneration, contribution or indemnity,
and any and all other rights that would result in the Guarantor being deemed a
"creditor" under the United States Bankruptcy Code of the Borrowers or any other
Person.
2.8. Continuing Agreement. This Agreement is a continuing guaranty
-------------------------
and shall continue in full force and effect until all Guaranteed Obligations and
all other amounts payable under this Agreement have been paid in cash and
performed in full, and all commitments to extend credit under, and all Letters
of Credit issued under, the Loan Documents have terminated, subject in any event
to reinstatement in accordance with Section 2.4. Without limiting the generality
of the foregoing, the Guarantor hereby irrevocably waives any right to terminate
or revoke this Agreement.
2.9. Limitation on Obligations. Notwithstanding any other provision
------------------------------
hereof, to the extent that mandatory and nonwaivable provisions of applicable
law pertaining to fraudulent transfer or fraudulent conveyance otherwise would
render the full amount of the obligations of the Guarantor under this Agreement
avoidable, invalid or unenforceable, the obligations of the Guarantor under this
Agreement shall be limited to the maximum amount which does not result in such
avoidability, invalidity or unenforceability. In any action, suit or proceeding
pertaining to this Agreement, the burden of proof, by clear and convincing
evidence, shall be on the Person claiming that this Section 2.9 applies to limit
any obligation of the Guarantor under this Agreement, or claiming that any
obligation of the Guarantor under this Agreement is avoidable, invalid or
unenforceable, as to each element of such claim.
Article III
-----------
Representations and Warranties
------------------------------
The Guarantor hereby represents and warrants to the Bank as follows:
3.1. Corporate Status. The Guarantor is a corporation duly
---------------------
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Guarantor has the power to own its property
and to transact the business[es] in which it is engaged or proposes to engage.
The Guarantor is duly qualified to do business as a foreign corporation and is
in good standing in all jurisdictions in which the ownership of its properties
or the nature of its activities or both makes such qualification necessary or
advisable.
3.2. Power and Authorization. The Guarantor has the power to
----------------------------
execute, deliver and perform its obligations under this Agreement and each other
Loan Document to which it is a party, and the Guarantor has taken all necessary
corporate action to authorize such execution, delivery and performance.
-4-
3.3. Execution and Binding Effect. This Agreement and each other
---------------------------------
Loan Document to which the Guarantor is a party has been duly executed and
delivered by the Guarantor and constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor in accordance
with its terms.
3.4. Governmental Approvals and Filings. No authorization, approval
---------------------------------------
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is or will be necessary or advisable in connection with
execution, delivery or performance of this Agreement or any other Loan Document
to which it is a party, or to ensure the legality, validity, binding effect,
enforceability or admissibility in evidence thereof.
3.5. Absence of Conflicts. The execution, delivery and performance
-------------------------
of this Agreement and the other Loan Documents does not and will not
(a) violate or conflict with any law, regulation or ordinance or any
order of any court or other governmental authority or regulatory body, or
(b) violate, conflict with or constitute a default under, or result
in (or give rise to any right of any Person to cause) any termination,
cancellation, prepayment or acceleration of performance of, or result in
the creation or imposition of (or give rise to any obligation to create or
impose) any lien, security interest, option or other charge or encumbrance
upon any of the property of the Guarantor pursuant to, or otherwise result
in (or give rise to any right, contingent or otherwise, of any Person to
cause) any change in any right, power, privilege, duty or obligation of
the Guarantor under or in connection with,
(i) the articles of incorporation or by-laws (or other
constituent documents) of the Guarantor, or
(ii) any agreement or instrument binding on or affecting the
Guarantor or any of its properties (now owned or hereafter
acquired).
Article IV
----------
Covenants
---------
4.1. Covenants Generally. Reference is hereby made to the provisions
of Articles VI and VII of the Credit Agreement (together with all related
definitions and cross-references). To the extent such provisions impose upon the
Borrowers a duty to cause the Guarantor to do or refrain from doing certain acts
or things or to meet or refrain from meeting certain conditions, the Guarantor
shall do or refrain from doing such acts or things, or meet or refrain from
meeting such conditions, as the case may be.
Article V
---------
Miscellaneous
-------------
5.1. Amendments, etc. No amendment to or waiver of any provision of
--------------------
this Agreement, and no consent to any departure by the Guarantor herefrom, shall
in any event be effective unless in a writing manually signed by or on behalf of
the Bank. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
-5-
5.2. No Implied Waiver; Remedies Cumulative. No delay or failure of
-------------------------------------------
the Bank in exercising any right or remedy under this Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies of the Bank under this Agreement
are cumulative and not exclusive of any other rights or remedies available
hereunder, under any other agreement, at law, or otherwise.
5.3. Notices. Except to the extent, if any, otherwise expressly
------------
provided herein, all notices and other communications (collectively, "notices")
under this Agreement shall be in writing (including facsimile transmission) and
shall be sent by first-class mail, by nationally-recognized overnight courier,
by personal delivery, or by facsimile transmission, in all cases with charges
prepaid. All notices shall be sent, if to the Guarantor, to its address
specified on the signature page hereof, or if to the Bank, to the address
specified in the Credit Agreement, or, in any case, to such other address as
shall have been designated by the applicable party by notice to the other party
hereto. Any properly given notice shall be effective when received, except that
properly given notices to the Guarantor shall be effective at the following
time, if earlier: if given by telephone, when telephoned; if by first-class
mail, three Business Days after deposit in the mail; if by overnight courier,
one Business Day after pickup by such courier; and if by facsimile transmission,
upon transmission. The Bank may rely on any notice (whether or not made in a
manner contemplated by this Agreement) purportedly made by or on behalf of the
Guarantor, and the Bank shall have no duty to verify the identity or authority
of the Person giving such notice.
5.4. Expenses. The Guarantor agrees to pay upon demand all
-------------
reasonable expenses (including reasonable fees and expenses of counsel) which
the Bank may incur from time to time arising from or relating to the
administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement.
5.5. Entire Agreement. This Agreement constitutes the entire
---------------------
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous understandings and agreements.
5.6. Survival. All representations and warranties of the Guarantor
-------------
contained in or made in connection with this Agreement shall survive, and shall
not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Bank, any extension of credit, or any other
event or circumstance whatever.
5.7. Counterparts. This Agreement may be executed in any number of
-----------------
counterparts, each of which shall be deemed an original, and all such
counterparts shall constitute but one and the same agreement.
5.8. Setoff. In the event that any obligation of the Guarantor now
-----------
or hereafter existing under this Agreement or any other Loan Document shall have
become due and payable, the Bank shall have the right from time to time, without
notice to the Guarantor, to set off against and apply to such due and payable
amount any obligation of any nature of the Bank to the Guarantor, including all
deposits (whether time or demand, general or special, provisionally or finally
credited, however evidenced) now or hereafter maintained by the Guarantor with
the Bank. Such right shall be absolute and unconditional in all circumstances
and, without limitation, shall exist whether such obligation to the Guarantor is
absolute or contingent, matured or unmatured (it being agreed that the Bank may
deem such obligation to be then due and payable at the time of such setoff),
regardless of the offices or branches through which the parties are acting with
respect to the offset obligations, regardless of whether the offset obligations
-6-
are denominated in the same or different currencies, and regardless of the
existence or adequacy of any other direct or indirect security or any other
right or remedy available to the Bank. Nothing in this Agreement or any other
Loan Document shall be deemed a waiver of or restriction on any right of setoff
or banker's lien available to the Bank under this Section 5.8, at law or
otherwise. The Guarantor hereby agrees that any affiliate of the Bank, and any
holder of a participation in any obligation of the Guarantor under this
Agreement, shall have the same rights of setoff as the Bank as provided in this
Section 5.8 (regardless of whether such affiliate or participant otherwise would
be deemed a creditor of the Guarantor).
5.9. Construction. In this Agreement, unless the context otherwise
-----------------
clearly requires, references to the plural include the singular, the singular
the plural, and the part the whole; the neuter case includes the masculine and
feminine cases; and "or" is not exclusive. In this Agreement, any references to
property (or similar terms) include any interest in such property (or other item
referred to); "include," "includes," "including" and similar terms are not
limiting; and "hereof," "herein," "hereunder" and similar terms refer to this
Agreement as a whole and not to any particular provision. Section and other
headings in this Agreement, and any table of contents herein, are for reference
purposes only and shall not affect the interpretation of this Agreement in any
respect. Section and other references in this Agreement are to this Agreement
unless otherwise specified. This Agreement has been fully negotiated between the
applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of
ambiguities against the party controlling the drafting, shall apply to this
Agreement.
5.10. Successors and Assigns. This Agreement shall be binding upon
----------------------------
the Guarantor, its successors and assigns, and shall inure to the benefit of and
be enforceable by the Bank and its successors and assigns. Without limitation of
the foregoing, the Bank (and any successive assignee or transferee) from time to
time may assign or otherwise transfer all or any portion of its rights or
obligations under the Loan Documents (including all or any portion of any
commitment to extend credit), or any Guaranteed Obligations, to any other
Person, and such Guaranteed Obligations (including any Guaranteed Obligations
resulting from extension of credit by such other Person under or in connection
with the Loan Documents) shall be and remain Guaranteed Obligations entitled to
the benefit of this Agreement, and to the extent of its interest in such
Guaranteed Obligations such other Person shall be vested with all the benefits
in respect thereof granted to the Bank in this Agreement or otherwise.
5.11. Certain Legal Matters.
---------------------------
(a) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the Commonwealth of Pennsylvania, exclusive of
choice of law principles.
(b) Submission to Jurisdiction and Venue; Consent to Service of
-----------------------------------------------------------
Process; Waiver of Jury Trial; Etc. The Guarantor hereby irrevocably and
----------------------------------
unconditionally:
(i) agrees that any action, suit or proceeding by any Person arising
from or relating to this Agreement or any other Loan Document or any
statement, course of conduct, act, omission or event in connection with
any of the foregoing (collectively, "Related Litigation") may be brought
in any state or federal court of competent jurisdiction sitting in
Philadelphia County, Pennsylvania, submits to the jurisdiction of such
courts, and agrees not to bring any Related Litigation in any other forum
(but nothing herein shall affect the right of the Bank to bring any
Related Litigation in any other forum);
-7-
(ii) acknowledges that such courts will be the most convenient forum
for any Related Litigation, waives any objection to the laying of venue of
any Related Litigation brought in any such court, waives any claim that
any Related Litigation brought in any such court has been brought in an
inconvenient forum, and waives any right to object, with respect to any
Related Litigation, that such court does not have jurisdiction over it;
(iii) consents and agrees to service of any summons, complaint or
other legal process in any Related Litigation by registered or certified
U.S. mail, postage prepaid, to it at the address for notices described in
this Agreement, and consents and agrees that such service shall constitute
in every respect valid and effective service (but nothing herein shall
affect the validity or effectiveness of process served in any other manner
permitted by law); and
(iv) waives the right to trial by jury in any Related Litigation.
(c) Limitation of Liability. No claim may be made by the Guarantor
-----------------------
against the Bank or any affiliate, director, officer, employee, attorney or
agent of the Bank for any special, indirect, consequential or punitive damages
in respect of any claim arising from or relating to this Agreement or any other
Loan Document or any statement, course of conduct, act, omission or event in
connection with any of the foregoing (whether based on breach of contract, tort
or any other theory of liability); and the Guarantor hereby waives, releases and
agrees not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist.
(d) Confession of Judgment. THE GUARANTOR HEREBY AUTHORIZES AND
----------------------
EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR
THE GUARANTOR AND TO CONFESS JUDGMENT AS OFTEN AS NECESSARY AGAINST THE
GUARANTOR IN FAVOR OF THE BANK, AS OF ANY TERM OR TIME, FOR ALL SUMS DUE
HEREUNDER PLUS INTEREST DUE, TOGETHER WITH COSTS AND OTHER EXPENSES OF LEGAL
PROCEEDINGS AND AN ATTORNEY'S COMMISSION EQUAL TO FIVE PERCENT OF THE AGGREGATE
AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN $500.00 WITH RELEASE OF
ALL ERRORS. THE GUARANTOR WAIVES ALL LAWS EXEMPTING REAL OR PERSONAL PROPERTY
FROM EXECUTION.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY COUNSEL
IN CONNECTION WITH THE EXECUTION AND DELIVERY OF THIS AGREEMENT AND THAT IT
KNOWINGLY WAIVES ITS RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT AND
UNDERSTANDS THAT, UPON SUCH ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL REAL
PROPERTY OF GUARANTOR IN THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.
NOTWITHSTANDING THE ATTORNEYS' COMMISSION PROVIDED FOR IN THE PRECEDING
PARAGRAPH (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF ESTABLISHING A SUM
CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY RECEIVE FROM THE
GUARANTOR SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED BY THE BANK.
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Agreement as of the date first above written.
-8-
[GUARANTOR]
By
-------------------------------------------------------
Name:
----------------------------------------------------
Title:
---------------------------------------------------
Address for Notices:
Attn:
Telephone:
Fax:
-9-
EXHIBIT F
---------
OFFICER'S COMPLIANCE CERTIFICATE
--------------------------------
The undersigned, on behalf of X-XXX.xxx Corp. and Broadband Capital
Corporation (the "Borrowers") and their consolidated Subsidiaries, hereby
certify to the Bank, as defined in the Credit Agreement referred to below, as
follows:
1. This Certificate is delivered to you pursuant to Section 6.01(d)
of the Credit Agreement dated as of February 26, 2002 (as the same may be
amended, modified or supplemented from time to time, the "Credit Agreement"), by
and among the Borrowers and Citizens Bank of Pennsylvania ("Bank"). Capitalized
terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrowers and
their Subsidiaries dated as of _________________ and for the _______________
period[s] then ended and such statements fairly present in all material respects
the financial condition of the Borrowers and their Subsidiaries on a
consolidated basis as of the dates indicated and the results of their operations
and cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement and the related
Loan Documents and have made, or caused to be made under my supervision, a
review in reasonable detail of the transactions and the condition of the
Borrowers and their Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Potential Default or an Event of Default,
nor do I have any knowledge of the existence of any such condition or event as
at the date of this Certificate [except, if such condition or event existed or
exists, describe the nature and period of existence thereof and what action the
Borrowers have taken, are taking and propose to take with respect thereto].
4. The Borrowers are in compliance with the financial covenants
contained in Section 7.01 of the Credit Agreement as shown on such Schedule 1,
----------
and the Borrowers and their Subsidiaries are in compliance with the other
covenants and restrictions contained in the Credit Agreement.
WITNESS the following signature as of the day of , .
----- ------------- ---------
X-XXX.XXX CORP., for itself and on behalf of the Borrowers
By:
--------------------------------------------------------
Name:
Title: Chief Financial Officer
EXHIBIT G
FORM OF OPINION LETTER
Schedule 4.01 - Organization and Qualification
Borrowers
X-XXX.xxx Corp. is a Pennsylvania corporation and is qualified to do business in
the following additional states:
California
Colorado
Texas
Virginia
Utah
North Carolina
Illinois
Washington
Broadband Capital Corporation is a Delaware corporation and is qualified to do
business in the following additional states:
None
Guarantors
Broadband Royalty Corporation is a Delaware corporation and is qualified to do
business in the following additional states:
None
Broadband Network Services, Inc. is a Delaware corporation and is qualified to
do business in the following additional states:
California
Colorado
Florida, Georgia
Idaho, Massachusetts
New York
Louisiana
Tennessee
Xxxxxxxx
Xxxxxxxxxx
Broadband Management Solutions, LLC is a Delaware limited liability company and
is qualified to do business in the following additional states and provinces:
California
Colorado
Pennsylvania
Ontario
Quebec
Subsidiaries
C-COR Electronics Canada, Inc. - incorporated in Ontario, Canada
C-COR Electronics Foreign Sales Corporation - incorporated in the Virgin Islands
C-COR Europe, BV - registered in Almere, The Netherlands
C-COR Europe Holding, BV - registered in Almere, The Netherlands
C-COR de Mexico, S.A. de CV - incorporated in Tijuana, Baja California, Mexico
C-COR Comulux, Inc. - incorporated in Pennsylvania
Broadband Sales Company, LLC - established in Delaware
C-COR Broadband Communications, GmbH - registered in Klagenfurt, Austria
C-COR Argentina, SRL - registered in Buenos Aires, Argentina
Schedule 4.04 - Authorization and Filings
None
Schedule 4.05 - Absence of Conflicts
None
Schedule 4.06 - Financial Statements
Schedule 4.08 - Litigation
1. Certain former security holders and employees of a company we acquired
filed claims against us in March 2001 alleging violations of state
securities laws and certain other state law claims under a stock option
plan. The complaint alleges that the damages suffered by the individuals
are equal to approximately $2,130,000, which is based on the amount of the
stock options multiplied by the highest price of our common stock since the
merger, and does not take into account the amount of the exercise price
which the plaintiffs would have had to pay if the options had been
exercised. The plaintiffs also petitioned for treble damages, an
undetermined amount of punitive damages and reimbursement of attorneys'
fees. We believe that we have defenses to these claims and are contesting
them vigorously; however, we cannot be sure that we will be successful in
defending these claims.
2. X-XXX.xxx filed claims in October 2001 against a former customer, Gemini
Networks alleging breach of contract and other causes of action and seeking
monetary damages. The case is in the early stages of discovery.
3. A complaint was filed in the Circuit Court for Xxxx County, Tennessee on
October 15, 2001, against Xxxxxxx Xxxxxxx and Worldbridge Broadband
Services, Inc. (Worldbridge). The plaintiff alleges Xx. Xxxxxxx, in his
capacity as an employee or agent of Worldbridge, while installing cable
television equipment at the plaintiffs residence did negligently cause his
(the defendant's) vehicle to move forward down the plaintiffs driveway,
striking the plaintiff and causing physical injury requiring medical
treatment. Attorney for X-XXX.xxx's auto insurance carrier is responding to
the complaint.
4. A complaint was filed in the 41st District Court of Kentucky on February
4,2002, against Xxxxx Xxxx Xxxxxx and Xxxx Xxxxxxxxx and Worldbridge
Broadband Services, Inc. (Worldbridge). The plaintiffs allege that Xx.
Xxxxxx and Xx. Xxxxxxxxx, in their capacity as an employees or agents of
Worldbridge, while operating a vehicle did negligently cause a collision
between the plaintiffs' vehicle and the defendant's vehicle resulting in
the destruction of the plaintiffs' vehicle. Attorney for X-XXX.xxx' s auto
insurance carrier is responding to the complaint.
5. A compliant was filed in the Circuit Court of the 20th Judicial Circuit in
and for Xxx County, Florida against Xxxxx X. Xxxxxxx and Worldbridge
Broadband Services, Inc. (Worldbridge). The complaint allegs that the he
was injured in an October 27, 2000, motor vehicle accident caused by Xx.
Xxxxxxx'x negligent operation of a Worldbridge vehicle. Attorney for
X-XXX.xxx's auto insurance carrier is responding to the complaint.
6. Other outstanding actions include:
2/2/98 - PJIRCJEEOC Claim 2-2-98. Claimant alleges she was
discriminated against due to disability. Status: open.
5/10/01 - Demand for Relief - Claimant alleges he was discriminated
against in reduction in force due to national origin. Status: No
further action on this demand letter since 5/01.
9/4/01 - Demand for Relief - Claimant alleges she was discriminated
against due to disability, gender and age. She also alleges
retaliation, breach of covenant of good faith and fair dealing, and
infliction of emotional stress. Status: open.
2/8/02 - EEOC Claim. Claimant alleges he was discriminated against in
a reduction in force due to being a disabled veteran.
Schedule 4.09 - Subsidiaries
1. C-COR Electronics Canada Inc. - a wholly-owned subsidiary of X-XXX.xxx Corp.
000 XxxXxxxxx Xxxxxx, Xxxx 0
Xxxx, Xxxxxxx X0X 0X0
XXXXXX
a. Authorized capitalization - 1
b. Shares issued and outstanding - 1
c. Shares owned by X-XXX.xxx Corp. - 1
d. Shares owned by Subsidiary - 0
2. Broadband Royalty Corporation - a wholly-owned subsidiary of Broadband
Capital Corporation
Suite 1300
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Federal ID No. 00-0000000
a. Authorized capitalization -100
b. Shares issued and outstanding -100
c. Shares owned by X-XXX.xxx Corp. - 0
d. Shares owned by Subsidiary (Broadband Capital Corporation) -100
3. Broadband Capital Corporation - a wholly-owned subsidiary of X-XXX.xxx Corp.
Suite 1300
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Federal ID No. 00-0000000
a. Authorized capitalization -100
b. Shares issued and outstanding -100
c. Shares owned by X-XXX.xxx Corp. -100
d. Shares owned by Subsidiary - 0
4. C-COR Electronics Foreign Sales Corporation - a wholly-owned subsidiary of
XXXX.xxx Corp.
Mailing Address:
X.X. Xxx 00000
Xx. Xxxxxx, XX 00000
Physical Address:
Guardian Xxxxxxxx
Xxxxxxxxxx, 0xx Xxxxx
Xx. Xxxxxx, XX 00000
Federal ID No. 00-0000000
a. Authorized capitalization - 1,000
b. Shares issued and outstanding - 100
c. Shares owned by X-XXX.xxx Corp. - 100
d. Shares owned by Subsidiary - 0
5. C-COR Europe B.V. - a wholly-owned subsidiary of C-COR Europe Holding, B.V.
Mailing Address:
X.X. Xxx 00.000
0000 XX Xxxxxx
XXX XXXXXXXXXXX
Physical Address:
Xxxxxxxxxxxx 00
0000 XX Xxxxxx
XXX XXXXXXXXXXX
a. Authorized capitalization - 41
b. Shares issued and outstanding - 41
c. Shares owned by X-XXX.xxx Corp. - 0
d. Shares owned by Subsidiary (C-COR Europe Holding, B.V.) - 41
6. C-COR Europe Holding, B.V.
Mailing Address:
X.X. Xxx 00.000
0000 XX Xxxxxx
XXX XXXXXXXXXXX
Physical Address:
Xxxxxxxxxxxx 00
0000 XX Xxxxxx
XXX XXXXXXXXXXX
a. Authorized capitalization - 50
b. Shares issued and outstanding - 50
c. Shares owned by X-XXX.xxx Corp. - 50
d. Shares owned by Subsidiary - 0
7. C-COR de Mexico, S.A. de C.V. - a subsidiary of X-XXX.xxx Corp.
Blvd. Pacifico No. 14532-b
Parque Industrial Xxxxxxxx
Xxxxxxx, B.C., MEXICO
a. Authorized capitalization - 100
b. Shares issued and outstanding - 100
c. Shares owned by X-XXX.xxx Corp. - 99
d. Shares owned by Subsidiary (Broadband Capital Corporation) - 1
8. C-COR/Comlux, Inc. - a wholly-owned subsidiary of X-XXX.xxx Corp.
a. Authorized capitalization - 10,000
b. Shares issued and outstanding - 10,000
c. Shares owned by X-XXX.xxx Corp. - 10,000
d. Shares owned by Subsidiary - 0
9. Broadband Network Services, Inc. - a wholly owned subsidiary of X-XXX.xxx
Corp.
000 Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
a. Authorized capitalization - 100
b. Shares issued and outstanding - 100
c. Shares owned by X-XXX.xxx Corp. - 100
d. Shares owned by Subsidiary - 0
10. Broadband Management Services, LLC - a sole member limited liability
company. The sole member is Broadband Network Services, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
11. Broadband Sales Company, LLC - sole member limited liability company. The
sole member is X-XXX.xxx Corp.
12. C-COR Broadband Communications Europe, GmbH - a subsidiary of C-COR Europe
Holding B.V.
a. Authorized shares - N/A
b. Shares issued and outstanding - 1
c. Shares owned by X-XXX.xxx Corp. - 0
d. Shares accrued by Subsidiary (C-COR Europe Holding, BV) - 1
13. C-COR Argentina, SRL - a subsidiary of Broadband Capital Corporation
a. Authorized quotes - 100
b. Quotas issued and outstanding - 100
c. Quotas owned by X-XXX.xxx Corp. - 1
d. Quotas owned by Subsidiary (Broadband Capital Corporation) - 99
Schedule 4.10 - Pension Related Matters
X-XXX.xxx Corp. 401(k) Plan
X-XXX.xxx Corp. Supplemental Executive Retirement Plan
Broadband Network Services Inc. 401(k)
Schedule 4.11 - Title to Property
Approximate Square Owned or
Location Principal Use Footage Leased
-------- ------------- ------- ------
00 Xxxxxxx Xxxx Administrative Offices and 133,000 Owned
Xxxxx Xxxxxxx, XX 00000 Engineering
0 Xxxx Xxxxxx Xxxx - under contract to be sold 45,000 Owned
Xxxxx X. Xxxxxx Industrial Park
Xxxxxx, XX 00000
000 Xxxxxxxx Xxxxxxx Administrative Offices and 33,600 Leased
Xxxxxxx, XX 00000 Engineering
000 Xxxxxxxx Xxxxxxx Development Engineering and 50,000 Leased
Xxxxxxx, XX 00000 Assembly
0000 Xxxxxx Xx., Xxxxx Xxxx - facility closed 24,500 Leased
Xxxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxx Development Engineering 13,650 Leased
Xxxxxxx, XX 00000
0000 Xxxxxxxxx Xxxxx Administrative Offices and 18,729 Leased
Suite 100 Development Engineering
Xxxxxxxxxx, XX 00000
000 Xxxxx Xxxx. Adminstrative Offices 4,510 Leased
Xxxxx 000
Xxxxxxxx, XX 00000
Blvd. Pacifico No. 14532-b Manufacturing 89,400 Leased
Parque Industrial Xxxxxxxx
Xxxxxxx, B.C., Mexico
Televisieweg 15 Adminstrative Offices 5,100 Leased
0000 XX
Xxxxxx, Xxx Xxxxxxxxxxx
1974 Otiz Street, Burzaco, Adminstrative Offices and Leased
Buenos Aires, Argentina Manufacturing
Xxxxxxxxxxxx Xxx. 00 Adminstrative Offices and Leased
A-9020 Manufacturing
Klagenfurt, Austria
Schedule 4.12 - Contracts
Agreement and Plan of Merger dated as of March 29, 2001, between the X-XXX.xxx
Corp., Broadband Management Solutions, LLC and MobileForce Technologies, Inc.
Agreement and Plan of Merger as of July 2, 2001, between Aerotech
Communications, Inc. and Worldbridge Broadband Services, Inc.
Rights Agreement, dated as of August 17, 1999, between X-XXX.xxx Corp. and
American Stock Transfer and Trust Co., as Rights Agent, including the Form of
Statement with Respect to Shares as Exhibit A, the Form of Right Certificate as
Exhibit B and the Summary of Rights as Exhibit C
1988 Stock Option Plan
1989 Non-Employee Directors' Non-Qualified Stock Option Plan
X-XXX.xxx Corporation Incentive Plan
Stock Option Plan (Silicon Valley Communications Employees Only)
Stock Option Plan (Worldbridge Broadband Employees Only)
Stock Option Plan (Former MobileForce, Tech 1997 Stock Plan)
X-XXX.xxx Corp Retirement Savings and Profit Sharing Plan
X-XXX.xxx Supplemental Executive Retirement Plan
Worldbridge Broadband Services 401(K) Plan
C-COR Electronics Inc. 1992 Stock Purchase Plan
Amendment to Employment Agreement dated January 18, 2000, between X-XXX.xxx
Corp. and Xxxxxxx X. Xxxxxxxx
Amendment to Employment Agreement dated January 18, 2000, between X-XXX.xxx
Corp. and Xxxxx X. Xxxxxx
Employment Agreement dated February 18, 2000, between Worldbridge Broadband
Services, Inc. and Xxxx Xxxxxx.
Indemnification Agreements with certain Executive Officers
Supplemental Retirement Plan Participation Agreements with certain Executive
Officers
Change of Control Agreements with certain Executive Officers
Fiscal year 2001/2002 Incentive and Retention Plan (IRP).
Credit Agreement dated August 9, 1999, between X-XXX.xxx Corp. and Broadband
Capital Corporation as borrowers, and The Banks Parties Hereto From Time to Time
and Mellon Bank, N.A. as Agent.
First Amendment to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent, dated December 29,
1999.
Second Amendment to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent, dated May 4,2000
Third Amendment to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent, dated November 24, 0000
Xxxxxx Xxxxxxxxx to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent, dated June 24, 2001.
Fifth Amendment to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent, dated November 29,
2001.
Sixth Amendment to Credit Agreement dated August 9, 1999, between X-XXX.xxx
Corp. and Broadband Capital Corporation as borrowers, and The Banks Parties
Hereto From Time to Time and Mellon Bank, N.A. as Agent.
Master Lease Agreement dated as of April 28, 1999 between X-XXX.xxx Corp and
Bankers Direct Leasing, a division of EAB Leasing Corp.
Insurance Contracts as outlined in Schedule 4.29
Schedule 4.18 - Compliance With Laws
None
Schedule 4.19 - Patents, Licenses, Franchises
Patent or Patent
Application
Number Title Date
---------------- ----- ----
Patents
4,394,631 Radio Frequency Choke and Method of Use 7/19/83
Feed Forward Circuit And A Method For Aligning And Balancing
4,517,521 The Same 5/14/85
Method For Attaching A Printed Circuit Board To A Connector For
4,698,906 Testing Purposes 10/13/97
4,737,111 RF Connector For Use In Testing A Printed Circuit Board 4/12/88
5,130,664 One GHZ CATV Repeater Station 7/14/92
5,459,607 Synchronous Optical Digital Transmission System and Method 10/17/95
5,641,953 Safety Interlock System for Telecommunication Amplifiers 1/24/97
5,734,762 Optical Isolator System and Method 3/31/98
5,745,276 Universal Optical Signal Receiver 4/28/98
System and Method For Routing Data Messages Through A Cable
5,841,468 Transmission System 11/24/98
5,907,422 Universal Optical Signal Receiver 5/25/99
6,055,278 Linearization Circuits and Methods 4/25/00
Patent
Applications
09/471,431 Return Path Architectures For CATV Networks 12/23/99
09/590,933 Adaptive Filter For Reducing Ingress Noise In CATV Return Signals 6/8/00
Ampliltude and Phase Transfer Linearization Method and Apparatu 4/19/01
Lossy Linearizers for Analog Optical Transmitters 11/22/00
09/517,039 Intermediate Frequency Video Decoder 3/2/00
Schedule 4.20 - Ownership and Control
X-XXX.xxx Corp.'s authorized capital stock of consists of (i) 100,000,000 shares
of Common Stock, of which 35,920,069 shares were outstanding as of February 19,
2002 and (ii) 2,000,000 shares of preferred stock, no par value, none of which
is outstanding. As of February 19, 2002, there were options to acquire 6,354,912
shares of Common Stock issued and outstanding and there were warrants to acquire
300,149 shares of Common Stock issued and outstanding. All of the issued and
outstanding shares of Parent Common Stock are validly issued and are fully paid,
nonassessable and free of preemptive rights.
X-XXX.xxx Corp. also has a stock option program for employees and directors (the
Stock Option Plan of 1998) that provides for issuance of options at the time of
hire and on an annual basis thereafter.
To the Company's knowledge the following parties own in excess of 5% of C-COR
common stock as of February 25,2002.
Citigroup Inc. - 4,942,422
Xxxxxx, LLC - 3,000,000
See Schedule 4.09 for authorized capitalization of Broadband Capital Corporation
and Subsidiaries.
Schedule 4.24 - Business
ABOUT X-XXX.xxx
---------------
We provide technology and services to the global market for the full network
life cycle of two-way hybrid fiber coaxial cable broadband networks. Our
principal customers are the largest cable operators in the United States as well
as many smaller domestic cable operators and several international cable
operators. Our core strategy is to leverage our 48-year reputation for quality
and service, our strong customer relationships and our extensive installed base
of transmission equipment to provide a broad line of flexible, reliable and
cost-effective network products and service solutions. We offer a comprehensive
range of products, including digital video transport equipment, optical
transmitters and receivers, optical nodes, and optical and radio frequency
amplifiers. Our services focus on enabling reliable, high-speed, broadband
communications over hybrid fiber coaxial cable networks, and include network
engineering, design, construction, activation, optimization, certification,
maintenance and operations. Our products and services enable cable network
operators to offer applications such as digital television, Internet, telephony
and video-on-demand.
In August 2001, we realigned our business into three divisions to position
ourselves better in the market to deliver a broad complement of advanced network
products and services to the broadband market. Each of these divisions focuses
on a market segment that is key to network integrity:
The Broadband Communications Products Division, headquartered in Meriden,
Connecticut, with supporting facilities in the United States, Mexico, Austria
and Argentina, is responsible for development, management, production, support
and sale of our advanced digital video transport, optical and radio frequency
equipment.
The Broadband Management Solutions Division, headquartered in Pleasanton,
California, with an engineering facility in State College, Pennsylvania, is
responsible for development, integration, management, implementation, support
and sale of our solutions to operate and manage reliable, high-quality
multi-service networks. The division's flagship products include
COR-Convergence, an integrated service management platform that takes the best
in standards-based network management technology and integrates it with customer
care and billing data sources to provide a real-time view of network, customer
and service status, and a suite of field service management tools that combines
browser-based business applications with real-time connectivity to the mobile
workforce through wireless data connections and mobile computing devices.
The Broadband Network Services Division, headquartered in Lakewood, Colorado,
with satellite offices in the northeast, midwest, southeast and western regions
of the United States, provides outsourced technical field services, including
broadband network engineering and design, construction, activation,
optimization, certification, maintenance and operations.
Schedule 4.26 - Partnerships and Other Affiliated Entities
Schedule 4.29 - Insurance
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Property & Boiler 7/1/2001-02 31-3-67743 Industrial Risk Insurers
$127,306,000 Policy Amount at Inception
Special Form Subject to Policy Exclusions and Limitations - Per
Schedule of Values on File
Included Agreed Amount-Replacement Cost
Included Real & Personal Property
Included Business Interruption
Included Boiler & Machinery
$ 1,000,000 Extra Expense
$ 250,000 Expediting Expenses
$ 250,000 Contingent BJ/EE
$ 50,000,000 Earthquake - Annual Aggregate, except
$ 1,000,000 Earthquake - Annual Aggregate, Santa Clara, CA Facility
$ 50,000,000 Flood - Annual Aggregate, except:
$ 2,500,000 Flood - Annual Aggregate, Santa Clara, CA Facility
$ 5,000,000 Accounts Receivable
$ 1,000,000 Valuable Papers
$ 250,000 Valuable Papers in Transit and Off Premises
$ 500,000 In Transit (U.S., Canada, P.R., Virginia Islands)
$ 500,000 Miscellaneous Unnamed Locations
$ 350,000 Exhibition
$ 100,000 Excess Hazardous Material Clean Up of Land & Water
$ 500,000 Off-Premises Power PD/BI Combined
$ 5,000,000 Debris Removal (or 25% of Loss, whichever is greater)
$ 1,000,000 Communicable Disease - Annual Aggregate
$ Included Contingent Liability/Building Laws DICC
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Property & Boiler (Continued)
Deductible Amounts:
$ 100,000 All Other
$ 100,000 Boiler & Machinery & 1XADV Time Element
$ 100,000 Earthquake
$ 100,000 Flood - except: $75,000 - Santa Clara, CA Facility excess of NFIP
coverage
$ 5,000 Transit, Accounts Receivables, Valuable Papers
24 HourWaiting Period Loss of Utilities (Off Premises Power)
24 HourWaiting Period Business Interruption from Electric Arcing, Mechanical
Breakdown or Steam Boiler
Special Provisions:
Idle, Vacant or Unoccupied Property Endorsement (applies to Reedsville & Xxxxxx)
Errors & Omissions Clause
Extended Period of lndemnity-90 Days
Notice of Occurrence
$1,000,000 Newly Acquired Property and BI (180 Days to Report)
National Flood 3/18/2001-02 99013679152001 The Hartford
Insurance Program
Santa Clara, CA Facility
Primary Flood Insurance
$ 170,500 Building (I&B)
$ 500,000 Contents
$ 500 Deductible
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Excess Flood 2/15/2001-02 AEF00266 Underwriters at Lloyds
Insurance
Santa Clara, CA Facility
$ 7,855,000 Blanket Building, Contents & Business Interruption
Excess of $75,000 IRI Deductible and $500,000 NEIP Coverage
Earthquake DIC 7/1/2001-02 D1C11508 Westport Insurance
Insurance Company
Santa Clara, CA Facility
$ 9,855,000 Excess of $1,000,000 Primary
Commercial Package 9/15/2001-02 TE064 1399 St. Xxxx Fire & Marine
(Property, Inland Marine, GL, Auto, E&O, Umbrella) Insurance Co.
Property/Inland Marine
$ 232,500 Blanket Building & BPP (Riverside, CA; Goodlettsville, TN;
Lakewood, CO; San Diego, CA and Simi Valley, CA)
$ 400,000 Blanket Third Party Inventory
$ 125,000 Building - Simi Valley, CA
$ 1,000 Deductible, per event
$ 2,471,000 Scheduled Contractors Equipment
$ 200,000 Unscheduled Contractors Equipment, maximum of $10,000 per item
(Auditable)
$1,000 Deductible
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Commercial Package (Continued)
Commercial General Liability
$ 2,000,000 General Total Limit (Per Project, Per Location)
$ 1,000,000 Products and Completed Work Total Limit
$ 1,000,000 Personal Injury
$ 1,000,000 Advertising Injury
$ 1,000,000 Each Event
$ 500,000 Premises Damage Limit
$ 10,000 Medical Expenses Limit
Employee Benefits Liability
$ 1,000,000 Each Wrongful Act
$ 3,000,000 Total Limit
$ 1,000 Deductible
Automobile Liability
$ 1,000,000 Liability per Accident
Hired Auto Physical Damage Coverage
Actual Cash Value up to $80,000 on Trucks
Actual Cash Value up to $30,000 on Private Passengers (PPTs)
$100/250 Deductibles on Comp & Collision on PPTs
$500/1,000 Deductibles on Trucks
No Physical Damage Coverage on Owned Automobiles
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Commercial Package (Continued)
Errors & Omissions Liability
$ 3,000,000 Each Wrongful Act
$ 3,000,000 Total Limit
$ 50,000 Deductible, Each Wrongful Act
Exclusion for Broadband Management Solutions (insured separately)
Commercial Umbrella
$ 30,000,000 General Total Limit (Per Project, Per Location)
$ 30,000,000 Products and Completed Work Total Limit
$ 30,000,000 Personal Injury
$ 30,000,000 Advertising Injury
$ 30,000,000 Each Event
$ 10,000 Deductible applicable to events not covered by underlying
insurance
Errors and Omissions 10/5/2001-02 GU6617377 Gulf Underwriters
Liability Insurance Co.
(Broadband Management Solutions)
$ 3,000,000 Each Wrongful Act
$ 3,000,000 Total Limit
$ 50,000 Deductible, Each Wrongful Act
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Marine Open Cargo 7/1/2001-02 390JM2420 St. Xxxx Fire & Marine
Insurance Co.
$ 50,000 Steamer
$ 50,000 Air
$ 50,000 On Deck
$ 10,000 Mail/Parcel Post
$ 10,000 Registered Mail
$ 0 Barge or Tow
$ 0 Deductible
Workers' Compensation 9/15/2001-02 RH00464506/ Royal Indemnity Company
& Employer's Liability R2TC464508
Workers' Compensation Benefits - Statutory
Employer's Liability:
$ 1,000,000 Bodily Injury each Accident, Each Accident
$ 1,000,000 Bodily Injury by Disease, Policy Limit
$ 1,000,000 Bodily Injury by Disease, Each Employee
Excess Workers' 7/1/2001-02 H35-3701693 Republic Western
Compensation & Employer's Liability (Pennsylvania) Specialty Underwriters,
Inc.
Workers' Compensation Benefits - Statutory
Employer's Liability:
$ 300,000 Insured Retention for each Accident/Disease
None Aggregate Retention
$ 1,000,000 Aggregate Limit of Indemnity
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Contractor's 12/19/2001-02 GPO 1958237 American International
Pollution Liability Specialty Lines
(Worldbridge Broadband Services, Inc.) Insurance Co. (AIG)
$ 1,000,000 Each Loss
$ 2,000,000 Aggregate
$ 5,000 Deductible, each loss
Racing Owner's 8/2/2001-02 KSPOOO3 803776201 TIG Insurance Company
General Liability & Participants Legal Liability
(Mini Grand Prix Event)
$ 1,000,000 General Liability, each occurrence
$ 1,000,000 Participants Legal Liability, each occurrence
$ 1,000,000 Personal & Advertising Injury, aggregate
$ 300,000 Fire Legal Liability
$ 5,000 Medical Payments
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Directors & Officers 4/30/2001-02 873-09-90 National Union Fire
Liability Insurance Company (AIG)
$ 10,000 000 Policy Aggregate
$ 500,000 Retention
Directors & Officers 4/30/2001-02 CKX0005064 North American Specialty
Liability Insurance Co.
1 st Layer Excess
$ 5,000,000 Each Loss
$ 5,000,000 Combined Aggregate
Directors & Officers 4/30/2001-02 PSF003090 Royal Insurance Company
Liability
2nd Layer Excess
$5,000,000 Each Limit Period
Directors & Officers 4/30/2001-02 538CM0203 St. Xxxx Mercury
Liability Insurance Company
3rd Layer Excess
$ 5,000,000 Limit of Liability
Directors & Officers 4/30/2001-02 3DY-01-6094-00 Lumbermens Mutual
Liability Company (Xxxxxx) Casualty
4th Layer Excess
$ 5,000,000 Each Loss
$ 5,000,000 Maximum Aggregate
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Directors & Officers, 2/21/2000-03 8127-90-45-A Federal Insurance
Employment Practices, Fiduciary and Outside Company (Chubb Group)
Directorship Liability Runoff
(Worldbridge Broadband Services)
Coverage for Wrongful Acts occurring prior to 2/21/2000, but which have not
yet been discovered
$ 5,000,000 Each Loss
$ 5,000,000 Each Policy period
$ 200,000 Deductible applies to EPL and D&O losses
Fiduciary Liability 4/30/2001-02 873-13-30 National Union Fire
(AIG) Insurance Co.
$ 3,000,000 Limit of Liability
$ 10,000 Retention, Indemnifiable Loss
None Retention, Non-Indemnifiable Loss
Employment Practices 9/15/2001-02 8168-8728 Federal Insurance
Liability Company (Chubb Group)
$ 3,000,000 Each Claim
$ 3,000,000 Aggregate
$ 100,000 Deductible, each claim
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Commercial Crime 9/15/2001-02 3F 967 307-01 Lumbermens Mutual
Casualty Company(Xxxxxx)
$ 500,000 Employee Dishonesty
$ 500,000 Employee Dishonesty - Third Party Coverage for Property of Clients
or Customers
$ 500,000 Forgery or Alteration
$ 500,000 Theft, Disappearance & Destruction (Inside/Outside)
$ 500,000 Computer Fraud
$ 1,000 Deductible
Kidnap & Xxxxxx 4/30/01-04 646-6988 National Union Fire
(AIG) Insurance Co.
$ 2,000,000 Xxxxxx Monies, each loss
$ 2,000,000 In Transit/Delivery, each loss
$ 2,000,000 Expenses, each loss
Unlimited Consultants
$ 2,000,000 Judgements, Settlements and Defense Costs, each loss
$ 250,000 Death or Dismemberment, each person
$ 1,000,000 Death or Dismemberment, each incident
None Deductible
Note: No coverage applies while in Colombia.
Travel/Accident 4/1/2001-02 SR 83085962 Continental Casualty
(CNA) Company
$ 250,000 Class I - Executive Officers
$ 100,000 Class II - All other Employees
$ 1,500,000 Aggregate Limit, per accident
None Deductible
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Mexican Local 7/1/2001-02 QE108263 Seguros Comercial
Admitted America
Property
$ 1,000,000 Building
$ 28,140,000 Business Contents, including Inventory
$ 175,000 Electronic Equipment
$ 4,700,000 Machinery Breakdown
$ 35,000 Cash and/or Securities (Inside or Outside)
$ 13,000,000 Business Interruption - Fixed Expenses and Salaries for 12 months
Deductibles
$ 10,000 All Risk Property Damage, except
1% of Sum Insured for Hurricane, Hail, Windstorm or Flood ($10,000
minimum)
2% of Sum Insured for Earthquake
1% of Electronic Equipment Damage value ($350 minimum)
2% of Machinery Damage value ($10,000 minimum)
1% of Sum Insured for Cash and/or Securities
3 Days Business Interruption (except 7 Days for Earthquake)
General Liability
$ 1,000,000 Limit of Liability
$ 500,000 Tenant's Fire Legal Liability
$ 100,000 Excess Auto Liability
10% of the loss ($1,000 minimum) - Deductible
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Argentina Local Admitted
General Liability 8/1/2001-02 103.56 AIG Argentina
$ 1,000,000 Per Occurrence
$ 1,000,000 Annual Aggregate
Property 8/1/2001-02 127699 St. Xxxx Argentina
Coverage Includes : Fire, Hurricane, Cyclone, Tornado, Hail
$ 1,200,000 Building
$ 1,210,000 General Contents
$ 2,100,000 Raw Materials and Finished Goods (Fire Only)
Marine 8/1/2001-02 261.857 St. Xxxx Argentina
Coverage Includes Imports & Exports
$ 1,000,000 Limit
$ 25,000 Deductible
Electronic Data 0/0/0000-0/0/00 Xxxxxxx Xx. Xxxx Xxxxxxxxx
Equipment
$ 663,074 All Risk EDP
Deductibles:
$ 200 Up to sum insured of $5,000
10% Over sum insured of $5,000 ($300 minimum)
Automobile 8/1/2001-02 4178512 St. Xxxx Argentina
$ 30,000 Limit
Workers' Compensation 6/30/1997-02 156744 La Caja Cia de Seguros
Statutory As Per Law 24557
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Austria Local Admitted - All limits shown in Austrian Xxxxxxxxx (ATS)
Property 1/1/1999-11/1/09 91-F500.631-1 Wiener Staedtische
88,018,000 Equipment
20,000,000 Stock
20,000 Cash and Securities under Simple Lock
100,000 Reproduction costs for files and data
9,732,000 Debris Removal
1,843,000 Extra Costs for Contaminated Soil
25% Deductible for each and every Contaminated Soil loss
Burglary, Water 9/1/1998-11/1/09 K1-G637.906.J Wiener Staedtische
Damage and Cash Courier
91,018,000 Equipment and Stock
3,239,892 Burglary - reduced coinsurance
3,239,892 Water Damage - reduced coinsurance
20,000 Cash Courier
Business Interruption 9/1/1998-11/1/09 92-F500.632-2 Wiener Staedtishce
100,000,000 Gross Profit
20,000,000 20% Leeway
12 Months Indemnity Period
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
Austria Local Admitted (Continued) - All limits and premiums shown in Austrian
Xxxxxxxxx (ATS)
Inland Marine 8/21/1998-11/1/09 15-C524.080-8 Wiener Staedtische
Coverage:Transports of electronic component parts inside of Austria
5,000,000 Per Means of Transportation
Inland Marine 8/21/1998-11/1/09 15-CS 24.081-9 Wiener Staedtische
Coverage:Transports of electronic component parts outside of Austria
5,000,000 Per Means of Transportation
General Liability 11/1/1999-09 08-D600033/J Wiener Staedtische
Coverage:Production and distribution of electronic component parts
100,000 Limit of Liability
Deductibles:
10% Environmental and Tenants Liability, each and every loss
(minimum 10,000)
50,000 USA/Canada, each and every loss
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
International Package 7/1/2001-02 TE06401 186 St. Xxxx Fire & Marine
DIC Insurance Co.
Property
Locations Insured:
2713-B Parque Industrial Pacifico
22670 Tijuana, Baja California, Mexico
A-9020 Klagenfurt, Xxxxxxxxxxxxxxxxx 00 and Xxxxxxxxxxxxxxxx 000
Xxxxx 0000 Xxx. Buenos Aires, Xxxxxxx Xxxx. Xx Xxxxxx Xxxxx, Xxxxxxxxx
Limits:
$ 41,505,699 Blanket Building and Contents (Including Computers)
$ 24,874,532 Blanket Earnings and Expense
$ 500,000 Devaluation of Currency
$ 250,000 Newly Acquired Real Property
$ 100,000 Newly Acquired Business Personal Property
$ 500,000 Property in Transit
$ 500,000 Tenants', Neighbors' and Landlords' Liability
$ 300,000 Unscheduled Locations
Deductibles:
$ 10,000 All coverages per event, except
$ 5,000 Portable Computers
General Liability
$ 1,000,000 General Total Limit
$ 1,000,000 Products/Completed Work Total Limit
$ 1,000,000 Personal Injury
$ 1,000,000 Advertising Injury
$ 1,000,000 Each Event
$ 500,000 Premises Damage
$ 10,000 Medical Expenses
Coverage Term Policy Number Company
--------------------------------------------------------------------------------
International Package DIC (Continued)
Employee Benefits Liability
$ 1,000,000 Each Wrongful Act
$ 3,000,000 Total Limit
$ 1,000 Deductible, each wrongful act
Auto DIC/Excess Coverage - Hired and Non-Owned Autos
$ 1,000,000 Limit of Liability, each accident
$ 10,000 Medical Expense, each person
$ 50,000 Medical Expense, each accident
$ 1,000 Physical Damage (Borrowed Autos only)
$ 250 Physical Damage Deductible (Borrowed Autos Only)
Foreign Voluntary Compensation & Employer's Liability - U.S. and Canadian
Employees of Insured
Workers' Compensation Benefits - State of Hire
Employer's Liability:
$ 1,000,000 Bodily Injury each Accident, Each Accident
$ 1,000,000 Bodily Injury by Disease, Policy Limit
$ 1,000,000 Bodily Injury by Disease, Each Employee
$ 250,000 Transportation Expense (Repatriation), any one employee
$ 1,000,000 Transportation Expense (Repatriation), policy limit
Schedule 4.30 - Hazardous Materials
None
Schedule 7.02 - Liens
Date Filed Secured Party UCC No. Description
---------- ------------- ------- -----------
5/19/00 Bankers/ Softech/ 00000000 Computer equipment
Midstates
7/7/00 Bankers/ Softech/ 00000000 All property subject
Midstates of leasing agreement
8/29/01 Agilent Financial 34280524 Communication
Services equipment
11/26/01 Bankers/ Softech/ EAB 00000000 Blanket lien language
Broadband Network Services (d/b/a Worldbridge Broadband Services, Inc.)
Date Filed Secured Party UCC No. Description
---------- ------------- ------- -----------
9/17/01 GELCO 20011124915 2 Chevrolet trucks
1/10/02 Xxxx Deere Credit 20022007461 2 Ingersoll
compressors
12/17/97 Bankvest Capital 199772115687 Telecommunications
equipment
5/21/98 Bankvest Capital 19982033379 Corporate hardware
Broadband Management Solutions, LLC (including former MobileForce Technologies,
Inc.)
Date Filed Secured Party UCC No. Description
---------- ------------- ------- -----------
2/5/98 Colonial Pacific 9804260733 Telecommunications
Leasing equipment
7/20/00 NEC America Inc. 20760650 NEC Computer
system
11/6/00 Comdisco, Inc. 31460529 Equipment pursuant
to lease
3/23/01 GE Capital/ Colonial 108760734 Computer equipment
Pacific
3/23/01 GE Capital/ Colonial 108760737 Computer equipment
Pacific
3/26/01 Fidelity Leasing 108860889 Computer equipment
3/26/01 Fidelity Leasing 108960501 Equipment pursuant
to lease
6/14/01 IBM Credit Corp 117260581 Equipment pursuant
to lease
6/23/00 Loukianoff vs. C-828069 General civil
MobileForce
Technologies
Schedule 7.03 - Indebtedness
Loan with Altoona-Xxxxx County Development Corporation - Pennsylvania Industrial
Development Authority No. 6894 - approximately $162,000 balance remaining with
monthly payments through January, 2006.
Loan with Centre County Industrial Development Corporation - Pennsylvania
Industrial Development Authority No. 7622 - approximately $1,198,630 balance
remaining with monthly payments through December, 2010.
Intercompany Credit Agreement between X-XXX.xxx Corp., Broadband Capital
Corporation, and the other subsidiaries of X-XXX.xxx Corp.
Funding agreement with Austrian R&D funding institution (Forschungsfonds fuer
die Geweffliche Wirtschaft) - approximately 4.7 million ATS $300,000 USD with
expected payoff date of March 2003.
Schedule 7.04 - Guarantees and Contingent Liabilities
Under the terms of its acquisition agreements with Aerotec Communications, Inc.
and MobileForce Technologies, Inc., respectively, X-XXX.xxx is liable for the
following contingent payment if certain performance targets are achieved:
Aerotec - up to $3.75 million if targets are achieved through June 30, 2003.
MobileForce - up to $13.5 million if targets are achieved through April 30,
2002.
Schedule 7.05 - Loans and Investments
Investment accounts with the following institutions:
CIBC Worldmarkets/CIBC Xxxxxxxxxxx
First Union National Bank
Mellon Bank
M&T Bank
Mellon Private Asset Management
Convertible Secured Loan to Fortress Technologies, Inc. - $1.4 million
