Exhibit 10.1
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CREDIT AND SECURITY AGREEMENT
among
MTC TECHNOLOGIES, INC.,
and
MODERN TECHNOLOGIES CORP.,
as Borrowers,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Banks,
and
NATIONAL CITY BANK,
as Lead Arranger and Administrative Agent
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dated as of
January 31, 2003
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ..................................................1
Section 1.1 Definitions ..................................................1
Section 1.2 Accounting Terms ............................................19
Section 1.3 Terms Generally .............................................19
ARTICLE II AMOUNT AND TERMS OF CREDIT ..................................20
Section 2.1 Amount and Nature of Credit .................................20
Section 2.2 Revolving Loans .............................................20
Section 2.3 [Reserved] ..................................................20
Section 2.4 Swing Loans .................................................21
Section 2.5 Interest ....................................................22
Section 2.6 Evidence of Indebtedness ....................................23
Section 2.7 Notice of Credit Event; Funding of Loans ....................23
Section 2.8 Payment on Notes and Other Obligations ......................24
Section 2.9 Prepayment ..................................................25
Section 2.10 Commitment and Other Fees ...................................25
Section 2.11 Modification of Commitment ..................................26
Section 2.12 Computation of Interest and Fees ............................27
Section 2.13 Mandatory Payment ...........................................27
Section 2.14 Liability of Borrowers ......................................27
Section 2.15 Extension of Commitment .....................................28
ARTICLE III ADDITIONAL PROVISIONS RELATING TO LIBOR LOANS; INCREASED
CAPITAL; TAXES ...........................................29
Section 3.1 Requirements of Law .........................................29
Section 3.2 Taxes .......................................................30
Section 3.3 Funding Losses ..............................................31
Section 3.4 LIBOR Rate Lending Unlawful; Inability to Determine Rate ....32
ARTICLE IV CONDITIONS PRECEDENT ........................................32
Section 4.1 Conditions to Each Credit Event .............................32
Section 4.2 Conditions to the First Credit Event ........................33
ARTICLE V COVENANTS ...................................................35
Section 5.1 Insurance ...................................................35
Section 5.2 Money Obligations ...........................................35
Section 5.3 Financial Statements and Information ........................35
Section 5.4 Financial Records ...........................................36
Section 5.5 Franchises; Change in Business ..............................37
Section 5.6 ERISA Compliance ............................................37
Section 5.7 Financial Covenants .........................................37
Section 5.8 Borrowing ...................................................38
Section 5.9 Liens .......................................................39
Section 5.10 Regulations U and X .........................................39
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Section 5.11 Investments and Loans .......................................39
Section 5.12 Merger and Sale of Assets ...................................40
Section 5.13 Acquisitions ................................................40
Section 5.14 Notice ......................................................41
Section 5.15 Environmental Compliance ....................................41
Section 5.16 Affiliate Transactions ......................................42
Section 5.17 Use of Proceeds .............................................42
Section 5.18 Corporate Names and Location of Collateral ..................42
Section 5.19 Restricted Payments .........................................42
Section 5.20 Subsidiaries Guaranties; Pledge of Stock ....................42
Section 5.21 Property Acquired Subsequent to the Closing Date
and Right to Take Additional Collateral ..................43
Section 5.22 Collateral ..................................................45
Section 5.23 Restrictive Agreements ......................................46
Section 5.24 Other Covenants .............................................46
Section 5.25 Amendment of Organizational Documents .......................46
Section 5.26 Interest Rate Protection ....................................47
Section 5.27 Federal Assignment of Claims Act ............................47
Section 5.28 Department of Defense Account ...............................47
ARTICLE VI SECURITY ....................................................47
Section 6.1 Security Interest in Collateral .............................47
Section 6.2 Collections and Receipt of Proceeds by Borrowers ............47
Section 6.3 Collections and Receipt of Proceeds by Agent ................48
Section 6.4 Use of Inventory and Equipment ..............................49
ARTICLE VII REPRESENTATIONS AND WARRANTIES ..............................49
Section 7.1 Corporate Existence; Subsidiaries; Foreign Qualification ....49
Section 7.2 Corporate Authority .........................................49
Section 7.3 Compliance with Laws ........................................50
Section 7.4 Litigation and Administrative Proceedings ...................50
Section 7.5 Title to Assets .............................................50
Section 7.6 Liens and Security Interests ................................50
Section 7.7 Tax Returns .................................................50
Section 7.8 Environmental Laws ..........................................51
Section 7.9 Location ....................................................51
Section 7.10 Continued Business ..........................................51
Section 7.11 Employee Benefits Plans .....................................51
Section 7.12 Consents or Approvals .......................................52
Section 7.13 Solvency ....................................................52
Section 7.14 Financial Statements ........................................52
Section 7.15 Regulations .................................................52
Section 7.16 Intellectual Property .......................................53
Section 7.17 Insurance ...................................................53
Section 7.18 Accurate and Complete Statements ............................53
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Section 7.19 Defaults ....................................................53
ARTICLE VIII EVENTS OF DEFAULT ...........................................53
Section 8.1 Payments ....................................................53
Section 8.2 Special Covenants ...........................................53
Section 8.3 Other Covenants .............................................53
Section 8.4 Representations and Warranties ..............................53
Section 8.5 Cross Default ...............................................54
Section 8.6 ERISA Default ...............................................54
Section 8.7 Change in Control ...........................................54
Section 8.8 Money Judgment ..............................................54
Section 8.9 Material Adverse Effect .....................................54
Section 8.10 Validity of Loan Documents ..................................54
Section 8.11 Solvency ....................................................54
ARTICLE IX REMEDIES UPON DEFAULT .......................................55
Section 9.1 Optional Defaults ...........................................55
Section 9.2 Automatic Default ...........................................55
Section 9.3 [Reserved] ..................................................55
Section 9.4 Offsets .....................................................56
Section 9.5 Equalization Provision ......................................56
Section 9.6 Collateral ..................................................56
Section 9.7 Other Remedies ..............................................57
ARTICLE X THE AGENT ...................................................57
Section 10.1 Appointment and Authorization ...............................57
Section 10.2 Note Holders ................................................58
Section 10.3 Consultation with Counsel ...................................58
Section 10.4 Documents ...................................................58
Section 10.5 Agent and Affiliates ........................................58
Section 10.6 Knowledge of Default ........................................58
Section 10.7 Action by Agent .............................................58
Section 10.8 Default Notices .............................................58
Section 10.9 Indemnification of Agent ....................................59
Section 10.10 Successor Agent .............................................59
ARTICLE XI MISCELLANEOUS ...............................................59
Section 11.1 Banks' Independent Investigation ............................59
Section 11.2 No Waiver; Cumulative Remedies ..............................60
Section 11.3 Amendments, Consents ........................................60
Section 11.4 Notices .....................................................60
Section 11.5 Costs, Expenses and Taxes ...................................60
Section 11.6 Indemnification .............................................61
Section 11.7 Obligations Several; No Fiduciary Obligations ...............61
Section 11.8 Execution in Counterparts ...................................61
Section 11.9 Binding Effect; Borrowers' Assignment .......................61
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Section 11.10 Bank Assignments ............................................62
Section 11.11 Sale of Participations ......................................63
Section 11.12 Severability of Provisions; Captions; Attachments ...........64
Section 11.13 Entire Agreement ............................................65
Section 11.14 Legal Representation of Parties .............................65
Section 11.15 Governing Law; Submission to Jurisdiction ...................65
Section 11.16 Jury Trial Waiver ...........................................66
SCHEDULES AND EXHIBITS
Schedule I - Banking Institution, Commitment Percentage, Revolving Credit
Commitment Amount and Maximum Amount
Schedule 2 - Guarantors of Payment
Schedule 5.8 - Indebtedness
Schedule 5.9 - Liens
Schedule 7.1 - Subsidiaries
Schedule 7.9 - Locations
Schedule 7.11 - ERISA Plans
Schedule 7.17 - Insurance
Exhibit A - Revolving Credit Note
Exhibit B - Swing Line Note
Exhibit C - Notice of Loan
Exhibit D - Compliance Certificate
Exhibit E - Form of Assignment and Assumption Agreement
Annex 1 - Standard Terms and Conditions for Assignment and Assumption
Exhibit F - Request for Extension
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This CREDIT AND SECURITY AGREEMENT (as the same may from time to time be
amended, restated or otherwise modified, this "Agreement") is made effective as
of the 31st day of January, 2003, among:
(a) MTC TECHNOLOGIES, INC., a Delaware corporation ("MTCT");
(b) and MODERN TECHNOLOGIES CORP., an Ohio corporation, (together with
MTCT, collectively, "Borrowers" and, individually, each a "Borrower");
(c) the financial institutions listed on Schedule 1 hereto and each other
Eligible Transferee, as hereinafter defined, that becomes a party hereto
pursuant to Section 11.10 hereof (collectively, the "Banks" and, individually,
each a "Bank"); and
(d) NATIONAL CITY BANK, as lead arranger and administrative agent for the
Banks under this Agreement ("Agent").
WITNESSETH:
WHEREAS, Borrowers, Agent and the Banks desire to contract for the
establishment of credits in the aggregate principal amounts hereinafter set
forth, to be made available to Borrowers upon the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Account" shall mean (a) all accounts, as defined in Chapter 1309 of the
Ohio Revised Code as in effect from time to time; (b)(i) any right to payment
now or hereafter owing to a Company (including but not limited to any such right
to payment by reason of any lease, sale, manufacture, repair, processing or
fabrication of personal property formerly, now or hereafter owned or otherwise
held by such Company, by reason of any services formerly, now or hereafter
rendered by or on behalf of such Company or by reason of any former, existing or
future contract for any such lease, sale, manufacture, repair, processing,
fabrication and/or services), whether such right to payment be classified by law
as an instrument, chattel paper, contract right, account, document, general
intangible or otherwise, (ii) the security, if any, for such right to payment,
(iii) such Company's right, title and interest (including, without limitation,
all of such Company's rights as an unpaid vendor, and any applicable right of
stoppage in transit) in or to the personal property, if any, that is the subject
of such right to payment, and (iv) all books and records pertaining to such
right to payment; and (c) all proceeds of any of the foregoing, irrespective of
the form or kind thereof.
"Account Debtor" shall mean any Person obligated to pay all or any part of
any Account in any manner and includes (without limitation) any Guarantor
thereof.
"Acquisition" shall mean any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of any Person, or any business or
division of any Person (other than a Company), (b) the acquisition of in excess
of fifty percent (50%) of the stock (or other equity interest) of any Person
(other than a Company), or (c) the acquisition of another Person (other than a
Company) by a merger, amalgamation or consolidation or any other combination
with such Person.
"Additional Bank" shall mean a financial institution that shall become a
Bank hereunder during the Commitment Increase Period pursuant to Section 2.11(b)
hereof.
"Additional Bank Assumption Agreement" shall mean an additional bank
assumption agreement, in form and substance satisfactory to Agent, wherein an
Additional Bank shall become a Bank hereunder.
"Additional Bank Assumption Effective Date" shall have the meaning given
such term in Section 2.11(b) hereof.
"Additional Commitment" shall have the meaning given to such term in
Section 2.11(b) hereof.
"Administrative Borrower" shall mean MTCT.
"Advantage" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other indebtedness or otherwise)
received by any Bank in respect of the Debt, if such payment results in that
Bank having less than its pro rata share of the Debt then outstanding, than was
the case immediately before such payment.
"Affiliate" shall mean any Person, directly or indirectly, controlling,
controlled by or under common control with a Company and "control" (including
the correlative meanings, the terms "controlling", "controlled by" and "under
common control with") shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Company, whether through
the ownership of voting securities, by contract or otherwise. The term
"Affiliate" shall not include any Person controlled by Xxxxxx X. Xxxx that is
not a Company.
"Agent Fee Letter" shall mean the Agent Fee Letter between Borrowers and
Agent, dated as of the Closing Date, as the same may from time to time be
amended, restated or otherwise modified.
"Applicable Commitment Fee Rate" shall mean:
(a) for the period from the Closing Date through March 31, 2003,
twenty-five (25) basis points; and
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(b) commencing with the Consolidated financial statements of MTCT for the
fiscal quarter ending December 31, 2002, the number of basis points set forth in
the following matrix, based upon the result of the computation of the Leverage
Ratio, shall be used to establish the number of basis points that will go into
effect on April 1, 2003 and thereafter:
Leverage Ratio Applicable Commitment Fee Rate
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Greater than or equal to 2.00 to 1.00 50.00 basis points
Less than 2.00 to 1.00 but greater than
or equal to 1.00 to 1.00 37.50 basis points
Less than 1.00 to 1.00 25.00 basis points
After April 1, 2003, changes to the Applicable Commitment Fee Rate shall be
effective on the first day of each fiscal quarter following the date upon which
Agent received, or, if earlier, Agent should have received, pursuant to Section
5.3(a) or (b) hereof, the financial statements of MTCT. The above matrix does
not modify or waive, in any respect, the requirements of Section 5.7 hereof, the
rights of Agent and the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VIII and IX hereof.
"Applicable Margin" shall mean:
(a) for the period from the Closing Date through March 31, 2003, One
Hundred Fifty (150.00) basis points for LIBOR Loans and Negative Twenty Five
(-25.00) basis points for Base Rate Loans; and
(b) commencing with the Consolidated financial statements of MTCT for the
fiscal quarter ending December 31, 2002, the number of basis points (depending
upon whether Loans are LIBOR Loans or Base Rate Loans) set forth in the
following matrix, based upon the result of the computation of the Leverage
Ratio, shall be used to establish the number of basis points that will go into
effect on April 1, 2003 and thereafter:
Applicable Basis Applicable Basis
Points for LIBOR Points for
Leverage Ratio Loans Base Rate Loans
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Greater than or equal to 2.00 to 1.00 225.00 25.00
Less than 2.00 to 1.00 but greater than or equal to
1.50 to 1.000 200.00 0.00
Less than 1.50 to 1.00 but greater than or equal to
1.00 to 1.00 175.00 0.00
Less than 1.00 to 1.00 150.00 -25.00
After April 1, 2003 changes to the Applicable Margin shall be effective on the
first day of each fiscal quarter following the date upon which Agent received,
or, if earlier, Agent should have received, pursuant to Section 5.3(a) or (b)
hereof, the financial statements of MTCT. The above matrix does not modify or
waive, in any respect, the requirements of Section 5.7 hereof, the
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rights of Agent and the Banks to charge the Default Rate, or the rights and
remedies of Agent and the Banks pursuant to Articles VIII and IX hereof.
"Assignment Agreement" shall mean an Assignment and Assumption Agreement in
the form of the attached Exhibit E.
"Base Rate" shall mean a rate per annum equal to the greater of (a) the
Prime Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds
Effective Rate. Any change in the Base Rate shall be effective immediately from
and after such change in the Base Rate.
"Base Rate Loan" shall mean a Revolving Loan described in Section 2.2
hereof, on which Borrowers shall pay interest at a rate based on the Derived
Base Rate.
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which national banks are required or authorized to close, and, if the
applicable Business Day shall relate to any LIBOR Loan, a day of the year on
which dealings are carried on in the London interbank Eurodollar market.
"Capital Distribution" shall mean a payment made, liability incurred or
other consideration given by any Company to any Person that is not a Company,
for the purchase, acquisition, redemption, repurchase or retirement of any
capital stock or other equity interest of such Company or as a dividend, return
of capital or other distribution (other than any stock dividend, stock split or
other equity distribution payable only in capital stock or other equity of such
Company) in respect of such Company's capital stock or other equity interest.
"Capital Expenditure" means any expenditure that is classified as a capital
expenditure under GAAP.
"Capitalized Lease Obligations" shall mean obligations of the Companies for
the payment of rent for any real or personal property under leases or agreements
to lease that, in accordance with GAAP, have been or should be capitalized on
the books of the lessee and, for purposes hereof, the amount of any such
obligation shall be the capitalized amount thereof determined in accordance with
GAAP.
"Cash Collateral Account" shall mean a commercial Deposit Account
designated "cash collateral account" and maintained by any Borrower with Agent,
without liability by Agent or the Banks to pay interest thereon, from which
account Agent, on behalf of the Banks, shall have the exclusive right to
withdraw funds until all of the Debt is paid in full.
"Cash Security" shall mean all cash, instruments, Deposit Accounts and
other cash equivalents, whether matured or unmatured, whether collected or in
the process of collection, upon which any Borrower presently has or may
hereafter have any claim, wherever located, including but not limited to any of
the foregoing that are presently or may hereafter be existing or maintained
with, issued by, drawn upon, or in the possession of Agent or any Bank.
"Change in Control" shall mean (a) the acquisition of, or, if earlier, the
shareholder or director approval of the acquisition of, ownership or voting
control, directly or indirectly,
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beneficially or of record, on or after the Closing Date, by any Person or group
(within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act
of 1934, as then in effect), of shares representing more than fifty-one percent
(51%) of the aggregate ordinary Voting Power represented by the issued and
outstanding capital stock of any Borrower; or (b) the occupation of a majority
of the seats (other than vacant seats) on the board of directors or other
governing body of any Borrower by Persons who were neither (i) nominated by the
board of directors or other governing body of such Borrower nor (ii) appointed
by directors so nominated.
"Closing Commitment Amount" shall mean Thirty-Five Million Dollars
($35,000,000).
"Closing Date" shall mean the effective date of this Agreement as set forth
in the first paragraph of this Agreement.
"Closing Fee Letter" shall mean the Closing Fee Letter among Borrowers,
Agent and the Banks, dated as of the Closing Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended, together
with the rules and regulations promulgated thereunder.
"Collateral" shall mean all of each Borrower's existing and future (a)
personal property; (b) Accounts, instruments, contract rights, chattel paper,
documents, Investment Property, letter-of-credit rights, General Intangibles,
Inventory and Equipment; (c) funds now or hereafter on deposit in the Cash
Collateral Account, if any; (d) Cash Security; and (e) Proceeds, products,
profits, and rents of any of (a) through (d) above.
"Commitment" shall mean the obligation hereunder of the Banks, during the
Commitment Period, to make Loans pursuant to the Revolving Credit Commitments,
up to the Total Commitment Amount.
"Commitment Increase Period" shall mean the period from the Closing Date to
the last day of the Commitment Period, or such later date as shall be agreed to
in writing by Agent.
"Commitment Percentage" shall mean, for each Bank, the percentage set forth
opposite such Bank's name under the column headed "Commitment Percentage", as
listed in Schedule 1 hereto.
"Commitment Period" shall mean the period from the Closing Date to December
31, 2005 or such earlier date on which the Commitment shall have been terminated
pursuant to Article IX hereof.
"Companies" shall mean all Borrowers and all Subsidiaries.
"Company" shall mean a Borrower or a Subsidiary and any Dormant Subsidiary.
"Compliance Certificate" shall mean a certificate, substantially in the
form of the attached Exhibit D.
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"Consideration" shall mean, in connection with an Acquisition, the
aggregate consideration paid, including borrowed funds, cash, the issuance of
securities or notes, the assumption or incurring of liabilities (direct or
contingent), the payment of consulting fees or fees for a covenant not to
compete and any other consideration paid for such Acquisition.
"Consolidated" shall mean the resultant consolidation of the financial
statements of MTCT and its Subsidiaries in accordance with GAAP, including
principles of consolidation consistent with those applied in preparation of the
consolidated financial statements referred to in Section 7.14 hereof.
"Consolidated Capital Expenditures" shall mean, for any period, the amount
of capital expenditures of MTCT, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Depreciation and Amortization Charges" shall mean, for any
period, the aggregate of all depreciation and amortization charges for fixed
assets, leasehold improvements and general intangibles (specifically including
goodwill) of MTCT for such period, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, on a Consolidated basis and
in accordance with GAAP, Consolidated Net Earnings for such period plus the
aggregate amounts deducted in determining such Consolidated Net Earnings in
respect of (a) Consolidated Interest Expense, and (b) Consolidated Income Tax
Expense.
"Consolidated EBITDA" shall mean, for any period, on a Consolidated basis
and in accordance with GAAP, Consolidated EBIT plus the amount deducted in
determining Consolidated EBIT in respect of Consolidated Depreciation and
Amortization Charges and Consolidated Stock Option Expense.
"Consolidated Fixed Charges" shall mean, for any period, with respect to
MTCT, on a Consolidated basis and in accordance with GAAP, without duplication,
the aggregate of (a) Consolidated Interest Expense, (b) scheduled principal
payments on Consolidated Funded Indebtedness due within the current period, (c)
lease payments on Consolidated Rental Obligations for such period, and (d)
Consolidated Capital Expenditures.
"Consolidated Funded Indebtedness" shall mean, for any period, Funded
Indebtedness of MTCT for such period, as determined on a Consolidated basis and
in accordance with GAAP.
"Consolidated Income Tax Expense" shall mean, for any period, all
provisions for taxes based on the gross or net income of MTCT (including,
without limitation, any additions to such taxes, and any penalties and interest
with respect thereto), and all franchise taxes of MTCT, as determined on a
Consolidated basis and in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, the interest
expense of MTCT for such period, as determined on a Consolidated basis and in
accordance with GAAP.
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"Consolidated Net Earnings" shall mean, for any period, the net income
(loss) of MTCT for such period, as determined on a Consolidated basis and in
accordance with GAAP.
"Consolidated Net Worth" shall mean, at any date, the shareholders' equity
of MTCT, determined as of such date on a Consolidated basis and in accordance
with GAAP.
"Consolidated Rental Obligations" shall mean, for any period, all Rental
Obligations of MTCT (other than Capitalized Lease Obligations), as determined on
a Consolidated basis and in accordance with GAAP.
"Consolidated Stock Option Expense" shall mean, for any period, all
non-cash compensation expense arising from the issuance by MTCT of stock options
during such period, as determined on a Consolidated basis and in accordance with
GAAP.
"Consolidated Tangible Net Worth" shall mean, at any date, on a
Consolidated basis and in accordance to GAAP, the amount equal to (a)
Consolidated Net Worth, minus (b) the net book value of goodwill, patents,
franchises, trademarks and copyrights of MTCT.
"Controlled Group" shall mean a Company and each Person required to be
aggregated with a Company under Code Section 414(b), (c), (m) or (o).
"Credit Event" shall mean the making by the Banks of a Loan, the conversion
by the Banks of a Base Rate Loan to a LIBOR Loan, the continuation by the Banks
of a LIBOR Loan after the end of the applicable Interest Period, or the making
by the Swing Line Bank of a Swing Loan.
"Credit Party" shall mean each Borrower, Subsidiary or Affiliate, including
any Guarantor of Payment, that, in each case, is a party to any Loan Document.
"Debt" shall mean, collectively, (a) all Indebtedness and other obligations
incurred by any Borrower or Guarantor of Payment to Agent, the Swing Line Bank
or any Bank (or any affiliate thereof) pursuant to this Agreement and includes
the principal of and interest on all Notes; (b) each extension, renewal or
refinancing thereof in whole or in part; (c) the commitment fees, other fees and
any prepayment fees payable hereunder; and (d) all Related Expenses.
"Default" shall mean an event or condition that constitutes, or with the
lapse of any applicable grace period or the giving of notice or both would
constitute, an Event of Default and that has not been waived by the Required
Banks in writing.
"Default Rate" shall mean, (a) with respect to any Loan, a rate per annum
equal to two percent (2%) in excess of the Derived Base Rate from time to time
in effect, and (b) with respect to any other amount, if no rate is specified or
available, a rate per annum equal to two percent (2%) in excess of the Derived
Base Rate from time to time in effect.
"Department of Defense Account" shall mean demand deposit account no.
685409422 at National City Bank.
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"Deposit Account" shall mean (a) a deposit account, as defined in Chapter
1309 of the Ohio Revised Code as in effect from time to time, (b) any other
deposit account, and (c) any demand, time, checking, savings, passbook, or a
similar account maintained with a bank, savings and loan association, credit
union, or similar organization. The term "Deposit Account" shall not include the
Department of Defense Account.
"Derived Base Rate" shall mean a rate per annum equal to the sum of the
Applicable Margin (from time to time in effect) for Base Rate Loans plus the
Base Rate.
"Derived LIBOR Rate" shall mean a rate per annum equal to the sum of the
Applicable Margin (from time to time in effect) for LIBOR Loans plus the LIBOR
Rate.
"Derived Swing Loan Rate" shall mean a rate per annum equal to (a) Agent's
cost of funds as quoted to Administrative Borrower by Agent and agreed to by
Administrative Borrower, plus (b) the Applicable Margin (from time to time in
effect) for LIBOR Loans.
"Dollar" or the $ sign shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean a Subsidiary that is not a Foreign
Subsidiary.
"Dormant Subsidiary" shall mean a Company that (a) is not a Credit Party,
(b) has aggregate assets of less than Fifty Thousand Dollars ($50,000) and
aggregate investments by the Companies of less than Fifty Thousand Dollars
($50,000), and (c) has no direct or indirect Subsidiaries with aggregate assets
for all such Subsidiaries of more than Fifty Thousand Dollars ($50,000).
"Eligible Transferee" shall mean a commercial bank, financial institution
or other "accredited investor" (as defined in SEC Regulation D) that is not a
Borrower, a Subsidiary or an Affiliate.
"Environmental Laws" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or any foreign jurisdiction or by any state or
municipality thereof, or by any court, agency, instrumentality, regulatory
authority or commission of any of the foregoing concerning health, safety and
protection of, or regulation of the discharge of substances into, the
environment.
"Equipment" shall mean all (a) equipment, as defined in Chapter 1309 of the
Ohio Revised Code as in effect from time to time, including, without limitation,
machinery, motor vehicles, trade fixtures, office and other furniture and
furnishings, tools, dies, jigs, and molds; (b) goods that are used or bought for
use primarily in any Company's business; (c) goods that are not consumer goods,
farm products (as defined in Chapter 1309 of the Ohio Revised Code as in effect
from time to time), or Inventory; and (d) substitutes or replacements for, and
all parts, accessories, additions, attachments or accessions to (a) through (c)
above.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean (a) the existence of a condition or event with
respect to an ERISA Plan that presents a risk of the imposition of an excise tax
or any other liability on a Company or of the imposition of a Lien on the assets
of a Company; (b) the engagement by a Controlled Group member in a non-exempt
"prohibited transaction" (as defined under ERISA Section 406 or Code Section
4975) or a breach of a fiduciary duty under ERISA that could result in liability
to a Company; (c) the application by a Controlled Group member for a waiver from
the minimum funding requirements of Code Section 412 or ERISA Section 302 or a
Controlled Group member is required to provide security under Code Section
401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with
respect to any Pension Plan as to which notice is required to be provided to the
PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan
in a "complete withdrawal" or a "partial withdrawal" (as such terms are defined
in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or
occurrence or existence of any event or condition that makes likely the
involvement of, a Multiemployer Plan in any reorganization under ERISA Section
4241; (g) the failure of an ERISA Plan (and any related trust) that is intended
to be qualified under Code Sections 401 and 501 to be so qualified or the
failure of any "cash or deferred arrangement" under any such ERISA Plan to meet
the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps
to terminate a Pension Plan or appoint a trustee to administer a Pension Plan,
or the taking by a Controlled Group member of any steps to terminate a Pension
Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy
any requirements of law applicable to an ERISA Plan; (j) the commencement,
existence or threatening of a claim, action, suit, audit or investigation with
respect to an ERISA Plan, other than a routine claim for benefits; or (k) any
occurrence by or any expectation of the incurrence by a Controlled Group member
of any liability for post-retirement benefits under any Welfare Plan, other than
as required by ERISA Section 601, et. seq. or Code Section 4980B.
"ERISA Plan" shall mean an "employee benefit plan" (within the meaning of
ERISA Section 3(3)) that a Controlled Group member at any time sponsors,
maintains, contributes to, has liability with respect to or has an obligation to
contribute to such plan.
"Eurocurrency Reserve Percentage" shall mean, for any Interest Period in
respect of any LIBOR Loan, as of any date of determination, the aggregate of the
then stated maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves), expressed as a decimal, applicable to such
Interest Period (if more than one such percentage is applicable, the daily
average of such percentages for those days in such Interest Period during which
any such percentage shall be so applicable) by the Board of Governors of the
Federal Reserve System, any successor thereto, or any other banking authority,
domestic or foreign, to which a Bank may be subject in respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other category of liabilities
including deposits by reference to which the interest rate on LIBOR Loans is
determined or any category of extension of credit or other assets that include
the LIBOR Loans. For purposes hereof, such reserve requirements shall include,
without limitation, those imposed under Regulation D of the Federal Reserve
Board and the LIBOR Loans shall be deemed to constitute
9
Eurocurrency Liabilities subject to such reserve requirements without benefit of
credits for proration, exceptions or offsets that may be available from time to
time to any Bank under said Regulation D.
"Eurodollar" shall mean a Dollar denominated deposit in a bank or branch
outside of the United States.
"Event of Default" shall mean an event or condition that shall constitute
an event of default as defined in Article VIII hereof.
"Excluded Taxes" shall mean net income taxes (and franchise taxes imposed
in lieu of net income taxes) imposed on Agent or any Bank by the Governmental
Authority located in the jurisdiction where Agent or such Bank is organized
(other than any such connection arising solely from Agent or such Bank having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document).
"Federal Funds Effective Rate" shall mean, for any day, the rate per annum
(rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%))
announced by the Federal Reserve Bank of New York (or any successor) on such day
as being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous trading day, as
computed and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds Effective
Rate" as of the Closing Date.
"Financial Officer" shall mean any of the following officers: chief
executive officer, president, chief financial officer, vice president -
controller or treasurer. Unless otherwise qualified, all references to a
Financial Officer in this Agreement shall refer to a Financial Officer of MTCT.
"Fixed Charge Coverage Ratio" shall mean, for the most recently completed
four fiscal quarters of MTCT, on a Consolidated basis and in accordance with
GAAP, the ratio of (a) Consolidated EBITDA for such period plus lease payments
on Consolidated Rental Obligations for such period less the aggregate amounts
paid in respect of Consolidated Income Tax Expense, to (b) Consolidated Fixed
Charges.
"Foreign Subsidiary" shall mean a Subsidiary that is organized outside of
the United States.
"Funded Indebtedness" shall mean all Indebtedness for borrowed money and
Capitalized Lease Obligations, including, but not limited to, current, long-term
and Subordinated Indebtedness, if any.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, applied on a basis consistent with the
past accounting practices and procedures of Borrowers.
10
"General Intangibles" shall mean all (a) general intangibles, as defined in
Chapter 1309 of the Ohio Revised Code as in effect from time to time; (b) choses
in action, causes of action, all customer lists, corporate or other business
records, inventions, designs, patents, patent applications, service marks,
registrations, trade names, trademarks, copyrights, goodwill, computer software,
rights to indemnification and tax refunds; and (c) Proceeds of any of the
foregoing, irrespective of the form or kind thereof.
"Governmental Authority" shall mean any nation or government, any state,
province or territory or any city, county or other political subdivision
thereof, any governmental agency, authority, instrumentality, regulatory body,
court, central bank or other governmental entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
"Guarantor" shall mean a Person that shall have pledged its credit or
property in any manner for the payment or other performance of the indebtedness,
contract or other obligation of another and includes (without limitation) any
guarantor (whether of payment or of collection), surety, co-maker, endorser or
Person that shall have agreed conditionally or otherwise to make any purchase,
loan or investment in order thereby to enable another to prevent or correct a
default of any kind.
"Guarantor of Payment" shall mean each of the Companies set forth on
Schedule 2 hereto, that are each executing and delivering a Guaranty of Payment,
or any other Person that shall deliver a Guaranty of Payment to Agent subsequent
to the Closing Date, whether pursuant to Section 5.20 hereof or by agreement of
the parties hereto.
"Guaranty of Payment" shall mean each Guaranty of Payment of Debt executed
and delivered on or after the Closing Date in connection with this Agreement by
the Guarantors of Payment, as the same may from time to time be amended,
restated or otherwise modified.
"Hedge Agreement" shall mean any hedge agreement, interest rate swap, cap,
collar or floor agreement, or other interest rate management device entered into
by a Borrower with any Person in connection with any Indebtedness of such
Borrower.
"Indebtedness" shall mean, for any Company (excluding in all cases trade
payables payable in the ordinary course of business by such Company), without
duplication, (a) all obligations to repay borrowed money, direct or indirect,
incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase
price of capital assets, (c) all obligations under conditional sales or other
title retention agreements, (d) all obligations (contingent or otherwise) under
any letter of credit, banker's acceptance, currency swap agreement, interest
rate swap, cap, collar or floor agreement or other interest rate management
device, (e) all synthetic leases, (f) all lease obligations that have been or
should be capitalized on the books of such Company in accordance with GAAP, (g)
all obligations of such Company with respect to asset securitization financing
programs, (h) all obligations to advance funds to, or to purchase assets,
property or services from, any other Person in order to maintain the financial
condition of such Person, and (i) any other transaction (including forward sale
or purchase agreements) having the commercial effect
11
of a borrowing of money entered into by such Company to finance its operations
or capital requirements.
"Intellectual Property Collateral Assignment and Security Agreement" shall
mean any Intellectual Property Collateral Assignment and Security Agreement,
executed and delivered by a Borrower and/or each Guarantor of Payment in favor
of Agent, for the benefit of the Banks, from time to time after the Closing
Date, granting a security interest in and an assignment of all intellectual
property owned by such Borrower or Guarantor of Payment, as the same may from
time to time be amended, restated or otherwise modified.
"Interest Adjustment Date" shall mean the last day of each Interest Period.
"Interest Coverage Ratio" shall mean, for the most recently completed four
fiscal quarters of MTCT, on a Consolidated basis and in accordance with GAAP,
the ratio of (a) Consolidated EBIT to (b) Consolidated Interest Expense.
"Interest Period" shall mean, with respect to any LIBOR Loan, the period
commencing on the date such LIBOR Loan is made and ending on the last day of
such period, as selected by Administrative Borrower pursuant to the provisions
hereof, and thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of such period,
as selected by Administrative Borrower pursuant to the provisions hereof. The
duration of each Interest Period for LIBOR Loan shall be one month, two months,
three months or six months, in each case as Administrative Borrower may select
upon notice, as set forth in Section 2.7 hereof; provided that, if
Administrative Borrower shall fail to so select the duration of any Interest
Period at least three Business Days prior to the Interest Adjustment Date
applicable to such Loan, Borrowers shall be deemed to have converted such LIBOR
Loan to a Base Rate Loan at the end of the then current Interest Period.
"Interest Rate Protection" shall mean, with respect to Indebtedness of
Borrowers, that either (a) Borrowers shall have obtained a fixed rate of
interest on such Indebtedness, or (b) Borrowers shall have entered into a Hedge
Agreement or Hedge Agreements; either of which shall be upon such terms and
conditions as shall be satisfactory to Agent.
"Inventory" shall mean all (a) inventory, as defined in Chapter 1309 of the
Ohio Revised Code as in effect from time to time; (b) goods that are raw
materials; (c) goods that are work-in-process; (d) goods that are materials used
or consumed in the ordinary course of any Company's business; (e) goods that
are, in the ordinary course of any Company's business, held for sale or lease or
furnished or to be furnished under contracts of service; and (f) substitutes and
replacements for, and parts, accessories, additions, attachments or accessions
to (a) through (e) above.
"Investment Property" shall mean all investment property, as defined in
Chapter 1309 of the Ohio Revised Code as in effect from time to time, unless the
U.C.C. as in effect in another jurisdiction would govern the perfection and/or
priority of a security interest in investment property, and, in such case,
investment property shall be defined in accordance with the law of that
jurisdiction as in effect from time to time.
12
"Landlord's Agreement" shall mean a landlord's waiver or mortgagee's
waiver, each in form and substance satisfactory to Agent, delivered by a Company
in connection with this Agreement, as the same may from time to time be amended,
restated or otherwise modified.
"Leverage Ratio" shall mean, at any time, on a Consolidated basis and in
accordance with GAAP, the ratio of (a) Consolidated Funded Indebtedness (for the
most recently completed fiscal quarter of MTCT) to (b) Consolidated EBITDA (for
the most recently completed four fiscal quarters of MTCT).
"LIBOR Loan" shall mean a Loan described in Section 2.2 hereof on which
Borrowers shall pay interest at a rate based upon the Derived LIBOR Rate.
"LIBOR Rate" shall mean, with respect to an LIBOR Loan, for any Interest
Period, a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the nearest 1/16th of 1%) by dividing (a) the rate of interest,
determined by Agent in accordance with its usual procedures (which determination
shall be conclusive absent demonstrable error) as of approximately 11:00 A.M.
(London time) three Business Days prior to the beginning of such Interest Period
pertaining to such LIBOR Loan, as listed on British Bankers Association Interest
Rate LIBOR 01 or 02 as provided by Reuters (or, if for any reason such rate is
unavailable from Reuters, from any other similar company or service that
provides rate quotations comparable to those currently provided by Reuters) as
the rate in the London interbank market for deposits in Eurodollars in
immediately available funds with a maturity comparable to such Interest Period,
provided that, in the event that such rate quotation is not available for any
reason, then the LIBOR Rate shall be the average (rounded upward to the nearest
1/16th of 1%) of the per annum rates at which deposits in immediately available
funds in Eurodollars for the relevant Interest Period and in the amount of the
LIBOR Loan to be disbursed or to remain outstanding during such Interest Period,
as the case may be, are offered to Agent (or an affiliate of Agent, in Agent's
discretion) by prime banks in any Eurodollar market reasonably selected by
Agent, determined as of 11:00 A.M. (London time) (or as soon thereafter as
practicable), three Business Days prior to the beginning of the relevant
Interest Period pertaining to such LIBOR Loan hereunder; by (b) 1.00 minus the
Eurocurrency Reserve Percentage.
"Lien" shall mean any mortgage, security interest, lien (statutory or
other), charge, encumbrance on, pledge or deposit of, or conditional sale,
leasing, sale with a right of redemption or other title retention agreement and
any capitalized lease with respect to any property (real or personal) or asset.
"Loan" shall mean a Revolving Loan or Swing Loan granted to Borrowers by
the Banks in accordance with Section 2.2 or 2.4 hereof.
"Loan Documents" shall mean, collectively, this Agreement, each Note, each
Guaranty of Payment, each Security Document, the Agent Fee Letter and the
Closing Fee Letter, as any of the foregoing may from time to time be amended,
restated or otherwise modified or replaced, and any other document delivered
pursuant thereto.
13
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of any Company, (b) the business, operations, property, condition (financial or
otherwise) or prospects of the Companies taken as a whole, or (c) the validity
or enforceability of this Agreement or any of the other Loan Documents or the
rights and remedies of Agent or the Banks hereunder or thereunder.
"Material Indebtedness Agreement" shall mean any debt instrument, lease
(capital, operating or otherwise), guaranty, contract, commitment, agreement or
other arrangement evidencing any Indebtedness of any Company or the Companies in
excess of the aggregate amount of Five Hundred Thousand Dollars ($500,000).
"Maximum Amount" shall mean, for each Bank, the amount set forth opposite
such Bank's name under the column headed "Maximum Amount" as set forth on
Schedule 1 hereto, subject to decreases determined pursuant to Section 2.11(a)
hereof, increases pursuant to Section 2.11(b) hereof and assignments of
interests pursuant to Section 11.10 hereof; provided, however, that the Maximum
Amount for the Swing Line Bank shall exclude the Swing Line Commitment.
"Maximum Commitment Amount" shall mean Fifty Million Dollars ($50,000,000),
or such other amount as shall be determined pursuant to Section 2.11 hereof.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., or any successor to
such company.
"Mortgage" shall mean an Open-End Mortgage, Assignment of Leases and Rents
and Security Agreement (or comparable document), relating to Real Property
acquired by a Borrower or Guarantor after the Closing Date, executed and
delivered by such Borrower or Guarantor of Payment from time to time, to further
secure each Borrower's obligations under the Notes, as the same may from time to
time be amended, restated or otherwise modified.
"Multiemployer Plan" shall mean a Pension Plan that is subject to the
requirements of Subtitle E of Title IV of ERISA.
"Note" shall mean each Revolving Credit Note or the Swing Line Note, or any
other note delivered pursuant to this Agreement.
"Notice of Loan" shall mean a Notice of Loan in the form of the attached
Exhibit C.
"Organizational Documents" shall mean, with respect to any Person (other
than an individual), such Person's Articles (Certificate) of Incorporation, or
equivalent formation documents, and Regulations (Bylaws), or equivalent
governing documents, and any ,amendments to any of the foregoing.
"Other Taxes" shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, goods and services taxes,
harmonized sales taxes and other sales taxes, charges or similar levies arising
from any payment made hereunder or from the
14
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or its
successor.
"Pension Plan" shall mean an ERISA Plan that is a "pension plan" (within
the meaning of ERISA Section 3(2)).
"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, unincorporated organization, corporation, limited liability company,
institution, trust, estate, government or other agency or political subdivision
thereof or any other entity.
"Pledge Agreement" shall mean the Pledge Agreements executed and delivered
to Agent, for the benefit of the Banks, by each Borrower or Guarantor of Payment
(that directly owns an equity interest in a Borrower or Subsidiary), dated as of
the Closing Date, and any other Pledge Agreement executed by any other Person,
on or after the Closing Date, as any of the foregoing may from time to time be
amended, restated or otherwise modified.
"Pledged Securities" shall mean the shares of capital stock or other equity
interest of a Subsidiary of MTCT, whether now owned or hereafter acquired or
created, and all proceeds thereof.
"Prepayment Event" shall mean (a) the receipt by any Company of the
proceeds of any Indebtedness after the Closing Date from any Person other than
pursuant to this Agreement; (b) the issuance of equity by any Company; (c) the
disposition of any assets by any Company outside of the ordinary course of
business, provided that (i) the aggregate value of such assets shall exceed
$250,000 and (ii) the proceeds of such disposition shall not have been used by
the Companies for the purchase of other assets within one hundred eighty (180)
days of receipt of such proceeds; or (d) the receipt by any Company of any sums
in payment of insurance losses, returns or unearned premiums under any policy of
insurance, litigation awards or any other material recovery event, provided that
the proceeds of such event shall not have been used by the Companies for the
purchase of other assets within one hundred eighty (180) days of receipt of such
proceeds.
"Prepayment Proceeds" shall mean (a) with respect to a Prepayment Event
described in subparts (a), (c) and (d) of the definition of Prepayment Event,
then all of the proceeds of such Prepayment Event minus taxes, fees and expenses
actually paid in connection with such Prepayment Event; or (b) with respect to a
Prepayment Event described in subpart (b) of the definition of Prepayment Event,
an amount equal to eighty percent (80%) of the net proceeds of such Prepayment
Event.
"Prime Rate" shall mean the fluctuating rate of interest which is publicly
announced from time to time by Agent at its principal place of business as being
its "prime rate" or "base rate" thereafter in effect, with each change in the
Prime Rate automatically, immediately and without notice changing the
fluctuating interest rate thereafter applicable hereunder, it being agreed that
15
the Prime Rate is not necessarily the lowest rate of interest then available
from Agent on fluctuating rate loans.
"Proceeds" shall mean (a) any proceeds, and (b) whatever is received upon
the sale, exchange, collection, or other disposition of Collateral or proceeds,
whether cash or non-cash. Cash proceeds includes, without limitation, moneys,
checks, and Deposit Accounts. Proceeds includes, without limitation, any Account
arising when the right to payment is earned under a contract right, any
insurance payable by reason of loss or damage to the Collateral, and any return
or unearned premium upon any cancellation of insurance. Except as expressly
authorized in this Agreement, the right of Agent and the Banks to Proceeds
specifically set forth herein or indicated in any financing statement shall
never constitute an express or implied authorization on the part of Agent or any
Bank to a Borrower's sale, exchange, collection, or other disposition of any or
all of the Collateral.
"Real Property" shall mean real estate acquired by any Company after the
Closing Date together with all improvements and buildings thereon and all
appurtenances, easements or other rights thereto belonging, and being defined
collectively as the "Property" in the Mortgage with respect thereto.
"Regularly Scheduled Payment Date" shall mean the last business day of each
March, June, September and December of each year.
"Related Expenses" shall mean, without duplication, any and all costs and
expenses (including, without limitation, losses, damages, penalties, claims,
actions, attorneys' fees, legal expenses, judgments, suits and disbursements)
incurred by Agent, or imposed upon Agent or any Bank, in any attempt by Agent
(a) to obtain, preserve, perfect or enforce any Loan Document or any security
interest evidenced by any Loan Document; (b) to obtain payment, performance or
observance of any and all of the Debt; (c) to maintain, insure, audit, collect,
preserve, repossess or dispose of any of the collateral securing the Debt or any
thereof, including, without limitation, costs and expenses for appraisals,
assessments or audits of any Company or any such collateral; or (d) incidental
or related to (a) through (c) above, including, without limitation, interest
thereupon from the date incurred, imposed or asserted until paid at the Default
Rate.
"Related Writing" shall mean each Loan Document and any other assignment,
mortgage, security agreement, guaranty agreement, subordination agreement,
financial statement, audit report or other writing furnished by any Credit
Party, or any of its officers, to Agent or the Banks pursuant to or otherwise in
connection with this Agreement.
"Rental Obligations" shall mean, with respect to any Person during any
period, the aggregate amount of all rental obligations for which such Person is
directly or indirectly liable (as lessee or as guarantor or as other surety)
under all operating leases in effect or to be in effect at any time during such
period, including all amounts for which any Person was so liable during such
period accrued prior to the date such Person became a Subsidiary or was merged
into or consolidated with any Company.
16
"Reportable Event" shall mean a reportable event as that term is defined in
Title IV of ERISA, except actions of general applicability by the Secretary of
Labor under Section 110 of such Act.
"Request for Extension" shall mean a notice substantially in the form of
the attached Exhibit F.
"Required Banks" shall mean the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the Total Commitment Amount, or, if there shall
be any borrowing hereunder, the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate principal amount outstanding under the Notes
(other than the Swing Line Note).
"Requirement of Law" shall mean, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property.
"Restricted Payment" shall mean, with respect to any Company, (a) any
Capital Distribution, (b) any amount paid by such Company in repayment,
redemption, retirement, repurchase, direct or indirect, of any Subordinated
Indebtedness, or (c) any amount paid by such Company in respect of any
management, consulting or other similar arrangement with any shareholder of a
Company or Affiliate.
"Revolving Credit Commitment" shall mean the obligation hereunder, during
the Commitment Period, of (a) each Bank to make Revolving Loans and participate
in Swing Loans, up to the Maximum Amount for such Bank, and (b) the Swing Line
Bank to make Swing Loans pursuant to the Swing Line Commitment.
"Revolving Credit Exposure" shall mean, at any time, the sum of (a) the
aggregate principal amount of all Revolving Loans outstanding, and (b) the Swing
Line Exposure.
"Revolving Credit Note" shall mean a Revolving Credit Note executed and
delivered pursuant to Section 2.6(a) hereof.
"Revolving Loan" shall mean a Loan granted to Borrowers by the Banks in
accordance with Section 2.2 hereof.
"SEC" shall mean the United States Securities and Exchange Commission, or
any governmental body or agency succeeding to any of its principal functions.
"Secured Debt" shall mean, collectively, (a) the Debt and (b) all
obligations and liabilities now existing or hereafter incurred by a Borrower
under a Hedge Agreement with any of the Banks in connection with the Debt.
"Security Agreement" shall mean each Security Agreement, executed and
delivered by a Guarantor of Payment in favor of Agent, for the benefit of the
Banks, dated as of the Closing
17
Date, and any other Security Agreement executed on or after the Closing Date, as
the same may from time to time be amended, restated or otherwise modified.
"Security Documents" shall mean each Security Agreement, Pledge Agreement,
Intellectual Property Collateral Assignment Agreement, Landlord's Agreement,
Mortgage, U.C.C. financing statement, or similar filing as to a jurisdiction
located outside of the United States of America, filed in connection herewith or
perfecting any interest created in any of the foregoing documents, and any other
document pursuant to which any Lien is granted by a Company to Agent, for the
benefit of the Banks, as security for the Debt, or any part thereof, and each
other agreement executed in connection with any of the foregoing, as any of the
foregoing may from time to time be amended, restated or otherwise modified or
replaced.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc., or any successor to such company.
"Subordinated", as applied to Indebtedness, shall mean that the
Indebtedness shall have been subordinated (by written terms or written agreement
being, in either case, in form and substance satisfactory to Agent and the
Required Banks) in favor of the prior payment in full of the Debt.
"Subsidiary" of a Company shall mean (a) a corporation more than fifty
percent (50%) of the Voting Power of which is owned, directly or indirectly, by
such Company or by one or more other subsidiaries of such Company or by such
Company and one or more subsidiaries of such Company, (b) a partnership or
limited liability company of which such Company, one or more other subsidiaries
of such Company or such Company and one or more subsidiaries of such Company,
directly or indirectly, is a general partner or managing member, as the case may
be, or otherwise has an ownership interest greater than fifty percent (50%) of
all of the ownership interests in such partnership or limited liability company,
or (c) any other Person (other than a corporation, partnership or limited
liability company) in which such Company, one or more other subsidiaries of such
Company or such Company and one or more subsidiaries of such Company, directly
or indirectly, has at least a majority interest in the Voting Power or the power
to elect or direct the election of a majority of directors or other governing
body of such Person.
"Subsidiary Borrower" shall mean a Borrower other than MTCT.
"Swing Line" shall mean the credit facility established by the Swing Line
Bank for Borrowers in accordance with Section 2.4 hereof.
"Swing Line Bank" shall mean National City Bank, as holder of the Swing
Line Commitment.
"Swing Line Commitment" shall mean the commitment of the Swing Line Bank to
make Swing Loans to Borrowers up to the aggregate amount at any time outstanding
of Three Million Five Hundred Thousand Dollars ($3,500,000).
18
"Swing Line Exposure" shall mean, at any time, the aggregate principal
amount of all Swing Loans outstanding.
"Swing Line Note" shall mean the Swing Line Note executed and delivered
pursuant to Section 2.6(b) hereof.
"Swing Loan" shall mean a Loan granted to Borrowers by the Swing Line Bank
under the Swing Line.
"Swing Loan Maturity Date" shall mean, with respect to any Swing Loan, the
earlier of (a) thirty (30) days after the date such Swing Loan is made, or (b)
the last day of the Commitment Period.
"Taxes" shall mean any present or future taxes, levies, imposts, duties,
charges, fees, deductions or withholdings now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority (together with any
interest, penalties or similar liabilities with respect thereto) other than
Excluded Taxes.
"Total Commitment Amount" shall mean Thirty-Five Million Dollars
($35,000,000), as such amount may be increased up to the Maximum Commitment
Amount pursuant to Section 2.11(b) hereof, or decreased pursuant to Section 2.11
(a) hereof.
"U.C.C." shall mean the Uniform Commercial Code, as in effect from time to
time in Ohio.
"Voting Power" shall mean, with respect to any Person, the exclusive
ability to control, through the ownership of shares of capital stock,
partnership interests, membership interests or otherwise, the election of
members of the board of directors or other similar governing body of such
Person. The holding of a designated percentage of Voting Power of a Person means
the ownership of shares of capital stock, partnership interests, membership
interests or other interests of such Person sufficient to control exclusively
the election of that percentage of the members of the board of directors or
similar governing body of such Person.
"Welfare Plan" shall mean an ERISA Plan that is a "welfare plan" within the
meaning of ERISA Section 3(1).
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company or other entity, all of the securities or
other ownership interest of which having ordinary Voting Power to elect a
majority of the board of directors, or other Persons performing similar
functions, are at the time directly or indirectly owned by such Person.
Section 1.2. Accounting Terms. Any accounting term not specifically defined
in this Article I shall have the meaning ascribed thereto by GAAP.
Section 1.3. Terms Generally. The foregoing definitions shall be applicable
to the singular and plurals of the foregoing defined terms. Unless otherwise
defined in this Article I,
19
terms that are defined in Chapter 1309 of the Ohio Revised Code, as in effect
from time to time, are used herein as so defined.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
Section 2.1. Amount and Nature of Credit.
(a) Subject to the terms and conditions of this Agreement, each Bank,
during the Commitment Period and to the extent hereinafter provided, shall make
Loans to Borrowers and participate in Swing Loans made by the Swing Line Bank to
Borrowers, in such aggregate amount as Borrowers shall request pursuant to the
Commitment; provided, however, that in no event shall the Revolving Credit
Exposure be in excess of the Total Commitment Amount.
(b) Each Bank, for itself and not one for any other, agrees to make Loans
and participate in Swing Loans, during the Commitment Period, on such basis
that, immediately after the completion of any borrowing by Borrowers, (i) the
aggregate principal amount then outstanding on the Notes (other than the Swing
Line Note) issued to such Bank, when combined with such Bank's pro rata share,
if any, of the Swing Line Exposure, shall not be in excess of the Maximum Amount
for such Bank, and (ii) such aggregate principal amount outstanding on the Notes
(other than the Swing Line Note) issued to such Bank shall represent that
percentage of the aggregate principal amount then outstanding on all Notes
(other than the Swing Line Note) together with such Bank's interest in the Swing
Line Exposure that shall be such Bank's Commitment Percentage. Each borrowing
(other than Swing Loans) from the Banks hereunder shall be made pro rata
according to the respective Commitment Percentages of the Banks.
(c) The Loans shall be made either as Revolving Loans as described in
Section 2.2 hereof or Swing Loans as described in Section 2.4 hereof.
Section 2.2. Revolving Loans. Subject to the terms and conditions of this
Agreement, during the Commitment Period, the Banks shall make a Revolving Loan
or Revolving Loans to Borrowers in such amount or amounts as Borrowers may from
time to time request, but not exceeding in aggregate principal amount at any
time outstanding hereunder the Total Commitment Amount, when such Revolving
Loans are combined with the Swing Line Exposure. Borrowers shall have the
option, subject to the terms and conditions set forth herein, to borrow
Revolving Loans, maturing on the last day of the Commitment Period, by means of
any combination of Base Rate Loans or LIBOR Loans. Subject to the provisions of
this Agreement, Borrowers shall be entitled under this Section 2.2 to borrow
funds, repay the same in whole or in part and re-borrow hereunder at any time
and from time to time during the Commitment Period.
Section 2.3. [RESERVED]
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Section 2.4. Swing Loans.
(a) Generally. Subject to the terms and conditions of this Agreement,
during the Commitment Period, the Swing Line Bank shall make a Swing Loan or
Swing Loans to Borrowers in such amount or amounts as Borrowers may from time to
time request; provided that Borrowers shall not request any Swing Loan hereunder
if, after giving effect thereto, (i) the Revolving Credit Exposure would exceed
the Total Commitment Amount, or (ii) the Swing Line Exposure would exceed the
Swing Line Commitment. Each Swing Loan shall be due and payable on the Swing
Loan Maturity Date applicable thereto. Borrowers shall not request that more
than two Swing Loans be outstanding at any time.
(b) Refunding of Swing Loans. If the Swing Line Bank so elects, by giving
notice to Borrowers and the Banks, Borrowers agree that the Swing Line Bank
shall have the right, in its sole discretion, to require that any Swing Loan be
refinanced as a Revolving Loan. Such Revolving Loan shall be a Base Rate Loan
unless otherwise requested by and available to Borrowers hereunder. Upon receipt
of such notice by Borrowers and the Banks, Borrowers shall be deemed, on such
day, to have requested a Revolving Loan in the principal amount of the Swing
Loan in accordance with Sections 2.2 and 2.7 hereof (other than the requirement
set forth in subsection (d) of Section 2.7 hereof). Each Bank agrees to make a
Revolving Loan on the date of such notice, subject to no conditions precedent
whatsoever. Each Bank acknowledges and agrees that such Bank's obligation to
make a Revolving Loan pursuant to Section 2.2 hereof when required by this
subsection (b) is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the occurrence and
continuance of a Default or Event of Default, and that its payment to Agent, for
the account of the Swing Line Bank, of the proceeds of such Revolving Loan shall
be made without any offset, abatement, recoupment, counterclaim, withholding or
reduction whatsoever and whether or not such Bank's Revolving Credit Commitment
shall have been reduced or terminated. Borrowers irrevocably authorize and
instruct Agent to apply the proceeds of any borrowing pursuant to this
subsection (b) to repay in full such Swing Loan.
(c) Participation in Swing Loans. If, for any reason, Agent is unable to
or, in the opinion of Agent, it is impracticable to, convert any Swing Loan to a
Revolving Loan pursuant to the preceding subsection (b), then on any day that a
Swing Loan is outstanding (whether before or after the maturity thereof), Agent
shall have the right to request that each Bank purchase a participation in such
Swing Loan, and Agent shall promptly notify each Bank thereof (by facsimile or
telephone, confirmed in writing). Upon such notice, but without further action,
the Swing Line Bank hereby agrees to grant to each Bank, and each Bank hereby
agrees to acquire from the Swing Line Bank, an undivided participation interest
in such Swing Loan in an amount equal to such Bank's Commitment Percentage of
the aggregate principal amount of such Swing Loan. In consideration and in
furtherance of the foregoing, each Bank hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to Agent, for the
benefit of the Swing Line Bank, such Bank's ratable share of such Swing Loan
(determined in accordance with such Bank's Commitment Percentage). Each Bank
acknowledges and agrees that its obligation to acquire participation in Swing
Loans pursuant to this subsection (c) is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, without limitation,
the occurrence and continuance of a Default or an Event of Default, and that
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each such payment shall be made without any offset, abatement, recoupment,
counterclaim, withholding or reduction whatsoever and whether or not such Bank's
Revolving Credit Commitment shall have been reduced or terminated. Each Bank
shall comply with its obligation under this subsection (c) by wire transfer of
immediately available funds, in the same manner as provided in Section 2.7
hereof with respect to Revolving Loans to be made by such Bank.
Section 2.5. Interest.
(a) Revolving Loans.
(i) Base Rate Loan. Borrowers shall pay interest on the unpaid
principal amount of a Base Rate Loan outstanding from time to time from the
date thereof until paid at the Derived Base Rate from time to time in
effect. Interest on such Base Rate Loan shall be payable, commencing March
31, 2003, and on each Regularly Scheduled Payment Date thereafter and at
the maturity thereof.
(ii) LIBOR Loans. Borrowers shall pay interest on the unpaid principal
amount of each LIBOR Loan outstanding from time to time, fixed in advance
on the first day of the Interest Period applicable thereto through the last
day of the Interest Period applicable thereto (but subject to changes in
the Applicable Margin), at the Derived LIBOR Rate. Interest on such LIBOR
Loan shall be payable on each Interest Adjustment Date with respect to an
Interest Period (provided that if an Interest Period shall exceed three
months, the interest must be paid every three months, commencing three
months from the beginning of such Interest Period).
(b) Swing Loans. Borrowers shall pay interest to Agent, for the sole
benefit of the Swing Line Bank (and any Bank that shall have purchased a
participation in such Swing Loan), on the unpaid principal amount of each Swing
Loan outstanding from time to time from the date thereof until paid at the
Derived Swing Loan Rate applicable to such Swing Loan. Interest on each Swing
Loan shall be payable on the Swing Loan Maturity Date applicable thereto. Each
Swing Loan shall bear interest for a minimum of one day.
(c) Default Rate. Anything herein to the contrary notwithstanding, if an
Event of Default shall occur hereunder, upon the election of the Required Banks,
(i) the principal of each Note and the unpaid interest thereon shall bear
interest, until paid, at the Default Rate; and (ii) in the case of any other
amount due from Borrowers hereunder or under any other Loan Document, such
amount shall bear interest at the Default Rate; provided that during an Event of
Default under Section 8.11 hereof, the applicable Default Rate shall apply
without any election or action of the part of Agent or any Bank.
(d) Limitation on Interest. In no event shall the rate of interest
hereunder exceed the maximum rate allowable by law.
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Section 2.6. Evidence of Indebtedness.
(a) Revolving Loans. The obligation of Borrowers to repay the Revolving
Loans made by each Bank and to pay interest thereon shall be evidenced by a
Revolving Credit Note of Borrowers in the form of Exhibit A hereto, payable to
the order of such Bank in the principal amount of its Revolving Credit
Commitment or, if less, the aggregate unpaid principal amount of Revolving Loans
made hereunder by such Bank.
(b) Swing Loan. The obligation of Borrowers to repay the Swing Loans and to
pay interest thereon shall be evidenced by a Swing Line Note of Borrowers
substantially in the form of Exhibit B hereto, and payable to the order of the
Swing Line Bank in the principal amount of the Swing Line Commitment, or, if
less, the aggregate unpaid principal amount of Swing Loans made hereunder by the
Swing Line Bank.
Section 2.7. Notice of Credit Event: Funding of Loans.
(a) Notice of Credit Event. Administrative Borrower shall provide to Agent
a Notice of Loan prior to (i) 11:00 A.M. (Eastern time) on the proposed date of
borrowing or conversion of any Base Rate Loan, (ii) 11:00 A.M. (Eastern time)
three Business Days prior to the proposed date of borrowing, conversion or
continuation of any LIBOR Loan, and (iii) 2:00 P.M. (Eastern time) on the
proposed date of borrowing of any Swing Loan.
(b) Funding of Loans. Agent shall notify each Bank of the date, amount and
Interest Period (if applicable) promptly upon the receipt of a Notice of Loan,
and, in any event, by 2:00 P.M. (Eastern time) on the date such notice is
received. On the date that the Credit Event set forth in such notice is to
occur, each such Bank shall provide to Agent, not later than 3:00 P.M. (Eastern
time), the amount in Dollars, in federal or other immediately available funds,
required of it. If Agent shall elect to advance the proceeds of such Loan prior
to receiving funds from a Bank, Agent shall have the right, upon prior notice to
Administrative Borrower, to debit any account of any Borrower or otherwise
receive such amount from Borrowers, on demand, in the event that such Bank shall
fail to reimburse Agent in accordance with this subsection (b). Agent shall also
have the right to receive interest from such Bank at the Federal Funds Effective
Rate in the event that such Bank shall fail to provide its portion of the Loan
on the date requested and Agent shall elect to provide such funds. All funds
distributed hereunder shall be deposited in the account of Administrative
Borrower at the main office of Agent in Cleveland, Ohio.
(c) Conversion of Loans.
(i) Revolving Loans. At the request of Administrative Borrower to
Agent, subject to the notice and other provisions of this Section 2.7, the
Banks shall convert a Base Rate Loan to one or more LIBOR Loans at any time
and shall convert a LIBOR Loan to a Base Rate Loan on any Interest
Adjustment Date applicable thereto.
(ii) Swing Loans. Swing Loans may be converted by the Swing Line Bank
to Revolving Loans in accordance with Section 2.4(b) hereof.
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(d) Minimum Amount. Each request for:
(i) a Base Rate Loan shall be in an amount of not less than One
Million Dollars ($1,000,000), increased by increments of One Hundred
Thousand Dollars ($100,000);
(ii) a LIBOR Loan shall be in an amount of not less than Two Million
Five Hundred Thousand Dollars ($2,500,000), increased by increments of One
Million Dollars ($1,000,000); and
(iii) a Swing Loan shall be in an amount of not less than Five Hundred
Thousand Dollars ($500,000).
(e) Interest Periods. At no time shall Administrative Borrower request that
LIBOR Loans be outstanding for more than six different Interest Periods at any
time, and, if a Base Rate Loan is outstanding, then L1BOR Loans shall be limited
to five different Interest Periods at any time.
Section 2.8. Payment on Notes and Other Obligations.
(a) Payments Generally. Each payment made hereunder by a Credit Party shall
be made without any offset, abatement, recoupment, counterclaim, withholding or
reduction whatsoever.
(b) Payments in Dollars. With respect to any Loan, or any other payment to
Agent and the Banks, all such payments (including prepayments) to Agent of the
principal of or interest on such Loan or other payment, including but not
limited to principal, interest, fees or any other amount owed by any Borrower
under this Agreement, shall be made in Dollars. All payments described in this
subsection (b) shall be remitted to Agent at the address of Agent for notices
referred to in Section 11.4 hereof for the account of the Banks (or the Swing
Line Bank, as appropriate) not later than 11:00 A.M. (Eastern time) on the due
date thereof in immediately available funds. Any such payments received by Agent
after 11:00 A.M. (Eastern time) shall be deemed to have been made and received
on the next following Business Day.
(c) Payments to Banks. Upon Agent's receipt of payments hereunder, Agent
shall immediately distribute to each Bank its ratable share, if any, of the
amount of principal, interest, and commitment and other fees received by it for
the account of such Bank. Payments received by Agent in Dollars shall be
delivered to the Banks in Dollars in immediately available funds. Each Bank
shall record any principal, interest or other payment, the principal amounts of
Base Rate Loans and LIBOR Loans, all prepayments and the applicable dates,
including Interest Periods, with respect to the Loans made, and payments
received by such Bank, by such method as such Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under the Notes. The aggregate unpaid amount
of Loans, types of Loans, Interest Periods and similar information with respect
to the Loans set forth on the records of Agent shall be rebuttably presumptive
evidence with respect to
24
such information, including the amounts of principal and interest owing and
unpaid on each Note.
(d) Timing of Payments. Whenever any payment to be made hereunder,
including, without limitation, any payment to be made on any Note, shall be
stated to be due on a day that shall not be a Business Day, such payment shall
be made on the next succeeding Business Day and such extension of time shall in
each case be included in the computation of the interest payable on such Note;
provided, however, that, with respect to any LIBOR Loan, if the next succeeding
Business Day shall fall in the succeeding calendar month, such payment shall be
made on the preceding Business Day and the relevant Interest Period shall be
adjusted accordingly.
Section 2.9. Prepayment.
(a) Right to Prepay. Borrowers shall have the right at any time or from
time to time to prepay, on a pro rata basis for all of the Banks, all or any
part of the principal amount of the Revolving Credit Notes then outstanding, as
designated by Borrowers, plus interest accrued on the amount so prepaid to the
date of such prepayment and any amount payable under Article III hereof with
respect to the amount being prepaid. Borrowers shall have the right, at any time
and from time to time, to prepay, for the benefit of the Swing Line Bank (and
any Bank that has purchased a participation in such Swing Loan), all or any part
of the principal amount of the Swing Loans then outstanding, as designated by
Borrower, plus interest accrued on the amount so prepaid to the date of such
prepayment and any amount payable under Article III hereof with respect to the
amount being prepaid. Prepayments of Base Rate Loans shall be without any
premium or penalty, other than any prepayment fees, penalties or other charges
that may be contained in any Hedge Agreement.
(b) Notice of Prepayment. Administrative Borrower shall give Agent notice
of prepayment of any Base Rate Loan or Swing Loan by not later than 11:00 A.M.
(Eastern time) on the Business Day such prepayment is to be made and written
notice of the prepayment of any LIBOR Loan not later than 1:00 P.M. (Eastern
time) three Business Days before the Business Day on which such prepayment is to
be made.
(c) Minimum Amount. Each prepayment of a LIBOR Loan shall be in the
principal amount of not less than Five Hundred Thousand Dollars ($500,000),
except in the case of a mandatory prepayment pursuant to Section 2.13 or Article
III hereof.
Section 2.10. Commitment and Other Fees.
(a) Commitment Fee. Borrowers shall pay to Agent, for the ratable account
of the Banks, as a consideration for the Revolving Credit Commitment, a
commitment fee from the Closing Date to and including the last day of the
Commitment Period, payable quarterly, at a rate per annum equal to (i) the
Applicable Commitment Fee Rate in effect on the payment date, times (ii) (A) the
average daily Total Commitment Amount in effect during such quarter, minus (B)
the average daily outstanding principal amount of all Revolving Loans
outstanding during such quarter. The commitment fee shall be payable in arrears,
commencing on March 31, 2003 and
25
on each Regularly Scheduled Payment Date thereafter, and on the last day of the
Commitment Period.
(b) Agent Fee. Borrowers shall pay to Agent, for its sole benefit, the fees
set forth in the Agent Fee Letter.
Section 2.11. Modification of Commitment.
(a) Optional Reduction of Commitment. Borrowers may at any time or from
time to time permanently reduce in whole or ratably in part the Commitment
hereunder to an amount not less than the then existing Revolving Credit
Exposure, by giving Agent not fewer than five Business Days' notice of such
reduction, provided that any such partial reduction shall be in an aggregate
amount, for all of the Banks, of not less than One Million Dollars ($1,000,000),
increased by increments of One Hundred Thousand Dollars ($100,000). Agent shall
promptly notify each Bank of the date of each such reduction and such Bank's
proportionate share thereof. After each such reduction, the commitment fees
payable hereunder shall be calculated upon the Total Commitment Amount as so
reduced. If Borrowers reduce in whole the Commitment, on the effective date of
such reduction (Borrowers having prepaid in full the unpaid principal balance,
if any, of the Notes, together with all interest and commitment and other fees
accrued and unpaid and provided that no Swing Line Exposure shall exist), all of
the Notes shall be delivered to Agent marked "Canceled" and Agent shall
redeliver such Notes to Borrowers. Any partial reduction in the Total Commitment
Amount shall be effective during the remainder of the Commitment Period.
(b) Increase in Commitment. At any time during the Commitment Increase
Period, Administrative Borrower may request that Agent increase the Total
Commitment Amount from the Closing Commitment Amount up to the Maximum
Commitment Amount by either (i) increasing, for one or more Banks, with and
subject to their prior written consent, their respective Revolving Credit
Commitments, or (ii) with and subject to the prior written consent of Agent,
including one or more Additional Banks, each with a new Revolving Credit
Commitment, as a party to this Agreement (collectively, the "Additional
Commitment"). During the Commitment Increase Period, the Banks agree that Agent,
in its sole discretion, may permit one or more Additional Commitments upon
satisfaction of the following requirements: (A) each Additional Bank, if any,
shall execute an Additional Bank Assumption Agreement, (B) Agent shall provide
to each Bank a revised Schedule 1 to this Agreement, including revised
Commitment Percentages for each of the Banks, if appropriate, at least three
Business Days prior to the effectiveness of such Additional Commitments (each an
"Additional Bank Assumption Effective Date"), and (C) Borrowers shall execute
and deliver to Agent and the Banks such replacement or additional Revolving
Credit Notes as shall be required by Agent. The Banks hereby authorize Agent to
execute each Additional Bank Assumption Agreement on behalf of the Banks. On
each Additional Bank Assumption Effective Date, the Banks shall make adjustments
among themselves with respect to the Revolving Loans then outstanding and
amounts of principal, interest, commitment fees and other amounts paid or
payable with respect thereto as shall be necessary, in the opinion of Agent, in
order to reallocate among such Banks such outstanding amounts, based on the
revised Commitment Percentages and to otherwise carry out fully the intent and
terms of this subsection (b). Borrowers shall not request any increase in the
Total
26
Commitment Amount pursuant to this subsection (b) if a Default or an Event of
Default shall then exist, or immediately after giving effect to any such
increase would exist. Borrowers shall pay any attorneys' fees or other expenses
of Agent in connection with the documentation of any such increase, as well as
such other fees as may be agreed upon between Borrowers and Agent.
Section 2.12. Computation of Interest and Fees. Interest on Loans and
commitment and other fees and charges hereunder shall be computed on the basis
of a year having three hundred sixty (360) days and calculated for the actual
number of days elapsed.
Section 2.13. Mandatory Payment.
(a) If, at any time, the Revolving Credit Exposure shall exceed the Total
Commitment Amount as then in effect, Borrowers shall, as promptly as
practicable, but in no event later than the next Business Day, prepay an
aggregate principal amount of the Loans sufficient to bring the Revolving Credit
Exposure within the Total Commitment Amount.
(b) If, at any time, the Swing Line Exposure shall exceed the Swing Line
Commitment, Borrowers shall, as promptly as practicable, but in no event later
than the next Business Day, prepay an aggregate principal amount of the Swing
Loans sufficient to bring the Swing Line Exposure within the Swing Line
Commitment.
(c) If, at any time, a Prepayment Event occurs, Borrower shall, as promptly
as practicable, but in no event later than the next Business Day, apply the
Prepayment Proceeds to the Revolving Loans. The Revolving Commitments and the
Maximum Commitment Amount shall be permanently reduced by the amount of
Prepayment Proceeds allocated thereto, respectively, whether or not there shall
be any Revolving Credit Exposure thereunder.
(d) Any prepayment of a LIBOR Loan or Swing Loan pursuant to this Section
2.13 shall be subject to the prepayment penalties set forth in Article III
hereof.
Section 2.14. Liability of Borrowers.
(a) Joint and Several Liability. Each Borrower hereby authorizes
Administrative Borrower to request a Loan hereunder. Each Borrower acknowledges
and agrees that Agent and the Banks are entering into this Agreement at the
request of each Borrower and with the understanding that each Borrower is and
shall remain fully liable, jointly and severally, for payment in full of the
Debt. Each Borrower agrees that it is receiving or will receive a direct
pecuniary benefit for each Loan made hereunder.
(b) Appointment of Administrative Borrower. Each Borrower hereby
irrevocably appoints MTCT as the borrowing agent and attorney-in-fact for all
Borrowers ("Administrative Borrower") which appointment shall remain in full
force and effect unless and until Agent shall have received prior written notice
signed by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes Administrative Borrower (i) to provide Agent
with all notices with respect to Loans obtained for the benefit of any Borrower
and all
27
other notices and instructions under this Agreement and (ii) to take such action
as Administrative Borrower deems appropriate on its behalf to obtain Loans and
to exercise such other powers as are reasonably incidental thereto to carry out
the purposes of this Agreement. It is understood that the handling of the
Collateral of Borrowers in a combined fashion, as more fully set forth herein,
is done solely as an accommodation to Borrowers in order to utilize the
collective borrowing powers of Borrowers in the most efficient and economical
manner and at their request, and that neither Agent nor any Bank shall incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group.
(c) Maximum Liability of Each Borrower. Anything in this Agreement or any
other Loan Document to the contrary notwithstanding, in no event shall the
maximum liability of any Subsidiary Borrower exceed the maximum amount that
(after giving effect to the incurring of the obligations hereunder and to any
rights to contribution of such Subsidiary Borrower from other affiliates of such
Subsidiary Borrower) would not render the rights to payment of Agent and the
Banks hereunder void, voidable or avoidable under any applicable fraudulent
transfer law.
(d) Waivers of Each Borrower. In the event that any obligation of any
Borrower under this Agreement is deemed to be an agreement by such Borrower to
answer for the debt or default of another Credit Party or as a hypothecation of
property as security therefore, each Borrower represents and warrants that (i)
no representation has been made to it as to the creditworthiness of such other
Credit Party, and (ii) it has established adequate means of obtaining from such
other Credit Party on a continuing basis, financial or other information
pertaining to such other Credit Party's financial condition. Each Borrower
expressly waives, except as expressly required under this Agreement, diligence,
demand, presentment, protest and notice of every kind and nature whatsoever,
consents to the taking by Agent and the Banks of any additional security of
another Credit Party for the obligations secured hereby, or the alteration or
release in any manner of any security of another Credit Party now or hereafter
held in connection with the Debt, and consents that Agent, the Banks and any
other Credit Party may deal with each other in connection with said obligations
or otherwise, or alter any contracts now or hereafter existing between them, in
any manner whatsoever, including without limitation the renewal, extension,
acceleration, changes in time for payment of any such obligations or in the
terms or conditions of any security held. Agent and the Banks are hereby
expressly given the right, at their option, to proceed in the enforcement of any
of the Debt independently of any other remedy or security they may at any time
hold in connection with such obligations secured and it shall not be necessary
for Agent and the Banks to proceed upon or against or exhaust any other security
or remedy before proceeding to enforce their rights against such Borrower. Each
Borrower further subordinates any right of subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
of sums paid to Agent and the Banks by any other Credit Party.
Section 2.15. Extension of Commitment. Contemporaneously with the delivery
of the financial statements required pursuant to Section 5.3(b) hereof
(beginning with the financial statements for MTCT's fiscal year ending December
31, 2003), Administrative Borrower may deliver a Request for Extension,
requesting that the Banks extend the maturity of the
28
Commitment for an additional year. Each such extension shall require the
unanimous written consent of all of the Banks and shall be upon such terms and
conditions as may be agreed to by Agent, Borrowers and the Banks. Borrowers
shall pay any attorneys' fees or other expenses of Agent in connection with the
documentation of any such extension, as well as such other fees as may be agreed
upon between Borrowers and Agent.
ARTICLE III. ADDITIONAL PROVISIONS RELATING TO LIBOR
LOANS; INCREASED CAPITAL; TAXES.
Section 3.1. Requirements of Law.
(a) If, after the Closing Date (i) the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or (ii) the
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority:
(A) shall subject any Bank to any tax of any kind whatsoever with
respect to this Agreement or any LIBOR Loan made by it, or change the basis
of taxation of payments to such Bank in respect thereof (except for Taxes
and Excluded Taxes which are governed by Section 3.2 hereof);
(B) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank that is not otherwise included in the determination of
the LIBOR Rate; or
(C) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank of
making, converting into, continuing or maintaining LIBOR Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such case,
Borrowers shall pay to such Bank, promptly after receipt of a written request
therefor, any additional amounts necessary to compensate such Bank for such
increased cost or reduced amount receivable. If any Bank becomes entitled to
claim any additional amounts pursuant to this subsection (a), it shall promptly
notify Administrative Borrower (with a copy to Agent) of the event by reason of
which it has become so entitled.
(b) If any Bank shall have determined that, after the Closing Date, the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Bank or
any corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority shall have the effect of reducing the rate of return on such Bank's or
such corporation's capital as a consequence of its obligations hereunder, to a
level below that which such Bank or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
such corporation's policies with respect to
29
capital adequacy), then from time to time, upon submission by such Bank to
Administrative Borrower (with a copy to Agent) of a written request therefore
(which shall include the method for calculating such amount), Borrowers shall
promptly pay or cause to be paid to such Bank such additional amount or amounts
as will compensate such Bank for such reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section 3.1 submitted by any Bank to Administrative Borrower (with a copy to
Agent) shall be conclusive absent demonstrable error. In determining any such
additional amounts, such Bank may use any method of averaging and attribution
that it (in its reasonable discretion) shall deem applicable. The obligations of
Borrowers pursuant to this Section 3.1 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder
for ninety (90) days.
Section 3.2. Taxes.
(a) All payments made by any Credit Party under any Loan Document shall be
made free and clear of, and without deduction or withholding for or on account
of any Taxes or Other Taxes. If any Taxes or Other Taxes are required to be
withheld from any amounts payable to Agent or any Bank thereunder, the amounts
so payable to Agent or such Bank shall be increased to the extent necessary to
yield to Agent or such Bank (after payment of all Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in the Loan Documents.
(b) In addition, Credit Parties shall pay Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Taxes or Other Taxes are required to be withheld and paid
by a Credit Party, such Credit Party shall timely withhold and pay such taxes to
the relevant Governmental Authorities. As promptly as possible thereafter,
Borrowers shall send to Agent for its own account or for the account of the
relevant Bank, as the case may be, a certified copy of an original official
receipt received by such Credit Party showing payment thereof. If such Credit
Party shall fail to pay any Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to Agent the required receipts or other
required documentary evidence, Borrowers shall indemnify Agent and the Banks on
demand for any incremental taxes, interest or penalties that may become payable
by Agent or any Bank as a result of any such failure.
(d) If any Bank shall be so indemnified by a Credit Party, such Bank shall
use reasonable efforts to obtain the benefits of any refund, deduction or credit
for any taxes or other amounts with respect to the amount paid by such Credit
Party and shall reimburse such Credit Party to the extent, but only to the
extent, that such Bank shall receive a refund with respect to the amount paid by
such Credit Party or an effective net reduction in taxes or other governmental
charges (including any taxes imposed on or measured by the total net income of
such Bank) of the United States or any state or subdivision or any other
Governmental Authority thereof by virtue of any such deduction or credit, after
first giving effect to all other deductions and credits otherwise available to
such Bank. If, at the time any audit of such Bank's income tax return is
completed, such Bank determines, based on such audit, that it shall not have
been entitled to the
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full amount of any refund reimbursed to such Credit Party as aforesaid or that
its net income taxes shall not have been reduced by a credit or deduction for
the full amount reimbursed to such Credit Party as aforesaid, such Credit Party,
upon request of such Bank, shall promptly pay to such Bank the amount so
refunded to which such Bank shall not have been so entitled, or the amount by
which the net income taxes of such Bank shall not have been so reduced, as the
case may be.
(e) Each Bank that is not (i) a citizen or resident of the United States of
America, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States of America (or any jurisdiction thereof),
or (iii) any estate or trust that is subject to federal income taxation
regardless of the source of its income (any such Person, a "Non-U.S. Bank")
shall deliver to Administrative Borrower and Agent two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Bank claiming exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a
statement with respect to such interest and a Form W-8BEN, or any subsequent
versions thereof or successors thereto, properly completed and duly executed by
such Non-U.S. Bank claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by Credit Parties under this Agreement
and the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Bank on or before the date it becomes a party to this Agreement or such other
Loan Document. In addition, each Non-U.S. Bank shall deliver such forms or
appropriate replacements promptly upon the obsolescence or invalidity of any
from previously delivered by such Non-U.S. Bank. Each Non-U.S. Bank shall
promptly notify Administrative Borrower at any time it determines that it is no
longer in a position to provide any previously delivered certificate to
Administrative Borrower (or any other form of certification adopted by the U.S.
taxing authorities for such purpose). Notwithstanding any other provision of
this subsection (e), a Non-U.S. Bank shall not be required to deliver any form
pursuant to this subsection (e) that such Non-U.S. Bank is not legally able to
deliver.
(f) The agreements in this Section 3.2 shall survive the termination of the
Loan Documents and the payment of the Loans and all other amounts payable
hereunder.
Section 3.3. Funding Losses. Borrowers agree to indemnify each Bank,
promptly after receipt of a written request therefor, and to hold each Bank
harmless from, any loss or expense that such Bank may sustain or incur as a
consequence of (a) default by a Borrower in making a borrowing of, conversion
into or continuation of LIBOR Loans after such Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by a Borrower in making any prepayment of or conversion from LIBOR Loans
after such Borrower has given a notice thereof in accordance with the provisions
of this Agreement, (c) the making of a prepayment of LIBOR Loans on a day that
is not the last day of an Interest Period with respect thereof or (d) any
conversion of LIBOR Loans to a Base Rate Loan pursuant to Section 3.4 hereof on
a day that is not the last day of an Interest Period with respect thereto. Such
indemnification shall be in an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amounts so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the
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applicable rate of interest for such Loans provided for herein over (ii) the
amount of interest (as reasonably determined by such Bank) that would have
accrued to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the appropriate London interbank market,
along with any administration fee charged by such Bank. A certificate as to any
amounts payable pursuant to this Section 3.3 submitted to Administrative
Borrower by any Bank shall be conclusive absent demonstrable error. The
obligations of Borrowers pursuant to this Section 3.3 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
Section 3.4. LIBOR Rate Lending Unlawful; Inability to Determine Rate.
(a) If any Bank shall determine (which determination shall, upon notice
thereof to Administrative Borrower and Agent, be conclusive and binding on
Borrowers absent demonstrable error) that, after the Closing Date, (i) the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or (ii) any Governmental Authority asserts that it is unlawful, for
such Bank to make or continue any Loan as, or to convert (if permitted pursuant
to this Agreement) any Loan into, a LIBOR Loan, the obligations of such Bank to
make, continue or convert any such LIBOR Loan shall, upon such determination, be
suspended until such Bank shall notify Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBOR Loans payable to such Bank
shall automatically convert (if conversion is permitted under this Agreement)
into a Base Rate Loan, or be repaid (if no conversion is permitted) at the end
of the then current Interest Periods with respect thereto or sooner, if required
by law or such assertion.
(b) If the Required Banks determine that for any reason adequate and
reasonable means do not exist for determining the LIBOR Rate for any requested
Interest Period with respect to a proposed LIBOR Loan, or that the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Loan does not
adequately and fairly reflect the cost to such Banks of funding such Loan, Agent
will promptly so notify Administrative Borrower and each Bank. Thereafter, the
obligation of the Banks to make or maintain such LIBOR Loan shall be suspended
until Agent (upon the instruction of the Required Banks) revokes such notice.
Upon receipt of such notice, Administrative Borrower may revoke any pending
request for a borrowing of, conversion to or continuation of such LIBOR Loan or,
failing that, will be deemed to have converted such request into a request for a
borrowing of a Base Rate Loan in the amount specified therein.
ARTICLE IV. CONDITIONS PRECEDENT
Section 4.1. Conditions to Each Credit Event. The obligation of the Banks
to participate in any Credit Event shall be conditioned, in the case of each
Credit Event, upon the following:
(a) all conditions precedent as listed in Section 4.2 hereof required to be
satisfied prior to the first Credit Event shall have been satisfied prior to or
as of the first Credit Event;
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(b) Administrative Borrower shall have submitted a Notice of Loan and
otherwise complied with Section 2.7 hereof;
(c) no Default or Event of Default shall then exist or immediately after
the Credit Event would exist; and
(d) each of the representations and warranties contained in Article VII
hereof shall be true in all material respects as if made on and as of the date
of each Credit Event, except to the extent that any thereof expressly relate to
an earlier date.
Each request by Borrowers or Administrative Borrower for a Credit Event shall be
deemed to be a representation and warranty by Borrowers as of the date of such
request as to the satisfaction of the conditions precedent specified in
subsections (c) and (d) above.
Section 4.2. Conditions to the First Credit Event. The obligation of the
Banks to participate in the first Credit Event is subject to Borrowers
satisfying each of the following conditions prior to or concurrently with such
Credit Event:
(a) Notes. Each Borrower shall have executed and delivered to each Bank its
Revolving Credit Note and shall have executed and delivered to the Swing Line
Bank the Swing Line Note.
(b) Guaranty of Payment of Debt. Each Guarantor of Payment shall have
executed and delivered to Agent a Guaranty of Payment of Debt.
(c) Security Agreements. Each Guarantor of Payment shall have executed and
delivered to Agent, for the benefit of the Banks, a Security Agreement and such
other documents or instruments, as may be required by Agent to create or perfect
the Liens of Agent, for the benefit of the Banks, in the assets of such
Guarantor of Payment, all to be in form and substance satisfactory to Agent and
the Banks.
(d) Pledge Agreement. Each Borrower shall have executed and delivered to
Agent, for the benefit of the Banks, a Pledge Agreement, in form and substance
satisfactory to Agent and the Banks, with respect to the Pledged Securities,
together with delivery of the Pledged Securities referenced therein and
appropriate stock powers.
(e) Financing Statements and Lien Searches. With respect to the property
owned or leased by each Borrower and Guarantor of Payment, (i) U.C.C. financing
statements satisfactory to Agent and the Banks; (ii) the results of U.C.C. lien
searches, satisfactory to Agent and the Banks; and (iii) the results of federal
and state tax lien and judicial lien searches, satisfactory to Agent and the
Banks.
(f) Insurance Certificate. Borrowers shall have delivered to Agent evidence
of insurance on XXXXX 27 and XXXXX 25-S forms, and otherwise satisfactory to
Agent and the Banks, of adequate personal property and liability insurance of
each Company, with Agent, on behalf of the Banks, listed as loss payee and
additional insured.
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(g) Landlord's Agreements. Borrowers shall have delivered Landlord's
Agreements, if applicable, each in form and substance satisfactory to Agent and
the Banks, for each location of a Borrower or Guarantor of Payment, where any of
the Collateral consisting of tangible personal property is located (which
Collateral at any time can reasonably be expected to have an aggregate value in
excess of $500,000) unless such location is owned by the Company that owns the
Collateral located there.
(h) Officer's Certificate, Resolutions, Organizational Documents. Each
Borrower and Guarantor of Payment shall have delivered to Agent an officer's
certificate (or comparable domestic or foreign documents) certifying the names
of the officers of such Borrower or Guarantor of Payment authorized to sign the
Loan Documents, together with the true signatures of such officers and certified
copies of (i) the resolutions of the board of directors (or comparable domestic
or foreign documents) of such Borrower or Guarantor of Payment evidencing
approval of the execution and delivery of the Loan Documents and the execution
of other Related Writings to which such Borrower or Guarantor of Payment, as the
case may be, is a party, and (ii) the Organizational Documents of such Borrower
or Guarantor of Payment.
(i) Legal Opinion. Borrowers shall have delivered to Agent an opinion of
counsel for each Borrower, in form and substance satisfactory to Agent and the
Banks.
(j) Good Standing and Full Force and Effect Certificates. Borrowers shall
have delivered to Agent a good standing certificate, or full force and effect
certificate, as the case may be, for each Borrower and Guarantor of Payment,
issued on or about the Closing Date by the Secretary of State in the state(s)
where such Borrower or Guarantor of Payment is incorporated or formed or
qualified as a foreign entity.
(k) Agent Fee Letter, Closing Fee Letter and Other Fees. Borrowers shall
have (i) executed and delivered to Agent, the Agent Fee Letter and paid to
Agent, for its sole account, the fees stated therein, (ii) executed and
delivered to Agent the Closing Fee Letter and paid to Agent, for the benefit of
the Banks, the fees stated therein, and (iii) paid all legal fees and expenses
of Agent in connection with the preparation and negotiation of the Loan
Documents.
(l) Closing Certificate. Borrowers shall have delivered to Agent and the
Banks an officer's certificate certifying that, as of the Closing Date, (i) all
conditions precedent set forth in this Article IV have been satisfied, (ii) no
Default or Event of Default exists nor immediately after the first Credit Event,
and (iii) each of the representations and warranties contained in Article VII
hereof are true and correct as of the Closing Date.
(m) No Material Adverse Effect or Change. Agent shall have determined that
(i) no condition or event has occurred since September 30, 2002 which has had a
Material Adverse Effect, and (ii) no material adverse change has occurred in
either (A) the syndication market for credit facilities similar in nature to the
credit facility contemplated in this Agreement, or (B) the financial, banking or
capital markets that would have an adverse effect on the syndication market
referenced in subpart (A) hereof.
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(n) Miscellaneous. Borrowers shall have provided to Agent and the Banks
such other items and shall have satisfied such other conditions as may be
reasonably required by Agent or the Banks.
ARTICLE V. COVENANTS
Section 5.1. Insurance. Each Company shall at all times maintain insurance
upon its Inventory, Equipment and other personal and real property in such form,
written by such companies, in such amounts, for such period, and against such
risks as may be acceptable to Agent, with provisions satisfactory to Agent for
payment of all losses thereunder to Agent, for the benefit of the Banks, and
such Company as their interests may appear (loss payable endorsement in favor of
Agent, for the benefit of the Banks), and, if required. by Agent, Borrowers
shall deposit the policies with Agent. Any such policies of insurance shall
provide for no fewer than thirty (30) days prior written notice of cancellation
to Agent and the Banks. Any sums received by Agent, for the benefit of the
Banks, in payment of insurance losses, returns, or unearned premiums under the
policies may, at the option of Agent, be applied upon any Debt whether or not
the same is then due and payable, or may be delivered to Borrowers for the
purpose of replacing, repairing, or restoring the insured property. Agent is
hereby authorized to act as attorney-in-fact for each Borrower in obtaining,
adjusting, settling and canceling such insurance and indorsing any drafts. In
the event of failure to provide such insurance as herein provided, Agent may, at
its option, provide such insurance and Borrowers shall pay to Agent, upon
demand, the cost thereof. Should Borrowers fail to pay such sum to Agent upon
demand, interest shall accrue thereon, from the date of demand until paid in
full, at the Default Rate. Within ten days of Agent's written request,
Administrative Borrower shall furnish to Agent such information about any
Company's insurance as Agent may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to Agent and
certified by a Financial Officer of Administrative Borrower.
Section 5.2. Money Obligations. Each Company shall pay in full (a) prior in
each case to the date when penalties would attach, all taxes, assessments and
governmental charges and levies (except only those so long as and to the extent
that the same shall be contested in good faith by appropriate and timely
proceedings and for which adequate provisions have been established in
accordance with GAAP) for which it may be or become liable or to which any or
all of its properties may be or become subject; (b) all of its wage obligations
to its employees in compliance with the Fair Labor Standards Act (29 U.S.C.
(S)(S) 206-207) or any comparable provisions; and (c) all of its other
obligations calling for the payment of money (except only those so long as and
to the extent that the same shall be contested in good faith and for which
adequate provisions have been established in accordance with GAAP) before such
payment becomes overdue.
Section 5.3. Financial Statements and Information. Borrowers shall furnish
to Agent and the Banks:
(a) within forty-five (45) days after the end of each of the first three
quarter-annual periods of each fiscal year of MTCT (but in no event more than
two business days after the filing by MTCT with the SEC of MTCT's Report on Form
10-Q for such quarter), a balance sheet of
35
the Companies as of the end of such period and a statement of income (loss),
stockholders' equity and cash flow for such quarter and fiscal year to date
periods, all prepared on a Consolidated basis in accordance with GAAP, and in
form and detail satisfactory to Agent and the Banks and certified by a Financial
Officer of MTCT;
(b) within ninety (90) days after the end of each fiscal year of MTCT (but
in no event more than two business days after the filing by MTCT with the SEC of
MTCT's Report on Form 10-K for such year), an annual audit report of the
Companies for that year, which report shall include a balance sheet and
statement of income (loss), stockholders' equity and cash-flow for that period,
all prepared on a Consolidated basis in accordance with GAAP, and in form and
detail satisfactory to Agent and the Banks and certified by the Companies'
independent public accountants (which independent public accountants shall be
satisfactory to Agent);
(c) concurrently with the delivery of the financial statements set forth in
subsections (a) and (b) above, a Compliance Certificate;
(d) concurrently with the delivery of the financial statements in
subsections (a) and (b) above, a copy of any management report, letter or
similar writing furnished to the Companies by the Companies' independent public
accountants in respect of the Companies' systems, operations, financial
condition or properties;
(e) within ninety (90) days after the end of each fiscal year of MTCT,
annual proforma projections of the Companies for the then current fiscal year
and the next two succeeding fiscal years, to be in form acceptable to Agent;
(f) as soon as available, copies of all notices, reports, definitive proxy
or other statements and other documents sent by Borrowers to their shareholders,
to the holders of any of its debentures or bonds or the trustee of any indenture
securing the same or pursuant to which they are issued, or sent by Borrowers (in
final form) to any securities exchange or over the counter authority or system,
or to the SEC or any similar federal agency having regulatory jurisdiction over
the issuance of any Borrower's securities;
(g) as soon as available, and in any event, no later than thirty (30) days
following the execution thereof, a listing of all contracts in excess of
$1,000,000 with any Governmental Authority entered into by any Company; and
(h) within ten days of the written request of Agent or any Bank, such other
information about the financial condition, properties and operations of any
Company as Agent or such Bank may from time to time reasonably request, which
information shall be submitted in form and detail satisfactory to Agent or such
Bank and certified by a Financial Officer of the Company or Companies in
question.
Section 5.4. Financial Records. Each Company shall at all times maintain
true and complete records and books of account, including, without limiting the
generality of the foregoing, appropriate provisions for possible losses and
liabilities, all in accordance with GAAP, and at all reasonable times (during
normal business hours and upon notice to such
36
Company) permit Agent, or any representative of Agent, to examine such Company's
books and records and to make excerpts therefrom and transcripts thereof.
Section 5.5. Franchises; Change in Business.
(a) Each Company that is not a Dormant Subsidiary shall preserve and
maintain at all times its existence, rights and franchises.
(b) No Company shall engage in any business if, as a result thereof, the
general nature of the business of the Companies taken as a whole would be
substantially changed from the general nature of the business the Companies are
engaged in on the Closing Date.
Section 5.6. ERISA Compliance. No Company shall incur any material
accumulated funding deficiency within the meaning of ERISA, or any material
liability to the PBGC, established thereunder in connection with any ERISA Plan.
Borrowers shall furnish to the Banks (a) as soon as possible and in any event
within thirty (30) days after any Company knows or has reason to know that any
Reportable Event with respect to any ERISA Plan has occurred, a statement of a
Financial Officer of such Company, setting forth details as to such Reportable
Event and the action that such Company proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the PBGC if
a copy of such notice is available to such Company, and (b) promptly after
receipt thereof a copy of any notice such Company, or any member of the
Controlled Group may receive from the PBGC or the Internal Revenue Service with
respect to any ERISA Plan administered by such Company; provided, that this
latter clause shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service. Borrowers shall promptly notify the
Banks of any material taxes assessed, proposed to be assessed or that Borrowers
have reason to believe may be assessed against a Company by the Internal Revenue
Service with respect to any ERISA Plan. As used in this Section 5.6, "material"
means the measure of a matter of significance that shall be determined as being
an amount equal to five percent (5%) of the Consolidated Net Worth of MTCT. As
soon as practicable, and in any event within twenty (20) days, after any Company
shall become aware that an ERISA Event shall have occurred, such Company shall
provide Agent with notice of such ERISA Event with a certificate by a Financial
Officer of such Company setting forth the details of the event and the action
such Company or another Controlled Group member proposes to take with respect
thereto. Borrowers shall, at the request of Agent, deliver or cause to be
delivered to Agent true and correct copies of any documents relating to the
ERISA Plan of any Company.
Section 5.7. Financial Covenants.
(a) Leverage Ratio. Borrowers shall not suffer or permit at any time the
Leverage Ratio to exceed 2.50 to 1.00.
(b) Interest Coverage Ratio. Borrowers shall not suffer or permit at any
time the Interest Coverage Ratio to be less than 3.00 to 1.00.
37
(c) Fixed Charge Coverage Ratio. Borrowers shall not suffer or permit at
any time the Fixed Charge Coverage Ratio to be less than 1.50 to 1.00.
(d) Net Worth. Borrowers shall not suffer or permit at any time the
Consolidated Net Worth, for the most recently completed fiscal quarter of MTCT,
to be less than the current minimum amount required, which current minimum
amount required shall be $39,906,650 on the Closing Date through March 30, 2003,
with such current minimum amount required to be positively increased by the
Increase Amount on March 31, 2003 and by an additional Increase Amount on the
last day of each succeeding fiscal quarter of MTCT thereafter. As used herein,
the term "Increase Amount" shall mean an amount equal to fifty percent (50%) of
positive Consolidated Net Earnings for the fiscal quarter then ended plus an
amount equal to one hundred percent (100%) of the proceeds of any equity
offering by the Companies, or any debt offering of the Companies, to the extent
converted into equity.
(e) Tangible Net Worth. Borrowers shall not suffer or permit at any time
the Consolidated Tangible Net Worth, for the most recently completed fiscal
quarter of MTCT, to be less than $5,000,000.
(f) Capital Expenditures. No Borrower will make or commit to make Capital
Expenditures exceeding $1,000,000 in any fiscal year of Borrowers.
Section 5.8. Borrowing. No Company shall create, incur or have outstanding
any obligation for borrowed money or any Indebtedness of any kind; provided,
that this Section 5.8 shall not apply to the following:
(a) the Loans or any other Indebtedness under this Agreement;
(b) any loans granted to or capital leases entered into by any Company for
the purchase or lease of fixed assets (and refinancings of such loans or capital
leases), which loans and capital leases shall only be secured by the fixed
assets being purchased, so long as the aggregate principal amount of all such
loans and leases for all Companies shall not exceed One Million Dollars
($1,000,000) at any time outstanding;
(c) the Indebtedness existing on the Closing Date, in addition to the other
Indebtedness permitted to be incurred pursuant to this Section 5.8, as set forth
in Schedule 5.8 hereto (and any extension, renewal or refinancing thereof so
long as the principal amount thereof shall not be increased after the Closing
Date);
(d) loans to a Company from a Company so long as each such Company is a
Credit Party; and
(e) Indebtedness under any Hedge Agreement, so long as such Hedge Agreement
shall have been entered into in the ordinary course of business and not for
speculative purposes.
Section 5.9. Liens. No Company shall create, assume or suffer to exist any
Lien upon any of its property or assets, whether now owned or hereafter
acquired; provided that this Section 5.9 shall not apply to the following:
38
(a) Liens for taxes not yet due or that are being actively contested in
good faith by appropriate proceedings and for which adequate reserves shall have
been established in accordance with GAAP;
(b) other statutory Liens incidental to the conduct of its business or the
ownership of its property and assets that (i) were not incurred in connection
with the borrowing of money or the obtaining of advances or credit, and (ii) do
not in the aggregate materially detract from the value of its property or assets
or materially impair the use thereof in the operation of its business;
(c) Liens on property or assets of a Subsidiary to secure obligations of
such Subsidiary to a Credit Party;
(d) any Lien of Agent, for the benefit of the Banks;
(e) purchase money Liens on fixed assets securing the loans and capitalized
leases pursuant to Section 5.8(b) hereof, provided that such Lien is limited to
the purchase price and only attaches to the property being acquired; and
(f) the Liens existing on the Closing Date as set forth in Schedule 5.9
hereto and replacements, extensions, renewals, refundings or refinancings
thereof, but only to the extent that the amount of debt secured thereby shall
not be increased.
No Company shall enter into any contract or agreement that would prohibit Agent
or the Banks from acquiring a security interest, mortgage or other Lien on, or a
collateral assignment of, any of the property or assets of such Company.
Section 5.10. Regulations U and X. No Company shall take any action that
would result in any non-compliance of the Loans with Regulations U and X, or any
other applicable regulation, of the Board of Governors of the Federal Reserve
System.
Section 5.11. Investments and Loans. No Company shall, without the prior
written consent of Agent and the Required Banks, (a) create, acquire or hold any
Subsidiary, (b) make or hold any investment in any stocks, bonds or securities
of any kind, (c) be or become a party to any joint venture or other partnership,
(d) make or keep outstanding any advance or loan to any Person, or (e) be or
become a Guarantor of any kind; provided that this Section 5.11 shall not apply
to the following:
(i) any endorsement of a check or other medium of payment for deposit
or collection through normal banking channels or similar transaction in the
normal course of business;
(ii) any investment in direct obligations of the United States of
America or in certificates of deposit issued by a member bank of the
Federal Reserve System;
39
(iii) any investment in commercial paper or securities that at the
time of such investment is assigned the highest quality rating in
accordance with the rating systems employed by either Xxxxx'x or Standard &
Poor's;
(iv) the holding of Subsidiaries listed on Schedule 7.1 hereto;
(v) loans to a Company from a Company so long as each such Company is
a Credit Party; or
(vi) the holding of any Subsidiary as a result of an Acquisition made
pursuant to Section 5.13 hereof so long as such Subsidiary becomes a
Guarantor of Payment promptly following such Acquisition.
Section 5.12. Merger and Sale of Assets. No Company shall merge, amalgamate
or consolidate with any other Person, or sell, lease or transfer or otherwise
dispose of any assets to any Person, other than in the ordinary course of
business, except that, if no Default or Event of Default shall then exist or
immediately thereafter shall begin to exist:
(a) any Subsidiary (other than a Borrower) may merge with (i) a Borrower
(provided that such Borrower shall be the continuing or surviving Person) or
(ii) any one or more Guarantors of Payment, provided that either (A) the
continuing or surviving Person shall be a Wholly-Owned Subsidiary that shall be
a Guarantor of Payment, or (B) after giving effect to any merger pursuant to
this subpart (ii), a Borrower or one or more Wholly-Owned Subsidiaries that
shall be Guarantors of Payment shall own not less than the same percentage of
the outstanding Voting Power of the continuing or surviving Person as such
Borrower or one or more Wholly-Owned Subsidiaries (that shall be Guarantors of
Payment) owned of the merged Subsidiary immediately prior to such merger; or
(b) any Subsidiary (other than a Borrower) may sell, lease, transfer or
otherwise dispose of any of its assets to a Credit Party.
Section 5.13. Acquisitions. No Company shall effect an Acquisition;
provided, however, that a Credit Party may effect an Acquisition so long as:
(a) in the case of a merger, amalgamation or other combination including a
Borrower, such Borrower shall be the surviving entity;
(b) in the case of a merger, amalgamation or other combination including a
Credit Party (other than a Borrower), a Credit Party shall be the surviving
entity;
(c) the business to be acquired shall be similar to the lines of business
of the Companies;
(d) the Acquisition is non-hostile;
40
(e) the entity which is the target of the Acquisition would contribute
positively to Consolidated EBITDA;
(f) the aggregate Consideration for all Acquisitions made on or after the
Closing Date shall not exceed Forty-Five Million Dollars ($45,000,000) and any
single Acquisition shall not exceed Twenty Million Dollars ($20,000,000);
(g) no Default or Event of Default shall exist prior to or after giving
effect to such Acquisition;
(h) Borrowers shall have provided to Agent and the Banks, at least twenty
(20) days prior to such Acquisition, historical financial statements of the
target entity and a pro forma financial statement of the Companies accompanied
by a certificate of a Financial Officer of a Borrower showing pro forma
compliance with Section 5.7 hereof, both before and after the proposed
Acquisition; and
(i) immediately after the consummation of such Acquisition, the amount
equal to (i) the Total Commitment Amount minus (ii) the Revolving Credit
Exposure shall be no less than Five Million Dollars ($5,000,000).
Section 5.14. Notice. Each Borrower shall cause a Financial Officer of such
Borrower to promptly notify Agent and the Banks whenever any Default or Event of
Default may occur hereunder or any representation or warranty made in Article
VII hereof or elsewhere in this Agreement or in any Related Writing may for any
reason cease in any material respect to be true and complete.
Section 5.15. Environmental Compliance. Each Company shall comply in all
respects with any and all Environmental Laws including, without limitation, all
Environmental Laws in jurisdictions in which any Company owns or operates a
facility or site, arranges for disposal or treatment of hazardous substances,
solid waste or other wastes, accepts for transport any hazardous substances,
solid waste or other wastes or holds any interest in real property or otherwise.
Borrowers shall furnish to the Banks, promptly after receipt thereof, a copy of
any notice any Company may receive from any Governmental Authority or private
Person or otherwise that any material litigation or proceeding pertaining to any
environmental, health or safety matter has been filed or is threatened against
such Company, any real property in which such Company holds any interest or any
past or present operation of such Company. No Company shall allow the release or
disposal of hazardous waste, solid waste or other wastes on, under or to any
real property in which any Company holds any interest or performs any of its
operations, in violation of any Environmental Law. As used in this Section 5.15,
"litigation or proceeding" means any demand, claim, notice, suit, suit in
equity action, administrative action, investigation or inquiry whether brought
by any Governmental Authority or private Person or otherwise. Borrowers shall
defend, indemnify and hold Agent and the Banks harmless against all costs,
expenses, claims, damages, penalties and liabilities of every kind or nature
whatsoever (including attorneys' fees) arising out of or resulting from the
noncompliance of any Company with any Environmental Law. Such indemnification
shall survive any termination of this Agreement.
41
Section 5.16. Affiliate Transactions. No Company shall, or shall permit any
Subsidiary to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate
(other than a Credit Party that is a Company) on terms that shall be less
favorable to such Company or such Subsidiary, as the case may be, than those
that might be obtained at the time in a transaction with a non-Affiliate;
provided, however, that the foregoing shall not prohibit the payment of
customary and reasonable directors' fees to directors who are not employees of a
Company or any Affiliate.
Section 5.17. Use of Proceeds. Borrowers' use of the proceeds of the Notes
shall be solely for working capital, funding capital expenditures, permitted
acquisitions, and other general corporate purposes of the Companies.
Section 5.18. Corporate Names and Location of Collateral. No Company shall
change its corporate name, unless, in each case, such Company shall provide
Agent and the Banks with at least thirty (30) days prior written notice thereof.
No Company shall use trade names, assumed names or fictitious names without
giving Agent and the Banks at least thirty (30) days prior written notice
thereof. Borrowers shall also provide Agent with at least thirty (30) days prior
written notification of (a) any change in any location where any Company's
Inventory or Equipment is maintained and any new locations where any Company's
Inventory or Equipment is to be maintained (provided that such Inventory and/or
Equipment at any time can reasonably be expected to have an aggregate value in
excess of $500,000); (b) any change in the location of the office where any
Company's records pertaining to its Accounts are kept; (c) the location of any
new places of business and the changing or closing of any of its existing places
of business; and (d) any change in any Company's chief executive office. In the
event of any of the foregoing or as a result of any change of applicable law
with respect to the taking of security interests, Borrowers agree that Agent may
file new U.C.C. financing statements describing the Collateral and otherwise in
form and substance sufficient for recordation wherever necessary or appropriate,
as determined in Agent's sole discretion, to perfect or continue perfected the
security interest of Agent, for the benefit of the Banks, in the Collateral,
based upon such new places of business or names or such change in applicable
law, and Borrowers shall pay all filing and recording fees and taxes in
connection with the filing or recordation of such financing statements and shall
immediately reimburse Agent therefor if Agent pays the same. Such amounts shall
be Related Expenses hereunder.
Section 5.19. Restricted Payments. No Company shall make or commit itself
to pay any Restricted Payment at any time.
Section 5.20. Subsidiaries Guaranties; Pledge of Stock.
(a) Guaranties. Each Domestic Subsidiary of a Company (that is not Dormant
Subsidiary) created, acquired or held subsequent to the Closing Date, shall
immediately execute and deliver to Agent, for the benefit of the Banks, a
Guaranty of Payment of all of the Debt, such agreement to be in form and
substance acceptable to Agent, along with any such Security
42
Documents, corporate governance and authorization documents, and an opinion of
counsel as may be deemed necessary or advisable by Agent.
(b) Pledge of Stock. With respect to the creation or acquisition of a
Subsidiary, Borrowers shall deliver to Agent, for the benefit of the Banks, all
of the share certificates (or other evidence of equity) owned by a Credit Party
pursuant to the terms of a Pledge Agreement executed by the appropriate Credit
Party; provided, however, that no Company shall be required to pledge more than
sixty-five percent (65%) of the outstanding shares of stock of any Foreign
Subsidiary.
Section 5.21. Property Acquired Subsequent to the Closing Date and Right to
Take Additional Collateral.
(a) Generally. Borrowers shall provide Agent with prompt written notice
with respect to real or personal property (other than Accounts or Inventory)
with an aggregate cost in excess of $250,000 acquired by any Company subsequent
to the Closing Date. In addition to any other right that Agent and the Banks may
have pursuant to this Agreement or otherwise, upon written request of Agent,
Borrowers shall, and shall cause each Guarantor of Payment to, grant to Agent,
for the benefit of the Banks, as additional security for the Debt, a first
priority security interest Lien on any real or personal property of each
Borrower and each Guarantor of Payment in which Agent does not have a first
priority security interest Lien. Borrowers agree that, within thirty (30) days
after such written request, Borrowers shall secure all of the Debt by delivering
to Agent, for the benefit of the Banks, security agreements, Intellectual
Property Collateral Assignment and Security Agreements, pledge agreements,
Mortgages (or deeds of trust, if applicable) or other documents, instruments or
agreements or such thereof as Agent and the Required Banks may reasonably
require. Borrowers shall pay all recordation, legal and other expenses in
connection therewith.
(b) Real Estate Matters. Notwithstanding the generality of the foregoing
subsection (a), with respect to each parcel of Real Property acquired by each
Borrower or Guarantor of Payment after the Closing Date, such Borrower or
Guarantor of Payment shall provide to Agent within 30 days after the written
request thereof:
(i) a Loan Policy of title insurance, ALTA 1970 Form B (amended
10/17/70 and 10/17/84) issued to Agent, for the benefit of the Banks, by a
title company acceptable to Agent and the Banks (the "Title Company"), in
an amount equal to the lesser of the Total Commitment Amount or the
appraised value of the Real Property insuring the related Mortgage to be a
valid, first-priority lien in the Real Property, free and clear of all
defects and encumbrances except such matters of record as accepted by Agent
and the Banks, in their sole discretion, and shown as Permitted
Encumbrances in "Exhibit B" to such Mortgage, with such endorsements and
affirmative insurance as Agent and the Banks may require, including without
limitation:
(A) the deletion of all so-called "standard exceptions" from such
policy;
43
(B) a so-called "comprehensive" endorsement in form and substance
acceptable to Agent and the Banks;
(C) affirmative insurance coverage regarding access, compliance
with respect to restrictive covenants and any other matters to which
Agent and the Banks may have objection or require affirmative
insurance coverage; and
(D) the results of a federal tax lien search in the county
wherein the Real Property is located and each Borrower has its
principal place of business.
(ii) a current (certified not more than thirty (30) days prior to the
date of the Mortgage granted in favor of Agent with respect to such Real
Property) "as-built" survey of the Real Property prepared by a licensed
surveyor acceptable to Agent and the Banks, certified to Agent and the
Banks and the Title Company pursuant to certificate of survey acceptable to
Bank and the Banks. Such survey shall be in form and substance acceptable
to Agent and the Banks, in their sole discretion, shall be made in
accordance with the "Minimum Standard Detail Requirements for Land Title
Surveys" adopted by the American Land Title Association in 1999, and shall
show, without limitation:
(A) the location of the perimeter of the Real Property by courses
and distances with all reference points shown or referred to in the
aforesaid title policy;
(B) all easements (including those easements whose existence is
disclosed by physical inspection of the Real Property), rights-of-way
and the location of all utility lines servicing the improvements on
the Real Property;
(C) the established building lines;
(D) the full legal description of the real estate (conforming to
the legal description set forth in the aforesaid title policy) and a
certification as to the acreage and square footage thereof;
(E) the highway and street right-of-way lines abutting the Real
Property and the width thereof; and
(F) encroachments upon the Real Property and the extent thereof
in feet and inches;
(iii) a copy of the certificate of occupancy for each building located
on the Real Property issued by the city in which such Real Property is
located;
(iv) evidence satisfactory to Agent and the Banks of compliance with
all building and zoning codes applicable to the Real Property;
44
(v) evidence of the availability and adequacy of utilities for the
buildings located on the Real Property;
(vi) evidence to the satisfaction of Agent and the Banks, in their
sole discretion, that no portion of the Real Property is located in a
Special Flood Hazard Area or is otherwise classified as Class A or Class BX
on the Flood Maps maintained by the Federal Emergency Management Agency;
and
(vii) two fully executed originals of the Mortgage.
Section 5.22. Collateral. Each Borrower shall:
(a) at all reasonable times allow Agent or any Bank by or through any of
its officers, agents, employees, attorneys, or accountants to, if Agent or any
Bank determines that any of the following are necessary or desirable to protect
its rights hereunder or in the Collateral: (i) examine, inspect, and make
extracts from such Borrower's books and other records, including, without
limitation, the tax returns of such Borrower; (ii) arrange for verification of
such Borrower's Accounts, under reasonable procedures, directly with Account
Debtors or by other methods; and (iii) examine and inspect such Borrower's
Inventory and Equipment, wherever located;
(b) promptly furnish to Agent or any Bank upon request (i) additional
statements and information with respect to the Collateral, and all writings and
information relating to or evidencing any of such Borrower's Accounts
(including, without limitation, computer printouts or typewritten reports
listing the mailing addresses of all present Account Debtors), and (ii) any
other writings and information as Agent or such Bank may request that it
determines are necessary or desirable to protect the Bank's rights hereunder or
in the Collateral;
(c) if requested by Agent, place a footnote in its financial statements
indicating the security interest in the Collateral granted to Agent for the
benefit of the Banks hereunder;
(d) immediately notify Agent and the Banks in writing of any information
that any Borrower has or may receive with respect to the Collateral that might
in any manner materially and adversely affect the value thereof or the rights of
Agent or the Banks with respect thereto;
(e) maintain such Borrower's Equipment in good operating condition and
repair, ordinary wear and tear excepted, making all necessary replacements
thereof so that the value and operating efficiency thereof shall at all times be
maintained and preserved in all material respects, and promptly inform Agent of
any material additions to or deletions from such Borrower's Equipment; and
(f) if any condition or event shall occur after the Closing Date which the
Required Banks determine has had a Material Adverse Effect, upon the request of
Agent, promptly take such action as is necessary to comply with the federal
Assignment of Claims Act and any other applicable law with respect to collateral
consisting of any Accounts with respect to which the
45
Account Debtor is the United States of America or any Governmental Authority or
any business which is located in a foreign country; and
(g) upon request of Agent, promptly take such action and promptly make,
execute, and deliver all such additional and further items, deeds, assurances,
and instruments as Agent may require, including, without limitation, financing
statements, so as to completely vest in and ensure to Agent and the Banks their
respective rights hereunder and in or to the Collateral.
Each Borrower hereby authorizes Agent, on behalf of the Banks, to file financing
statements with respect to the Collateral. If certificates of title or
applications for title are issued or outstanding with respect to any of the
Inventory or Equipment of any Borrower, such Borrower shall, upon request of
Agent, (i) execute and deliver to Agent a short form security agreement, in the
form and substance acceptable to Agent, and (ii) deliver such certificate or
application to Agent and cause the interest of Agent, for the benefit of the
Banks, to be properly noted thereon. Each Borrower hereby authorizes Agent or
Agent's designated agent (but without obligation by Agent to do so) to incur
Related Expenses (whether prior to, upon, or subsequent to any Default), and
Borrowers shall promptly repay, reimburse, and indemnify Agent and the Banks for
any and all Related Expenses. If any Borrower fails to keep and maintain its
Equipment in good operating condition, Agent may (but shall not be required to)
so maintain or repair all or any part of such Borrower's Equipment and the cost
thereof shall be a Related Expense. All Related Expenses are payable to Agent
upon demand therefor; Agent may, at its option, debit Related Expenses directly
to the Revolving Credit Notes or any other Notes.
Section 5.23. Restrictive Agreements. Except as set forth in this
Agreement; Borrowers shall not, and shall not permit any of their Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (a) make, directly or indirectly, any Capital Distribution to any Borrower,
(b) make, directly or indirectly, loans or advances or capital contributions to
any Borrower, or (c) transfer or encumber, directly or indirectly, any of the
properties or assets of such Subsidiary to any Borrower; except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) customary non-assignment provisions in leases or other agreements entered
in the ordinary course of business and consistent with past practices, or (iii)
customary restrictions in security agreements or mortgages securing Indebtedness
of a Company, or capital leases of a Company, to the extent such restrictions
shall only restrict the transfer of the property subject to such security
agreement, mortgage or, as permitted in Section 5.8(b) hereof, lease.
Section 5.24. Other Covenants. In the event that any Borrower shall enter
into, or shall have entered into, any Material Indebtedness Agreement, wherein
the covenants and agreements contained therein shall be more restrictive than
the covenants set forth herein, then Borrowers shall be bound hereunder by such
covenants and agreements with the same force and effect as if such covenants and
agreements were written herein.
Section 5.25. Amendment of Organizational Documents. No Company shall amend
its Organizational Documents without the prior written consent of Agent.
46
Section 5.26. Interest Rate Protection. At the option of Borrowers,
Borrowers may obtain Interest Rate Protection with respect to Borrowers'
Indebtedness.
Section 5.27. Federal Assignment of Claims Act. If any condition or event
shall occur after the Closing Date which the Required Banks determine has had a
Material Adverse Effect, upon the request of Agent, Borrowers shall promptly
take such action as is necessary to comply with the federal Assignment of Claims
Act with respect to any contract between any Borrower and any Governmental
Authority which can reasonably be expected to exceed $1,000,000 in revenues per
annum.
Section 5.28. Department of Defense Account. Borrowers shall only deposit
in the Department of Defense Account funds of the United States Department of
Defense that are required to be maintained in a segregated demand deposit
account.
ARTICLE VI. SECURITY
Section 6.1. Security Interest in Collateral. In consideration of and as
security for the full and complete payment of all of the Secured Debt, each
Borrower hereby grants to Agent, for the benefit of the Banks, a security
interest in and an assignment of the Collateral.
Section 6.2. Collections and Receipt of Proceeds by Borrowers. Prior to
exercise by Agent and the Banks of their rights under Article IX of this
Agreement, both (a) the lawful collection and enforcement of all of such
Borrower's Accounts, and (b) the lawful receipt and retention by each Borrower
of all Proceeds of all of such Borrower's Accounts and Inventory shall be as
agent of the Banks. If any condition or event shall occur after the Closing Date
which the Required Banks determine has had a Material Adverse Effect, upon
written direction to Borrowers from Agent, a Cash Collateral Account shall be
opened by Borrowers at the main office of Agent in Cleveland, Ohio, and all such
lawful collections of each Borrower's Accounts and such Proceeds of each
Borrower's Accounts and Inventory shall be remitted daily by such Borrower to
Agent in the form in which they are received by such Borrower, either by mailing
or by delivering such collections and Proceeds to Agent, appropriately endorsed
for deposit in the Cash Collateral Account. In the event that such notice is
given to Borrowers from Agent, no Borrower shall commingle such collections or
Proceeds with any of such Borrower's other funds or property or the funds or
property of any other Borrower, but shall hold such collections and Proceeds
separate and apart therefrom upon an express trust for Agent, for the benefit of
the Banks. In such case, Agent may, in its sole discretion, and shall, at the
request of the Required Banks, at any time and from time to time, apply all or
any portion of the account balance in the Cash Collateral Account as a credit
against (i) the outstanding principal or interest of the Notes, or (ii) any
other Debt. If any remittance shall be dishonored, or if, upon final payment,
any claim with respect thereto shall be made against Agent on its warranties of
collection, Agent may charge the amount of such item against the Cash Collateral
Account or any other Deposit Account maintained by any Borrower with Agent or
with any other Bank, and, in any event, retain the same and such Borrower's
interest therein as additional security for the Secured Debt. Agent may, in its
sole discretion, at any time and from time to time, release funds from the Cash
Collateral Account to Borrowers for use in the business of the Borrowers. The
balance in the
47
Cash Collateral Account may be withdrawn by Borrowers upon termination of this
Agreement and payment in full of all of the Secured Debt. If any condition or
event shall occur after the Closing Date which the Required Banks determine has
had a Material Adverse Effect, at Agent's direction, each Borrower shall cause
all remittances representing collections and Proceeds of Collateral to be mailed
to a lock box in Cleveland, Ohio, to which Agent shall have access for the
processing of such items in accordance with the provisions, terms and conditions
of Agent's customary lock box agreement.
Agent, or Agent's designated agent, is hereby constituted and appointed as
each Borrower's attorney-in-fact with authority and power to endorse, any and
all instruments, documents, and chattel paper upon such Borrower's failure to do
so. Such authority and power, being coupled with an interest, shall be (a)
irrevocable until all of the Debt is paid, (b) exercisable by Agent at any time
during which a Cash Collateral Account or lockbox is being maintained pursuant
to this Section 6.2 and without any request upon such Borrower by Agent to so
endorse, and (c) exercisable in Agent's name or such Borrower's name. Each
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest, and any and all other similar notices with respect thereto,
regardless of the form of any endorsement thereof. Agent and the Banks shall not
be bound or obligated to take any action to preserve any rights therein against
prior parties thereto.
Section 6.3. Collections and Receipt of Proceeds by Agent. Each Borrower
hereby constitutes and appoints Agent, or Agent's designated agent, as such
Borrower's attorney-in-fact to exercise, at any time after the occurrence of a
condition or event which the Required Banks determine has had a Material Adverse
Effect, all or any of the following powers which, being coupled with an
interest, shall be irrevocable until the complete and full payment of all of the
Debt:
(a) to receive, retain, acquire, take, endorse, assign, deliver, accept,
and deposit, in the name of Agent or such Borrower, any and all of such
Borrower's cash, instruments, chattel paper, documents, Proceeds of Accounts,
Proceeds of Inventory, collection of Accounts, and any other writings relating
to any of the Collateral;
(b) to transmit to Account Debtors, on any or all of such Borrower's
Accounts, notice of assignment to Agent for the benefit of the Banks thereof and
Agent's, for the benefit of the Banks, security interest therein and to request
from such Account Debtors at any time, in the name of Agent or such Borrower,
information concerning such Borrower's Accounts and the amounts owing thereon;
(c) to transmit to purchasers of any or all of such Borrower's Inventory,
notice of Agent's security interest therein, and to request from such purchasers
at any time, in the name of Agent or such Borrower, information concerning such
Borrower's Inventory and the amounts owing thereon by such purchasers;
(d) to notify and require Account Debtors on such Borrower's Accounts and
purchasers of such Borrower's Inventory to make payment of their indebtedness
directly to Agent;
48
(e) to take or bring, in the name of Agent or such Borrower, all steps,
actions, suits, or proceedings deemed by Agent necessary or desirable to effect
the receipt, enforcement, and collection of the Collateral; and
(f) to accept all collections in any form relating to the Collateral,
including remittances which may reflect deductions, and to deposit the same,
into such Borrower's Cash Collateral Account or, at the option of Agent, to
apply them as a payment against any Note or Notes or any other Debt.
Section 6.4. Use of Inventory and Equipment. Until an Event of Default
shall occur, each Borrower may (a) retain possession of and use its Inventory
and Equipment in any lawful manner not inconsistent with this Agreement or with
the terms, conditions, or provisions of any policy of insurance thereon; (b)
sell or lease its Inventory in the ordinary course of business; provided,
however, that a sale or lease in the ordinary course of business does not
include a transfer in partial or total satisfaction of an Indebtedness; and (c)
use and consume any raw materials or supplies, the use and consumption of which
are necessary in order to carry on such Borrower's business.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
Section 7.1. Corporate Existence; Subsidiaries; Foreign Qualification. Each
Company is duly organized, validly existing, and in good standing under the laws
of its state or jurisdiction of incorporation or organization and is duly
qualified and authorized to do business and is in good standing as a foreign
entity in the jurisdictions set forth opposite its name on Schedule 7.1 hereto,
which are all of the states or jurisdictions where the character of its property
or its business activities makes such qualification necessary, except where the
failure to so qualify will not cause or result in a Material Adverse Effect.
Schedule 7.1 hereto sets forth each Subsidiary of a Borrower (and whether such
Subsidiary is a Dormant Subsidiary) and each Person that is an owner of a
Borrower's stock (other than the owners of the stock of MTCT), its state of
formation, its relationship to each Borrower, including the percentage of each
class of stock owned by a Company, the location of its chief executive offices
and its principal place of business. Each Borrower owns all of the capital stock
of each of its Subsidiaries.
Section 7.2. Corporate Authority. Each Credit Party has the right and power
and is duly authorized and empowered to enter into, execute and deliver the Loan
Documents to which it is a party and to perform and observe the provisions of
the Loan Documents. The Loan Documents to which each Credit Party is a party
have been duly authorized and approved by such Credit Party's board of directors
or other governing body, as applicable, and are the valid and binding
obligations of such Credit Party, enforceable against such Credit Party in
accordance with their respective terms. The execution, delivery and performance
of the Loan Documents will not conflict with nor result in any material breach
in any of the provisions of, or constitute a material default under, or result
in the creation of any Lien (other than Liens permitted under Section 5.9
hereof) upon any assets or property of any Company under the provisions of, such
Company's Organizational Documents or any agreement.
49
Section 7.3. Compliance with Laws. Each Company:
(a) holds permits, certificates, licenses, orders, registrations,
franchises, authorizations, and other approvals from federal, state, local, and
foreign governmental and regulatory bodies necessary for the conduct of its
business and is in compliance with all applicable laws relating thereto;
(b) is in compliance with all federal, state, local, or foreign applicable
statutes, rules, regulations, and orders including, without limitation, those
relating to environmental protection, occupational safety and health, and equal
employment practices; and
(c) is not in violation of or in default under any agreement to which it is
a party or by which its assets are subject or bound.
Section 7.4. Litigation and Administrative Proceedings. Except as set forth
on Schedule 7.4 hereto, there are (a) no lawsuits, actions, investigations, or
other proceedings pending or threatened against any Company, or in respect of
which any Company may have any liability, in any court or before any
Governmental Authority, arbitration board, or other tribunal, (b) no orders,
writs, injunctions, judgments, or decrees of any court or government agency or
instrumentality to which any Company is a party or by which the property or
assets of any Company are bound, or (c) no grievances, disputes, or
controversies outstanding with any union or other organization of the employees
of any Company, or threats of work stoppage, strike, or pending demands for
collective bargaining.
Section 7.5. Title to Assets. Each Company has good title to and ownership
of all property it purports to own, which property is free and clear of all
Liens, except those permitted under Section 5.9 hereof.
Section 7.6. Liens and Security Interests. On and after the Closing Date,
except for Liens permitted pursuant to Section 5.9 hereof, (a) there is no
financing statement outstanding covering any personal property of any Company,
other than a financing statement in favor of Agent for the benefit of the Banks;
(b) there is no mortgage outstanding covering any real property of any Company,
other than a mortgage in favor of Agent for the benefit of the Banks; and (c) no
real or personal property of any Company is subject to any security interest or
Lien of any kind other than any security interest or Lien that may be granted to
Agent, for the benefit of the Banks, except for Liens permitted by Section 5.9
hereof. No Company has entered into any contract or agreement that exists on or
after the Closing Date that would prohibit Agent and the Banks from acquiring a
security interest, mortgage or other Lien on, or a collateral assignment of, any
of the property or assets of any Company.
Section 7.7. Tax Returns. All federal, state and local tax returns and
other reports required by law to be filed in respect of the income, business,
properties and employees of each Company have been filed and all taxes,
assessments, fees and other governmental charges that are due and payable have
been paid, except as otherwise permitted herein. The provision for
50
taxes on the books of each Company is adequate for all years not closed by
applicable statutes and for the current fiscal year.
Section 7.8. Environmental Laws. Each Company is in material compliance
with any and all Environmental Laws, including, without limitation, all
Environmental Laws in all jurisdictions in which any Company owns or operates,
or has owned or operated, a facility or site, arranges or has arranged for
disposal or treatment of hazardous substances, solid waste or other wastes,
accepts or has accepted for transport any hazardous substances, solid waste or
other wastes or holds or has held any interest in real property or otherwise. No
litigation or proceeding arising under, relating to or in connection with any
Environmental Law is pending or, to the best knowledge of each Company,
threatened, against any Company, any real property in which any Company holds or
has held an interest or any past or present operation of any Company. No
release, threatened release or disposal of hazardous waste, solid waste or other
wastes is occurring, or has occurred (other than those that are currently being
cleaned up in accordance with Environmental Laws), on, under or to any real
property in which any Company holds any interest or performs any of its
operations, in violation of any Environmental Law. As used in this Section 7.8,
"litigation or proceeding" means any demand, claim, notice, suit, suit in
equity, action, administrative action, investigation or inquiry whether brought
by any Governmental Authority or private Person or otherwise.
Section 7.9. Location. The Companies have places of business or maintain
their Inventory and Equipment at the locations set forth on Schedule 7.9 hereto.
Each Company's chief executive office is set forth on Schedule 7.9 hereto.
Section 7.10. Continued Business. There exists no actual, pending, or, to
each Borrower's knowledge, threatened termination, cancellation or limitation
of, or any modification or change in the business relationship of any Company
and any customer or supplier, or any group of customers or suppliers, whose
purchases or supplies, individually or in the aggregate, are material to the
business of any Company, and there exists no present condition or state of facts
or circumstances that would have a Material Adverse Effect or prevent a Company
from conducting such business or the transactions contemplated by this Agreement
in substantially the same manner in which it was previously conducted.
Section 7.11. Employee Benefits Plans. Schedule 7.11 hereto identifies each
ERISA Plan. No ERISA Event has occurred or is expected to occur with respect to
an ERISA Plan. Full payment has been made of all amounts which a Controlled
Group member is required, under applicable law or under the governing documents,
to have been paid as a contribution to or a benefit under each ERISA Plan. The
liability of each Controlled Group member with respect to each ERISA Plan has
been fully funded based upon reasonable and proper actuarial assumptions, has
been fully insured, or has been fully reserved for on its financial statements.
No changes have occurred or are expected to occur that would cause a material
increase in the cost of providing benefits under the ERISA Plan. With respect to
each ERISA Plan that is intended to be qualified under Code Section 401(a), (a)
the ERISA Plan and any associated trust operationally comply with the applicable
requirements of Code Section 401(a); (b) the ERISA Plan and any associated trust
have been amended to comply with all such requirements as currently in effect,
other than those requirements for which a retroactive amendment can be
51
made within the "remedial amendment period" available under Code Section 401(b)
(as extended under Treasury Regulations and other Treasury pronouncements upon
which taxpayers may rely); (c) the ERISA Plan and any associated trust have
received a favorable determination letter from the Internal Revenue Service
stating that the ERISA Plan qualifies under Code Section 401(a), that the
associated trust qualifies under Code Section 501(a) and, if applicable, that
any cash or deferred arrangement under the ERISA Plan qualifies under Code
Section 401(k), unless the ERISA Plan was first adopted at a time for which the
above-described "remedial amendment period" has not yet expired; (d) the ERISA
Plan currently satisfies the requirements of Code Section 410(b), subject to any
retroactive amendment that may be made within the above-described "remedial
amendment period"; and (e) no contribution made to the ERISA Plan is subject to
an excise tax under Code Section 4972. With respect to any Pension Plan, the
"accumulated benefit obligation" of Controlled Group members with respect to the
Pension Plan (as determined in accordance with Statement of Accounting Standards
No. 87, "Employers' Accounting for Pensions") does not exceed the fair market
value of Pension Plan assets.
Section 7.12. Consents or Approvals. No consent, approval or authorization
of, or filing, registration or qualification with, any Governmental Authority or
any other Person is required to be obtained or completed by any Company in
connection with the execution, delivery or performance by any Company of any of
the Loan Documents, that has not already been obtained or completed.
Section 7.13. Solvency. Each Borrower has received consideration that is
the reasonable equivalent value of the obligations and liabilities that such
Borrower has incurred to Agent and the Banks. No Borrower is insolvent as
defined in any applicable state, federal or relevant foreign statute, nor will
such Borrower be rendered insolvent by the execution and delivery of the Loan
Documents to Agent and the Banks. No Borrower is engaged or about to engage in
any business or transaction for which the assets retained by it are or will be
an unreasonably small amount of capital, taking into consideration the
obligations to Agent and the Banks incurred hereunder. No Borrower intends to,
nor does it believe that it will, incur debts beyond its ability to pay such
debts as they mature.
Section 7.14. Financial Statements. The Consolidated financial statements
of MTCT for the fiscal year ended December 31, 2001 and the unaudited
Consolidated financial statements of MTCT for the fiscal quarter ended September
30, 2002, furnished to Agent and the Banks, are true and complete, have been
prepared in accordance with GAAP, and fairly present the financial condition of
the Companies as of the dates of such financial statements and the results of
their operations for the periods then ending. Since the dates of such
statements, there has been no material adverse change in any Company's financial
condition, properties or business or any change in any Company's accounting
procedures.
Section 7.15. Regulations. No Company is engaged principally or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United States of
America). The use of the proceeds of the Loans will not violate, or be
inconsistent with, the provisions of Regulation U or X or any other Regulation
of such Board of Governors.
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Section 7.16. Intellectual Property. Each Company owns, possesses, or has
the right to use all of the patents, patent applications, trademarks, service
marks, copyrights, licenses, and rights with respect to the foregoing necessary
for the conduct of its business without any known conflict with the rights of
others.
Section 7.17. Insurance. Each Company maintains with financially sound and
reputable insurers insurance with coverage and limits as required by law and as
is customary with Persons engaged in the same businesses as the Companies.
Schedule 7.17 hereto sets forth all insurance carried by the Companies on the
Closing Date, setting forth in detail the amount and type of such insurance.
Section 7.18. Accurate and Complete Statements. Neither the Loan Documents
nor any written statement made by any Company in connection with any of the Loan
Documents contains any untrue statement of a material fact or omits a material
fact necessary to make the statements contained therein or in the Loan Documents
not misleading. After due inquiry by Borrowers, there is no known fact that any
Company has not disclosed to Agent and the Banks that has or is likely to have a
Material Adverse Effect.
Section 7.19. Defaults. No Default or Event of Default exists hereunder,
nor will any begin to exist immediately after the execution and delivery hereof.
ARTICLE VIII. EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default hereunder:
Section 8.1. Payments. If the principal of or interest on any Note or any
commitment or other fee shall not be paid in full when due and payable.
Section 8.2. Special Covenants. If any Company shall fail or omit to
perform and observe Section 5.7, 5.8, 5.9, 5.11, 5.12, 5.13, 5.19, 5.20 or 5.23
hereof.
Section 8.3. Other Covenants. If a Company shall fail or omit to perform
and observe any agreement or other provision (other than those referred to in
Section 8.1 or 8.2 hereof) contained or referred to in this Agreement or any
Related Writing that is on such Company's part to be complied with, and that
Default shall not have been fully corrected within thirty (30) days after the
giving of written notice thereof to a Borrower by Agent or the Required Banks
that the specified Default is to be remedied.
Section 8.4. Representations and Warranties. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by any Company to Agent or
the Banks or any thereof or any other holder of any Note, shall be false or
erroneous and relates to a condition or event which the Required Banks have
determined has had a Material Adverse Effect.
53
Section 8.5. Cross Default. If any Company shall default in the payment of
any principal or interest due and owing upon any other obligation for borrowed
money or under any Material Indebtedness Agreement beyond any period of grace
provided with respect thereto or in the performance or observance of any other
agreement, term or condition contained in any agreement under which such
obligation for borrowed money is created or in any Material Indebtedness
Agreement, as the case may be, if the effect of such default is to allow the
acceleration of the maturity of such Indebtedness or to permit the holder
thereof to cause such Indebtedness to become due prior to its stated maturity.
Section 8.6. ERISA Default. The occurrence of one or more ERISA Events that
(a) the Required Banks determine could have a Material Adverse Effect, or (b)
results in a Lien on any of the assets of any Company.
Section 8.7. Change in Control. If any Change in Control shall occur.
Section 8.8. Money Judgment. A final judgment or order for the payment of
money shall be rendered against any Company by a court of competent
jurisdiction, that remains unpaid or unstayed and undischarged for a period
(during which execution shall not be effectively stayed) of thirty (30) days
after the date on which the right to appeal has expired.
Section 8.9. Material Adverse Effect. There shall have occurred any
condition or event that the Required Banks determine has had a Material Adverse
Effect.
Section 8.10. Validity of Loan Documents. (a) Any material provision, in
the sole opinion of Agent, of any Loan Document shall at any time for any reason
cease to be valid, binding and enforceable against any Credit Party; (b) the
validity, binding effect or enforceability of any Loan Document against any
Credit Party shall be contested by any Credit Party; (c) any Credit Party shall
deny that it has any or further liability or obligation thereunder; or (d) any
Loan Document shall be terminated, invalidated or set aside, or be declared
ineffective or inoperative or in any way cease to give or provide to Agent and
the Banks the benefits purported to be created thereby. In addition to any other
material Loan Documents, this Agreement, each Note and each Guaranty of Payment
shall be deemed to be "material".
Section 8.11. Solvency. If any Company (other than a Dormant Subsidiary) or
any Credit Party shall (a) except as permitted pursuant to Section 5.12 hereof,
discontinue business, (b) generally not pay its debts as such debts become due,
(c) make a general assignment for the benefit of creditors, (d) apply for or
consent to the appointment of an interim receiver, a receiver and manager, an
administrator, sequestrator, monitor, a custodian, a trustee, an interim trustee
or liquidator of all or a substantial part of its assets, (e) be adjudicated a
debtor or insolvent or have entered against it an order for relief under Title
11 of the United States Code, or under any other bankruptcy insolvency,
liquidation, winding-up, corporate or similar statute or law, foreign, federal,
state or provincial, in any applicable jurisdiction, now or hereafter existing,
(f) file a voluntary petition in bankruptcy, or file a proposal or notice of
intention to file a proposal or have an involuntary proceeding filed against it
and the same shall continue undismissed for a period of thirty (30) days from
commencement of such proceeding or case, or file a petition or an answer or an
application or a proposal seeking reorganization or an arrangement with
creditors or
54
seeking to take advantage of any other law (whether federal, provincial or
state, or, if applicable, other jurisdiction) relating to relief of debtors, or
admit (by answer, by default or otherwise) the material allegations of a
petition filed against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal, provincial or state, or, if applicable, other
jurisdiction) relating to relief of debtors, (g) suffer or permit or to continue
unstayed and in effect for thirty (30) consecutive days any judgment, decree or
order entered by a court of competent jurisdiction, that approves a petition or
an application or a proposal seeking its reorganization or appoints an interim
receiver, a receiver and manager, an administrator, custodian, trustee, interim
trustee or liquidator of all or a substantial part of its assets, (h) have an
administrative receiver appointed over the whole or substantially the whole of
its assets, (i) take, or omit to take, any action in order thereby to effect any
of the foregoing, or (j) have a moratorium declared in respect of any of its
Indebtedness, or any analogous procedure or step is taken in any jurisdiction.
ARTICLE IX. REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or elsewhere,
Section 9.1. Optional Defaults. If any Event of Default referred to in
Section 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9 or 8.10 hereof shall occur,
Agent may, with the consent of the Required Banks, and shall, at the request of
the Required Banks, give written notice to Borrowers, to:
(a) terminate the Commitment, if not previously terminated, and,
immediately upon such election, the obligations of the Banks, and each thereof,
to make any further Loan, and/or
(b) accelerate the maturity of all of the Debt (if the Debt is not already
due and payable), whereupon all of the Debt shall become and thereafter be
immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby waived
by Borrowers.
Section 9.2. Automatic Defaults. If any Event of Default referred to in
Section 8.11 hereof shall occur:
(a) all of the Commitment shall automatically and immediately terminate, if
not previously terminated, and no Bank thereafter shall be under any obligation
to grant any further Loan, and
(b) the principal of and interest then outstanding on all of the Notes, and
all of the other Debt, shall thereupon become and thereafter be immediately due
and payable in full (if the Debt is not already due and payable), all without
any presentment, demand or notice of any kind, which are hereby waived by
Borrowers.
Section 9.3. [RESERVED]
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Section 9.4. Offsets. If there shall occur or exist any Event of Default
referred to in Section 8.11 hereof or if the maturity of the Notes is
accelerated pursuant to Section 9.1 or 9.2 hereof, each Bank shall have the
right at any time to set off against, and to appropriate and apply toward the
payment of, any and all Debt then owing by Borrowers to such Bank (including,
without limitation, any participation purchased or to be purchased pursuant to
Section 2.4(c) or 9.4 hereof), whether or not the same shall then have matured,
any and all deposit (general or special) balances and all other indebtedness
then held or owing by such Bank (including, without limitation, by branches and
agencies or any affiliate of such Bank) to or for the credit or account of any
Borrower or Guarantor of Payment, all without notice to or demand upon any
Borrower or any other Person, all such notices and demands being hereby
expressly waived by each Borrower.
Section 9.5. Equalization Provision. Each Bank agrees with the other Banks
that if it, at any time, shall obtain any Advantage over the other Banks or any
thereof in respect of the Debt (except as to Swing Loans prior to Agent's giving
of notice to participate and except under Article III hereof), it shall purchase
from the other Banks, for cash and at par, such additional participation in the
Debt as shall be necessary to nullify the Advantage. If any such Advantage
resulting in the purchase of an additional participation as aforesaid shall be
recovered in whole or in part from the Bank receiving the Advantage, each such
purchase shall be rescinded, and the purchase price restored (but without
interest unless the Bank receiving the Advantage is required to pay interest on
the Advantage to the Person recovering the Advantage from such Bank) ratably to
the extent of the recovery. Each Bank further agrees with the other Banks that
if it at any time shall receive any payment for or on behalf of any Borrower on
any indebtedness owing by any Borrower to that Bank (whether by voluntary
payment, by realization upon security, by reason of offset of any deposit or
other indebtedness, by counterclaim or cross-action, by the enforcement of any
right under any Loan Document, or otherwise) it will apply such payment first to
any and all Debt owing by such Borrower to that Bank (including, without
limitation, any participation purchased or to be purchased pursuant to this
Section or any other Section of this Agreement). Each Borrower agrees that any
Bank so purchasing a participation from the other Banks or any thereof pursuant
to this Section may exercise all of its rights of payment (including the right
of set-off) with respect to such participation as fully as if such Bank was a
direct creditor of such Borrower in the amount of such participation.
Section 9.6. Collateral. Upon the occurrence of an Event of Default and at
all times thereafter, Agent, on behalf of the Required Banks, shall have the
rights and remedies of a secured party under the Ohio Revised Code as in effect
from time to time, in addition to the rights and remedies of a secured party
provided elsewhere within this Agreement, in any other Related Writing executed
by any Borrower or otherwise provided in law or equity. Agent may require
Borrowers to assemble the Collateral, which Borrowers agree to do, and make it
available to Agent and the Banks at a reasonably convenient place to be
designated by Agent. Agent may, with or without notice to or demand upon
Borrowers and with or without the aid of legal process, make use of such force
as may be necessary to enter any premises where the Collateral, or any thereof,
may be found and to take possession thereof (including anything found in or on
the Collateral that is not specifically described in this Agreement, each of
which findings shall be considered to be an accession to and a part of the
Collateral) and for that purpose may pursue the Collateral wherever the same may
be found, without liability for trespass or
56
damage caused thereby to Borrowers. After any delivery or taking of possession
of the Collateral, or any thereof, pursuant to this Agreement, then, with or
without resort to Borrowers personally or any other Person or property, all of
which Borrowers hereby waive, and upon such terms and in such manner as Agent
may deem advisable, Agent, in its discretion, may sell, assign, transfer and
deliver any of the Collateral at any time, or from time to time. No prior notice
need be given to Borrowers or to any other Person in the case of any sale of
Collateral that Agent determines to be perishable or to be declining speedily in
value or that is customarily sold in any recognized market, but in any other
case Agent shall give Borrowers not fewer than ten days prior notice of either
the time and place of any public sale of the Collateral or of the time after
which any private sale or other intended disposition thereof is to be made.
Borrowers waive advertisement of any such sale and (except to the extent
specifically required by the preceding sentence) waive notice of any kind in
respect of any such sale. At any such public sale, Agent or the Banks may
purchase the Collateral, or any part thereof, free from any right of redemption,
all of which rights Borrowers hereby waive and release. After deducting all
Related Expenses, and after paying all claims, if any, secured by Liens having
precedence over this Agreement, Agent may apply the net proceeds of each such
sale to or toward the payment of the Debt, whether or not then due, in such
order and by such division as Agent, in its sole discretion, may deem advisable.
Any excess, to the extent permitted by law, shall be paid to Borrowers, and
Borrowers shall remain liable for any deficiency. In addition, Agent shall at
all times have the right to obtain appraisals of Borrowers or the Collateral,
the cost of which shall be paid by Borrowers.
Section 9.7. Other Remedies. The remedies in this Article IX are in
addition to, not in limitation of, any other right, power, privilege, or remedy,
either in law, in equity, or otherwise, to which the Banks may be entitled.
Agent shall exercise the rights under this Article IX and all other collection
efforts on behalf of the Banks and no Bank shall act independently with respect
thereto, except as otherwise specifically set forth in this Agreement.
ARTICLE X. THE AGENT
The Banks authorize National City Bank and National City Bank hereby agrees
to act as agent for the Banks in respect of this Agreement upon the terms and
conditions set forth elsewhere in this Agreement, and upon the following terms
and conditions:
Section 10.1. Appointment and Authorization. Each Bank hereby irrevocably
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers hereunder as are delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither Agent
nor any of its affiliates, directors, officers, attorneys or employees shall be
liable for any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct. Neither Agent nor any of its affiliates, directors, officers,
attorneys or employees shall (a) be liable for any action taken or omitted to be
taken by it or them hereunder or in connection herewith, except for its or their
own gross negligence or willful misconduct, or be responsible in any manner to
any of the Banks for the effectiveness, enforceability, genuineness, validity or
due execution of this Agreement or any other Loan Documents, (b) be under any
57
obligation to any of the Banks to ascertain or to inquire as to the performance
or observance or any of the terms, covenants or conditions hereof or thereof on
the part of Borrowers, or the financial condition of Borrowers, or (c) be liable
to any of the Companies for consequential damages resulting from any breach of
contract, tort or other wrong in connection with the negotiation, documentation,
administration or collection of the Loans or any of the Loan Documents.
Section 10.2. Note Holders. Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with it,
signed by such payee and in form and substance satisfactory to Agent.
Section 10.3. Consultation with Counsel. Agent may consult with legal
counsel selected by it and shall not be liable for any action taken or suffered
in good faith by it in accordance with the opinion of such counsel.
Section 10.4. Documents. Agent shall not be under any duty to examine into
or pass upon the validity, effectiveness, genuineness or value of any Loan
Document or any other Related Writing furnished pursuant hereto or in connection
herewith or the value of any collateral obtained hereunder, and Agent shall be
entitled to assume that the same are valid, effective and genuine and what they
purport to be.
Section 10.5. Agent and Affiliates. With respect to the Loans, Agent shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not Agent, and Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Company or any Affiliate.
Section 10.6. Knowledge of Default. It is expressly understood and agreed
that Agent shall be entitled to assume that no Default or Event of Default has
occurred, unless Agent has been notified by a Bank in writing that such Bank
believes that a Default or Event of Default has occurred and is continuing and
specifying the nature thereof or has been notified by a Borrower pursuant to
Section 5.14 hereof.
Section 10.7. Action by Agent. Subject to the other terms and conditions
hereof, so long as Agent shall be entitled, pursuant to Section 10.6 hereof, to
assume that no Default or Event of Default shall have occurred and be
continuing, Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights that may be vested in it by,
or with respect to taking or refraining from taking any action or actions that
it may be able to take under or in respect of, this Agreement. Agent shall incur
no liability under or in respect of this Agreement by acting upon any notice,
certificate, warranty or other paper or instrument believed by it to be genuine
or authentic or to be signed by the proper party or parties, or with respect to
anything that it may do or refrain from doing in the reasonable exercise of its
judgment, or that may seem to it to be necessary or desirable in the premises.
Section 10.8. Default Notices. In the event that Agent shall have acquired
actual knowledge of any Default or Event of Default, Agent shall promptly notify
the Banks and shall take such action and assert such rights under this Agreement
as the Required Banks shall direct
58
and Agent shall inform the other Banks in writing of the action taken. Agent may
take such action and assert such rights as it deems to be advisable, in its
discretion, for the protection of the interests of the holders of the Notes.
Section 10.9. Indemnification of Agent. The Banks agree to indemnify Agent
(to the extent not reimbursed by Borrowers) ratably, according to their
respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against Agent in its capacity as agent in any way
relating to or arising out of this Agreement or any Loan Document or any action
taken or omitted by Agent with respect to this Agreement or any Loan Document,
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements resulting from Agent's
gross negligence or willful misconduct as determined by a court of competent
jurisdiction, or from any action taken or omitted by Agent in any capacity other
than as agent under this Agreement or any other Loan Document.
Section 10.10. Successor Agent. Agent may resign as agent hereunder by
giving not fewer than thirty (30) days prior written notice to Borrowers and the
Banks. If Agent shall resign under this Agreement, then either (a) the Required
Banks shall appoint from among the Banks a successor agent for the Banks (with
the consent of Administrative Borrower so long as an Event of Default has not
occurred and which consent shall not be unreasonably withheld), or (b) if a
successor agent shall not be so appointed and approved within the thirty (30)
day period following Agent's notice to the Banks of its resignation, then Agent
shall appoint a successor agent that shall serve as agent until such time as the
Required Banks appoint a successor agent. Upon its appointment, such successor
agent shall succeed to the rights, powers and duties as agent, and the term
"Agent" shall mean such successor effective upon its appointment, and the former
agent's rights, powers and duties as agent shall be terminated without any other
or further act or deed on the part of such former agent or any of the parties to
this Agreement.
ARTICLE XI. MISCELLANEOUS
Section 11.1. Banks' Independent Investigation. Each Bank, by its signature
to this Agreement, acknowledges and agrees that Agent has made no representation
or warranty, express or implied, with respect to the creditworthiness, financial
condition, or any other condition of any Company or with respect to the
statements contained in any information memorandum furnished in connection
herewith or in any other oral or written communication between Agent and such
Bank. Each Bank represents that it has made and shall continue to make its own
independent investigation of the creditworthiness, financial condition and
affairs of the Companies in connection with the extension of credit hereunder,
and agrees that Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information with
respect thereto (other than such notices as may be expressly required to be
given by Agent to the Banks hereunder), whether coming into its possession
before the first Credit Event hereunder or at any time or times thereafter.
59
Section 11.2. No Waiver; Cumulative Remedies. No omission or course of
dealing on the part of Agent, any Bank or the holder of any Note in exercising
any right, power or remedy hereunder or under any of the Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder or under any of the
Loan Documents. The remedies herein provided are cumulative and in addition to
any other rights, powers or privileges held by operation of law, by contract or
otherwise.
Section 11.3. Amendments, Consents. No amendment, modification,
termination, or waiver of any provision of any Loan Document nor consent to any
variance therefrom, shall be effective unless the same shall be in writing and
signed by the Required Banks and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Anything herein to the contrary notwithstanding, unanimous consent of the Banks
shall be required with respect to (a) any increase in the Commitment hereunder
(except as specified in Section 2.11(b) hereof), (b) the extension of maturity
of the Notes, the payment date of interest or principal thereunder, or the
payment of commitment or other fees or amounts payable hereunder, (c) any
reduction in the rate of interest on the Notes, or in any amount of principal or
interest due on any Note, or the payment of commitment or other fees hereunder
or any change in the manner of pro rata application of any payments made by
Borrowers to the Banks hereunder, (d) any change in any percentage voting
requirement, voting rights, or the Required Banks definition in this Agreement,
(e) the release of any Borrower or Guarantor of Payment or of any collateral in
excess of Fifty Thousand Dollars ($50,000) securing the Debt or any part
thereof, or (f) any amendment to this Section 11.3 or Section 9.5 hereof. Notice
of amendments or consents ratified by the Banks hereunder shall be forwarded by
Agent to all of the Banks.
Section 11.4. Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing and, if to a Borrower,
mailed or delivered to it, addressed to it at the address specified on the
signature pages of this Agreement, if to a Bank, mailed or delivered to it,
addressed to the address of such Bank specified on the signature pages of this
Agreement, or, as to each party, at such other address as shall be designated by
such party in a written notice to each of the other parties. All notices,
statements, requests, demands and other communications provided for hereunder
shall be deemed to be given or made (i) when delivered or two Business Days
after being deposited in the mails with postage prepaid by registered or
certified mail, addressed as aforesaid, or (ii) when sent by facsimile with
telephonic confirmation of receipt, except that notices from a Borrower to Agent
or the Banks pursuant to any of the provisions hereof shall not be effective
until received by Agent or the Banks, as the case may be.
Section 11.5. Costs, Expenses and Taxes. Borrowers agree to pay on demand
all reasonable costs and expenses of Agent, including but not limited to, (a)
Related Expenses, (b) syndication, administration, travel and out-of-pocket
expenses, including but not limited to attorneys' fees and expenses, of Agent in
connection with the preparation, negotiation and closing of the Loan Documents
and the administration of the Loan Documents, the collection and disbursement of
all funds hereunder and the other instruments and documents to be delivered
hereunder, (c) extraordinary expenses of Agent in connection with the
administration of the Loan
60
Documents and the other instruments and documents to be delivered hereunder, and
(d) the fees and out-of-pocket expenses of special counsel for Agent, with
respect to the foregoing, and of local counsel, if any, who may be retained by
said special counsel with respect thereto. Borrowers also agree to pay on demand
all reasonable costs and expenses of Agent and the Banks, including attorneys'
fees, in connection with the restructuring or enforcement of the Debt, this
Agreement or any Related Writing. In addition, Borrowers shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution and delivery of the Loan Documents, and the other instruments
and documents to be delivered hereunder, and agree to hold Agent and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes or fees.
Section 11.6. Indemnification. Each Borrower agrees to defend, indemnify
and hold harmless Agent and the Banks (and their respective affiliates,
officers, directors, attorneys, agents and employees) from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments and
suits of any kind or nature whatsoever (together with all reasonable costs and
expenses, including attorneys' fees, and disbursements, incurred or made by
Agent or any Bank in relation thereto) that may be imposed on, incurred by or
asserted against Agent or any Bank, or any affiliate thereof, in connection with
(a) any investigative, administrative or judicial proceeding (whether or not
Agent or such Bank, or any affiliate thereof, shall be designated a party
thereto), or (b) any claim by any Person relating to or arising out of any Loan
Document or any actual or proposed use of proceeds of the Loans or any of the
Debt, or any activities of any Company or its Affiliates; provided that no Bank
nor Agent shall have the right to be indemnified under this Section 11.6 for its
own gross negligence or willful misconduct as determined by a court of competent
jurisdiction. All obligations provided for in this Section 11.6 shall survive
any termination of this Agreement.
Section 11.7. Obligations Several; No Fiduciary Obligations. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by Agent or the Banks pursuant hereto
shall be deemed to constitute Agent or the Banks a partnership, association,
joint venture or other entity. No default by any Bank hereunder shall excuse the
other Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among Borrowers, Agent and the Banks with respect to the Loan
Documents and the Related Writings is and shall be solely that of debtors and
creditors, respectively, and neither Agent nor any Bank shall have any fiduciary
obligation toward any Credit Party with respect to any such documents or the
transactions contemplated thereby.
Section 11.8. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
Section 11.9. Binding Effect; Borrowers' Assignment. This Agreement shall
become effective when it shall have been executed by each Borrower, Agent and
each Bank and thereafter shall be binding upon and inure to the benefit of each
Borrower, Agent and each of the
61
Banks and their respective successors and assigns, except that no Borrower shall
have the right to assign its rights hereunder or any interest herein without the
prior written consent of Agent and all of the Banks.
Section 11.10. Bank Assignments.
(a) Assignments of Commitments. Each Bank shall have the right at any time
or times to assign to an Eligible Transferee (other than to a Bank that shall
not be in compliance with this Agreement or to a Borrower or an Affiliate of a
Company), without recourse, all or a percentage of all of the following: (i)
such Bank's Commitment, (ii) all Loans made by that Bank, (iii) such Bank's
Notes, and (iv) such Bank's interest in any Swing Loan, and any participation
purchased pursuant to Section 2.4(c) or 9.5 hereof.
(b) Prior Consent. No assignment may be consummated pursuant to this
Section 11.10 without the prior written consent of Administrative Borrower and
Agent (other than an assignment by any Bank to another Bank or to any affiliate
of such Bank which affiliate is either wholly-owned by a Bank or is wholly-owned
by a Person that wholly owns, either directly or indirectly, such Bank), which
consent of Administrative Borrowers and Agent shall not be unreasonably
withheld; provided, however, that, Administrative Borrower's consent shall not
be required if, at the time of the proposed assignment, any Default or Event of
Default shall then exist. Anything herein to the contrary notwithstanding, any
Bank may at any time make a collateral assignment of all or any portion of its
rights under the Loan Documents to a Federal Reserve Bank, and no such
assignment shall release such assigning Bank from its obligations hereunder.
(c) Minimum Amount. Each such assignment shall be in a minimum amount of
the lesser of Five Million Dollars ($5,000,000) of the assignor's Commitment and
interest herein, or the entire amount of the assignor's Commitment and interest
herein.
(d) Assignment Fee. Unless the assignment shall be to an affiliate of the
assignor or the assignment shall be due to merger of the assignor or for
regulatory purposes, either the assignor or the assignee shall remit to Agent,
for its own account, an administrative fee of Three Thousand Five Hundred
Dollars ($3,500).
(e) Assignment Agreement. Unless the assignment shall be due to merger of
the assignor or a collateral assignment for regulatory purposes, the assignor
shall (i) cause the assignee to execute and deliver to Administrative Borrower
and Agent an Assignment Agreement, and (ii) execute and deliver, or cause the
assignee to execute and deliver, as the case may be, to Agent such additional
amendments, assurances and other writings as Agent may reasonably require.
(f) Non-U.S. Assignee. If the assignment is to be made to an assignee that
is organized under the laws of any jurisdiction other than the United States or
any state thereof, the assignor Bank shall cause such assignee, at least five
Business Days prior to the effective date of such assignment, (i) to represent
to the assignor Bank (for the benefit of the assignor Bank, Agent and Borrowers)
that under applicable law and treaties no taxes will be required to be
62
withheld by Agent, Borrowers or the assignor with respect to any payments to be
made to such assignee in respect of the Loans hereunder, (ii) to furnish to the
assignor (and, in the case of any assignee registered in the Register (as
defined below), Agent and Borrowers) either (A) U.S. Internal Revenue Service
Form W-8ECI or W-8BEN or (B) United States Internal Revenue Service Form W-8 or
W-9, as applicable (wherein such assignee claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder),
and (iii) to agree (for the benefit of the assignor, Agent and Borrowers) to
provide to the assignor Bank (and, in the case of any assignee registered in the
Register, to Agent and Borrowers) a new Form W-8ECI or Form W-8BEN or Form W-8
or W-9, as applicable, upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by such assignee, and
to comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
(g) Deliveries by Borrowers. Upon satisfaction of all applicable
requirements specified in subsections (a) through (f) above, Borrowers shall
execute and deliver (i) to Agent, the assignor and the assignee, any consent or
release (of all or a portion of the obligations of the assignor) required to be
delivered by Borrowers in connection with the Assignment Agreement, and (ii) to
the assignee and the assignor, if applicable, an appropriate Note or Notes.
After delivery of the new Note or Notes, the assignor's Note or Notes being
replaced shall be returned to Borrowers marked "replaced".
(h) Effect of Assignment. Upon satisfaction of all applicable requirements
set forth in subsections (a) through (g) above, and any other condition
contained in this Section 11.10, (i) the assignee shall become and thereafter be
deemed to be a "Bank" for the purposes of this Agreement, (ii) the Assignor
shall be released from its obligations hereunder to the extent that its interest
has been assigned, (iii) in the event that the assignor's entire interest has
been assigned, the assignor shall cease to be and thereafter shall no longer
be deemed to be a "Bank", and (iv) the signature pages hereto and Schedule 1
hereto shall be automatically amended, without further action, to reflect the
result of any such assignment.
(i) Agent to Maintain Register. Agent shall maintain at the address for
notices referred to in Section 11.4 hereof a copy of each Assignment Agreement
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment of, and principal amount of the
Loans owing to, each Bank from time to time. The entries in the Register shall
be conclusive, in the absence of demonstrable error, and Borrowers, Agent and
the Banks may treat each Person whose name is recorded in the Register as the
owner of the Loan recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by Borrowers or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
Section 11.11. Sale of Participations. Any Bank may, in the ordinary course
of its commercial banking business and in accordance with applicable law, at any
time sell participations to one or more Eligible Transferees or an affiliate of
such Bank (each a "Participant") in all or a portion of its rights or
obligations under this Agreement and the other
63
Loan Documents (including, without limitation, all or a portion of the
Commitment and the Loans and participations owing to it and the Note held by
it); provided, that:
(a) any such Bank's obligations under this Agreement and the other Loan
Documents shall remain unchanged;
(b) such Bank shall remain solely responsible to the other parties hereto
for the performance of such obligations;
(c) the parties hereto shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and each of the other Loan Documents;
(d) such Participant shall be bound by the provisions of Section 9.5
hereof, and the Bank selling such participation shall obtain from such
Participant a written confirmation of its agreement to be so bound; and
(e) no Participant (unless such Participant is itself a Bank) shall be
entitled to require such Bank to take or refrain from taking action under this
Agreement or under any other Loan Document, except that such Bank may agree with
such Participant that such Bank will not, without such Participant's consent,
take action of the type described as follows:
(i) increase the portion of the participation amount of any
Participant over the amount thereof then in effect, or extend the
Commitment Period, without the written consent of each Participant affected
thereby; or
(ii) reduce the principal amount of or extend the time for any payment
of principal of any Loan, or reduce the rate of interest or extend the time
for payment of interest on any Loan, or reduce the commitment fee, without
the written consent of each Participant affected thereby.
Borrowers agree that any Bank that sells participations pursuant to this Section
11.11 shall still be entitled to the benefits of Article III hereof,
notwithstanding any such transfer; provided, however, that the obligations of
Borrowers shall not increase as a result of such transfer and Borrowers shall
have no obligation to any Participant.
Section 11.12. Severability of Provisions; Captions; Attachments. Any
provision of this Agreement that shall be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. The several captions to Sections and subsections
herein are inserted for convenience only and shall be ignored in interpreting
the provisions of this Agreement. Each schedule or exhibit attached to this
Agreement shall be incorporated herein and shall be deemed to be a part hereof.
64
Section 11.13. Entire Agreement. This Agreement, any Note and any other
Loan Document or other agreement, document or instrument attached hereto or
executed on or as of the Closing Date integrate all of the terms and conditions
mentioned herein or incidental hereto and supersede all oral representations and
negotiations and prior writings with respect to the subject matter hereof.
Section 11.14. Legal Representation of Parties. The Loan Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement or any
other Loan Document to be construed or interpreted against any party shall not
apply to any construction or interpretation hereof or thereof.
Section 11.15. Governing Law; Submission to Jurisdiction. This Agreement,
each of the Notes and any Related Writing shall be governed by and construed in
accordance with the laws of the State of Ohio and the respective rights and
obligations of Borrowers and the Banks shall be governed by Ohio law, without
regard to principles of conflict of laws. Each Borrower hereby irrevocably
submits to the non-exclusive jurisdiction of any Ohio state or federal court
sitting in Cleveland, Ohio, over any action or proceeding arising out of or
relating to this Agreement, the Debt or any Related Writing, and each Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such Ohio state or federal court. Each
Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to the laying of venue in any action or proceeding in any such court as
well as any right it may now or hereafter have to remove such action or
proceeding, once commenced, to another court on the grounds of FORUM NON
CONVENIENS or otherwise. The parties hereto each agree that a final,
nonappealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
[Remainder of page left intentionally blank]
65
Section 11.16. JURY TRIAL WAIVER. EACH BORROWER, AGENT AND EACH BANK, TO
THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
BORROWERS, AGENT AND THE BANKS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.
[Remainder of page is intentionally blank.]
66
Executed and delivered as of the date first set forth above in Dayton,
Ohio.
Address: 0000 Xxxxxx Xxxxxx MTC TECHNOLOGIES INC.
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000 By: /s/ Xxxxx X.Xxxxxxxx
-----------------------------
Name: Xxxxx X.Xxxxxxxx
Title: EVP/Secretary/CFO
Address: 0000 Xxxxxx Xxxxxx MODERN TECHNOLOGIES CORP.
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000 By: /s/ Xxxxx X.Xxxxxxxx
-----------------------------
Name: Xxxxx X.Xxxxxxxx
Title: Secretary/CFO
Address: 000 Xxxxxx Xxxxxx NATIONAL CITY BANK
LOC. 01-3034 as Agent and as a Bank
Xxxxxxxxx, Xxxx 00000
Attention: Capital Markets Division
-Loan Syndications By: /s/ Xxxx X. Xxxxxx
Fax: (000) 000-0000 -----------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address: 00 Xxxxx Xxxx Xxxxxx XXXXXXX NATIONAL ASSOCIATION
Xxxxxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000 By: /s/ R. Xxxxxxx Xxxxxxxx
-----------------------------
Name: R. Xxxxxxx Xxxxxxxx
Title: Vice President
Address: 000 Xxxxx Xxxx Xxxxxx FIFTH THIRD BANK
Xxxxxx XX 00000
Attention: Xxxxxxx Xxxxx
Fax: (000) 000-0000 By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: AVP
Address: 000 Xxxx Xxxxxx Xxxxxx XXXXXX BANKING AND TRUST
16th Floor COMPANY
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx
00000
Attention: Xxxxxxx Bass By: /s/ Xxxxxxx Bass
Fax: (000) 000-0000 -----------------------------
Name: /s/ Xxxxxxx Bass
Title: Senior Vice President
67
SCHEDULE 1
REVOLVING
CREDIT
COMMITMENT COMMITMENT
BANKING INSTITUTIONS PERCENTAGE AMOUNT MAXIMUM AMOUNT
------------------------ --------------- ----------- --------------
National City Bank 31.4285% $11,000,000 $11,000,000
KeyBank National
Association 22.8571% $ 8,000,000 $ 8,000,000
Fifth Third Bank 22.8571% $ 8,000,000 $ 8,000,000
Branch Banking and Trust
Company 22.8571% $ 8,000,000 $ 8,000,000
------- ----------- -----------
Total Commitment Amount 100% $35,000,000 $35,000,000
======= =========== ===========
(approximately)
S-1
SCHEDULE 2
GUARANTORS OF PAYMENT
Amcomp Corporation, a California corporation
S-2
SCHEDULE 5.8
Indebtedness
None.
SCHEDULE 5.9
Liens
Filings against Modern Technologies Corp.
Secured Party Jurisdiction File No. Filing Date Collateral/Comments
--------------------------- --------------- -------------- ----------- -------------------
National City Leasing Corp. OH SOS AM08656 08-15-95 Leased Equipment
20010110024 08-17-00 continuation
National City Leasing Corp. Montgomery Cty. F9511068 08-28-95 Leased Equipment
CFSS-00-073397 07-25-00 continuation
National City Leasing Corp. OH SOS AM21285 10-12-95 Leased Equipment
20002710036 09-13-00 continuation
Provident Commercial Group Montgomery Cty. F9513270 10-16-95 Leased Equipment
CFSN-00-080933 08-15-00 continuation
Provident Commercial Group OH SOS AM38057 12-22-95 Leased Equipment
20003050242 09-18-00 continuation
Provident Commercial Group Montgomery Cty. F9600337 01-08-96 Leased Equipment
CFSN-00-094176 09-15-00 continuation
Provident Commercial Group OH SOS AM56312 03-12-96 Leased Equipment
20010640208 02-21-01 continuation
Provident Commercial Group Montgomery Cty. F9603637 03-19-96 Leased Equipment
CFSN-01-002773 01-09-01 continuation
Provident Commercial Group OH SOS AM97002 08-21-96 Leased Equipment
20011090828 02-21-01 continuation
Provident Commercial Group Montgomery Cty. F9610789 08-23-96 Leased Equipment
CFSN-01-071119 06-22-01 continuation
National City Leasing Corp. OH SOS AP0030170 03-04-98 Leased Equipment
20023240272 11-18-02 continuation
National City Leasing Corp. Montgomery Cty. F9802517 03-02-98 Leased Equipment
CNC Associates, Inc. OH SOS AP0091160 10-08-98 Leased Equipment
NMHG Financial Services OH SOS AP0162932 06-30-99 Leased Forklift
NMHG Financial Services Montgomery Cty. 99-069862 06-28-99 Leased Forklift
Toyota Motor Credit Corp. OH SOS XX0000000 07-26-99 Leased Forklift
Toyota Motor Credit Corp. Montgomery Cty. 99-088896 08-10-99 Leased Forklift
Provident Commercial Group OH SOS AP328980 03-05-01 Leased Equipment
Schedule 5.9, continued
Secured Party Jurisdiction File No. Filing Date Collateral/Comments
---------------------------- --------------- -------------- ----------- -------------------
Toyota Motor Credit Corp. OH SOS OH00035165009 06-13-01 Leased Forklift
Toyota Motor Credit Corp. Montgomery Cty. FS/S-01-066258 06-13-01 Leased Forklift
Toyota Motor Credit Corp. OH SOS OH00036812881 08-03-01 Leased Forklift
Heartland Business Credit OH SOS OH00042643870 12-12-01 Leased Equipment
National City Leasing Corp. OH SOS OH00048880424 05-06-02 Leased Equipment
National City Leasing Corp. OH SOS OH00048880868 05-06-02 Leased Equipment
New England Copy Specialists MA SOC 200214141780 08-14-02 Leased Copier
SCHEDULE 7.1
Subsidiaries
State of Jurisdiction
Company Formation where Qualified
------------------------- ---------- ---------------
MTC Technologies, Inc. Delaware Ohio
Modern Technologies Corp. Ohio Alabama
California
Florida
Georgia
Illinois
Massachusetts
Michigan
Nebraska
New Jersey
Oklahoma
Utah
Virginia
AMCOMP Corporation California Colorado (in process)
Dormant
Company Subsidiary Ownership Subsidiary
------------------------- ------------------------- --------- ----------
MTC Technologies, Inc. Modern Technologies Corp. 100% No
Modern Technologies Corp. AMCOMP, Inc. 100% No
Location of Chief Principal Place
Company Executive Office of Business
------------------------ ------------------------------ ------------------------------
MTC Technologies, Inc. 0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Modem Technologies Corp. 0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
AMCOMP Corporation 00000 Xxxxxxxxx Xxxx, Xxx. 000 00000 Xxxxxxxxx Xxxx, Xxx. 000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
SCHEDULE 7.4
Litigation
Bear Steams Merchant Fund Corp. vs. Modern Technologies Corp. and Xxxxxx X.
Xxxx, Case No. 02 CV 6084 (GEL), United States District, Southern District of
New York, filed July 9, 2002. Breach of contract, seeking damages in an amount
of at least $2,000,000.
SCHEDULE 7.9
Locations
Modern Technologies Corp.
Cincinnati
0000 Xxxxxxxx-Xxxxxxx Xx., Xxx. 000
Xxxxxxxxxx, XX 00000-0000
Cleveland
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxx, Xxx. 000
Xxxxxxxxxx Xxx, XX 00000-0000
Corporate Headquarters
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Detroit
00000 Xxx Xxxx Xxxxxx, Xxx. 000
Xxxxxx, XX 00000-0000
Evandale
00000 Xxxx Xxxxxxx Xxx #000
Xxxxxxxxxx, XX 00000-0000
Fort Xxxxxx
000 Xxxxxxx Xxxxx XX
Xx. Xxxxxx Xxxxx, XX 00000-0000
Goldstone
Xxxx. X-00, x/x Xxxxxxxxx XXXX
Xx. Xxxxx, XX 00000
Hampton Roads
0000 Xxxxxxxxx Xxxxx, Xxxxx Xxx 00
Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Hunstville
0000 Xxxxxxxxxx Xxxxx, Xxx. 00
Xxxxxxxxxx, XX 00000-0000
Lynn
Clocktower Business Center
000 Xxxxxxx, Xxx. 000
Xxxx, XX 00000-0000
O'Fallon
0 Xxxxx Xxxxxx
X'Xxxxxx, XX 00000-0000
Xxxxxx AFB
0000 Xxxxxx Xxxx X.
Xxxxxxxx, XX 00000-0000
Ogden
0000 Xxxxx Xxxx Xxxxxx, Xxx. 00X
Xxxxxx, XX 00000-0000
Oklahoma City
0000 XX 00xx, Xxx. 000
Xxx Xxxx, XX 00000-0000
Shrewsbury
000 Xxxxxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxx, XX 00000-0000
Warner Robins
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000-0000
Washington, D.C.
0000 Xxxxx Xxxxxxx Xx., Xxx. X 000
Xxxxxxxxxxx, XX 00000-0000
Schedule 7.9, continued
MTC Technologies, Inc.
Corporate Headquarters
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
AMCOMP Corporation
Corporate Headquarters
00000 Xxxxxxxxx Xxxx, Xxx. 000
Xxxxxxxx, XX 00000
SCHEDULE 7.11
Employee Benefits Plans
1. Modern Technologies Corp. Group Benefit Plan, effective July 1, 1989,
amended as of January 1, 2001.
2. Modern Technologies Corp. Lifestyle Life Plan, effective July 1, 1989.
3. Modern Technologies Corp. Flex Plan, effective July 1, 1997.
4. Modern Technologies Corp. Employee Welfare Plan, effective December 1,
1997.
5. The Corporate Plan for Retirement 100 (AMCOMP 401(k) plan).
SCHEDULE 7.17
Insurance
Insurer Coverage Type Amount of Coverage
------- ------------- ------------------
Chubb Property
Blanket Building/Personal Property $ 1,909,215
EDP Hardware $ 2,883,296
Business Income $ 1,740,000
Contingent Business Income $ 250,000
Earthquake $ 5,000,000
Flood $ 5,000,000
Property on Exhibit $ 5,000
Pollution Cleanup and Removal $ 25,000
Valuable Papers Off Site $ 15,000
EDP in transit $ 50,000
Inventory or Appraisals $ 10,000
Loss Prevention Expenses $ 5,000
Blanket Limit $ 250,000
Boiler and Machinery
Property Limit $ 5,046,337
Business Income Limit $ 1,740,000
Crime
Employee Theft Coverage $ 500,000
Depositor's Forgery and Alteration $ 500,000
Premises Coverage $ 500,000
Transit Coverage $ 500,000
Computer Theft/Funds Transfer Fraud $ 500,000
ERISA Coverage Included
General Liability
General Aggregate $ 2,000,000
Products/Completed Operations $ 2,000,000
Personal/Advertising Injury $ 1,000,000
Each Occurrence $ 1,000,000
Fire Damage Limit $ 1,000,000
Medical Payments $ 1,000,000
Employee Benefits Liability $ 10,000
Aggregate Per Location $ 1,000,000
Schedule 7.17, continued
Automobile
Liability - Combined Single Limit $ 1,000,000
Uninsured Motorist Liability $ 1,000,000
Underinsured Motorist Liability $ 1,000,000
Hired/Non-owned Auto Liability Included
Hired Car Physical Damage $ 50,000
Medical Payments (ea. person) $ 5,000
Workers' Compensation
Workers' Compensation Statutory
Employers Liability/Ohio Stop Gap
Per Accident $ 500,000
Disease (ea. employee) $ 500,000
Disease (policy limit) $ 500,000
Payroll $30,236,555
Umbrella $10,000,000
International
General Liability
Occurrence $ 1,000,000
Products/Completed Operations $ 1,000,000
Personal/Advertising Injury $ 1,000,000
Medicine Expenses $ 10,000
Contingent Automobile Liability $ 1,000,000
Hired Auto Physical Damage
Per Accident $ 1,000
Policy Period $ 10,000
Employer Liability $ 1,000,000
Repatriation $ 250,000
Personal Property at Unnamed Locations $ 20,000
Personal Property in Transit $ 20,000
Kidnap/Xxxxxx $ 1,000,000
Executive Assistance Services $ 250,000
U.S. Defense Base Act Coverage
Workers' Compensation Included
Employers Liability
Bodily Injury - Accident $ 1,000,000
Bodily Injury - Disease/Policy Limit $ 1,000,000
Bodily Injury - Disease/Ea. Employee $ 1,000,000
Repatriation Expense $ 250,000
Schedule 7.17, continued
Aviation Products
Policy Aggregate Limit $ 5,000,000
Products/Completed Operations $ 5,000,000
Grounding Liability (ea. grounding) $ 5,000,000
American International Technology Liability Insurance
Specialty Lines Liability (ea. occurrence) $ 1,000,000
Aggregate $ 1,000,000
Genesis Insurance D&O - Initial Public Offerings (MTC)
Company Limit (claims made) $10,000,000
Liberty Mutual D&O - Initial Public Offerings (MTCT)
Insurance Company Limit (claims made) $ 5,000,000
excess of
$10,000,000
Jefferson Pilot $ 5,000,000
Financial Officers
Life Insurance Company
EXHIBIT A
REVOLVING CREDIT NOTE
$_____________________ Dayton, Ohio
January 31, 2003
FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC., and MODERN
TECHNOLOGIES CORP. (collectively, "Borrowers" and, individually, each a
"Borrower"), jointly and severally, promise to pay, on the last day of the
Commitment Period, as defined in the Credit Agreement (as hereinafter defined),
to the order of _______________________ ("Bank") at the main office
of NATIONAL CITY BANK, as Agent, as hereinafter defined, 0000 Xxxx 0xx Xxxxxx,
Xxxxxxxxx, Xxxx 00000-0000, the principal sum of
________________________________________________________________________ DOLLARS
or the aggregate unpaid principal amount of all Revolving Loans made by Bank to
Borrowers pursuant to Section 2.2 of the Credit Agreement, whichever is less, in
lawful money of the United States of America.
As used herein, "Credit Agreement" means the Credit and Security Agreement
dated as of January 31, 2003, among Borrowers, the Banks, as defined therein,
and National City Bank, as lead arranger and administrative agent for the Banks
("Agent"), as the same may from time to time be amended, restated or otherwise
modified. Each capitalized term used herein that is defined in the Credit
Agreement and not otherwise defined herein shall have the meaning ascribed to it
in the Credit Agreement.
Borrowers also promise to pay interest on the unpaid principal amount of
each Revolving Loan from time to time outstanding, from the date of such
Revolving Loan until the payment in full thereof, at the rates per annum that
shall be determined in accordance with the provisions of Section 2.5 of the
Credit Agreement. Such interest shall be payable on each date provided for in
such Section 2.5; provided, however, that interest on any principal portion that
is not paid when due shall be payable on demand.
The portions of the principal sum hereof from time to time representing
Base Rate Loans and LIBOR Loans, and payments of principal of any thereof, shall
be shown on the records of Bank by such method as Bank may generally employ;
provided, however, that failure to make any such entry shall in no way detract
from the obligations of Borrowers under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds. In the event of a failure to pay
interest or principal, when the same becomes due, Bank may collect and Borrowers
agree to pay a late
A-1
charge of an amount equal to the greater of (a) ten percent (10%) of the amount
of such late payment, or (b) Twenty-Five Dollars ($25).
This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement. Reference is made to the Credit Agreement for a description of the
right of the undersigned to anticipate payments hereof, the right of the holder
hereof to declare this Note due prior to its stated maturity, and other terms
and conditions upon which this Note is issued.
Except as expressly provided in the Credit Agreement, Borrowers expressly
waive presentment, demand, protest and notice of any kind.
Each of the undersigned, to the extent permitted by law, hereby waives any
right to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.
MTC TECHNOLOGIES, INC.
By: ______________________________________
Name: ____________________________________
Title:____________________________________
MODERN TECHNOLOGIES CORP.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
A-2
EXHIBIT B
SWING LINE NOTE
$3,500,000 Dayton, Ohio
January 31, 2003
FOR VALUE RECEIVED, the undersigned, MTC TECHNOLOGIES, INC. and MODERN
TECHNOLOGIES CORP. (collectively, "Borrowers" and, individually, each a
"Borrower"), jointly and severally, promise to pay to the order of NATIONAL CITY
BANK ("Bank") at the main office of NATIONAL CITY BANK, Agent, as hereinafter
defined, 0000 Xxxx 0xx Xxxxxx, Xxxxxxxxx, Xxxx 00000-0000, the principal sum of
THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
or, if less, the aggregate unpaid principal amount of all Swing Loans, as
defined in the Credit Agreement (as hereinafter defined) made by Bank to
Borrowers pursuant to Section 2.4 of the Credit Agreement, in lawful money of
the United States of America on the earlier of the last day of the applicable
Commitment Period, as defined in the Credit Agreement, or, with respect to each
Swing Loan, the Swing Loan Maturity Date applicable thereto.
As used herein, "Credit Agreement" means the Credit and Security Agreement
dated as of January 31, 2003, among Borrowers, the Banks, as defined therein,
and National City Bank, as lead arranger and administrative agent for the Banks
("Agent"), as the same may from time to time be amended, restated or otherwise
modified. Each capitalized term used herein that is defined in the Credit
Agreement and not otherwise defined herein shall have the meaning ascribed to it
in the Credit Agreement.
Borrowers also promise to pay interest on the unpaid principal amount of
each Swing Loan from time to time outstanding, from the date of such Swing Loan
until the payment in full thereof, at the rates per annum that shall be
determined in accordance with the provisions of Section 2.5 of the Credit
Agreement. Such interest shall be payable on each date provided for in such
Section 2.5; provided, however, that interest on any principal portion which is
not paid when due shall be payable on demand.
The principal sum hereof from time to time and the payments of principal
and interest thereon of either hereof, shall be shown on the records of Bank by
such method as Bank may generally employ; provided, however, that failure to
make any such entry shall in no way detract from the obligation of Borrowers
under this Note.
If this Note shall not be paid at maturity, whether such maturity occurs by
reason of lapse of time or by operation of any provision for acceleration of
maturity contained in the Credit Agreement, the principal hereof and the unpaid
interest thereon shall bear interest, until paid, at a rate per annum equal to
the Default Rate. All payments of principal of and interest on this Note shall
be made in immediately available funds. In the event of a failure to pay
interest or principal, when the same becomes due, Bank may collect and Borrowers
agree to pay a late
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charge of an amount equal to the greater of (a) ten percent (10%) of the amount
of such late payment, or (b) Twenty-Five Dollars ($25).
This Note is the Swing Line Note referred to in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the right of the
undersigned to anticipate payments hereof, the right of the holder hereof to
declare this Note due prior to its stated maturity, and other terms and
conditions upon which this Note is issued.
Except as expressly provided in the Credit Agreement, Borrowers expressly
waives presentment, demand, protest and notice of any kind.
Each of the undersigned, to the extent permitted by law, hereby waives any
right to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between the undersigned (or any of them) and the
holder of this Note arising; out of, in connection with, related to, or
incidental to the relationship established between them in connection with this
Note and the Credit Agreement or the transactions related thereto.
MTC TECHNOLOGIES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
MODERN TECHNOLOGIES CORP.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
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EXHIBIT C
NOTICE OF LOAN
[Date] _________________________, 20____
National City Bank, as Agent
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: _________________
Ladies and Gentlemen:
The undersigned, MTC TECHNOLOGIES INC., refers to the Credit and Security
Agreement, dated as of January 31, 2003, among the undersigned, Modern
Technologies Corp., the Banks, as defined therein, and National City Bank, as
Agent (as the same may from time to time be amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), and hereby gives you notice, pursuant to Section 2.2 of the
Credit Agreement that the undersigned hereby request a Loan under the Credit
Agreement, and in connection therewith sets forth below the information relating
to the Loan (the "Proposed Loan") as required by Section 2.7 of the Credit
Agreement:
(a) The Borrower requesting the Loan is __________________________.
(b) The Business Day of the Proposed Loan is _______________, 20___.
(c) The amount of the Proposed Loan is $ ____________________.
(d) The Proposed Loan is to be a Base Rate Loan ______ /LIBOR Loan ____.
Swing Loan ______ (Check one.)
(e) If the Proposed Loan is a LIBOR Loan, the Interest Period requested is
one month ___, two months ___, three months ___,six months ___.
(Check one.)
The undersigned hereby certifies on behalf of Borrowers that the following
statements are true on the date hereof, and will be true on the date of the
Proposed Loan:
(i) the representations and warranties contained in each Loan Document are
correct, before and after giving effect to the Proposed Loan and the application
of the proceeds therefrom, as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from such
Proposed Loan, or the application of proceeds therefrom, that constitutes a
Default or Event of Default; and
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(iii) the conditions set forth in Section 2.7 and Article IV of the Credit
Agreement have been satisfied.
Very truly yours,
MTC TECHNOLOGIES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________
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EXHIBIT D
COMPLIANCE CERTIFICATE
For Fiscal Quarter ended ___________________
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Chief Executive Officer] [President] [Chief
Financial Officer] [Vice President - Controller] [Treasurer] of MTC
TECHNOLOGIES, INC. ("Administrative Borrower");
(2) I am familiar with the terms of that certain Credit and Security
Agreement, dated as of January 31, 2003, among MTC Technologies, Inc., Modern
Technologies Corp., the Banks, as defined therein, and National City Bank, as
Agent (as the same may from time to time be amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), and the terms of the other Loan Documents, and I have made, or
have caused to be made under my supervision, a review in reasonable detail of
the transactions and condition of the Companies during the accounting period
covered by the attached financial statements;
(3) The review described in paragraph (2) above did not disclose, and I
have no knowledge of, the existence of any condition or event that constitutes
or constituted a Default or Event of Default, at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate;
(4) To my knowledge, the representations and warranties made by Borrowers
contained in each Loan Document are true and correct as though made on and as of
the date hereof; and
(5) Set forth on Attachment I hereto are calculations of the financial
covenants set forth in Section 5.7 of the Credit Agreement, which calculations
show compliance with the terms thereof.
IN WITNESS WHEREOF, I have signed this certificate the ____ day
of _____________, 20___.
__________________________________________
[Name, Title]
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EXHIBIT E
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between TYPE
ASSIGNOR NAME HERE (the "Assignor") and TYPE ASSIGNEE NAME HERE (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as, the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: NATIONAL CITY BANK
2. Assignee: TYPE ASSIGNEE NAME HERE
3. Borrowers: MTC TECHNOLOGIES, INC.; MODERN TECHNOLOGIES CORP.
4. Administrative Agent: National City Bank, as the administrative agent
under the Credit Agreement
5. Credit Agreement: Credit and Security Agreement, dated as of
January 31, 2003, among MTC Technologies, Inc.,
Modern Technologies Corp., the Banks, as defined
therein, and National City Bank, as Agent
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6. Assigned Interest:
----------------------------------------------------------------------------------------------
Aggregate Amount of
FACILITY Commitment Loans for all Amount of Commitment/Loans Percentage Assigned of
ASSIGNED Lenders* Assigned * Commitment/Loans
----------------------------------------------------------------------------------------------
FACILITY TYPE AMOUNT TYPE AMOUNT HERE TYPE PERCENT HERE
----------------------------------------------------------------------------------------------
$0.00 $0.00 0.0000000000%
----------------------------------------------------------------------------------------------
$0.00 $0.00 0.0000000000%
----------------------------------------------------------------------------------------------
----------
* Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the trade date and the effective date
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7. Trade Date: TYPE TRADE DATE HERE
8. Effective Date: TYPE EFFECTIVE DATE HERE.
The terms set forth in this Assignment and Assumption are hereby agreed to:
NATIONAL CITY BANK TYPE ASSIGNEE NAME HERE
as Assignor By: TYPE PORTFOLIO MANAGER HERE
By:___________________________________ By:________________________________
Name: Name:
Title: Title:
Consented to and Accepted:
NATIONAL CITY BANK,
as Administrative Agent
By:___________________________________
Xxxxx XxXxxxx
Senior Vice President
X-0
XXXXX 0
XXXXXXXX XXXXX AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Credit Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Documents or any collateral thereunder, (iii) the financial condition of
any Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Credit Document or (iv) the performance or
observance by any Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is not a United
States person (as such term is detailed in section 7701(a)(30) of the Code for
federal income tax purposes, attached to the Assignment and Assumption is any
documentation required to be delivered by it pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee; and (b) agrees that (i)
it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and
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Assumption. This Assignment and Assumption shall be governed by, and construed
in accordance with, the law of the State of Ohio, without regard to its
conflicts of laws principles.
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EXHIBIT F
REQUEST FOR EXTENSION
[__________________ , 2003
National City Bank, as Agent
0000 Xxxx 0x Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000,
Attention: ________________
Ladies and Gentlemen:
The undersigned, MTC TECHNOLOGIES INC., refers to the Credit and Security
Agreement, dated as of January 31, 2003, among the undersigned, Modern
Technologies Corp., the Banks, as defined therein, and National City Bank, as
Agent (as the same may from time to time be amended, restated or otherwise
modified, the "Credit Agreement", the terms defined therein being used herein as
therein defined), and hereby gives you notice, pursuant to Section 2.15 of the
Credit Agreement that the undersigned hereby requests an extension as set forth
below (the "Extension") under the Credit Agreement, and in connection with the
Extension sets forth below the information relating to the Extension as required
by Section 2.15 of the Credit Agreement.
The undersigned hereby requests Agent and the Banks to extend the
Commitment Period from _____________________, 200__ to _________________, 200__.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Extension: (a) the
representations and warranties contained in each Loan Document are correct,
before and after giving effect to the Extension and the application of the
proceeds therefrom, as though made on and as of such date; (b) no event has
occurred and is continuing, or would result from such Extension, or the
application of proceeds therefrom, which constitutes a Default or an Event of
Default; and (c) the conditions set forth in Section 2.15 and Article IV of the
Credit Agreement have been satisfied.
Very truly yours,
MTC TECHNOLOGIES, INC.
By: ______________________________________
Name: ____________________________________
Title: ___________________________________