Exhibit 10.1
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CREDIT AGREEMENT
among
Pennsylvania Crusher Corporation
THE LENDERS PARTY TO THIS CREDIT AGREEMENT, and
NATIONAL CITY BANK, as Agent
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Dated as of January 3, 2003
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of the 3rd day of January, 2003 (as amended,
restated, modified or otherwise supplemented from time to time pursuant to the
terms hereof, this "AGREEMENT") by and among NATIONAL CITY BANK ("BANK"),
individually, as Issuer, a Lender and Agent, the OTHER FINANCIAL INSTITUTIONS,
if any, listed on the signature pages to this Agreement, and Pennsylvania
Crusher Corporation (the "BORROWER"). Bank, the financial institutions listed on
the signature pages to this Agreement, if any, and any other financial
institutions which may become parties to this Agreement pursuant to the terms
hereof from time to time, are sometimes collectively referred to as the
"LENDERS" and individually as a "LENDER." Bank, when acting in its capacity as
administrative agent for the Lenders and Issuer, or any successor or assign that
assumes that position pursuant to the terms of this Agreement, is hereinafter
sometimes referred to as the "AGENT."
BACKGROUND OF AGREEMENT
The Borrower, itself and through its subsidiaries, is engaged in the
business of producing equipment used in the process of crushing various
materials, including coal and wood. The Borrower has requested the Lenders to
provide a senior credit facility in an aggregate amount not to exceed at any
time $17,000,000.00, consisting of (a) a revolving credit facility in an
aggregate amount not to exceed at any time $3,500,000.00 with a letter of credit
subfacility in an amount not to exceed $750,000.00, and (b) term loans in an
aggregate original principal amount equal to $13,500,000.00.
The subsidiaries of the Borrower will derive substantial benefits from
this credit facility. The Borrower may, among other things, use proceeds of the
loans hereunder to make capital contributions in, and extend credit to, its
subsidiaries. Such access to capital provided to the subsidiaries though this
financing is on terms that are more advantageous to the subsidiaries than such
subsidiaries could obtain if they accessed capital independently. Accordingly,
the credit facility provided for in this Agreement, is to be guaranteed by the
Borrower's subsidiaries and secured by the equity of the Borrower and its
subsidiaries as well as by the material assets of those entities. Certain terms
used in this Agreement are defined in Article 9 below.
NOW, THEREFORE, it is agreed:
ARTICLE 1
THE LOANS
1.1 REVOLVING CREDIT LOANS.
1.1.1 COMMITMENT TO MAKE RC LOANS. Subject to and upon the terms and
conditions set forth in this Agreement, the RC Lenders shall make advances to
the Borrower until the RC Maturity Date in an aggregate principal amount
outstanding at any one time not to exceed the lesser of the following: (a)
$3,500,000.00 (as the same may be reduced by any mandatory or voluntary
reductions pursuant to the terms of this Agreement, the "RC COMMITMENT"); or (b)
the amount of the Borrowing Base; provided, however, that no advance shall be
made in excess of the amount of the Available Commitment, and provided, further,
however that the percentage and aggregate amount of all RC Loans which each RC
Lender is obligated to lend shall not exceed at any time the percentage or
amount of the RC Commitment set forth opposite the name of such RC Lender on
Schedule 1.1 hereto (as supplemented and amended by giving effect to the
assignments contemplated in this Agreement). The portion of the RC Commitment
attributable to each RC Lender is sometimes referred to herein as such Lender's
RC Commitment. Within the limits set forth above, the Borrower may borrow under
this Section 1.1, repay or prepay such advances, and reborrow under this Section
1.1. The amounts loaned to the Borrower pursuant to the reducing revolving
credit facility described in this Section 1.1 are referred to as the "RC LOANS".
1.1.2 AVAILABLE COMMITMENT. "AVAILABLE COMMITMENT" shall mean the RC
Commitment reduced by: (a) the face amount of any outstanding undrawn Letters of
Credit; (b) the amount of any Unreimbursed Drawings; and (c) the aggregate
principal amount of any outstanding RC Loans.
1.1.3 VOLUNTARY COMMITMENT REDUCTIONS. In addition to the Borrower's
right to prepay the RC Loans under subsection 1.1.6 below, the Borrower shall
have the right at any time and from time to time upon five (5) Business Days'
prior written notice to the Agent to permanently reduce (on a pro rata basis
among the RC Lenders) or terminate the RC Commitment. Any partial reductions
shall be in minimum amounts of Two Hundred Fifty Thousand Dollars ($250,000.00)
or in whole multiples of Fifty Thousand Dollars ($50,000.00) in excess thereof.
1.1.4 MANDATORY COMMITMENT REDUCTIONS. In addition to the RC
Commitment reductions specified in the preceding Subsection 1.1.3 (Voluntary
Commitment Reductions), the RC Commitment shall be permanently reduced at such
times as are set forth in Subsection 1.2.6 (Mandatory Prepayments).
1.1.5 REPAYMENT IN CONNECTION WITH COMMITMENT REDUCTIONS AND ON RC
MATURITY DATE. Upon the effective date of each reduction in the RC Commitment
referred to above (whether voluntary or mandatory), the Borrower shall pay to
the Agent for the benefit of the RC Lenders the principal amount of the RC
Loans, to the extent, if any, that (a) the aggregate amount of the RC Loans then
outstanding plus the aggregate face amount of undrawn Letters of
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Credit then outstanding and any Unreimbursed Drawings, exceeds (b) the amount of
the RC Commitment as so reduced and as reduced by any previous mandatory or
voluntary reductions thereto. Accrued interest on the RC Loans so prepaid shall
be due and payable at the time of such prepayment. All amounts of principal,
interest and fees relating to RC Loans not due and payable before the RC
Maturity Date are due and payable on the RC Maturity Date.
1.1.6 VOLUNTARY PREPAYMENT. In addition to the Borrower's right to
reduce the RC Commitment under subsection 1.1.3 above, and except as otherwise
provided in this Agreement, the Borrower shall be permitted to prepay the RC
Loans at any time without penalty or premium, and without limiting the
Borrower's ability to reborrow under the RC Commitment, other than as provided
in Subsections 1.8 (Additional Costs), 1.7.5 (Breakage) and 11.15
(Indemnification), if applicable. In connection with each voluntary prepayment:
(a) The Borrower shall provide the Agent with notice of its
intention to prepay,
(i) no later than 11:00 a.m. (Philadelphia, PA time) on
the date of prepayment in the case of Base Rate Loans, and
(ii) no later than 11:00 a.m. (Philadelphia, PA time)
three (3) Business Days prior to the date of prepayment in the case of LIBOR
Loans.
(b) Each prepayment of principal of an RC Loan shall be in a
minimum amount equal to $250,000.00 or in integral multiples of $50,000.00 in
excess thereof.
1.2 TERM LOANS.
1.2.1 COMMITMENT FOR TERM LOAN A. Upon the terms and subject to the
conditions of this Agreement, each Term Lender agrees to make advances to the
Borrower on the Closing Date ("TERM LOAN A") in an aggregate principal amount
not to exceed Ten Million Dollars ($10,000,000.00) (the "TERM LOAN A
COMMITMENT"), provided, however, that the amount and percentage of the Term Loan
A Commitment that any Lender is obligated to lend shall not exceed the amount or
percentage set forth opposite the name of such Lender on Schedule 1.1 hereto.
The Term Loan A Commitment of any Term Lender is sometimes referred to herein as
such Lender's Term Loan A Commitment. The Borrower shall not be permitted to
reborrow any amount of the Term Loan A once repaid.
1.2.2 REPAYMENT OF TERM LOAN A. The principal of the Term Loan A
shall be due and payable in quarterly installments on March 31, June 30,
September 30 and December 31 of each year commencing on March 31, 2003 through
the Term Loan A Maturity Date and on the Term Loan A Maturity Date, in each case
in an amount equal to the amount specified below, such that all of the Term Loan
A will be repaid in full on or before the Term Loan A Maturity Date:
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Amount of Repayment
(Assuming No
Repayment Dates Unscheduled Repayments)
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March 31, 2003 - $1,500,000.00 in the aggregate
December 31, 2003 ($375,000.00 per payment date)
March 31, 2004 - $1,750,000.00 in the aggregate
December 31, 2004 ($437,500.00 per payment date)
March 31, 2005 - $2,000,000.00 in the aggregate
December 31, 2005 ($500,000.00 per payment date)
March 31, 2006 - $2,250,000.00 in the aggregate
December 31, 2006 ($562,500.00 per payment date)
March 31, 2007 - $2,500,000.00 in the aggregate
September 30, 2007 and ($625,000.00 per payment date)
on the Term Loan A
Maturity Date
All amounts of principal, interest and fees relating to Term Loan A not due and
payable before Term Loan A Maturity Date are due and payable on that date.
1.2.3 COMMITMENT FOR TERM LOAN B. Upon the terms and subject to the
conditions of this Agreement, each Term Lender agrees to make advances to the
Borrower on the Closing Date ("TERM LOAN B") in an aggregate principal amount
not to exceed Three Million Five Hundred Thousand Dollars ($3,500,000.00) (the
"TERM LOAN B COMMITMENT"), provided, however, that the amount and percentage of
the Term Loan B Commitment that any Lender is obligated to lend shall not exceed
the amount or percentage set forth opposite the name of such Lender on Schedule
1.1 hereto. The Term Loan B Commitment of any Term Lender is sometimes referred
to herein as such Lender's Term Loan B Commitment. The Borrower shall not be
permitted to reborrow any amount of the Term Loan B once repaid.
1.2.4 REPAYMENT OF TERM LOAN B. The principal of the Term Loan B
shall be due and payable in quarterly installments on March 31, June 30,
September 30 and December 31 of each year commencing on March 31, 2003 through
the Term Loan B Maturity Date and on the Term Loan B Maturity Date, in each case
in an amount equal to the amount specified below, such that all of the Term Loan
B will be repaid in full on or before the Term Loan B Maturity Date:
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Amount of Repayment
(Assuming No
Repayment Dates Unscheduled Repayments)
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March 31, 2003 - $100,000.00 in the aggregate
December 31, 2003 ($25,000.00 per payment date)
March 31, 2004 - $100,000.00 in the aggregate
December 31, 2004 ($25,000.00 per payment date)
March 31, 2005 - $100,000.00 in the aggregate
December 31, 2005 ($25,000.00 per payment date)
March 31, 2006 - $100,000.00 in the aggregate
December 31, 2006 ($25,000.00 per payment date)
March 31, 2007 - $100,000.00 in the aggregate
December 31, 2007 ($25,000.00 per payment date)
March 31, 2008 - $3,000,000.00 in the aggregate
September 30, 2008 and ($750,000.00 per payment date)
on the Term Loan B
Maturity Date
All amounts of principal, interest and fees relating to Term Loan B not due and
payable before Term Loan B Maturity Date, together with all other Secured
Obligations then outstanding, are due and payable on that date.
1.2.5 VOLUNTARY PREPAYMENTS. The Borrower may at any time and from
time to time upon five (5) Business Days' prior written notice to the Agent
prepay any of the Term Loans (whether accruing interested based upon the Base
Rate or Adjusted LIBOR) in whole or in part, without penalty or premium except
as provided in Subsections 1.8 (Additional Costs), 1.7.5 (Breakage) and Section
11.15 (Indemnification), if applicable. In connection with each voluntary
prepayment:
(a) The Borrower shall provide the Agent with notice of its
intention to prepay,
(i) no later than 11:00 a.m. (Philadelphia, PA time) on
the date of prepayment in the case of Base Rate Loans, and
(ii) no later than 11:00 a.m. (Philadelphia, PA time)
three (3) Business Days prior to the date of prepayment in the case of LIBOR
Loans.
(b) Each prepayment of principal of a Term Loan shall be in a
minimum amount equal to $250,000.00 or in integral multiples of $50,000.00 in
excess thereof.
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1.2.6 MANDATORY PREPAYMENTS.
(a) At any time that the Borrower or any of its Subsidiaries
issues any equity or incurs any Indebtedness for borrowed money (exclusive of
(a) equity issued to, or Indebtedness for borrowed money payable to, the
Borrower and (b) common stock issued by, or capital contributions made to, the
Borrower, subject to Change of Control limitations set forth herein), the
Borrower shall prepay, on the date of such issuance or incurrence thereof, such
amount of the Term Loans as is equal to the net proceeds of such equity or
Indebtedness. If the amount of such net proceeds exceeds the aggregate
outstanding principal amount of the Term Loans, the Term Loans shall be repaid
in full and any excess shall serve to prepay the RC Loans, or, at the Borrower's
option, reduce the amount of the RC Commitment, in accordance with Subsection
1.1.4.
(b) On or prior to April 30 of each fiscal year of the
Borrower, commencing April 30, 2004 until the Loans are repaid in full, the
Borrower shall deliver to the Agent, a written statement calculating the Excess
Cash Flow for the prior fiscal year (the "subject fiscal year") of the Borrower
and its Subsidiaries, on a Consolidated basis, and within seven (7) Business
Days of the delivery of such written statement shall pay to the Agent, for the
ratable account of Lenders, an amount equal to 50% of such Excess Cash Flow;
provided, however, that so long as no Default or Event of Default is then
occurring, voluntary reductions of the RC Commitment pursuant to Section 1.1.3
(Voluntary Commitment Reductions) and voluntary prepayments of Term Loans
pursuant to Section 1.2.5 (Voluntary Prepayments) made during the subject fiscal
year shall be applied first as a credit against the required Excess Cash Flow
payment and provided, further, that if no Default or Event of Default is then
occurring, the Borrower shall not be obligated to make the foregoing payment in
any fiscal year in which the Borrower's Consolidated Total Debt to EBITDA Ratio
for the prior fiscal year was less than 2.00:1.00. If the amount of such Excess
Cash Flow Payment exceeds the aggregate outstanding principal amount of the Term
Loans, the Term Loans shall be repaid in full and any excess shall serve to
prepay the RC Loans, or, at the Borrower's option, reduce the amount of the RC
Commitment, in accordance with Subsection 1.1.4.
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(c) In the event the Borrower or any of its Subsidiaries
receives property or casualty insurance proceeds and/or a condemnation or
similar payment, (a) if such payment is in excess of $1,000,000.00 for one event
or a series of related events and the Agent does not determine in its discretion
that such proceeds are to be used by (and upon such determination, such proceeds
will be used by) Borrower to repair or replace the applicable property, the
Borrower shall promptly, and in any event no later than thirty (30) days from
the date of receipt thereof, pay to the Agent, for the ratable benefit of the
Lenders, 100% of all such insurance proceeds or payments as a prepayment of the
Loans, or (b) if such payment is $1,000,000 or less for any one event or series
of related events and the Borrower or relevant Subsidiary does not use the
proceeds to repair or replace the applicable property, the Borrower shall
promptly, and in any event no later than thirty (30) days from the date of
receipt thereof, pay to the Agent, for the ratable benefit of the Lenders, 100%
of all such insurance proceeds or payments as a prepayment of the Loans. If the
amount of such insurance proceeds paid to the Agent exceeds the aggregate
outstanding principal amount of the Term Loans, the Term Loans shall be repaid
in full and any excess shall serve to prepay the RC Loans or, at Borrower's
option, to reduce the amount of the RC Commitment, in accordance with Subsection
1.1.4.
(d) At any time that the Borrower or any of its Subsidiaries
sells, leases, abandons, transfers or otherwise disposes of any of its assets or
property, whether directly or indirectly, in a single transaction or series of
transactions (other than transfers permitted under clauses (a) through (c) and
(f) of Subsection 7.7.2), the Borrower shall promptly prepay such amount of the
Term Loans as is equal to the net proceeds of such disposition. If the amount of
the net proceeds (after taxes) exceeds the aggregate outstanding principal
amount of the Term Loans, the Term Loans shall be repaid in full and any excess
shall serve to reduce the amount of the RC Commitment, in accordance with
Subsection 1.1.4.
1.2.7 HOLDING OF MANDATORY PREPAYMENTS IN CASH COLLATERAL ACCOUNT.
Provided that no Event of Default or Default is then occurring or occurs during
the holding thereof, at the option of the Borrowers, any mandatory prepayments
under Subsection 1.2.6 above will be held in a cash collateral account by the
Agent for application to Loans as their Interest Periods expire and the required
payment date shall be deemed to be the last day of the relevant Interest Period.
1.2.8 RELATIONSHIP OF VOLUNTARY AND OTHER MANDATORY PREPAYMENTS TO
SCHEDULED PAYMENTS. Any voluntary prepayments of Term Loans pursuant to
Subsection 1.2.5 above (Voluntary Prepayments) or mandatory prepayments pursuant
to Subsection 1.2.6 above (Mandatory Prepayments) shall be applied (a) against
the scheduled payments set forth in Subsections 1.2.2 and 1.2.4 above (Repayment
of Term Loan A and Repayment of Term Loan B, respectively) in inverse order of
maturity, and (b) as between the Term Loan A and Term Loan B, on a pro rata
basis.
1.3 LENDERS' AND ISSUER'S OBLIGATIONS SEVERAL.
Each Lender and the Issuer is severally bound by this Agreement, but
there shall be no joint obligation of the Lenders or the Issuer under this
Agreement. The failure of any Lender or the Issuer to make any share of the
Loans or obligations respecting Letters of Credit to be made by
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it on the date specified for the Loans or such obligations shall not relieve any
other Lender or the Issuer of its obligation to make its share of the Loans or
other obligations on such date, but neither any Lender, the Issuer nor the Agent
shall be responsible for the failure of any other Lender or the Issuer to make a
share of the Loans or other obligations to be made by such other Lender or the
Issuer.
1.4 NOTES.
Upon the request of any RC Lender, the aggregate principal amount of
each RC Lender's share of the RC Commitment and RC Loans shall be evidenced by a
note to be issued by the Borrower to each RC Lender in substantially the form
attached hereto as Exhibit A-1 (with appropriate completion of the name of the
applicable RC Lender). Upon the request of any Term Lender, the aggregate amount
of such Term Lender's share of the Term Loan A Commitment and the Term Loan A
shall be evidenced by a note to be issued by the Borrower to such Term Lender in
substantially the form attached hereto as Exhibit A-2 (with the appropriate
completion of the name of the applicable Term Lender). Upon the request of any
Term Lender, the aggregate amount of such Term Lender's share of the Term Loan B
Commitment and the Term Loan B shall be evidenced by a note to be issued by the
Borrower to such Term Lender in substantially the form attached hereto as
Exhibit A-3 (with the appropriate completion of the name of the applicable Term
Lender).
1.5 BORROWING NOTICE.
Each RC Loan shall be in the minimum amount of Five Hundred Thousand
Dollars ($500,000.00) and integral multiples of One Hundred Thousand Dollars
($100,000.00) in excess of such minimum amount. To effect a funding, the
Borrower shall give the Agent written notice in the form annexed to this
Agreement as Exhibit B specifying the amount and date of each intended borrowing
and the manner in which the same shall be disbursed, which notice:
(a) in the case of Base Rate Loans, shall be given no later
than 11:00 a.m. (Philadelphia, PA time) one (1) Business Day prior to the date
of such borrowing, and
(b) in the case of LIBOR Loans, shall be given no later than
11:00 a.m. (Philadelphia, PA time) at least three (3) Eurodollar Business Days
prior to each such borrowing and shall specify the Interest Period with respect
to such borrowing.
The Agent in turn shall give prompt written or telephonic (promptly
confirmed in writing) notice to each Lender of its pro rata share of the
borrowing, the interest rate option selected and the scheduled date of the
funding. After receipt of such notice, each Lender shall make such arrangements
as are necessary to assure that its share of the funding shall be immediately
available (in Dollars) to the Agent no later than 2:00 p.m. (Philadelphia, PA
time), on the date on which the funding is to occur. After receipt of the funds,
the Agent shall disburse the amount of such funding in accordance with
instructions in the Borrower's borrowing notice.
The Lenders shall not be obligated to comply with a borrowing notice
if there shall then exist and be continuing an Event of Default or a Default
regardless of whether Lenders have
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determined to exercise their remedies arising upon the occurrence of such Event
of Default or Default.
1.6 FEES TO LENDERS.
1.6.1 COMMITMENT FEES. The Borrower shall pay to the Agent for the
account of the RC Lenders quarterly in arrears on each Quarterly Payment Date a
commitment fee (the "COMMITMENT FEE") (calculated on the basis of a 360-day year
for the actual days elapsed) equal to one-half of one percent (.50%) of the
average daily unused portion of the RC Commitment for the preceding quarter.
1.6.2 LETTER OF CREDIT FEES AND FACING FEES. The Borrower shall pay
to the Agent for the account of the Issuer and/or RC Lenders, as applicable,
such letter of credit fees as are described in Article 2 (Letters of Credit)
below.
1.6.3 OTHER FEES. The Borrower shall pay such other fees, if any, as
the Borrower has otherwise agreed to pay to the Agent, the Issuer and/or the
Lenders, including without limitation the other fees identified in the
Commitment Letter.
1.6.4 MISCELLANEOUS. All fees payable to Lenders hereunder or under
any of the other Loan Documents, when due, shall be fully earned and
non-refundable.
1.7 INTEREST.
1.7.1 THE RATES. The Loans shall bear interest at Borrower's option
(subject to the limitation and conditions set forth in this Subsection) at the
Base Rate plus the Applicable Margin or at the Adjusted LIBOR plus the
Applicable Margin. Interest on Base Rate Loans shall be payable quarterly on
each Quarterly Payment Date, commencing with the first Quarterly Payment Date
after the Closing Date. Interest on LIBOR Loans shall be payable on the last day
of each Interest Period, provided that if the Interest Period is six (6) months
or longer, interest shall be payable on the ninetieth (90th) day of the Interest
Period, every ninetieth (90th) day thereafter until the end of the Interest
Period and on the last day of the Interest Period. All interest on LIBOR Loans
shall be computed on the basis of a 360-day year, and all interest on Base Rate
Loans shall be computed on the basis of an actual/365-day year.
1.7.2 APPLICABLE MARGIN. The term "APPLICABLE MARGIN" when used with
respect to the Base Rate shall mean the following:
Consolidated Total Base Rate
Debt to EBITDA Ratio Applicable Margin (%)
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> 3.00:1.00 1.75
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> 2.50:1.00 < 3.00:1.00 1.25
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> 2.00:1.00 < 2.50:1.00 .75
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< 2.00:1.00 .25
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The term "APPLICABLE MARGIN" when used with respect to Adjusted
LIBOR shall mean the following:
Consolidated Total Adjusted LIBOR Adjusted LIBOR
Debt to EBITDA Applicable Margin for Applicable Margin
Ratio RC Loans and Term Loan A (%) for Term Loan B (%)
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> 3.00:1.00 3.00 3.50
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> 2.50:1.00 < 3.00:1.00 2.75 3.25
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> 2.00:1.00 < 2.50:1.00 2.50 3.00
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< 2.00:1.00 2.00 2.50
Notwithstanding the foregoing, until delivery of the audited year-end
financial statements for the calendar year ending December 31, 2002 pursuant to
the terms hereof, the Applicable Margin shall be that set forth in the tables
above as if the Consolidated Total Debt to EBITDA Ratio were greater than or
equal to 3.00:1.00.
1.7.3 ADJUSTMENTS TO APPLICABLE MARGIN. The Applicable Margin shall
be adjusted five (5) Business Days after the delivery of the Officer's
Compliance Certificate delivered pursuant to Subsection 5.1.3 below (Delivery of
Officers' Compliance Certificates), provided, however, at any time that the
Borrower shall have not delivered such compliance certificate at the time
specified in said Subsection 5.1.3, until such time as the certificate is so
delivered to the Agent, the Applicable Margin shall be the maximum amount for
the applicable type of Loan set forth above. The foregoing shall not limit any
rights of the Lenders to receipt of the Default Rate, if applicable.
1.7.4 LIBOR ELECTION.
(a) Unless otherwise elected by the Borrower, all Loans shall
be Base Rate Loans. The Borrower may, upon three (3) Eurodollar Business Days'
prior written notice to the Agent in the form of Exhibit C to this Agreement,
and subject to and upon the terms and conditions set forth in this Agreement,
elect to borrow money that will bear interest based on Adjusted LIBOR plus the
Applicable Margin or to convert a portion of the Loans to bear interest based on
Adjusted LIBOR plus the Applicable Margin. Any such election may be made with
respect to a principal amount designated in such notice and equal to at least
Five Hundred Thousand Dollars ($500,000.00) and integral multiples of One
Hundred Thousand Dollars ($100,000.00) in excess of such minimum, for the period
next ensuing, which period ("INTEREST PERIOD") shall equal one, two, three or
six months as designated by Borrower in its notice.
(b) The Borrower may not convert any outstanding Loans to
LIBOR Loans if at the time of such conversion or election there shall exist a
Default or an Event of Default.
(c) If an interest rate based on Adjusted LIBOR plus the
Applicable Margin is elected, such interest rate shall remain in effect for the
Interest Period selected and
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such interest rate shall not otherwise be converted to another interest rate
prior to the expiration of the Interest Period except as otherwise required by
this Section. If an Interest Period for any LIBOR Loan would otherwise commence
on a day which is not a Eurodollar Business Day, such Interest Period shall
commence on the next Eurodollar Business Day.
(d) Each LIBOR Loan shall, on the last day of the applicable
Interest Period, automatically convert into a Base Rate Loan unless, at least
three (3) Business Days prior thereto, the Agent has received a notice in the
form of Exhibit C that the Borrower has elected to continue such Loan as a LIBOR
Loan.
(e) The Borrower may not elect an interest rate based on
Adjusted LIBOR if such election would require the Agent to administer
concurrently a combination of elective rates of interest based on Adjusted
LIBOR, Base Rate and/or any combination of Interest Periods that exceed an
aggregate of six (6).
(f) If an Interest Period would otherwise end on a day which
is not a Eurodollar Business Day, such Interest Period shall be extended to the
next Eurodollar Business Day, unless such next Eurodollar Business Day shall
fall in the next calendar month in which event such Interest Period shall end on
the immediately preceding Eurodollar Business Day.
(g) No Interest Period may be elected that would end later
than the RC Maturity Date (for RC Loans), the Term Loan A Maturity Date (for
Term Loan A) or the Term Loan B Maturity Date (for Term Loan B).
1.7.5 BREAKAGE. Without limiting the Borrower's option to have
mandatory prepayments under Subsection 1.2.6 held in a cash collateral account
pursuant to Subsection 1.2.7 above, in the event that the Borrower makes a
prepayment (whether voluntary or mandatory) of any LIBOR Loans on a day other
than the last day of the applicable Interest Period, if the Borrower provides
written notice to the Agent of its request to borrow a LIBOR Loan and fails to
borrow such LIBOR Loan, if the Borrower provides written notice to the Agent of
its request to convert a Loan and fails to convert such Loan to a LIBOR Loan on
the date specified in the applicable notice, the Borrower will pay to the Agent,
upon demand, for the account of the affected Lenders any cost, loss or expense
incurred as a result thereof. Each affected Lender shall certify the amount of
such cost, loss or expense to the Borrower, which certification and statement
shall be conclusive in the absence of manifest error.
1.7.6 DEFAULT RATE. Anything in this Agreement to the contrary
notwithstanding, (a) after maturity, whether scheduled, by acceleration or
otherwise, and whether prior to or after a judgment against the Borrower, or (b)
during the existence of an Event of Default, the outstanding Loans shall bear
interest at two percent (2%) per annum plus the interest rate(s) otherwise in
effect from time to time pursuant to this Agreement (the "DEFAULT RATE").
1.7.7 SOURCE OF FUNDS. Although each Lender may elect to purchase in
the London Inter-Bank Eurocurrency Market one or more Eurodollar deposits in
order to fund or maintain its funding of LIBOR Loans hereunder, it is
acknowledged that the provisions of this Agreement relating to such funding are
included only for the purpose of determining the rate of
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interest to be paid and any other amounts owing under this Agreement in
connection with such election, and each Lender shall be entitled to fund and
maintain its funding of all or any part of that portion of the principal amount
of the Loans in any manner it sees fit. Nonetheless, all such determinations
shall be made as if each Lender had actually funded and maintained its LIBOR
Loans through the purchase of Eurodollar deposits.
1.8 ADDITIONAL COSTS; UNAVAILABILITY.
1.8.1 INABILITY TO DETERMINE LIBOR. In the event that the Agent or
Majority Lenders shall have determined that for any reason it has become
impossible or impracticable to determine the Adjusted LIBOR (or the Adjusted
LIBOR for any specified Interest Periods), the Agent shall promptly give notice
of such determination to the Borrower. In that case, no part of the Loans shall
thereafter be available at the Adjusted LIBOR (or at the Adjusted LIBOR for the
specified Interest Period) until the Agent determines that the circumstances
described above cease to exist.
1.8.2 LAWS AFFECTING LIBOR AVAILABILITY. If it shall become unlawful
or impossible for any Lender (or any of their respective lending offices) to
make or maintain LIBOR Loans (or LIBOR Loans of a specified duration) due to (a)
the introduction of, or any change in, any Law or any change in the
interpretation or administration thereof by any Governmental Authority, or (b)
compliance by any Lender (or any of their respective lending offices) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority, such Lender shall promptly give notice thereof to the
Agent and the Agent shall promptly give notice to the Borrower and the other
Lenders. Thereafter, until the Agent notifies the Borrower that such
circumstances no longer exist, (a) the obligations of the Lenders to make such
LIBOR Loans and the right of the Borrower to convert any Loan or continue any
Loan as such shall be suspended and thereafter the Borrower may select only Base
Rate Loans hereunder, and (b) if any of the Lenders may not lawfully continue to
maintain a Loan as a LIBOR Loan to the end of the then current Interest Period
applicable thereto, the applicable Loan shall immediately be converted to a Base
Rate Loan.
1.8.3 CAPITAL ADEQUACY. If either (a) the introduction of, or any
change in, or in the interpretation of, any Law or (b) compliance with any
guideline or request from any central bank or comparable agency or other
Governmental Authority (whether or not having the force of law), has or would
have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by any such Lender, the Borrower shall pay to such Lender from
time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or corporation controlling such Lender for such
reduction.
1.8.4 OTHER INCREASED COSTS. Without limiting the provisions of the
preceding Subsection 1.8.3, if the introduction of, or any change in, any Law,
or in the interpretation or administration thereof by any Governmental
Authority, or compliance by any of the Lenders (or
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any of their respective lending offices) with any request or directive (whether
or not having the force of law) of such Governmental Authority:
(a) shall subject any of the Lenders (or any of their
respective lending offices) to any tax, duty or other charge with respect to any
Loan, Letter of Credit or commitment therefor or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective lending
offices) with respect to the principal of or interest on any Loan or Letter of
Credit or commitment therefor or any other amounts due under this Agreement in
respect thereof (except for changes in the rate of tax on the overall net income
of any of the Lenders or any of their respective lending offices imposed by the
jurisdiction in which such Lender is organized or is or should be qualified to
do business or such ending office is located), or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective lending offices) or
shall impose on any of the Lenders (or any of their respective lending offices)
or the foreign exchange and interbank markets any other condition affecting any
obligation hereunder; and the result of any of the foregoing is to increase the
costs to any of the Lenders of maintaining any Loan or issuing or participating
in Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a Loan or Letter of Credit,
then such Lender shall promptly notify the Agent, and the Agent
shall promptly notify the Borrower of such fact and demand compensation
therefor. Within fifteen (15) days after such notice by the Agent, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender or Lenders for such increased cost or reduction.
1.8.5 DETERMINATIONS AND NOTICE. Any determination by the Agent or
specified Lender pursuant to this Section 1.8 shall be conclusive and binding
for all purposes. The Agent shall notify the Borrower and each affected lender
as to the determinations made pursuant to this Section 1.8 and the Agent or the
applicable Lender will provide the Borrower with a written statement setting
forth the methodology of such determination by the Agent or the applicable
Lender, as the case may be; provided, however, that the Agent or applicable
Lender shall have no liability for failure to give such notice.
1.9 PURPOSE.
Upon satisfaction of the conditions and other requirements set forth
in this Agreement, the proceeds of the Loans shall be used by the Borrower: (a)
to fund amounts required in connection with the merger of pre-merger PCC
Acquisition Corp. and pre-merger Pennsylvania Crusher Corporation ("OLD PA
CRUSHER"), which merger is being consummated substantially simultaneously with
the initial advance hereunder and is resulting in the surviving entity being the
Borrower hereunder, and (b) for working capital needs and general corporate
purposes of Borrower and its Subsidiaries.
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1.10 MECHANICS OF PAYMENTS: BORROWER PAYMENTS.
1.10.1 MANNER OF MAKING PAYMENTS. All payments on account of
principal and interest on the Loans, the Commitment Fee, and all other amounts
otherwise payable to Lenders under this Agreement, shall be made to the Agent,
for the benefit of each Lender, in Dollars which are immediately available.
Unless otherwise specified, all payments by the Borrower shall be made by noon
(Philadelphia, PA time), on the due date for such payment, at the Agent's office
at One South Broad Street, 13th Floor, Locator 01-5997, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, specifying the amount and date of payment, re: Pennsylvania
Crusher Corporation (and if by wire transfer, in accordance with the
instructions on the signature page to this Agreement) or to such other accounts
or Persons or at such other place as the Agent may direct in writing. The
failure by the Borrower to make a payment by noon shall not constitute an Event
of Default if such payment is made on the due date; however, any payment made
after such time on such due date shall be deemed made on the next Business Day
for the purpose of interest and reimbursement calculations.
1.10.2 PERMITTED ASSUMPTIONS BY AGENT AS TO BORROWER PAYMENTS.
Unless the Agent shall have been notified by the Borrower in writing prior to
the date on which the Borrower is scheduled to make a payment to the Agent for
the account of one or more of the Lenders or the Issuer (such payment being the
"BORROWER REQUIRED PAYMENT") that the Borrower does not intend to make the
Borrower Required Payment to the Agent, the Agent may assume that the Borrower
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make such amount available to the Lenders entitled
thereto on such date. If the Borrower has not in fact made the Borrower Required
Payment to the Agent, the recipient(s) of such payment shall, on demand, repay
to the Agent the amount so made available together with interest in respect of
each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such day.
1.10.3 DISBURSEMENTS FROM AGENT TO LENDERS. The Agent shall promptly
remit to each Lender its pro rata share of payments received pursuant to the
preceding Subsection 1.10.1 in immediately available funds, except that all
reimbursement payments in respect of losses, out-of-pocket expenses, funding
losses or like matters shall be retained by the Agent or remitted to the Lenders
according to their respective appropriate entitlement to such reimbursement.
Unless otherwise provided in this Agreement or other Loan Documents, payments
from the Borrower shall be applied first to fees, then to interest (to the
extent then payable), then to principal of Base Rate Loans, and then to
principal of LIBOR Loans (and among such LIBOR Loans, first to those with the
earliest expiring Interest Periods).
1.10.4 AUTHORIZATION TO MAKE LOANS IN SATISFACTION OF SECURED
OBLIGATIONS. At any time that the Borrower is required to make a payment of
principal, interest, fees, costs, expenses or other amounts pursuant to the
terms of this Agreement or other Loan Documents and fails to do so, in addition
to other rights and remedies of the Agent and Lenders hereunder, under the other
Loan Documents and at Law, the Borrower hereby authorizes the Lenders (after
receipt of notice from the Agent to do so) to cause the aforesaid payments to be
made by drawing under
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the RC Commitment to make additional RC Loans (and any such drawings shall be
subject to interest at the Default Rate and shall be part of the Secured
Obligations and secured by all of the security interests granted pursuant to the
Loan Documents); provided, however, that notwithstanding the making by the
Lenders of any of the aforesaid payments as set forth in this sentence, the
failure of the Borrower to make any of the aforesaid payments when due shall
constitute an Event of Default. The Lenders may cause payments to be made
pursuant to this Subsection 1.10.4, in their sole discretion, regardless of the
existence of an Event of Default and whether or not the aggregate amount of the
outstanding RC Loans, after giving effect to such payments, exceeds the amount
of the RC Commitment.
1.10.5 PAYMENTS DUE ON NON-BUSINESS DAYS. Subject to Subsection
1.7.4 (LIBOR Election) as to payments with respect to Adjusted LIBOR, whenever
any payment to be made under the Loan Documents shall become due and payable on
a day which is not a Business Day, such payment may be made on the next
succeeding Business Day and such extension of time shall in such case be
included in computing interest on such payment.
1.11 MECHANICS OF PAYMENTS: LENDER PAYMENTS.
1.11.1 PERMITTED ASSUMPTIONS BY AGENT AS TO LENDER PAYMENTS. Unless
the Agent shall have been notified by a Lender prior to noon (Philadelphia, PA
time) on the date on which it is scheduled to fund to the Agent any amount
payable by a Lender under this Agreement (such payment being the "LENDER
REQUIRED PAYMENT") that it does not intend to make the Lender Required Payment
to the Agent, the Agent may assume that the Lender Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the Borrower (or other appropriate party)
on such date. If such Lender has not in fact made the Lender Required Payment to
the Agent, the Borrower (or other recipient) shall, on demand, repay to the
Agent the amount so made available together with interest thereon in respect of
each day during the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
equal to the Base Rate. The foregoing does not limit the obligation of any
Lender to make a Lender Required Payment. Any Lender Required Payment made by
the Agent in reliance on the assumption that the applicable Lender was funding
the same, if not returned by the Borrower (or other recipient), shall be paid,
on demand, to the Agent by the applicable Lender, together with interest thereon
accruing at the Base Rate. In addition, any Lender that fails to make a Lender
Required Payment upon receipt of notice therefor, shall not be entitled to vote
on any matters that it otherwise would be entitled to vote on under this
Agreement until it makes such payment.
1.11.2 SPECIAL PURPOSE FUNDING VEHICLE. Notwithstanding anything to
the contrary contained herein, any lender (a "GRANTING LENDER") may grant to a
special purpose funding vehicle (an "SPFV") the option to fund all or any part
of any Loan that such Granting Lender would otherwise be obligated to fund
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPFV to fund any Loan, and (ii) if an SPFV elects not to
exercise such option or otherwise fails to fund all or any part of such Loan,
the Granting Lender shall be obligated to fund such Loan pursuant to the terms
hereof. The funding of a Loan by an SPFV hereunder shall utilize the RC
Commitment of the Granting Lender to the same extent, and as if, such Loan were
funded by such Granting Lender. Each party hereto hereby agrees that no SPFV
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shall be liable for any indemnity or payment under this Agreement for which a
Lender would otherwise be liable for so long as, and to the extent, the Granting
Lender provides such indemnity or makes such payment. Notwithstanding anything
to the contrary contained in this Agreement, any SPFV may disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or Loans
to any rating agency, commercial paper, dealer or provider of any surety or
guarantee to such SPFV. This Section may not be amended without the prior
written consent of each Granting Lender, all or any part of whose Loan is being
funded by an SPFV at the time of such amendment. No SPFV shall be entitled to
any indemnities or additional costs or other amounts referred to in Section 1.8
(Additional Costs; Unavailability) or breakage pursuant to Subsection 1.7.5
(Breakage) or similar payments except to the extent it shares in payments made
to the Granting Lender pursuant to entitlements of the Granting Lender
hereunder.
1.12 TAXES.
1.12.1 PAYMENTS FREE AND CLEAR. Any and all payments by the Borrower
on account of the Secured Obligations shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (a) in the case of each Lender and the Agent, income and franchise
taxes imposed by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (b) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
lending office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or Letter of Credit to any Lender or the Agent, (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
1.12) such Lender or the Agent (as the case may be) receives an amount equal to
the amount such party would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) the Borrower shall deliver to the Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Subsection 1.12.4. The affected Lender will take
reasonable steps as are requested by the Borrower at the Borrower's expense to
obtain any refund that is available with respect to Taxes for which the Borrower
has compensated such Lender and will promptly remit any such refund as may be
received to the Borrower.
1.12.2 STAMP AND OTHER TAXES. In addition, the Borrower shall pay
any present or future stamp, registration, recordation or documentary taxes or
any other similar fees or charges or excise or property taxes, levies of the
United States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Loans, the Letters of Credit, the other Loan Documents, or any
other Secured Obligations or the perfection of any rights or security interest
in respect thereto (hereinafter referred to as "OTHER TAXES").
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1.12.3 INDEMNITY. The Borrower shall indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section 1.12) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted; provided, however, that there is a reasonable and
legal basis for the assertion of such Taxes. Such indemnification shall be made
within thirty (30) days from the date such Lender or the Agent (as the case may
be) makes written demand therefor, shall constitute Secured Obligations, be
secured by all collateral security for the Secured Obligations and, if not paid
within such 30-day period, shall accrue interest until paid at the Default Rate.
1.12.4 EVIDENCE OF PAYMENT. Within thirty (30) days after the date
of any payment of Taxes or Other Taxes, the Borrower shall furnish to the Agent,
at its address referred to in Section 11.1, the original or a certified copy of
a receipt evidencing payment thereof or other evidence of payment satisfactory
to the Agent.
1.12.5 TAX FORMS. Each Lender or assignee or participant of a Lender
that is not incorporated under the Laws of the United States of America or a
state thereof agrees that it will deliver to each of the Borrower and the Agent
two (2) duly completed appropriate valid Withholding Certificates (as defined
under Section 1.1441-1(c)(16) of the Internal Revenue Code or Regulations
promulgated thereunder (for the purposes hereof, the "Regulations")) certifying
its status (i.e., U.S. or foreign person) and, if appropriate, making a claim of
reduced, or exemption from, U.S. withholding tax on the basis of an income tax
treaty or an exemption provided by the Internal Revenue Code. The term
"Withholding Certificate" means a Form W-9; a Form W-8BEN; a Form W-8ECI; a Form
W-8IMY and the related statements and certifications as required under Sections
1.1441-1(e)(2) and (3) of the Regulations; a statement described in Section
1.871-14(c)(2)(v) of the Regulations; or any other certificates under the
Internal Revenue Code or Regulations that certify or establish the status of a
payee or beneficial owner as a U.S. or foreign person. Each Lender, assignee or
participant required to deliver to the Borrower and the Agent a Withholding
Certificate pursuant to the preceding sentence shall deliver such valid
Withholding Certificate as follows: (A) each Lender which is a party hereto on
the Closing Date shall deliver such valid Withholding Certificate at least five
(5) Business Days prior to the first date on which any interest or fees are
payable by the Borrower hereunder for the account of such Lender; and (B) each
assignee or participant shall deliver such valid Withholding Certificate at
least five (5) Business Days before the effective date of such assignment or
participant. Each Lender, assignee or participant which so delivers a valid
Withholding Certificate further undertakes to deliver to each of the Borrower
and the Agent two (2) additional copies of such Withholding Certificate (or a
successor form) on or before the date that such Withholding Certificate expires
or becomes obsolete or after the occurrence of any event requiring a change in
the most recent Withholding Certificate so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent. Notwithstanding the submission of a Withholding
Certificate claiming a reduced rate of or exemption from U.S. withholding tax,
the Borrower or the Agent, as the case may be, shall be entitled to withhold
U.S. federal income taxes at the full 30% withholding rate if in its reasonable
judgment it is required to do so under the due diligence requirements imposed
upon a withholding agent under Section 1.1441-7(b) of the Treasury Regulations.
Further, the Borrower and
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the Agent are indemnified under Section 1.1461-1(e) of the Treasury Regulations
against any claims and demands of any Lender or assignee or participant of a
Lender for the amount of any tax it deducts and withholds in accordance with
regulations under Section 1441 of the Internal Revenue Code.
1.12.6 SURVIVAL. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 1.12 shall survive the payment in full of the
Secured Obligations and the termination of the Commitments.
ARTICLE 2
LETTERS OF CREDIT
2.1 LETTERS OF CREDIT.
2.1.1 COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
requirements set forth below, the Borrower may use a portion of the RC
Commitment, which portion shall not exceed $750,000.00 (the "LETTER OF CREDIT
SUBLIMIT"), for the purpose of causing the Issuer to issue standby Letters of
Credit for the account of the Borrower, provided that (a) the Borrower executes
and delivers a letter of credit application and, if required by the Issuer,
reimbursement agreement, each in a form acceptable to the Issuer, and complies
with any other conditions to the issuance of such Letter of Credit (including
the payment of any applicable fees) set forth therein; (b) the Issuer approves
the form of such Letter of Credit; (c) such Letter of Credit bears an expiration
date not later than the earlier of (i) one (1) year after issuance and (ii)
thirty (30) days prior to the RC Maturity Date; (d) the Issuer receives a
request for issuance three (3) Business Days prior to the date of issuance
(unless the Issuer, in its sole and absolute discretion, agrees to shorter
notice in any instance); and (e) the conditions set forth in Section 3.2
(Requirements for Each Loan/Letter of Credit) are satisfied to the satisfaction
of the Issuer as of the date of the issuance of such Letter of Credit.
2.1.2 LIMITATION ON AMOUNT. The Issuer shall not be obligated or
permitted under this Section 2.1 to issue any Letter of Credit for the account
of the Borrower to the extent that the sum of (a) the amount that would be
available to be drawn under the proposed Letter of Credit plus (b) the sum of
all amounts available to be drawn under outstanding Letters of Credit plus (c)
any Unreimbursed Drawings would exceed the lesser of (i) the Letter of Credit
Sublimit, (ii) the excess of the RC Commitment over the outstanding principal
amount of RC Loans; and (iii) the excess of the amount of the Borrowing Base
over the outstanding principal amount of RC Loans.
2.1.3 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 2.1 (including without limitation reimbursement obligations) shall be
absolute and unconditional under any and all circumstances and irrespective of
the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had against the Issuer, the Agent, any Lender or any
beneficiary of a Letter of Credit. The Borrower further agrees that the Issuer,
the Agent and the Lenders shall not be responsible for, and the Borrower's
reimbursement obligations shall not be
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affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Issuer, the Agent and the Lenders
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. Any action taken or
omitted by the Issuer under or in connection with each Letter of Credit and the
related drafts and documents shall be binding upon the Borrower and shall not
result in any liability on the part of the Issuer.
2.1.4 RELIANCE BY ISSUER. The Issuer shall be entitled to rely, and
shall be fully protected in relying upon, any Letter of Credit, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and believed by it to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Issuer and the Agent.
2.1.5 FEES. In connection with each Letter of Credit issued
hereunder, the Borrower shall pay to the Agent for the account of the RC Lenders
a fee equal to the product of (a) the Applicable Margin for RC Loans bearing
interest at a rate based on Adjusted LIBOR (or, if the Default Rate is then in
effect, the margin of the Default Rate over Adjusted LIBOR) multiplied by (b)
the face amount of such Letter of Credit (the "LETTER OF CREDIT FEES"). In
addition, the Issuer shall receive a facing fee equal to 1/4 of 1% per annum of
the face amount of all outstanding Letters of Credit ("FACING FEE"). All Letter
of Credit Fees and Facing Fees are fully earned and non-refundable when due, and
shall be payable quarterly in arrears on each Quarterly Payment Date based on
the number of days during each quarter that a Letter of Credit is outstanding
during such quarter (calculated on the basis of a 360-day year). The Borrower
shall also pay to the Issuer all of the Issuer's standard fees and charges for
the opening, amendment, modification, presentation or cancellation of a Letter
of Credit and otherwise in respect of a Letter of Credit and shall execute all
of the Issuer's standard agreements in connection with the issuance of the
Letter of Credit.
2.1.6 PARTICIPATION BY RC LENDERs.
(a) Effective immediately upon the issuance of each Letter of
Credit and without further action on the part of the Issuer, the Issuer shall be
deemed to have granted to each RC Lender, and each RC Lender shall be deemed to
have irrevocably purchased and received from the Issuer, without recourse or
warranty, an undivided interest and participation in such Letter of Credit to
the extent of each RC Lender's percentage of the RC Commitment. Further, each
Lender acknowledges and agrees that it shall be absolutely liable, to the extent
of its percentage of the RC Commitment, to fund on demand or reimburse the
Issuer on demand for the amount of each draft paid by the Issuer under each
Letter of Credit to the extent that such amount is not immediately reimbursed by
the Borrower.
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(b) In furtherance of the provisions of the preceding
paragraph (a), the Issuer shall notify the Agent promptly upon receipt of notice
of an intended draw under a Letter of Credit. The Agent shall give written,
telecopied or telegraphic notice to each of the other RC Lenders of its pro rata
share of such draw and the scheduled date thereof. After receipt of such notice,
and whether or not an Event of Default or Default then exists, each RC Lender
shall make available to the Agent such RC Lender's share of such draw in
immediately available (in Dollars) to the Agent no later than noon
(Philadelphia, PA time), on the date specified in the Agent's notice. The
failure of the Issuer or the Agent to give timely notice pursuant to this
Subsection 2.1.6 shall not affect the right of the Issuer to reimbursement from
the RC Lenders. Any amount paid by Agent and RC Lenders pursuant to a draw made
under a Letter of Credit shall constitute an RC Loan and shall be repaid
pursuant to the provisions respecting RC Loans, provided that if an Event of
Default or Default exists at the time of a draw, the Borrower shall immediately
reimburse the amount of such draw to the Agent for the benefit of the RC
Lenders.
2.1.7 STANDARD OF CONDUCT. The Issuer shall be entitled to
administer each Letter of Credit in the ordinary course of business and in
accordance with its usual practices, modified from time to time as it deems
appropriate under the circumstances, and shall be entitled to use its discretion
in taking or refraining from taking any action in connection herewith as if it
were the sole party involved. Any action taken or omitted to be taken by the
Issuer under or in connection with any Letter of Credit shall not create for the
Issuer any resulting liability to any other Lender.
2.1.8 CASH COLLATERAL ACCOUNT. In the event that (a) the excess of
(i) the amount of the RC Commitment, over (ii) the amount of outstanding RC
Loans, is less than (b) the aggregate face amount of all outstanding Letters of
Credit plus the amount of any Unreimbursed Drawings for any reason (whether
because the RC Commitment has been reduced or terminated or otherwise), the
Borrower shall forthwith pay to the Agent an amount equal to the excess of the
amount described in clause (b) above over the amount described in clause (a)
above. Such amount shall first be applied against Unreimbursed Drawings and the
remainder shall be maintained by the Agent in an interest bearing cash
collateral account in the name of and for the benefit of the Agent and the
Lenders to secure the repayment of Borrower's obligation to reimburse the
Lenders for drafts drawn or which may be drawn under outstanding Letters of
Credit until such time as all outstanding Letters of Credit have expired or been
cancelled.
2.1.9 OBLIGATIONS SECURED. The obligations of the Borrower to the
Issuer, the Agent and the Lenders in respect of Letters of Credit shall be
Secured Obligations and shall be secured by all collateral security therefor.
ARTICLE 3
CONDITIONS TO FUNDINGS AND
ISSUANCE OF LETTERS OF CREDIT
3.1 CONDITIONS TO INITIAL FUNDING. The obligation of the Lenders to
make the initial Loans or the Issuer to issue the initial Letters of Credit
pursuant to this Agreement shall be subject to the fulfillment, to the
satisfaction of the Agent, Lenders and Issuer (unless otherwise
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specified), of the following conditions on or before January 3, 2003 (the date
of such fulfillment being the "CLOSING DATE"). The making of any Loan by any
Lender or the issuance of any Letter of Credit by the Issuer on the Closing Date
shall constitute evidence of such Lender's or the Issuer's satisfaction with the
fulfillment thereof.
3.1.1 EXECUTION OF THIS AGREEMENT. This Agreement shall have been
duly executed by the Borrower, each Lender party to this Agreement as of the
Closing Date, the Issuer and the Agent.
3.1.2 THE NOTES. The Borrower shall have delivered duly executed
Notes to each of the Lenders that requests a Note.
3.1.3 SECURITY AGREEMENT. The Borrower and each Subsidiary of the
Borrower shall have executed and delivered to the Agent a Security Agreement (as
amended, restated, modified or supplemented from time to time in accordance with
the terms hereof and thereof, the "SECURITY AGREEMENT") in substantially the
form annexed to this Agreement as Exhibit D, together with (a) such Uniform
Commercial Code financing statements as are necessary to perfect the security
interests created by such Security Agreement, (b) such landlord waivers as the
Agent shall request, (c) bailee waiver letters from each Person that has
possession of any inventory of the Borrower or its Subsidiaries, and (d) a power
of attorney duly executed by the Borrower and each Subsidiary of the Borrower in
substantially the form attached as Annex B to the Security Agreement, and all
equipment appraisals required by Lenders shall have been completed to Lenders'
satisfaction.
3.1.4 GUARANTY AND SURETYSHIP AGREEMENT. Each Subsidiary of the
Borrower shall have executed and delivered to the Agent one or more Guaranty and
Suretyship Agreements (as amended, restated, modified or supplemented from time
to time in accordance with the terms hereof and thereof, together with each
other guaranty and suretyship agreement executed by a Subsidiary of the Borrower
pursuant to the terms hereof, the "SUBSIDIARY SURETYSHIPS") in substantially the
form annexed to this Agreement as Exhibit E.
3.1.5 PLEDGE AGREEMENTS.
(a) Parent shall own directly all of the capital stock of the
Borrower and shall have executed and delivered to the Agent a Pledge Agreement
(as the same may be amended, restated, modified or supplemented from time to
time in accordance with the terms hereof and thereof, the Parent Pledge (as the
same may be amended, restated, modified or supplemented from time to time in
accordance with the terms hereof and thereof, the "PARENT PLEDGE") in
substantially the form and annexed to this Agreement as Exhibit F-1, together
with all original stock certificates, duly executed in blank and undated
assignment powers and financing statements required thereunder.
(b) The Borrower shall own directly all of the capital stock
and other equity of the Subsidiaries specified on Schedule 4.1 hereto and the
Borrower shall have executed and delivered to the Agent a Pledge Agreement (as
the same may be amended, restated, modified or supplemented from time to time in
accordance with the terms hereof and thereof, the
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"BORROWER PLEDGE") in substantially the form annexed to this Agreement as
Exhibit F-2, together with all original stock and other equity certificates,
duly executed in blank and undated assignment powers and financing statements
required thereunder.
3.1.6 SUBORDINATION AGREEMENT. Parent and K-Tron shall have executed
and delivered to the Agent a Subordination Agreement (as amended, restated,
modified or supplemented from time to time in accordance with the terms hereof
and thereof the "SUBORDINATION AGREEMENT") respecting management fees and other
obligations of the Borrower in substantially the form and annexed to this
Agreement as Exhibit G.
3.1.7 MORTGAGES AND LANDLORD WAIVERS. The Borrower and each
Subsidiary shall have executed and delivered to the Agent mortgages (as amended,
restated, modified and supplemented from time to time in accordance with the
terms hereof and thereof, and together with any other mortgages delivered
pursuant to this Agreement at any time, the "MORTGAGES") in substantially the
form annexed to this Agreement as Exhibit I, in form appropriate for recording
in the relevant jurisdiction, and landlord waivers (as amended, restated,
modified and supplemented from time to time in accordance with the terms hereof
and thereof, and together with any other landlord consents, waivers or
subordinations delivered pursuant to this Agreement at any time, the "LANDLORD
WAIVERS") in form and substance satisfactory to Agent for each parcel of real
property owned or leased by such Person, and shall have delivered such
environmental reports, flood certifications, title commitments and insurance
policies, surveys, lease agreements, warehouseman waivers, mortgagee waivers and
other instruments, agreements, documents and certificates as may be required by
the Mortgages or otherwise reasonably requested by Agent in connection with any
real property owned, leased or otherwise occupied by Borrower or any of its
Subsidiaries or upon which any assets of the Borrower or any of its Subsidiaries
may be situated (including without limitation such reports, certifications,
commitments and other information relating to the South Carolina Property as the
Agent may reasonably request).
3.1.8 REPAYMENT OF EXISTING INDEBTEDNESS. All Indebtedness of
Borrower, Old PA Crusher or any subsidiary of Old PA Crusher owing to any Person
other than Indebtedness permitted under Section 7.1 (collectively, the
"PREDECESSOR INDEBTEDNESS") shall have been repaid in full prior to or
concurrently with the initial advances under this Agreement. In addition, each
Person to which any Predecessor Indebtedness is owed, shall have terminated all
commitments in respect of its respective Predecessor Indebtedness and shall have
prepared and, if required by Law, executed and/or filed (or agreed to file
concurrent with receipt of payment in full of its respective Predecessor
Indebtedness), releases and terminations of all liens and cancellations of all
guarantees or other collateral security instruments and agreements provided in
connection therewith, in form and substance satisfactory to Agent. Arrangements
for the payoff of the Predecessor Indebtedness shall have been made and a payoff
letter in form and substance satisfactory to the Agent shall have been
delivered.
3.1.9 PAYMENT OF FEES AND COSTS. The Borrower shall have paid all of
the fees required to be paid to the Agent, the Issuer and other Lenders on the
Closing Date, including without limitation the remaining portion of the upfront
fee referenced in the Commitment Letter and all of the fees and disbursements of
counsel for the Agent in connection with the review,
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negotiation, preparation, execution and delivery of this Agreement and the other
documents contemplated herein.
3.1.10 NO DEFAULT. Before and after giving effect to the
Indebtedness to be incurred hereunder, there shall exist no Event of Default or
Default under this Agreement.
3.1.11 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement or otherwise made in
writing in connection with this Agreement or the other Loan Documents, whether
made by the Borrower or any Subsidiary, shall be true and correct with the same
effect as though such representations and warranties were made to Lenders or
Agent on behalf of Lenders on and as of the Closing Date and the Borrower shall
deliver a certificate so stating.
3.1.12 FINANCIAL STATEMENTS; PROJECTIONS.
(a) The Lenders shall have received a balance sheet, a
statement of incomes and changes in retained earnings and a statement of cash
flow of the Borrower and its Subsidiaries (or Old PA Crusher and its
Subsidiaries, as applicable) for the most recent twelve (12) month period on a
pro forma basis, all in form and substance satisfactory to the Lenders and
prepared in accordance with GAAP.
(b) The Lenders shall have received a final set of operating
projections and budgets for the Borrower and its Subsidiaries, dated no more
than 120 days prior to the Closing Date, for the period beginning on or before
the Closing Date and ending on December 31, 2007, which shall be in reasonable
detail, shall be based on the closing capital structure of the Borrower and its
Subsidiaries, shall reflect the consummation of the transactions contemplated by
this Agreement and shall otherwise be in form and substance satisfactory to the
Agent.
3.1.13 LEGAL PROCEEDINGS. All corporate, partnership and other legal
proceedings and all instruments in connection with the transactions contemplated
by this Agreement and other Loan Documents shall be satisfactory in form and
substance to the Agent and its counsel, and the Agent and its counsel shall have
received all information and copies of all documents and records of all
corporate and partnership proceedings, which the Agent or its counsel has
requested, such documents where appropriate to be certified by proper corporate,
partnership, governmental or other authorities.
3.1.14 CONSENTS AND APPROVALS. All corporate, governmental and
judicial consents, approvals and waivers and other third party consents,
approvals and waivers necessary in connection with this Agreement and the Loans,
the acquisition of Old PA Crusher or other related transactions, shall have been
obtained and, if applicable, become final and non-appealable, and shall remain
in full force and effect, without the imposition of any conditions that are not
acceptable to the Lenders.
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3.1.15 MATERIAL ADVERSE CHANGE; COMPLIANCE WITH LAW.
(a) No Material Adverse Change shall have occurred since
September 30, 2002.
(b) The Borrower and its Subsidiaries shall be in substantial
compliance with all Law, including without limitation environmental laws.
(c) There shall be no material litigation or proceeding
pending or overtly threatened against the Borrower, Old PA Crusher or any of
their Subsidiaries, except as previously disclosed in writing to the Agent prior
to December 2, 2002.
3.1.16 OPINIONS OF COUNSEL. The Agent shall have received the
following favorable opinions of counsel as to the transactions contemplated
hereby addressed to the Agent, the Issuer and the Lenders and dated as of the
Closing Date, in form and content satisfactory to Agent, the Issuer and the
Lenders:
(a) opinions of counsel to the Borrower, its Subsidiaries and
any other Loan Parties; and
(b) opinions of special local counsel to the Borrower and its
Subsidiaries in the State of South Carolina and such other states as Agent may
reasonably require.
3.1.17 OFFICER'S COMPLIANCE CERTIFICATE. There shall have been
delivered to each Lender an Officer's Compliance Certificate, dated as of the
Closing Date, demonstrating pro forma compliance with the financial covenants
set forth in Article 6 (Financial Covenants) and certifying as to the absence of
any Default and any Event of Default.
3.1.18 GOOD STANDING. The Agent shall have received (a) good
standing certificates for the Borrower and each of its Subsidiaries, evidencing
its good standing under the laws of the state of its incorporation or formation
and (b) good standing certificates for the Borrower and each of its
Subsidiaries, evidencing its good standing under the laws of each of the states
in which it is required to qualify to do business.
3.1.19 LIEN SEARCHES. The Borrower shall have delivered to the Agent
Uniform Commercial Code, tax and judgment lien searches, pending litigation and
bankruptcy searches, of a recent date, in such offices as are acceptable to the
Agent, together with U.S. Patent and Trademark Office and Copyright Office
searches, of a recent date, if requested by Agent, in all cases showing no Liens
with respect to Borrower and each of its Subsidiaries other than Permitted
Liens.
3.1.20 EVIDENCE OF INSURANCE. The Agent shall have received evidence
of the insurance required by Section 7.14 (Insurance) below.
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3.1.21 STOCK PURCHASE AND MERGER DOCUMENTS, INSTRUMENTS AND
AGREEMENTS. The Agent shall have received (a) executed, final copies of the
stock purchase agreement relating to Borrower's acquisition of all of the issued
and outstanding capital stock of Old PA Crusher, together with all exhibits and
schedules thereto, which shall be in form and substance satisfactory to the
Agent, (b) all documents, instruments, certificates and agreements governing the
merger of Old PA Crusher with and into Borrower, including without limitation a
filed certificate of merger, all in form and substance satisfactory to Agent,
and (c) such evidence as Agent and its counsel may request, in form and
substance satisfactory to Agent, showing satisfaction of all conditions set
forth in any of the documents or agreements described in clause (a) or (b) of
this Subsection 3.1.21 and completion of the transactions contemplated in such
documents and agreements. The purchase price for Old PA Crusher shall not exceed
an amount equal to $25,000,000, plus reasonable fees and expenses associated
therewith in an amount acceptable to the Agent.
3.1.22 CAPITAL STRUCTURE AND EQUITY INVESTMENTS. Borrower shall have
received a capital contribution in an amount no less than $5,000,000.00 and the
Borrower's capitalization as of the Closing Date shall otherwise be satisfactory
to Lenders. The Agent shall have received copies of all documents related to the
capitalization of the Borrower, all of which shall be in form and substance
satisfactory to the Agent.
3.1.23 INITIAL BORROWING BASE REPORT AND AVAILABILITY UNDER
BORROWING BASE. The Borrower shall have delivered to the Agent an initial
Borrowing Base Certificate showing availability under the Borrowing Base in an
amount acceptable to Lenders.
3.1.24 MATERIAL CONTRACTS. The Agent shall have received copies of
all management agreements, employment contracts and other material contracts and
agreements requested by Agent, all in form and substance satisfactory to Agent.
3.1.25 TAX SHARING AGREEMENT. The Borrower shall have delivered to
the Agent a duly executed tax sharing agreement with K-Tron and K-Tron's
Consolidated Subsidiaries in form and substance satisfactory to Agent (the "TAX
SHARING AGREEMENT").
3.1.26 PRO FORMA EBITDA. The Agent shall have received satisfactory
evidence that the Borrower's (or Old PA Crusher's) pro forma EBITDA for the most
recent twelve (12) month period (or, subject to the reasonable satisfaction of
the Agent, the most recent twelve (12) month period for which financial
statements are available), as determined in accordance with GAAP (with certain
adjustments as agreed to by the Agent) shall be at least equal to $5,100,000.00.
3.1.27 CONSOLIDATED TOTAL DEBT TO PRO FORMA EBITDA RATIO. The Agent
shall have received a certificate from the Borrower, signed by the Borrower's
Chief Executive Officer, President, Chief Financial Officer or Treasurer,
certifying as to the ratio of Consolidated Total Debt to pro forma EBITDA (as
measured above), which shall be no greater than 3.00 to 1.00, together with
supporting calculations and such evidence thereof as the Agent may request.
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3.1.28 PRIMARY DEPOSIT ACCOUNTS. The Borrower and its Subsidiaries
shall maintain their primary deposit accounts with Agent or a Lender.
3.1.29 OTHER REQUIREMENTS. The Agent shall have received such
additional information and material as the Agent or any Lender may reasonably
request.
3.2 REQUIREMENTS FOR EACH LOAN/LETTER OF CREDIT.
The Lenders shall not be required to make any Loans to the Borrower
(including, without limitation, the initial Loan) and Issuer shall not be
required to issue any Letters of Credit (including, without limitation, the
initial Letter of Credit) unless the following conditions are fulfilled to the
satisfaction of Agent:
3.2.1 NO DEFAULT. There shall not, either prior to or after giving
effect to each such funding or Letter of Credit, exist an Event of Default or
Default;
3.2.2 REQUEST FOR ADVANCE/LETTER OF CREDIT. Agent shall have timely
received a borrowing notice pursuant to Section 1.5 (Borrowing Notice) or
request for a Letter of Credit pursuant to Subsection 2.1.1 (Commitment to Issue
Letters of Credit);
3.2.3 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Borrower and the other Loan Parties made in the Loan Documents
shall be true and correct in all material respects as of the date of each such
Loan or Letter of Credit (both immediately prior to and after giving effect to
said Loan or Letter of Credit) as if made on and as of such date, except to the
extent that changes in the facts and conditions on which such representations
and warranties are based do not result from an act or omission that constitutes
a breach of any covenant or Default or Event of Default set forth in this
Agreement or in any other Loan Document and have been disclosed to Lenders in
writing;
3.2.4 MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred since the date of this Agreement; and
3.2.5 METHOD OF CERTIFYING CERTAIN CONDITIONS. The request for, and
acceptance of, each Loan and each Letter of Credit by the Borrower shall be
deemed a representation and warranty by the Borrower that the conditions
specified in Subsections 3.2.1 (No Default), 3.2.3 (Representations and
Warranties), and 3.2.4 (Material Adverse Change) have been satisfied.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
In order to induce Issuer and the Lenders to enter into this
Agreement and to make the Loans and other extensions of credit contemplated by
this Agreement, the Borrower hereby makes the following representations,
covenants and warranties:
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4.1 STATUS.
4.1.1 ORGANIZATION AND QUALIFICATION. The Borrower and each of its
Subsidiaries are duly organized and validly existing corporations, partnerships
or limited liability companies, as applicable, under the laws of the respective
states as indicated on Schedule 4.1 and each is in good standing under the laws
of its state of incorporation or formation, as applicable. The Borrower and each
of its corporate and limited liability company Subsidiaries has perpetual
existence, and the Borrower and each of its Subsidiaries has the corporate,
partnership or limited liability company, as applicable, power and authority to
own its property and assets and to transact the business in which it is engaged
or presently proposes to engage. Neither the Borrower nor any of its
Subsidiaries has failed to qualify to do business in any state or jurisdiction
where the failure to so qualify could result in a Material Adverse Change.
4.1.2 STOCK OWNERSHIP. All of the capital stock of the Borrower is
owned by Parent. The Borrower does not have any Subsidiary and does not
presently operate all or any portion of its businesses through any Person, other
than through K-Tron pursuant to the Management Agreement and as otherwise
disclosed on Schedule 4.1. Schedule 4.1 also correctly lists as to each
Subsidiary of the Borrower on the date of this Agreement:
(a) its name,
(b) the jurisdiction of its incorporation or organization and
organizational number issued by such jurisdiction,
(c) the classes of stock or partnership or other equity
interest issued by such Person and the principal characteristics of each such
class, and
(d) the names of each of the equity holders and the number and
percentage of the issued and outstanding shares or partnership interests of each
class (and certificate numbers by which such interests are designated) owned by
each of the holders of such shares or interests.
All the outstanding shares of capital stock of the Borrower and of each of its
Subsidiaries are validly issued, fully paid and nonassessable, and all such
shares and partnership and other equity interests indicated in Schedule 4.1 as
owned by the Borrower or any of its Subsidiaries are so owned beneficially and
of record by such Person, free and clear of any Lien, except for the Lien
created pursuant to the Loan Documents and Permitted Liens. Schedule 4.1 also
correctly lists as to the Borrower and each of its Subsidiaries any options,
warrants or other securities issued by the Borrower or any of its Subsidiaries
and the identity of each holder of any such option, warrant or other security.
Except as set forth on Schedule 4.1, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction on the voting or
transfer of any shares of, capital stock of the Borrower or any of its
Subsidiaries pursuant to the certificate or articles of incorporation, bylaws or
other governing document or any agreement or other instrument to which the
Borrower or any of its Subsidiaries is a party or by which any of them may be
bound.
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4.2 POWER AND AUTHORITY; ENFORCEABILITY.
The Borrower and each of its Subsidiaries has the corporate,
partnership or limited liability company, as applicable, power to execute,
deliver and carry out the terms and provisions of the Loan Documents to which
each is a party, and each such Person has taken all necessary corporate,
partnership or limited liability company, as applicable, action (including,
without limitation, any consent of stockholders, members or partners required by
Law or by their respective articles of incorporation, bylaws or other
organizational documents) to authorize the execution, delivery and performance
of the Loan Documents to which each is a party. The Loan Documents, when
executed and delivered by the Borrower and/or its Subsidiaries, as applicable,
constitute or will constitute the authorized, valid and legally binding
obligations of each such Person enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
4.3 NO VIOLATION OF AGREEMENTS; ABSENCE OF CONFLICTS.
The execution and delivery of the Loan Documents, the consummation
of the transactions contemplated by the Loan Documents and compliance with the
terms and provisions of the Loan Documents will not:
(a) require any consent or approval, governmental or
otherwise, not already obtained;
(b) violate any Law respecting the Borrower or any of its
Subsidiaries;
(c) conflict with, result in a breach of, or constitute a
default under, the charter documents or bylaws of the Borrower or any of its
Subsidiaries, or under any indenture, agreement, license or other instrument to
which the Borrower or any of its Subsidiaries is a party or by which any of them
or their respective properties may be bound; or
(d) result in, or require the creation or imposition of, any
Lien upon or with respect to any property now owned or hereafter acquired by the
Borrower or any of its Subsidiaries, other than in favor of Agent for the
benefit of the Secured Parties as provided herein and in the other Loan
Documents.
4.4 RECORDING, ENFORCEABILITY AND CONSENT.
Assuming the due recording of the Uniform Commercial Code financing
statements delivered in connection herewith, no consent, approval or
authorization of any Person, or recording, filing, registration, notice or other
similar action with or to any Person, is required in order to insure the
legality, validity, binding effect or enforceability of any of the Loan
Documents as against all Persons, except such consents, approvals or
authorizations as have been obtained and remain in effect. No consent, approval
or authorization of any Person which has not been obtained is required for the
continued conduct by the Borrower or any of its Subsidiaries of their business
as now conducted or as proposed to be conducted.
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4.5 LINES OF BUSINESS.
The Borrower and its Subsidiaries are engaged only in Permitted
Businesses.
4.6 SECURITY INTEREST IN COLLATERAL.
(a) The Borrower has delivered, or caused to be delivered, to
the Agent all Uniform Commercial Code financing statements in recordable form
that may be necessary to perfect the security interests granted pursuant to the
Loan Documents to the extent that such security instruments may be perfected by
filing under the Uniform Commercial Code in effect in any applicable
jurisdiction. The Borrower has delivered, or caused to be delivered, to the
Agent all original instruments, certificates, documents and investment property
necessary to perfect the security interest granted pursuant to the Loan
Documents, to the extent that a security interest therein may be perfected by
delivery under the Uniform Commercial Code in effect in any applicable
jurisdiction. Upon the filing of such Uniform Commercial Code financing
statements in the offices specified therein no further action, including without
limitation, any filing or recording of any document or the obtaining of any
consent, is necessary in order to establish, perfect and maintain the Agent's
first priority security interests in the personal property (including fixtures)
and equity of the Borrower and its Subsidiaries (for the benefit of the Secured
Parties) purported to be created by the Pledge Agreements and the Security
Agreement, except for the periodic filing of continuation statements with
respect to such Uniform Commercial Code financing statements, or the filing of
appropriate documentation with the United States Patent and Trademark Office
and/or United States Copyright Office (all of which filings have been duly made,
to the extent such are necessary for the perfection of Agent's security interest
in Borrower's or any of its Subsidiary's Intellectual Property). The perfection
questionnaire delivered to the Agent by the Borrower is true, complete and
correct and there have been no changes thereto since the date of delivery.
(b) The Mortgage relating to the South Carolina Property, when
duly filed in the office referred to therein, will create a first priority
perfected Lien on the real property owned by the Borrower and its Subsidiaries
described therein, subject to no prior Liens other than Permitted Liens, and no
further action, including, without limitation, the filing or recording of any
document, is necessary to maintain such first priority perfected Lien.
(c) Except as set forth on Schedule 4.6 hereto, neither the
Borrower nor any Subsidiary of the Borrower has any inventory or other assets
located at any premises that are not owned or leased by the Borrower or such
Subsidiary and, in the case of inventory or other assets that are located at
premises leased by the Borrower or a Subsidiary, as to which a landlord waiver
has been duly obtained. Schedule 4.6 shows, as of the Closing Date, the address
of each of the premises where such inventory or other assets are located, the
name and address of the Person that is in possession of such inventory or other
assets and the value of the assets at each such location.
4.7 LITIGATION; COMPLIANCE WITH LAWS.
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(a) There are no actions, suits, protests, reconsiderations or
proceedings pending, or to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries or Affiliates before any court
or before any Governmental Agency, wherein unfavorable decisions, rulings or
findings individually or in the aggregate could result in a Material Adverse
Change.
(b) The Borrower and each of its Subsidiaries are in material
compliance with all Law.
4.8 NO BURDENSOME AGREEMENTS.
Neither the Borrower nor any of its Subsidiaries is a party to any
agreement or instrument or subject to any corporate or other restrictions which,
assuming compliance by such Persons with the terms of such agreements or
instruments, could result in a Material Adverse Change.
4.9 CONDITION OF PROPERTY.
All of the material properties, equipment and systems of the
Borrower and its Subsidiaries are in good repair, working order and condition
subject to normal wear and tear and routine maintenance and are and will be in
material compliance with all applicable standards or rules imposed by any
Governmental Authority.
4.10 LICENSES; INTELLECTUAL PROPERTY.
The Borrower and each of its Subsidiaries holds or is the licensee
of all patents, trademarks, service marks, trade names, copyrights, franchises,
licenses and authorizations, governmental or otherwise (the "rights") necessary
for the conduct of its business as now conducted, without any known material
conflict with the rights of others. The Borrower and each of its Subsidiaries
has obtained all material equipment rental or other agreements necessary for the
operation of its business as now conducted. Schedule 4.10 attached hereto
correctly lists all registered patents, registered trademarks and other material
intellectual property rights, including any licenses of same, as well as all
material governmental licenses, authorizations and similar rights. Each material
license agreement under which Borrower or any Subsidiary of Borrower is the
licensee is a valid and binding license agreement, enforceable against the
licensor.
4.11 TITLE TO PROPERTIES; LIENS.
The Borrower and each of its Subsidiaries has good and marketable
title to its properties and assets, including the properties and assets
reflected in the financial statements referred to in Subsection 4.13.1
(Financial Statements) (except properties and assets disposed of since the date
thereof in the ordinary course of business), and none of such properties or
assets is subject to any Liens except Permitted Liens. Each of the Borrower and
its Subsidiaries enjoys peaceful and undisturbed possession under all leases
necessary in any material respect for the
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operation of such properties and assets, and all such leases are valid and
subsisting and are in full force and effect.
4.12 MANAGEMENT AGREEMENTS.
The Borrower and its Subsidiaries are not parties to any management
or other similar agreement respecting the management of their businesses except
for (a) usual and customary employment agreements, (b) usual and customary
consulting agreements that do not provide for the control of the business or the
general management of the business, and (c) the Management Agreement.
4.13 FINANCIAL STATEMENTS AND PROJECTIONS.
4.13.1 FINANCIAL STATEMENTS. Each of the financial statements
delivered pursuant to Subsections 3.1.12 (Financial Statements; Projections),
5.1.1 (Delivery of Quarterly Financial Statements) and 5.1.2 (Delivery of Annual
Financial Statements; Accountants' Certification) have been prepared in
accordance with GAAP applied on a consistent basis throughout the period
specified and present fairly in all material respects the financial position of
the Borrower and its Subsidiaries as of the date specified and the results of
operations and statements of cash flow for the period specified, except in the
case of unaudited financial statements for the omission of footnotes and
year-end adjustments.
4.13.2 UNDISCLOSED LIABILITIES. Neither the Borrower nor any of its
Subsidiaries has any material liabilities, contingent or otherwise, other than
as disclosed in the financial statements referred to in the preceding Subsection
4.13.1 or other liabilities arising since the date of the most recent balance
sheet delivered to Agent that were incurred by Borrower in the ordinary course
of its business, and there are not now and not anticipated any material
unrealized losses of the Borrower or any of its Subsidiaries.
4.13.3 ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date of the
delivery of the most recent financial statements referred to in Subsection
3.1.12 (Financial Statements; Projections) above, there has been no Materially
Adverse Change.
4.13.4 PROJECTIONS. The operating projections submitted on behalf of
the Borrower to the Lenders and Issuer pursuant to Subsection 3.1.12 (Financial
Statements; Projections) present to the best of the Borrower's knowledge and
belief based on the reasonable assumptions set forth in such projections the
expected results of operations and sources and uses of cash of the Borrower for
the periods covered by the projections.
4.14 TAX RETURNS AND PAYMENTS; OTHER FEES.
(a) All tax returns required by Law to be filed (including
extensions) by or in respect of the Borrower and its Subsidiaries and each other
entity that files a consolidated tax return with the Borrower have been filed.
All taxes, assessments and other governmental charges levied upon them and any
of their respective properties, assets, income or franchises which are due and
payable have been paid, other than those presently payable without penalty or
interest.
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(b) The Borrower and each of its Subsidiaries and each other
entity that files a consolidated tax return with the Borrower have paid all
franchise, license and other fees and charges which have become due pursuant to
any franchise or permit in respect of its business and has made appropriate
provision as is required by GAAP for any such fees and charges which have
accrued.
4.15 FISCAL YEAR.
The fiscal year of the Borrower and each of its Subsidiaries ends on
December 31 or such date as may be permitted under Section 7.16.
4.16 FEDERAL RESERVE REGULATIONS.
Neither the Borrower nor any of its Subsidiaries 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 security" or
"margin stock" as defined in Regulations T, U and X of the Board of Governors of
the Federal Reserve System. None of the proceeds of any of the Loans shall be
used to purchase or carry, or to reduce or retire or refinance any credit
incurred to purchase or carry, any margin stock (within the meaning of
Regulations T, U and X of the Board of Governors of the Federal Reserve System)
or to extend credit to others for the purpose of purchasing or carrying any
margin stock. If requested by the Agent, the Borrower shall complete and sign
Part I of a copy of the Federal Reserve Form U-1 referred to in Regulation U of
the Board of Governors of the Federal Reserve System and deliver such copy to
each Lender. Neither the Borrower nor any of its Subsidiaries, nor any bank
acting on any of their behalf, has taken or will take any action which might
cause this Agreement or the Note to violate Regulation T, U or X or any other
regulation of the Board of Governors of the Federal Reserve System, as now or
hereafter in effect.
4.17 INVESTMENT COMPANY ACT.
Neither the Borrower nor any of its Subsidiaries is an "investment
company", or "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
4.18 PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Borrower nor any Subsidiary of the Borrower is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
4.19 BENEFIT PLAN COMPLIANCE.
4.19.1 PLANS. None of the Borrower, any of its Subsidiaries or any
ERISA Affiliate maintains or contributes to any Plan, except as disclosed in
Schedule 4.19 attached hereto (and other than Plans in effect outside the United
States and its territories). The Borrower
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has furnished to the Lender a copy of the most recent actuarial report for each
Plan which is a defined benefit plan as defined in Section 3(35) of ERISA or is
a funded employee welfare benefit plan, and each such report is true, complete
and accurate in all material respects.
4.19.2 FAVORABLE DETERMINATION LETTERS. Except as described in
Schedule 4.19, each Plan as most recently amended, which is intended to be
qualified within the meaning of Section 401 of the Code, is the subject of a
favorable determination by the Internal Revenue Service with respect to its
qualification under Section 401 of the Code.
4.19.3 COMPLIANCE WITH LAW. The Borrower, its Subsidiaries and their
respective ERISA Affiliates have operated each Plan in all material respects in
compliance with the requirements of the Code and ERISA and the terms of each
Plan.
4.19.4 ABSENCE OF CERTAIN CONDITIONS. Except as specifically
disclosed in Schedule 4.19: (a) no Plan has engaged in any transaction in
connection with which the Borrower or any of its Subsidiaries could be subject
to either a material civil penalty assessed pursuant to Section 502(i) of ERISA
or a material tax penalty imposed pursuant to Section 4975 of the Code, (b)
there is no Accumulated Funding Deficiency with respect to any Employee Pension
Plan, whether or not waived, or an unfulfilled obligation to contribute to any
Multiemployer Plan or withdrawal from any Multiemployer Plan, (c) no Plan has
been terminated under conditions which resulted or could result in any material
liability to the PBGC, (d) no material liability to the PBGC has been or is
expected by the Borrower to be incurred with respect to any Plan maintained by
the Borrower or any of its Subsidiaries or ERISA Affiliates except for required
premium payments to the PBGC, (e) there has been (i) no Reportable Event with
respect to any Employee Pension Plan (except to the extent that the PBGC has
waived such reporting requirement with respect to any such event), and (ii) no
event or condition which presents a material risk of termination of any Plan by
the PBGC, in either case involving conditions which could result in any
liability to the PBGC, (f) none of the Borrower or its Subsidiaries or any ERISA
Affiliate has incurred or anticipates incurring Withdrawal Liability with
respect to any Multiemployer Plan, (g) no Multiemployer Plan is in
Reorganization, (h) the Borrower and its Subsidiaries have complied in all
material respects with the health continuation coverage requirements of COBRA
and the requirements of the Health Insurance Portability and Accountability Act
of 1996, (i) there is no material unfunded benefit liability in respect of any
Plan, (j) there is not now, and has not been, any material violation of the Code
or ERISA with respect to the filing of applicable reports, documents, and
notices regarding any Plan with the Secretary of Labor, the Secretary of the
Treasury, the PBGC or any other governmental entity or the furnishing of such
documents to the participants or beneficiaries of such Plan and (k) there is no
Plan providing for retiree health and/or life insurance or retiree death
benefits or any welfare plan having material unfunded liabilities. For the
purposes of Subsection 4.19.3 and this Subsection, the term "material" means any
violation that could reasonably be expected to result in, and the phrase "in
material compliance with" means in compliance to the extent that noncompliance
could reasonably be expected to result in, liabilities in excess of $75,000.00
singly or in the aggregate with all other such liabilities, or any violation or
noncompliance which could otherwise result in a Material Adverse Change.
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4.19.5 ABSENCE OF CERTAIN LIABILITIES. No liability (whether or not
such liability is being litigated) has been asserted against the Borrower, any
of its Subsidiaries or any ERISA Affiliate in connection with any Employee
Pension Plan or any Multiemployer Plan by the PBGC other than for required
premium payments to the PBGC, by a trustee appointed pursuant to Section 4042(b)
or (c) of ERISA, or by a sponsor or an agent of a sponsor of a Multiemployer
Plan, and no lien has been attached and no Person has threatened to attach a
lien on any of the Borrower's, any of its Subsidiaries' or any ERISA Affiliate's
property as a result of failure to comply with ERISA or as a result of the
termination of any Plan.
4.20 ACCURACY AND COMPLETENESS OF DISCLOSURE.
Neither this Agreement nor any other document, certificate or
instrument delivered to the Agent or Lenders by or on behalf of the Borrower or
any Subsidiary in connection with this Agreement contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained in this Agreement and in such other documents,
certificates or instruments not misleading in light of the circumstances under
which such statements were made.
4.21 ADEQUACY OF CAPITAL; SOLVENCY.
The proceeds of the Loans, together with the proceeds of
Indebtedness, if any, permitted under Section 7.1 (Indebtedness), will be
sufficient until satisfaction in full of the Loans to enable the Borrower and
its Subsidiaries to operate their respective businesses as currently
contemplated by the Borrower. The Borrower and each of its Subsidiaries is
Solvent and will be Solvent after giving effect to the transactions contemplated
by this Agreement.
4.22 ABSENCE OF RESTRICTIVE PROVISIONS.
Other than this Agreement, neither the Borrower nor any of its
Subsidiaries is subject or party to any agreement, lien or encumbrance, charter
or bylaw, regulatory, or other provision (except for applicable statutory
corporate law), restricting, directly or indirectly,
(a) the payment of dividends by a Subsidiary of the Borrower
or the making of advances or other cash payments by any Subsidiary to the
Borrower, or
(b) the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of the Borrower or any of its Subsidiaries.
4.23 ENVIRONMENTAL COMPLIANCE. Except for occurrences or conditions which
could not reasonably be expected to result in liabilities in excess of
$10,000.00 singly or in the aggregate with all other violations or
non-compliance or liabilities, or any violation which could not reasonably be
expected to otherwise result in a Material Adverse Change:
4.23.1 None of the real property currently or previously owned
and/or occupied by the Borrower or any of its Subsidiaries has ever been used by
previous owners and/or
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operators or ever been used by the Borrower or any of its Subsidiaries to treat,
produce, store, handle, transfer, process, transport, dispose or otherwise
Release any Hazardous Substances in violation of any Environmental Law;
4.23.2 There is no condition which exists on the real property owned
and/or occupied by the Borrower or any of its Subsidiaries which requires
Remedial Action;
4.23.3 Neither the Borrower nor any of its Subsidiaries has been
notified of, or has actual knowledge of any notification having been filed with
regard to, a Release on or into any real property now or previously owned and/or
occupied by the Borrower or any of its Subsidiaries;
4.23.4 Neither the Borrower nor any of its Subsidiaries has received
a summons, citation, notice of violation, administrative order, directive,
letter or other communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission related to the
generation, storage, transportation, handling, transfer, disposal or treatment
of Hazardous Substances in violation of any Environmental Law;
4.23.5 There are no "friable" (as that term is defined in
regulations under the Federal Clean Air Act) asbestos or asbestos-containing
materials which have not been encapsulated in accordance with accepted
guidelines promulgated by the United States Environmental Protection Agency
existing in any real property owned and/or occupied by the Borrower or any of
its Subsidiaries;
4.23.6 No equipment containing polychlorinated biphenyls, including
electrical transformers, are located on any real property occupied by the
Borrower or any of its Subsidiaries in levels which exceed those permitted by
any and all governmental authorities with jurisdiction over such premises and
which are not properly labeled in accordance with requisite standards; and
4.23.7 Each of the tanks on any real property owned and/or occupied
by the Borrower or any of its Subsidiaries have been registered and tested to
the extent required by, and in accordance with, any applicable Environmental
Laws and there is no evidence of leakage from any such tanks. All tanks that
have been removed or abandoned have been closed in accordance with applicable
standards under Environmental Laws.
4.24 INSURANCE. Borrower is in compliance with the requirements relating
to insurance coverage set forth in Section 7.14.
ARTICLE 5
REPORTING REQUIREMENTS AND NOTICES
The Borrower covenants that from the date of this Agreement so long as any
of the Secured Obligations remain unpaid, any Letters of Credit remain
outstanding, the Lenders have an unexpired Commitment to lend hereunder or the
Issuer has an unexpired commitment to issue
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Letters of Credit hereunder, it shall comply with each of the reporting and
notice requirements set forth in this Article 5.
5.1 FINANCIAL DATA AND REPORTING REQUIREMENTS; NOTICE OF CERTAIN EVENTS.
5.1.1 DELIVERY OF QUARTERLY FINANCIAL STATEMENTS. As soon as
practicable and in any event within forty-five (45) days after the close of each
of the first three quarters of each fiscal year of Borrower, the Borrower shall
deliver to the Lenders a management-prepared Consolidated and Consolidating
balance sheet, statement of income and changes in retained earnings, and
statement of cash flows of Borrower and its Subsidiaries as at the end of and
for (a) the period commencing at the end of the previous fiscal year and ending
with such quarter and (b) the period commencing at the end of the previous
fiscal quarter and ending with such currently reported quarter, setting forth in
comparative form the corresponding figures for the appropriate periods of the
preceding fiscal year, certified by the Chief Executive Officer, President,
Chief Financial Officer or Treasurer of the Borrower as (i) having been prepared
in accordance with GAAP and (ii) presenting fairly the financial position and
results of operations of the Borrower and such Subsidiaries as at the date and
for the period specified, and subject to normal recurring year-end audit
adjustments, it being understood that footnotes may be omitted.
5.1.2 DELIVERY OF ANNUAL FINANCIAL STATEMENTS. As soon as
practicable and in any event within one hundred twenty (120) days after the
close of each fiscal year of the Borrower, the Borrower shall deliver to the
Lenders, an audited Consolidated and Consolidating balance sheet, statement of
income and changes in retained earnings, and statement of cash flow of K-Tron
and its Subsidiaries, including Borrower and its Subsidiaries, as at the end of
and for the fiscal year just closed in reasonable detail and certified (without
any qualification, modification or exception) by KPMG, LLC or other
nationally-recognized independent certified public accountants selected by the
Borrower and satisfactory to Agent provided that the Consolidating statements
for the Borrower and its Subsidiaries are included within the audit and
specifically referenced therein.
5.1.3 DELIVERY OF OFFICER'S COMPLIANCE CERTIFICATES. As soon as
practicable after the close of each quarter of each fiscal year of the Borrower
and in any event no later than the date on which financial statements are
required to be delivered for each such quarter or year, as provided in
Subsections 5.1.1 (Delivery of Quarterly Financial Statements) and 5.1.2
(Delivery of Annual Financial Statements; Accountants' Certification), the
Borrower shall deliver to the Lenders an Officer's Compliance Certificate (a)
demonstrating compliance with the financial covenants set forth in Article 6 and
(b) certifying that, as at the date of such Certificate, there existed no Event
of Default and no Default or if any such Event of Default or Default existed,
specifying the nature thereof, the period of existence thereof and what action
the Borrower proposes to take, or has taken, with respect thereto.
5.1.4 AUDITORS' REPORTS. Promptly upon receipt, the Borrower shall
deliver to the Lenders copies of all financial reports or written
recommendations, if any, submitted to the Borrower or any of its Subsidiaries by
its auditors in connection with each annual or interim audit or examination of
its books by such auditors.
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5.1.5 SEC FILINGS, ETC. Promptly upon receipt or transmission
thereof, as applicable, the Borrower shall deliver to the Agent and the Lenders:
(a) at any time when the Borrower or any of its Subsidiaries
is subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended, or any regulations promulgated thereunder, all letters of comment or
material correspondence sent to the Borrower or any of its Subsidiaries by any
securities exchange or the Securities and Exchange Commission in relation to the
affairs of the Borrower or any of its Subsidiaries,
(b) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by the Borrower or any of its
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission or any governmental authority succeeding to any of its functions,
(c) financial statements, reports, notices and proxy
statements sent or made available generally by the Borrower or any of its
Subsidiaries to other lenders to such Persons (if any) and their other
respective bondholders or security holders (or any trustee or other
representative of any of the foregoing) and any non-routine notices or other
non-routine correspondence from bondholders or security holders (or trustee or
other representative of such Persons), and
(d) all press releases and other statements made available by
the Borrower or any of its Subsidiaries to the public concerning material
developments in their respective businesses.
5.1.6 MONTHLY CERTIFICATES AND REPORTS. As soon as practicable after
the close of each month and in any event within thirty (30) days of the last day
of each month, the Borrower shall deliver to the Agent (a) a duly executed
Borrowing Base Certificate, and (b) a management-prepared statement of
operations for the Borrower and its Subsidiaries on a Consolidated basis, each
certified by Borrower's Chief Executive Officer, President or Chief Financial
Officer to be true, correct and complete. In connection therewith, the Agent
may, during normal business hours upon reasonable advance notice, conduct such
field examinations as it may deem necessary or advisable, in its discretion, to
evaluate the Borrower's Inventory and Accounts Receivable, which exams shall be
at Borrower's sole cost and expense.
5.1.7 ANNUAL BUDGET. No later than January 31 of each year, the
Borrower shall deliver management-prepared operating projections and budgets for
the Borrower and its Subsidiaries for such fiscal year, certified to be true,
correct and complete by the Chief Executive Officer, President or Chief
Financial Officer of Borrower, in reasonable detail and otherwise in form and
substance satisfactory to the Lenders.
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5.2 NOTICE OF DEFAULTS.
The Borrower shall give written notice of any Event of Default or
Default to the Agent, the Issuer and the Lenders promptly upon (and in any event
within two (2) Business Days of) any officer of the Borrower obtaining knowledge
thereof.
5.3 NOTICE OF DISPUTES AND OTHER MATTERS.
The Borrower shall give written notice to Agent of any of the
following occurrences promptly upon (and in any event within ten (10) Business
Days of) any officer of the Borrower obtaining knowledge thereof:
5.3.1 CERTAIN LITIGATION. Any actions, proceedings or claims
commenced or asserted against Borrower or any of its Subsidiaries in which the
amount involved is $100,000.00 or more and which is not fully covered by
insurance, or which, if not solely a claim for monetary damages, could
reasonably be expected to, if adversely determined, result in a Material Adverse
Change;
5.3.2 CONDITIONS AFFECTING COLLATERAL. Any of the following
conditions: (i) movement of any Collateral to a location not covered by a
Uniform Commercial Code financing statement, to the extent local filing is
required due to the nature of such Collateral; (ii) acquisition of property by
the Borrower or any Subsidiary not subject to a valid and perfected, first
priority Lien pursuant to the then existing Loan Documents; (iii) any change of
name, jurisdiction of registration or address of the chief executive office of
the Borrower or any Subsidiary; or (iv) any other circumstance which could
affect the attachment or perfection of the Agent's security interest in the
Collateral;
5.3.3 MATERIAL ADVERSE CHANGE. Any Material Adverse Change or the
existence of any facts or circumstances or the occurrence or failure to occur of
any event which could result in a Material Adverse Change; or
5.3.4 REPRESENTATIONS AND WARRANTIES. Any changes in facts or
circumstances on which the representations and warranties set forth in this
Agreement are made which makes such representations and warranties false or
misleading in any material respect.
5.4 ERISA NOTICES.
The Borrower shall deliver to the Agent:
(a) promptly after the filing or receiving thereof, copies of all
reports, including annual reports and audited financial statements, and notices
which the Borrower or any Subsidiary or any ERISA Affiliate files with or
receives from PBGC or the US Department of Labor under ERISA, and
(b) as soon as possible and in any event within twenty (20) days
after the Borrower or any of its Subsidiaries or any ERISA Affiliate knows or
has reason to know that any
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Reportable Event or Prohibited Transaction has occurred with respect to any Plan
or that the PBGC or the Borrower or any Subsidiary or any ERISA Affiliate has
instituted or will institute proceedings under Title IV of ERISA to terminate
any Plan, or that any Withdrawal Liability from a Multiemployer Plan has been or
will be incurred by Borrower or any of its Subsidiaries or any ERISA Affiliate
or that any Multiemployer Plan to which Borrower or any of its Subsidiaries or
any ERISA affiliate contribute is or will be in Reorganization, a certificate of
the chief financial officer of the Borrower setting forth details as to such
Reportable Event or Prohibited Transaction or Plan termination or Withdrawal
Liability or Reorganization and the action the Borrower proposes to take with
respect thereto.
5.5 MISCELLANEOUS. With reasonable promptness, the Borrower shall deliver
such other information respecting the business, operations and financial
condition of itself and its Subsidiaries as the Agent or any Lender may from
time to time reasonably request.
5.6 AUTHORIZATION OF THIRD PARTIES TO DELIVER INFORMATION. The Borrower
hereby agrees that any opinion, report or other information delivered to the
Agent, the Issuer or any Lender pursuant to the Loan Documents is hereby deemed
to have been authorized and directed by the Borrower to be delivered for the
benefit, and reliance thereupon, of such recipient.
ARTICLE 6
FINANCIAL COVENANTS
The Borrower covenants that from the date of this Agreement so long as any
of the Secured Obligations remain unpaid, any Letters of Credit remain
outstanding, the Lenders have an unexpired Commitment to lend hereunder or the
Issuer has an unexpired commitment to issue Letters of Credit hereunder, it
shall comply with each of the financial covenants set forth in this Article 6.
6.1 MINIMUM TANGIBLE NET WORTH. The Borrower and its Subsidiaries, on a
Consolidated basis, shall maintain a Tangible Net Worth of not less than the sum
of (a) the Base Amount (as defined below) plus (b) an amount equal to 50% of the
Consolidated Net Income of the Borrower and its Subsidiaries for the period
commencing on the first day of the 2003 fiscal year and ending on the last day
of the fiscal year ending on, or most recently prior to, the applicable test
date. Test dates for this covenant shall be the last day of each fiscal quarter.
"BASE AMOUNT" means the Tangible Net Worth of the Borrower and its Subsidiaries
as at the last day of the 2002 fiscal year, subject to such adjustments as are
satisfactory to Agent.
6.2 FIXED CHARGE COVERAGE RATIO. The Borrower and its Subsidiaries, on a
Consolidated basis, shall maintain a Fixed Charge Coverage Ratio of at least
1.10:1.00 at all times. This covenant shall be tested quarterly.
6.3 CONSOLIDATED TOTAL DEBT TO EBITDA RATIO. The Borrower and its
Subsidiaries, on a Consolidated basis, shall maintain a ratio of Consolidated
Total Debt, as at the date of determination, to EBITDA, for the twelve (12)
month period most recently ended, of no more
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than the ratio specified for the period specified. For purposes of this Section
6.3: the first fiscal quarter of any fiscal year shall be designated as "Q1";
the second fiscal quarter of any fiscal year shall be designated as "Q2"; the
third fiscal quarter of any fiscal year shall be designated as "Q3"; and the
fourth fiscal quarter of any fiscal year shall be designated as "Q4".
Ratio Period
----- ------
3.00:1.00 Closing through end of Q4 2003
2.75:1.00 thereafter through end of Q2 2004
2.50:1.00 thereafter through end of Q4 2004
2.25:1.00 thereafter through end of Q4 2005
2.00:1.00 thereafter through end of Q4 2006
1.75:1.00 thereafter
This covenant shall be tested quarterly and at any time the Borrower incurs any
Indebtedness hereunder; provided, however, the Borrower shall not be required to
provide written evidence of compliance at the time of each incurrence of
Indebtedness (unless the Agent specifically requests such evidence in connection
with any specified incurrence), it being understood that the request for a Loan
hereunder shall be deemed to constitute a representation by Borrower as to such
compliance.
6.4 LIMITATION ON CAPITAL EXPENDITURES. The Borrower and its Subsidiaries,
on a Consolidated basis, shall not permit its Capital Expenditures to exceed
$1,000,000.00 in the aggregate in any fiscal year.
6.5 ADDITIONAL PROVISIONS RESPECTING CALCULATION OF FINANCIAL COVENANTS.
Except as otherwise provided in this Agreement, the following provisions shall
apply.
6.5.1 Calculations made pursuant to this Article 6 shall give
effect, on a pro forma basis, to all Acquisitions and dispositions made during
the quarter or year to which the required compliance relates, as if such
Acquisition or disposition had been consummated on the first day of the
applicable period.
6.5.2 Except as otherwise provided in this Agreement, calculations
under this Agreement shall be made and financial data and terms referred to in
this Agreement shall be prepared and interpreted both as to classification of
items and as to amounts in accordance with GAAP.
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ARTICLE 7
BUSINESS COVENANTS
The Borrower covenants that from the date of this Agreement so long as any
of the Secured Obligations remain unpaid, any Letters of Credit remain
outstanding, the Lenders have an unexpired Commitment to lend hereunder or the
Issuer has an unexpired commitment to issue Letters of Credit hereunder, it
shall comply with each of the covenants set forth in this Article 7.
7.1 INDEBTEDNESS.
7.1.1 IN GENERAL. The Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
permit to exist or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness other than any of the following:
(a) obligations under Interest Rate Protection Agreements
entered into with respect to the Borrower's or a Subsidiary's Indebtedness but
not for speculative purposes;
(b) obligations under the Loan Documents and Letters of Credit
issued hereunder;
(c) Capital Lease Obligations and Equipment Purchase Money
Indebtedness in a principal amount not to exceed $1,000,000.00 singly or in the
aggregate at any time;
(d) obligations owing to the Borrower or to a Subsidiary of
Borrower; and
(e) the Old PA Crusher Letter of Credit Indebtedness, to the
extent such obligations (i) are unsecured except by cash collateral acceptable
to Agent and (ii) expire on the date (or dates) described in Schedule 7.1.1
annexed hereto.
7.1.2 LIMITATION ON INCURRENCE. In addition to the limitations on
the incurrence or existence of Indebtedness referred to above, no Indebtedness
may be incurred by Borrower or any of its Subsidiaries unless immediately before
and after giving effect to the incurrence of such Indebtedness, no Default or
Event of Default shall have occurred and be continuing.
7.1.3 NO DEFAULT. The Borrower shall not allow any such Indebtedness
to be in default.
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7.2 LIENS; LICENSES.
7.2.1 IN GENERAL. The Borrower will not, and will not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or assets of the Borrower or
any of its Subsidiaries, except any of the following (the Liens referred to in
clauses (a) through (e) are, collectively, the "PERMITTED LIENS"):
(a) Liens created in favor of the Agent for the benefit of the
Secured Parties pursuant to the Loan Documents;
(b) Liens for taxes, assessments or other governmental charges
the payment of which is not at the time required by Section 7.11 (Payment of
Taxes and Claims);
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen incurred in the ordinary course of
business for sums not yet due or the payment of which is not at the time
required by Section 7.11 (Payment of Taxes and Claims);
(d) Capital Leases or Liens securing Equipment Purchase Money
Indebtedness, incurred in compliance with paragraph (c) of Subsection 7.1.1
above, provided that no such security interest or other Lien shall extend to or
cover any property other than the leased property or equipment purchased from
the proceeds of such Equipment Purchase Money Indebtedness;
(e) cash collateral acceptable to the Agent securing the Old
PA Crusher Letter of Credit Indebtedness, to the extent such cash collateral is
released promptly after expiration of the letter of credit secured by such cash
collateral;
(f) encumbrances arising by reason of easements, licenses,
reservations, covenants, rights-of-way and other similar encumbrances on the use
of real property, to the extent such Liens do not materially interfere with the
use, enjoyment or value of the subject real property or with the business of the
Borrower or any of its Subsidiaries;
(g) any exception to title set forth in the title insurance
policy or title commitment with respect to any property of the Borrower or any
of its Subsidiary with respect to which a Mortgage has been executed;
(h) leases or subleases of real estate permitted by this
Agreement granted to others, easements, rights-of-way, restrictions and other
similar charges or encumbrances on real property, in each case (i) incidental to
and not interfering with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries and (ii) subordinate, on terms and conditions acceptable
to the Agent, to the Lien of the Lenders (or the Agent for the benefit of the
Secured Parties) on such real property under the Loan Documents;
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(i) Liens listed on Schedule 7.2.1 annexed hereto; and
(j) encumbrances in the nature of utility easements, zoning or
other building restrictions and other similar Liens on real property disclosed
in real property record searches and title insurance commitments delivered to
the Agent, to the extent such Liens do not materially interfere with the use,
enjoyment or value of the subject real property or with the business of the
Borrower or any of its Subsidiaries.
7.2.2 NEGATIVE PLEDGE. The Borrower will not, and will not permit
any of its Subsidiaries to, agree with any Person, to restrict or place
limitations on the right of the Borrower or any of its Subsidiaries to create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of the Borrower or any of its Subsidiaries.
7.2.3 LICENSES. Except as set forth on Schedule 7.2.3 annexed
hereto, the Borrower will not, and will not permit any Subsidiaries to, license
or sublicense any of its Intellectual Property or general intangibles.
7.3 INVESTMENTS, LOANS, ACQUISITIONS, ETC.
Except as set forth on Schedule 7.3 annexed hereto, the Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
make or permit to exist any Investment or make any Acquisition, whether in one
transaction or in a series of transactions except that so long as no Default or
Event of Default then exists or would be caused thereby, the Borrower and its
Subsidiaries may purchase:
(a) Investments by the Borrower in its direct or indirect
wholly-owned Subsidiaries or the creation by the Borrower of new direct or
indirect wholly-owned Subsidiaries, subject to compliance with the provisions of
Subsections 3.1.4 (Guaranty and Suretyship Agreements) and 3.1.5(Pledge
Agreements);
(b) Investments by a Subsidiary of the Borrower in an other
Person that is a direct or indirect wholly-owned Subsidiary of the Borrower or
the creation by any direct or indirect wholly-owned Subsidiary of the Borrower
of an other Person that is a direct or indirect wholly-owned Subsidiary of the
Borrower, subject to compliance with the provisions of Subsections 3.1.4
(Guaranty and Suretyship Agreements) and 3.1.5 (Pledge Agreements);
(c) marketable, direct obligations of the United States of
America, its agencies and instrumentalities maturing within three hundred
sixty-five (365) days of the date of purchase;
(d) commercial paper issued by corporations, each of which
shall have a net worth of at least $100 million and each of which conducts a
substantial part of its business in the United States of America, maturing
within two hundred seventy (270) days from the date of the original issue
thereof, and which at the time of acquisition has the highest rating by Xxxxx'x
Investors Service, Inc. or Standard and Poor's Corporation; and
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(e) bankers' acceptances and certificates of deposit maturing
within three hundred sixty-five (365) days of the date of purchase which are
issued by, or time deposits maintained with, an Eligible Institution having
capital, surplus and undivided profits totaling more than $100 million and which
have the highest rating by Xxxxx'x Investors Service, Inc. or Standard and
Poor's Corporation.
7.4 RESTRICTED PAYMENTS
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum or
property for any Restricted Payment, except that:
(a) INTERCOMPANY DISTRIBUTIONS. Restricted Payments may be
declared and paid to the Borrower by direct or indirect wholly owned
Subsidiaries of the Borrower.
(b) TAX DISTRIBUTIONS. In addition, Tax Distributions may be
made in any fiscal year, so long as no Event of Default or Default exists or
would be created as a result of the making thereof.
7.5 SALE-LEASEBACKS.
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly sell or otherwise transfer, in one or more related
transactions, any property (whether real, personal or mixed) and thereafter rent
or lease such transferred property or substantially identical property.
7.6 TRANSACTIONS WITH AFFILIATES.
The Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, engage in any transaction with any Affiliate, on
terms that are less favorable to the Borrower or such Subsidiary than those
which might be obtained at the time from unaffiliated third parties, provided
that the foregoing restrictions shall not apply to transactions among the
Borrower and any of its Subsidiaries or to the transactions specified on
Schedule 7.6 hereto.
7.7 MERGERS AND DISPOSITIONS.
7.7.1 CONSOLIDATIONS AND MERGERS. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly:
(a) consolidate with or merge into any other Person, except
that a Subsidiary of the Borrower may consolidate with or merge into a
wholly-owned Subsidiary of the Borrower;
(b) permit any Person that is not a Subsidiary of the Borrower
to consolidate with or merge into it; or
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(c) enter into any winding-up, liquidation, dissolution,
division or similar transaction.
7.7.2 SALES AND OTHER DISPOSITIONS. The Borrower will not, and will
not permit any Subsidiaries to, directly or indirectly, whether in a single
transaction or series of related transactions, sell, lease, license, abandon or
otherwise transfer or dispose of (any such transaction being a "transfer") any
of its assets or property of any nature except (a) sales of inventory in the
ordinary course of its business, (b) transfers to a wholly-owned Subsidiary of
the Borrower or to the Borrower, (c) transfers of assets no longer used or
useful in the business of the Borrower and its Subsidiaries, for substantially
market value, the proceeds of which are used within ninety (90) days of transfer
to purchase or otherwise acquire capital assets for use in the business of the
Borrower and its Subsidiaries, (d) subject to the mandatory prepayment
requirement of Subsection 1.2.6(d), transfers of assets no longer used or useful
in the business of the Borrower and its Subsidiaries, for substantially market
value, the proceeds of which are not used within ninety (90) days of transfer to
purchase or otherwise acquire capital assets for use in the business of the
Borrower and its Subsidiaries, to the extent the value thereof does not exceed
$500,000.00 singly or in the aggregate in any fiscal year, (e) subject to the
mandatory prepayment requirement of Subsection 1.2.6(d), other transfers
specifically agreed to in writing by the Majority Lenders, and (f) the lease or
sublease of real property (other than the South Carolina Property which will not
be leased without the Agent's consent) not constituting a sale and leaseback, to
the extent not otherwise prohibited by this Agreement.
7.8 MANAGEMENT ARRANGEMENTS.
The Borrower shall not, and shall not permit any of its Subsidiaries
to (a) enter into any management agreement with any Person that gives such
Person the right to manage its business except for usual and customary
employment agreements and the Management Agreement, the payment under which
shall not exceed $500,000.00 in any fiscal year, or (b) directly or indirectly
pay or accrue to any Person any sum or property for fees for management or
similar services rendered in connection with the operation of a Permitted
Business except as set forth above. The Borrower shall not permit the Management
Agreement to be amended, modified or otherwise supplemented except upon the
Agent's prior written consent.
7.9 EXISTENCE.
The Borrower will at all times preserve and keep in full force and
effect (a) its corporate existence and the corporate, partnership or other
existence of each of its Subsidiaries, and (b) its good standing and the good
standing of each of its Subsidiaries, in each case in all states in which it or
its Subsidiaries are formed or required to qualify to do business, except, as to
qualification only, where the failure to keep in full force and effect any such
good standing could not result in a Material Adverse Change and except that a
Subsidiary of the Borrower may be dissolved following the transfer of all of its
assets to one or more other wholly-owned Subsidiaries of the Borrower (the
"TRANSFEREE SUBSIDIARIES") subject to the conditions that (i) both before and
after the transfer and subsequent dissolution, no Event of Default or Potential
Default shall exist and (ii) all of the equity of the Transferee Subsidiaries
shall have been duly pledged to the Agent, for the
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benefit of the Secured Parties, pursuant to Subsection 3.1.5 (Pledge
Agreements), all of the material assets of the Transferee Subsidiaries shall
have been pledged as security pursuant to the Security Agreement, Mortgages and
leasehold mortgages (if required by the Agent, and if required, in form and
substance satisfactory to Agent) (collectively, "LEASEHOLD MORTGAGES")and the
Transferee Subsidiaries shall all be parties to one or more Subsidiary
Suretyships pursuant to Subsection 3.1.4 (Guaranty and Suretyship Agreements).
7.10 COMPLIANCE WITH LAW.
The Borrower will, and will cause each of its Subsidiaries to,
comply with all Law, and obtain or maintain all franchises, permits, franchises
and other governmental authorizations and approvals necessary for the ownership,
acquisition and disposition of their respective properties and the conduct of
their respective businesses.
7.11 PAYMENT OF TAXES AND CLAIMS.
The Borrower will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its franchises, business,
income or profits before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by Law have or
might become a Lien upon any of its properties or assets, provided that no such
charge or claim need be paid if being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor and, if the filing of a bond or other indemnity is necessary
to avoid the creation of a Lien against any of the assets of the Borrower or any
of its Subsidiaries, such bond shall have been filed or indemnity provided.
7.12 TAX CONSOLIDATION.
The Borrower will not file, or consent to or permit the filing of,
any consolidated income tax return on behalf of it or any of its Subsidiaries
with any Person, other than a consolidated return of K-Tron and its
Subsidiaries. The Borrower shall cause the Tax Sharing Agreement to remain in
full force and effect, and shall not permit same to be amended, modified or
otherwise supplemented except upon the prior written consent of Agent. The
Borrower shall compute its federal income tax liability in accordance with
Section 1552(a)(2) of the Code.
7.13 COMPLIANCE WITH ERISA. Except for violations that could not
reasonably be expected to result in liabilities in excess of $75,000.00 singly
or in the aggregate with all other such liabilities, or any violation or
noncompliance which could not reasonably be expected to otherwise result in a
Material Adverse Change:
7.13.1 The Borrower shall, and shall cause each of its Subsidiaries
and ERISA Affiliates to, in all respects, make all contributions to any Employee
Pension Plan and Multiemployer Plan when such contributions are due and not
incur any Accumulated Funding
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Deficiency, whether or not waived, and will otherwise comply with the
requirements of the Code and ERISA with respect to the operation of all Plans in
all respects;
7.13.2 The Borrower shall, and shall cause each of its Subsidiaries
and ERISA Affiliates to, comply in all respects with the provisions of ERISA and
the Code with respect to any Plan both in form and operation including, but not
limited to, the timely filing of required annual reports and the payment of PBGC
premiums;
7.13.3 The Borrower shall, and shall cause each of its Subsidiaries
and ERISA Affiliates to, comply in all respects with the requirements of COBRA
regarding continued health coverage and of the Health Insurance Portability and
Accountability Act of 1996 with respect to any Plans subject to the requirements
thereof;
7.13.4 The Borrower will not, and will not permit any of its
Subsidiaries or any of its ERISA Affiliates to, take any of the following
actions or permit any of the following events to occur if such action or event
together with all other such actions or events would subject the Borrower, any
of its Subsidiaries or any of its ERISA Affiliates to any tax, penalty, or other
liabilities:
(a) engage in any transaction in connection with which the
Borrower, any of its Subsidiaries or any ERISA Affiliate could be subject to
either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code;
(b) terminate any Employee Pension Plan in a manner, or take
any other action, which could result in any liability of the Borrower, any of
its Subsidiaries or any ERISA Affiliate to the PBGC;
(c) fail to make full payment when due of all amounts which,
under the provisions of any Plan, the Borrower, any of its Subsidiaries or any
ERISA Affiliate is required to pay as contributions thereto, or permit to exist
any Accumulated Funding Deficiency, whether or not waived, with respect to any
Employee Pension Plan;
(d) permit the current value of all vested accrued benefits
under all Plans which are subject to Title IV of ERISA to exceed the current
value of the assets of such Plans allocable to such vested accrued benefits,
except as may be permitted under actuarial funding standards adopted in
accordance with Section 412 of the Code; or
(e) withdraw from any Multiemployer Plan, if such withdrawal
would result in the imposition of Withdrawal Liability; and
7.13.5 The Borrower shall comply with the ERISA reporting
requirements set forth in Section 5.4 (ERISA Notices) hereof.
As used in this Section, the term "accrued benefit" has the meaning
specified in Section 3(23) of ERISA and the term "current value" has the meaning
specified in Section 4001(a)(18)(B) of ERISA.
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7.14 INSURANCE.
7.14.1 LIABILITY, PROPERTY DAMAGE, ETC. The Borrower will maintain,
and will cause each of its Subsidiaries to maintain, with financially sound and
reputable insurers, insurance against loss or damage and liability of the kinds
customarily insured against by Persons of established reputation engaged in the
same or similar businesses and similarly situated and in such amounts as are
customarily carried under similar circumstances by, and otherwise as is prudent
for, Persons engaged in such same or similar businesses. In addition, Borrower
will, and will cause each of its Subsidiaries to, maintain such other insurance
as may be required by the Security Agreement, Mortgages or any other Loan
Document. On an annual basis (and from time to time upon request of the Agent),
the Borrower will promptly furnish to the Agent evidence, in form and substance
satisfactory to the Agent, of the maintenance of all insurance, indemnities or
bonds required by this Section.
7.14.2 PBGC. The Borrower shall maintain or cause to be maintained
all insurance available through the PBGC and/or insurers acceptable to the Agent
against its obligations and the obligations of its Subsidiaries to the PBGC.
7.15 MAINTENANCE OF PROPERTIES.
The Borrower will, and will cause each Subsidiary to: (a) maintain
its and their properties and their properties in good repair, working order and
condition; (b) make all appropriate and proper repairs, renewals, replacements,
additions and improvements thereto; and (c) keep all systems and equipment which
may now or in the future be subject to compliance with any material standards or
rules imposed by any Governmental Authority in compliance in all material
respects with such standards or rules. The Borrower shall, and shall cause each
Subsidiary to, maintain, preserve and protect, and, when necessary, renew, all
franchises, licenses, permits, service marks, patent applications, patents,
trademarks, trade names and other general intangibles held by any of them and
all material agreements to which any of them are parties which are necessary to
conduct the Borrower's or applicable Subsidiary's business.
7.16 MAINTENANCE OF RECORDS; FISCAL YEAR.
The Borrower will, and will cause each of its Subsidiaries to, keep
at all times books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
affairs. The Borrower will, and will cause each of its Subsidiaries to, keep its
and their books of account and financial statements in accordance with GAAP and
report on the basis of a fiscal year ending on December 31; provided, however,
that the Borrower and its Subsidiaries may change their fiscal year to end on
the Saturday nearest to December 31 upon prior written notice to Agent.
7.17 INSPECTION.
Upon reasonable notice (and for this purpose no more than two (2)
Business Days notice shall be required under any circumstances) if no Event of
Default or Default shall exist, or at
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any time with or without notice after the occurrence of an Event of Default or
Default, the Borrower will, and will cause each of its Subsidiaries to, allow
any representative of Agent, the Issuer or any Lender to visit and inspect any
of the properties of the Borrower and any of its Subsidiaries, to examine the
books of account and other records and files of the Borrower and any of its
Subsidiaries (including, without limitation, the financial statements (audited
and unaudited, to the extent prepared) of each Subsidiary and information with
respect to each Permitted Business operated by the Borrower and any of its
Subsidiaries), to make copies thereof and to discuss the affairs, business,
finances and accounts of the Borrower and its Subsidiaries with its personnel
and accountants.
7.18 EXCHANGE OF NOTES.
Upon receipt of a written notice of loss, theft, destruction or
mutilation of any or all of the Notes and of a letter of indemnity from the
affected Lender or its successors or assigns, and upon surrendering for
cancellation such Notes if mutilated (in which event no indemnity shall be
required), the Borrower shall promptly execute and deliver a new Note or Notes
of like tenor in lieu of such lost, stolen, destroyed or mutilated Notes, as the
case may be.
7.19 FURTHER ASSURANCES
At its sole cost and expense, upon the reasonable request of the
Agent, the Borrower will duly execute and deliver, and will cause each
Subsidiary to execute and deliver, to the Agent and the Lenders such further
instruments and do or cause to be done such further acts as may be necessary or
proper in the reasonable opinion of the Agent to carry out more effectively the
provisions and purpose of this Agreement and the other Loan Documents.
7.20 CONSISTENT ACTION - VOTING.
The Borrower shall, and shall cause its Subsidiaries to, exercise
any and all voting or similar rights that they hold in any Person in a manner
consistent with adherence to the provisions of this Agreement and the other Loan
Documents.
7.21 ISSUANCE OF EQUITY.
The Borrower shall not, and shall not permit any Subsidiary to,
issue, authorize the issuance of, or obligate itself to issue any shares of its
capital stock or other equity to any Person that (a) would contravene any other
provision of this Agreement, including without limitation result in a Change of
Control, or (b) would result in there being capital stock of the Borrower or any
of its Subsidiaries that is not pledged pursuant to the Pledge Agreements.
7.22 CHANGE IN DOCUMENTS; NEW DOCUMENTS.
The Borrower will not, and will not permit any of its Subsidiaries
to, amend or otherwise modify the respective articles or certificate of
incorporation, bylaws or other organization document of such Person (except in
connection with a merger permitted by Section 7.7 above (Mergers and
Dispositions.)
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7.23 LIMITATIONS ON CERTAIN RESTRICTIVE PROVISIONS.
The Borrower will not, and will not permit any of its Subsidiaries
to (a) permit or place any restriction, directly or indirectly, on (x) the
payment of dividends or distributions by any Subsidiary or (y) the making of
advances or other cash payments by any such Subsidiary or (z) the transfer by
any Subsidiary of any of its properties or assets, in each case to the Borrower
or its Subsidiaries, or (b) agree with any Person other than the Agent and the
Lenders that the Borrower and/or its Subsidiaries shall not amend the Loan
Documents.
7.24 ENVIRONMENTAL MATTERS.
Except for occurrences or conditions which could not reasonably be
expected to result in liabilities in excess of $10,000.00 singly or in the
aggregate with all other violations or liabilities, or any violation or
non-compliance which could not reasonably be expected to otherwise result in a
Material Adverse Change, the Borrower shall not, and shall not allow any of its
Subsidiaries to,
(a) cause a Release of any Hazardous Substance in violation of
any Environmental Law,
(b) permit to exist any Release of any Hazardous Substance on
any real property owned or occupied by the Borrower or any of its Subsidiaries
in violation of any Environmental Law, or
(c) take any action (or fail to take any action) in violation
of the Environmental Law or take any action (or fail to take any action) which
could result in liability in as a result of any environmental condition.
7.25 CORPORATE SEPARATENESS.
The Borrower and each of its Subsidiaries shall conduct its business
and operations separate from that of each other Affiliate. Without limiting the
generality of the foregoing, the Borrower shall not, and shall not permit any
Subsidiary, to commingle funds with any Person that is not the Borrower or a
Subsidiary of the Borrower.
7.26 SUBSIDIARIES, SUBSIDIARY PLEDGES AND SUBSIDIARY SURETYSHIPS.
Without limiting any other restrictions set forth in this Agreement,
if any Subsidiary of the Borrower at any time acquires or otherwise comes to own
directly any capital stock or other equity interest in any Subsidiary of the
Borrower (other than any Subsidiary existing on the date hereof), such
Subsidiary shall promptly execute and deliver to the Agent a Pledge Agreement
(each such Pledge Agreement, as amended, restated, modified and supplemented
from time to time in accordance with the terms hereof and thereof, a "SUBSIDIARY
PLEDGE") in form and substance satisfactory to the Agent, together with all
original stock and other equity certificates, duly executed in blank and undated
assignment powers and financing
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statements required thereunder. If Borrower or any Subsidiary of Borrower at any
time creates or otherwise causes to exist any direct or indirect Subsidiary of
Borrower (other than any Subsidiary existing on the date hereof), Borrower shall
promptly cause such new Subsidiary to execute and deliver to the Agent a
Subsidiary Suretyship along with such other documents, agreements and
instruments as the Agent may reasonably request in connection therewith.
7.27 INTELLECTUAL PROPERTY COLLATERAL AGREEMENTS.
Without limiting any other restrictions set forth in this Agreement,
if Borrower or any of its Subsidiaries at any time acquires or otherwise comes
to own any material copyrights or other material Intellectual Property, the
Borrower or such Subsidiary, as the case may be, shall promptly execute and
deliver to the Agent an Intellectual Property Collateral Agreement (each such
Intellectual Property Collateral Agreement, as amended, restated, modified or
supplemented from time to time in accordance with the terms hereof and thereof,
an "INTELLECTUAL PROPERTY COLLATERAL AGREEMENT") in form and substance
satisfactory to the Agent, together with such other notices for recording in the
United States Patent and Trademark Office or the Copyright Office and such
Uniform Commercial Code financing statements as are reasonably necessary to
perfect the security interests created by such Intellectual Property Collateral
Agreement.
7.28 REAL PROPERTY LEASED AND OWNED; OTHER LOCATIONS.
7.28.1 IN GENERAL. Without limiting any other restrictions set forth
in this Agreement, if Borrower or any of its Subsidiaries at any time acquires
or otherwise comes to own any fee or leasehold interests in any real property
(other than real property in which the Agent, for the benefit of the Secured
Parties, has obtained a perfected Lien pursuant to the Mortgages or any then
existing Leasehold Mortgages executed pursuant to the terms hereof), or
otherwise comes to occupy or have assets situated upon any real property owned
by any other Person unless otherwise agreed to by the Agent, the Borrower or
such Subsidiary, as the case may be, shall promptly execute and deliver to the
Agent such mortgages, leasehold mortgages, in form and substance satisfactory to
the Agent, together with such Uniform Commercial Code financing statements as
are necessary to perfect the security interests created by, in each case in form
appropriate for recording in the relevant jurisdiction, and shall deliver such
opinions of counsel, environmental reports, flood certifications, title
commitments and insurance policies, surveys, lease agreements, landlord consents
and waivers, warehouseman waivers, mortgagee waivers and other instruments,
agreements, documents and certificates as may be reasonably requested by Agent
in connection therewith, all in form and substance reasonably satisfactory to
the Agent.
7.28.2 OTHER LOCATIONS. The Borrower shall notify the Agent if it or
any of its Subsidiaries has, at any time, inventory or other assets at a
location not owned or leased by the Borrower or such Subsidiary and not listed
on Schedule 4.6 hereto. In that event, the Borrower shall use commercially
reasonable efforts to deliver to the Agent a bailee acknowledgement and
agreement in form and substance satisfactory to the Agent. If the Borrower fails
to obtain any such a bailee acknowledgment and agreement, any assets of the
Borrower or its Subsidiaries at the subject location shall be excluded from the
Borrowing Base.
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ARTICLE 8
EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT
"EVENT OF DEFAULT" wherever used herein means any one of the
following events (whatever the reason for such Event of Default, whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court, or any order, rule or regulation
of any administrative or governmental instrumentality):
8.1.1 FAILURE TO PAY PRINCIPAL. If the Borrower shall fail to make
any payment of the principal of the Loans on the dates when the same shall
become due and payable, whether at stated maturity or at a date fixed for any
installment or prepayment thereof or otherwise; or
8.1.2 FAILURE TO PAY INTEREST, FEES, REIMBURSEMENT OBLIGATIONS, ETC.
If the Borrower shall fail to make any payment of interest on the Loans, the
Commitment Fees, reimbursement obligations in respect of Letters of Credit or
any other amounts owing hereunder (other than principal of the Loans) or under
any Letters of Credit on the dates when such interest, Commitment Fees or other
amounts shall become due and payable and such failure continues for more than
two (2) Business Days; or
8.1.3 CROSS-DEFAULT TO INDEBTEDNESS. (a) If the Borrower or any of
its Subsidiaries shall default (as payor or guarantor or other surety) in the
payment of any Indebtedness (other than obligations which are covered in
Subsections 8.1.1 or 8.1.2 above) and the underlying obligation with respect to
which a default has occurred aggregates Five Hundred Thousand Dollars
($500,000.00) or more or could result in a required payment of Five Hundred
Thousand Dollars ($500,000.00) or more, or (b) if any event shall occur or
condition shall exist in respect of any such Indebtedness or under any Interest
Rate Protection Agreements or Letters of Credit which would permit, or shall
have caused, the acceleration of the payment, time for payment or maturity of
any such obligations; or
8.1.4 OTHER CROSS-DEFAULTS. If the Borrower or any of its
Subsidiaries shall default in a payment or performance of any obligation (except
obligations which are covered in Subsections 8.1.1, 8.1.2 and 8.1.3 above),
whether now or hereafter incurred, which default or could result in a required
payment of Five Hundred Thousand Dollars ($500,000.00) or more; or
8.1.5 MISREPRESENTATIONS. If any representation or warranty made (a)
by the Borrower in this Agreement or in any other Loan Document or (b) by the
Borrower or any other Person (other than the Agent, the Issuer or a Lender) in
any document, certificate or statement furnished pursuant to this Agreement or
any other Loan Document, shall be false or misleading in any material respect
when made or deemed made; or
8.1.6 CERTAIN COVENANT DEFAULTS. If there shall occur a default in
the due performance or observance of any term, covenant or agreement to be
performed or observed
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pursuant to any of Article 5 (Reporting Requirements And Notices), Article 6
(Financial Covenants), or Article 7 (Business Covenants); or
8.1.7 OTHER COVENANT DEFAULTS. If there shall occur any default in
the due performance or observance of any term, covenant or agreement to be
performed or observed pursuant to the provisions of this Agreement, other than
as provided in Subsections 8.1.1, 8.1.2, 8.1.3, and/or 8.1.6 above, or any
agreement incidental hereto (other than as provided in Subsection 8.1.8) and, if
capable of being remedied, such default shall continue unremedied for thirty
(30) days after the commencement of such default; or
8.1.8 OTHER LOAN DOCUMENT DEFAULTS; SECURITY. If any of the parties,
other than the Agent, the Issuer and the Lenders, to any of the Loan Documents
(other than this Agreement) shall fail to perform any of its obligations under
any of such agreements (after taking into account any applicable cure period set
forth in such agreements); or if the validity of this Agreement or any of the
other Loan Documents shall have been challenged or disaffirmed by or on behalf
of any of such parties thereto; or if, other than as a direct result of any
action of the Agent, the Issuer or the Lenders, any Liens created or intended to
be created by any of the Loan Documents shall at any time cease to be valid and
perfected first priority Liens in favor of the Agent (for the benefit of the
Secured Parties), subject to no equal or prior Liens except Permitted Liens; or
8.1.9 CUSTODY OR CONTROL OF ASSETS. If custody or control of any
substantial part of the property of the Borrower or any of its Subsidiaries or
any Affiliate of the foregoing shall be assumed by any Governmental Authority or
any court of competent jurisdiction, or any other Person at the insistence of
any Governmental Authority or any court of competent jurisdiction; or
8.1.10 DISCONTINUANCE OF BUSINESS. If the Borrower or any of its
Subsidiaries shall suspend or discontinue its business except, in the case of
Subsidiaries, pursuant to a dissolution or merger of such Subsidiary permitted
by the terms of this Agreement; or
8.1.11 INSOLVENCY. If the Borrower or any of its Subsidiaries or any
of their Affiliates shall make an assignment for the benefit of creditors or a
composition with creditors, shall generally not be paying its debts as they
mature, shall admit its inability to pay its debts as they mature, shall file a
petition in bankruptcy, shall become insolvent (howsoever such insolvency may be
evidenced), shall be adjudicated insolvent or bankrupt, shall petition or apply
to any tribunal for the appointment of any receiver, custodian, liquidator or
trustee of or for it or any substantial part of its property or assets, shall
commence any proceeding relating to it under any bankruptcy, reorganization,
arrangement, readjustment of debt, receivership, dissolution or liquidation law
or statute of any jurisdiction, whether now or hereafter in effect; or if there
shall be commenced against the Borrower or any of its Subsidiaries or any of
their Affiliates any such proceeding and the same shall not be dismissed within
sixty (60) days or an order, judgment or decree approving the petition in any
such proceeding shall be entered against the Borrower or any of its Subsidiaries
or any of their Affiliates, or if the Borrower or any of its Subsidiaries or any
of their Affiliates, shall have concealed, removed, or permitted to be concealed
or removed, any part of its property, with intent to hinder, delay or defraud
its creditors, or any of them, or shall have made or suffered a transfer of any
of its property which may be fraudulent under any
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bankruptcy, fraudulent conveyance or similar law, or if the Borrower or any of
its Subsidiaries or any of their Affiliates, shall have made any transfer of its
property to or for the benefit of a creditor which constitutes a preferential
transfer under any bankruptcy or similar law; or if the Borrower or any of its
Subsidiaries or any of their Affiliates shall have suffered or permitted, while
insolvent, any creditor to obtain a lien upon any of its property through legal
proceedings or distraint; or
8.1.12 MATERIAL ADVERSE EFFECT. If there shall occur or be
threatened any event, or if there shall exist any fact or condition, which could
result in a Material Adverse Change; or
8.1.13 JUDGMENTS. If any final judgment or judgments or
non-appealable assessment or assessments for the payment of money in excess of
Five Hundred Thousand Dollars ($500,000.00) in the aggregate shall be rendered
against the Borrower or any of its Subsidiaries and such judgment remains either
unstayed or unsatisfied for a period of thirty (30) days or more; or
8.1.14 CHANGE OF CONTROL. If there shall occur a Change of Control;
or
8.1.15 LEASE TERMINATION. If the Borrower's lease (as in effect from
time to time) for its premises located in Cuyahoga Falls, Ohio or Broomall,
Pennsylvania is terminated prior to the end of its stated term except a
voluntary early termination of the lease by the Borrower, or the landlord under
such lease sends Borrower or Agent a notice of its intention to terminate such
lease prior to the end of its stated term.
8.1.16 SUBORDINATION. If the obligations purported to be subject to
the Subordination Agreement or any other subordination agreement in favor of the
Lenders (or the Agent for the benefit of the Secured Parties) cease to be fully
subordinated to all of the obligations under this Agreement.
8.2 ACCELERATION; REMEDIES.
8.2.1 ACCELERATION UPON INSOLVENCY. Upon the occurrence of any event
described in Subsection 8.1.11 (Insolvency) relating to the Borrower or any
Subsidiary thereof, the entire unpaid principal balance of the Notes, and
interest accrued and premium, if any, thereon, and any unpaid accrued Commitment
Fees and all other Secured Obligations shall be immediately due and payable by
the Borrower and the Commitment shall terminate without presentation, demand,
protest, notice of protest or other notice of dishonor of any kind, all of which
are hereby expressly waived by the Borrower.
8.2.2 ACCELERATION UPON OTHER DEFAULTS. Upon the occurrence of any
other Event of Default, or at any time thereafter if any Event of Default shall
then be continuing, the Agent may (and shall if directed by the Majority
Lenders) by written notice to the Borrower, declare the entire unpaid principal
balance or any portion of the principal balance of all or any of the Notes, and
interest accrued and premium, if any, thereon and any unpaid accrued Commitment
Fees and all other Secured Obligations, to be immediately due and payable by the
Borrower and/or may terminate the Commitment.
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8.2.3 REMEDIES IN GENERAL. In the event of acceleration pursuant to
Subsection 8.2.1 (Acceleration Upon Insolvency) or Subsection 8.2.2
(Acceleration Upon Other Defaults) above, all principal and interest, premium,
fees, and other Secured Obligations shall thereupon become and be immediately
due and payable, without presentation, demand, protest, notice of protest or
other notice of dishonor of any kind, all of which are hereby expressly waived
by the Borrower; and the Agent (acting directly or through appointment of one or
more trustees of the Agent's choosing) may proceed to protect and enforce its
rights and those of the Issuer and the Lenders under the Loan Documents in any
manner or order it deems expedient without regard to any equitable principles of
marshalling or otherwise. It is agreed that, in addition to all other rights
hereunder or under Law, the Agent shall have the right to institute proceedings
in equity or other appropriate proceedings for the specific performance of any
covenant or agreement made in any of the Loan Documents or for an injunction
against the violation of any of the terms of any of the Loan Documents or in aid
of the exercise of any power granted in any of the Loan Documents or by Law or
otherwise. Further, the Agent shall be entitled to the appointment of a trustee
or receiver for all or any part of the businesses of the Borrower or any of its
Subsidiaries, which trustee or receiver shall have such powers as may be
conferred by the appointing authority. All rights and remedies given by this
Agreement, the Notes and the other Loan Documents are cumulative and not
exclusive of any of such rights or remedies or of any other rights or remedies
available to the Agent, the Issuer or any Lender, and no course of dealing
between the Borrower or any Subsidiary, on one hand, and the Agent, the Issuer
or any Lender, on the other hand, or any delay or omission in exercising any
right or remedy shall operate as a waiver of any right or remedy, and every
right and remedy may be exercised from time to time and as often as shall be
deemed appropriate by the Agent.
8.3 PROCEEDS OF COLLATERAL.
Following an Event of Default and acceleration of remedies, the Agent
shall apply proceeds of Collateral as follows:
First, to payment of that portion of the Secured Obligations
constituting fees, expenses (including, without limitation, expenses
relating to attorneys' fees and other professionals' fees), indemnities
and other amounts due to the Agent in its capacity as such;
Second, to payment of that portion of the Secured Obligations
constituting accrued and unpaid interest and accrued and unpaid
Commitment Fees or other fees, ratably amongst the Secured Parties in
proportion to the respective amounts described in this clause "Second"
due to them;
Third, to payment of that portion of the Secured Obligations
constituting unpaid principal of the Loans, ratably amongst the Lenders
in proportion to the respective amounts described in this clause
"Third" due to them;
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Fourth, to payment of all other Secured Obligations, ratably
amongst the Secured Parties in proportion to the respective amounts
described in this clause "Fourth" due to them; and
Finally, the balance, if any, after all of the Secured
Obligations have been satisfied, to the Borrower or applicable
Subsidiary or as otherwise required by Law.
ARTICLE 9
DEFINITIONS
9.1 DEFINED TERMS.
As used in this Agreement, the following terms shall have the
meanings specified in this Section unless the context otherwise requires.
Defined terms in this Agreement shall also mean in the singular number the
plural and in the plural the singular.
- ACCOUNT DEBTOR: the meaning specified for such term under the
Uniform Commercial Code, but in any even shall include, but not be limited to,
each Person obligated on an Account Receivable.
- ACCOUNT RECEIVABLE: the meaning specified for "Account" under the
Uniform Commercial Code, but in any event shall include, but not be limited to,
credit card receivables, lottery winnings, health-care-insurance receivables,
any right to payment arising out of goods or other property (including, without
limitation, Intellectual Property) sold or leased, licensed, assigned or
disposed of or for services rendered which is not evidenced by an instrument or
chattel paper, whether or not it has been earned by performance including all
rights to payment of rents under a lease or license and payment under a charter
or other contract and all rights incident to such lease, charter or contract.
- ACCUMULATED FUNDING DEFICIENCY: any accumulated funding deficiency
as defined in Section 302(a) of ERISA.
- ACQUISITION: means (whether by purchase, lease, exchange, issuance
of equity or debt securities, merger, reorganization or any other method) (a)
any acquisition by the Borrower or any of its Subsidiaries of an interest in any
other Person which shall then become Consolidated with the Borrower or any such
Subsidiary in accordance with GAAP, or (b) any acquisition by the Borrower or
any of its Subsidiaries of all or any substantial part of the assets of any
other Person.
- ADJUSTED LIBOR: the rate per annum (rounded upwards if necessary
to the nearest one-hundredth of one percent) determined by the Agent to be equal
to the quotient of (a) LIBOR, divided by (b) a number equal to 1.00 minus the
Reserve Percentage.
- AFFILIATE: means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Control" means the possession, directly or indirectly,
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of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
- AGENT: the meaning specified in the preamble to this Agreement.
- AGREEMENT: the meaning specified in the introductory paragraph
hereof.
- APPLICABLE MARGIN: the meaning specified in Subsection 1.7.2.
- APPROVED FUND: any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
- ASSIGNMENT AND ASSUMPTION: an assignment and assumption agreement
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by Subsection 11.7.2 (Assignment)), and accepted by
the Agent, in substantially the form of Exhibit K, or any other form approved by
the Agent.
- AVAILABLE COMMITMENT: the meaning specified in Subsection 1.1.2.
- BASE RATE: the higher of (a) the rate of interest publicly
announced by the Agent from time to time at its principal office as its prime
commercial lending rate (which rate is not necessarily the lowest rate charged
by the Agent to its borrowers) and (b) the Federal Funds Rate plus one-half of
one percent (-1/2%).
- BASE RATE LOANS: Loans bearing interest at a rate equal to the
Base Rate plus the Applicable Margin.
- BORROWER: the meaning specified in the preamble to this Agreement.
- BORROWER PLEDGE: the meaning specified in paragraph (b) of
Subsection 3.1.5.
- BORROWER REQUIRED PAYMENT: the meaning specified in Subsection
1.10.2.
- BORROWING BASE: means, at any time, an amount equal to the sum of
(a) eighty-five (85%) percent of Eligible Accounts Receivable, plus (b) sixty
(60%) percent of Eligible Finished Inventory (without duplication of any
Eligible Raw Materials Inventory), plus (c) sixty (60%) percent of Eligible Raw
Materials Inventory.
- BORROWING BASE CERTIFICATE: means a full and complete certificate
in the form attached hereto as Exhibit L, certified as true and correct by the
Borrower's Chief Executive Officer, President or Chief Financial Officer.
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- BUSINESS DAY: a day other than a Saturday, Sunday or other day on
which commercial banks in Philadelphia, PA are authorized or required by law to
close.
- CAPITAL EXPENDITURES: expenditures for fixed or capital assets.
- CAPITAL LEASE: a lease with respect to which the lessee is
required to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.
- CAPITAL LEASE OBLIGATION: with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder which would in accordance with
GAAP appear on a balance sheet of such lessee in respect of such Capital Lease
or otherwise be disclosed in a note to such balance sheet.
- CERCLA: the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended from time to time, and all rules and
regulations promulgated in connection therewith.
- CHANGE OF CONTROL:
(a) K-Tron (i) ceases to own, directly or indirectly, all of the
voting stock of the Borrower, free and clear of all Liens (and if K-Tron's
ownership is indirect, all equity that is involved in the indirect ownership
chain is free and clear of Liens) except Liens in favor of Lender pursuant to
the Pledge Agreement, (ii) enters into, or allows any of its Subsidiaries to
enter into, any voting trust or other agreement which in any way limits its
ability to exercise such 100% voting power, or transfers any of the economic
benefits of ownership of such voting stock to any other Person with the effect
that it ceases to maintain 100% of the economic and non-economic benefits of
ownership of the voting stock of the Borrower, or (iii) otherwise ceases to own
and control, directly or indirectly, 100% of the voting stock of the Borrower;
(b) None of Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxxx and Xxxxxx X.
Xxxxxxxxxx serve in key management positions with the Borrower (it being
understood that this Event of Default is not triggered so long as any one of the
three specified individuals remains with the Borrower); provided that Borrower
shall have ninety (90) days to replace such individuals with other individuals
reasonably satisfactory to the Majority Lenders (it being agreed that from and
after one year after the Closing Date, either Xxxxxx Xxxxxx or Xxxxxx X. Xxxxxx,
XX, will be a satisfactory replacement); or
(c) Both Xxxxxx Xxxxxx and Xxxxxx X. Xxxxxx, XX, cease to serve in
key management positions with K-Tron, provided that K-Tron shall have ninety
(90) days to replace such individuals with other individuals reasonably
satisfactory to the Majority Lenders.
- CLOSING DATE: the meaning specified in Section 3.1.
- COBRA: the group health plan continuation coverage requirements of
Section 4980B of the Code and Part 6 of Subtitle B of the Title I of ERISA.
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- CODE: the Internal Revenue Code of 1986, as amended, or its
predecessor or successor, as applicable, and any Treasury regulations, revenue
rulings or technical information releases issued thereunder.
- COLLATERAL: all property of any sort in which the Borrower or any
Subsidiary of the Borrower has granted, or purported to grant, a security
interest or other Lien pursuant to any of the Loan Documents.
- COMMITMENT FEE: the meaning specified in Subsection 1.6.1.
- COMMITMENT FEE BASE: the meaning specified in Subsection 1.6.1.
- COMMITMENT LETTER: that certain commitment letter and attachments
thereto, dated December 2, 2002, between the Agent and K-Tron.
- COMMITMENTS: the collective reference to the RC Commitment, the
Term Loan A Commitment and the Term Loan B Commitment.
- CONSOLIDATED: with respect to any Person and any specified
Subsidiaries, refers to the consolidation of financial statements of such Person
and such Subsidiaries and of particular items in such financial statements in
accordance with GAAP.
- CONSOLIDATED TOTAL DEBT: for any period, for any Person, all
Indebtedness of such Person.
- CONSOLIDATING: with respect to any Person and any specified
Subsidiaries, refers to the separate presentation of financial statements of
each such Person in accordance with GAAP.
- DEFAULT: any condition or event specified in Article 8 which, with
notice or lapse of time or both, would become an Event of Default.
- DEFAULT RATE: the meaning specified in Subsection 1.7.6.
- DISQUALIFIED STOCK: means, with respect to any Person, any capital
stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable): (a) matures or is mandatorily
redeemable for any reason, (b) is convertible or exchangeable for Indebtedness
or Disqualified Stock, or (c) is redeemable at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
stated maturity of the Notes.
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- EBITDA:(1) for any Person for any period, the Net Income of such
Person for such period plus the sum of the following (to the extent deducted in
the computation of such Net Income):
(a) depreciation expense;
(b) amortization expense;
(c) Interest Expense;
(d) income and franchise taxes or Tax Distributions (but, if there
is a net tax benefit, that shall be deducted from Net Income in calculating
EBITDA); and
(e) permitted management fees.
- ELIGIBLE ACCOUNT: an Account Receivable of Borrower or any of its
Subsidiaries party to the Subsidiary Suretyship and Security Agreement that
meets all of the following requirements on its date of invoice or other
origination date and continuing thereafter until collected:
(a) such Account Receivable represents a complete bona fide
transaction which requires no further act under any circumstances on the part of
such Person to make such Account Receivable payable by the Account Debtor;
(b) such Account Receivable shall not be unpaid more than ninety
(90) days from its due date, not to exceed one hundred twenty (120) days from
its date of invoice or other origination date;
(c) if applicable, the goods, the sale of which gave rise to such
Account Receivable, were shipped or delivered to the Account Debtor on an
absolute sale basis and not on a xxxx and hold sale basis, a consignment sale
basis, a progress basis, a guaranteed sale basis, a sale or return basis, or on
the basis of any other similar understanding, and no part of such goods has been
returned or rejected;
(d) such Account Receivable is not evidenced by chattel paper or an
instrument of any kind;
(e) the Account Debtor with respect to such Account Receivable is
not insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action which might have a materially adverse
effect on the business of such Account Debtor or is not, in the reasonable
discretion of Agent, deemed ineligible for credit for any other reason;
(f) if such Account Receivable arises from the performance of
services, such services have been fully rendered;
(1) Closing Date adjustments satisfactory to Agent to be made.
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(g) such Account Receivable is a valid, legally enforceable
obligation of the Account Debtor with respect thereto and is not subject to any
present, or contingent, and no facts exist which are the basis for any future,
offset or counterclaim or other defense on the part of such Account Debtor,
including, without limitation, any account payable owing by such Person to such
Account Debtor;
(h) such Account Receivable shall be subject to a valid and
perfected first priority Lien in favor of the Agent (for the benefit of the
Secured Parties), subject to no Lien, except for Liens in favor of Agent (for
the benefit of the Secured Parties) and other Permitted Liens;
(i) such Account Receivable is evidenced by an invoice or other
documentation in a form acceptable to the Agent;
(j) such Account Receivable is not subject to any provision
prohibiting its assignment or requiring notice of, or consent to, such
assignment;
(k) if applicable, the goods giving rise to such Account Receivable,
at the time of the sale thereof, were subject to a valid and perfected first
priority Lien in favor of the Agent (for the benefit of the Secured Parties) and
subject to no Lien, except for Liens in favor of Agent (for the benefit of the
Secured Parties) and other Permitted Liens;
(l) if the Account Debtor with respect thereto is the United States
or any department, agency or instrumentality thereof, such Account Receivable
shall have been assigned to the Agent in full compliance with all applicable
laws and regulations, including without limitation the Assignment of Claims Act
of 1940, as amended;
(m) the Account Debtor with respect thereto is domiciled within the
United States of America or, if permitted by Agent, Canada, except as provided
in subclause (n) below;
(n) if the Account Debtor with respect thereto is located outside of
the United States of America, or, if permitted by Agent, Canada, the goods which
gave rise to such Account Receivable were shipped after receipt by such Person
from the Account Debtor of an irrevocable letter of credit, which letter of
credit has been confirmed by a financial institution acceptable to the Agent and
is in form and substance acceptable to the Agent, payable in the full face
amount of the face value of the Account Receivable in freely convertible Dollars
at a place of payment located within the United States of America;
(o) such Account Receivable does not arise out of any transaction
with any Affiliate of such Person;
(p) such Account Receivable is not due from an Account Debtor where
more than fifty (50%) percent of the total Accounts Receivable from such Account
Debtor are not Eligible Accounts Receivable;
(q) that portion of an otherwise Eligible Account that does not
exceed twenty (20%) percent of the aggregate total of all of such Person's
Accounts Receivable; and
(r) such Account Receivable is otherwise satisfactory to the Agent
in its sole discretion based upon the Agent's eligibility requirements as in
effect from time to time.
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- ELIGIBLE ASSIGNEE:
(a) a Lender;
(b) an Affiliate of a Lender;
(c) an Approved Fund; and
(d) any Person (other than a natural person) approved by (i) the
Agent, (ii) in the case of any assignment of a RC Commitment, the Issuer, and
(iii) unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
- ELIGIBLE FINISHED INVENTORY: Inventory of Borrower or any of its
Subsidiaries party to the Subsidiary Suretyship and the Security Agreement
which:
(a) has been sold by such Person in the ordinary course of business,
(i) with respect to the Borrower, during the preceding forty-eight (48) month
period, or (ii) with respect to any of Borrower's Subsidiaries, during the
preceding twenty-four (24) month;
(b) is located on premises (i) owned by the Borrower or a Subsidiary
of the Borrower free of any mortgage, except in favor of the Agent, (ii) leased
by the Borrower or a Subsidiary of the Borrower where the landlord (and any
mortgagee thereof) shall have executed and delivered a landlord waiver in form
and substance satisfactory to Agent, or (iii) otherwise used by the Borrower or
a Subsidiary of the Borrower where the bailee (and, if required by Agent, any
landlord or mortgagee thereof) shall have executed and delivered a bailee
acknowledgement and agreement in form and substance satisfactory to Agent;
(c) is owned by such Person and not purchased or acquired on a
consignment, approval or sale or return basis;
(d) is subject to a valid and perfected first priority Lien in favor
of the Agent (for the benefit of the Secured Parties), and subject to no other
Liens;
(e) is fully and adequately insured, with the Agent named as an
additional insured and lender loss payee as provided herein;
(f) is not unsalable, damaged or obsolete as the Agent shall
determine;
(g) is not classified as work-in-progress except Eligible Raw
Materials Inventory to the extent it is so classified;
(h) is not cartons or packaging materials;
(i) is not manufacturing materials or supplies; and
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(j) is otherwise satisfactory to the Agent in its sole discretion
based upon the Agent's eligibility requirements as in effect from time to time.
- ELIGIBLE RAW MATERIALS INVENTORY: Inventory of Borrower or any of
its Subsidiaries party to the Subsidiary Suretyship and Security Agreement which
consists of raw materials and is otherwise satisfactory to the Agent in its sole
discretion.
- EMPLOYEE PENSION PLAN: any Plan which (a) is maintained by the
Borrower, any of its Subsidiaries or any ERISA Affiliate and (b) is subject to
Part 3 of Subtitle B of Title I of ERISA.
- ENVIRONMENTAL LAWS: any national, state or local law or regulation
(including, without limitation, CERCLA and RCRA) enacted in connection with or
relating to the protection or regulation of the environment, including, without
limitation, those laws, statutes, and regulations regulating the disposal,
removal, production, storing, refining, handling, transferring, processing, or
transporting of Hazardous Substances, and any regulations issued or promulgated
in connection with such statutes by any governmental authority and any orders,
decrees or judgments issued by any court of competent jurisdiction in connection
with any of the foregoing.
- ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and any regulations issued thereunder by the Department of Labor or
PBGC.
- ERISA AFFILIATE: (a) any corporation included with the Borrower in
a controlled group of corporations within the meaning of Section 414(b) of the
Code, (b) any trade or business (whether or not incorporated) which is under
common control with the Borrower within the meaning of Section 414(c) of the
Code, and (c) any member of an affiliated service group of which the Borrower is
a member within the meaning of Section 414(m) of the Code.
- EQUIPMENT PURCHASE MONEY INDEBTEDNESS: indebtedness for the
purchase of equipment, whether such indebtedness is in the form of lease
payments or otherwise.
- EURODOLLAR BUSINESS DAY: a day on which the relevant London
international financial markets are open for the transaction of business
contemplated in this Agreement and which is also other than a Saturday, Sunday
or other day on which commercial banks are required or permitted to close in
Philadelphia, PA.
- EVENT OF DEFAULT: the meaning specified in Section 8.1.
- EXCESS CASH FLOW: means, for any fiscal year, (a) EBITDA, minus
(b) the sum of (without duplication) (i) scheduled principal payments on total
Indebtedness, including scheduled payments under Capital Leases, plus (ii)
Interest Expense, plus (iii) Capital Expenditures, plus (iv) cash income and
franchise taxes (or cash Tax Distributions, as applicable), plus (v) management
fees paid and any Restricted Payments paid in cash, plus or minus (vi) any
decrease or increase during such fiscal year in net working capital, as
determined for Borrower and its Subsidiaries on a Consolidated basis for such
fiscal year in accordance with GAAP.
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- FEDERAL FUNDS RATE: for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next Business Day as
so published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to Agent on such day on such transactions as determined by the
Agent.
- FIXED CHARGE COVERAGE RATIO: as at the end of any fiscal quarter,
the ratio of EBITDA as at the end of such quarter to Fixed Charges for the four
fiscal quarters then ending.
- FIXED CHARGES: for any period, the sum of the following determined
on a Consolidated basis, without duplication, for the Borrower and its
Subsidiaries in accordance with GAAP: (a) scheduled principal payments on all
Indebtedness, including scheduled payments under Capital Leases, plus (b)
Interest Expense, plus (c) Capital Expenditures, plus (d) cash income and
franchise taxes (or cash Tax Distributions, as applicable).
- FOREIGN LENDER: a Lender that is not organized under the Laws of
the United States or any state or political subdivision thereof.
- FACING FEE: the meaning specified in Subsection 2.1.5.
- FUND: any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise interesting in
commercial loans and similar extensions of credit in the ordinary course of its
business.
- GAAP: generally accepted accounting principles consistently
applied, which, as applied to the Borrower and its Subsidiaries shall be
consistent with those applied in the preparation of the financial statements
referred to in Subsection 3.1.12 (Financial Statements; Projections).
- GOVERNMENTAL AUTHORITY: any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government
including, without limitation, the European Central Bank.
- GRANTING LENDER: the meaning of specified in Subsection 1.11.2.
- GUARANTY: as applied to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another Person, including,
but not limited to, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including, but not
limited to, any such obligation in effect guaranteed by
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such Person through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise),
or to maintain the solvency or any balance sheet or other financial condition of
the obligor of such obligation, or to make payment for any products, materials
or supplies or for any transportation or services regardless of the non-delivery
or nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. No Guaranty shall be permitted by this Agreement unless the maximum
dollar amount of the obligation being guaranteed is readily ascertainable by the
terms of such obligation or the agreement or instrument evidencing such Guaranty
specifically limits the dollar amount of the maximum exposure of the guarantor
thereunder, and the amount involved in any Guaranty made during any period shall
be the aggregate amount of the obligation guaranteed (or such lesser amount as
to which the maximum exposure of the guarantor shall have been specifically
limited), less any amount by which the guarantor may have been discharged with
respect thereto (including any discharge by way of a reduction in the amount of
the obligation guaranteed).
- HAZARDOUS SUBSTANCES: any and all pollutants, contaminants, toxic
or hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which is or shall be restricted, prohibited or penalized by any Environmental
Law (including, without limitation, petroleum products, asbestos, urea
formaldehyde foam insulation and polychlorinated biphenyls and substances
defined as Hazardous Substances under CERCLA).
- INDEBTEDNESS: with respect to any Person (without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all obligations of such Person for the deferred purchase price
of capital assets or for any part of the deferred purchase price of other
property or services which purchase price for other property or services is due
more than six months (or a longer period of up to one year, if such terms are
available from suppliers in the ordinary course of business) from the date of
incurrence of the obligation in respect thereof;
(c) all obligations of such Person evidenced by notes, bonds (other
than performance bonds), debentures or other similar instruments;
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property) and all other indebtedness secured by a Lien on the property or assets
of such Person;
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(e) all Capital Lease Obligations of such Person;
(f) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities;
(g) all obligations in respect of Disqualified Stock or other
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any capital stock of such Person or any warrants, rights or
options to acquire such capital stock, which obligations shall be valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends and, in the
case of other such obligations, at the amount that, in light of all the facts
and circumstances existing at the time of determination, can reasonably be
expected to become payable;
(h) a Guaranty of such Person;
(i) all Indebtedness referred to in clauses (a) through (g) above
secured by (or which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness;
(j) all unfunded pension liabilities;
(k) all payments required by such Person under non-compete
agreements; and
(l) all obligations of such Person that are the functional
equivalent of the Indebtedness referred to in clauses (a) through (d) such as
synthetic lease obligations.
- INDEMNITEES: the meaning specified in Section 11.15.
- INTELLECTUAL PROPERTY: the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, l registrations
and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, (b) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, and all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, (c) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State
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thereof or any other country or any political subdivision thereof, or otherwise,
and all common-law rights related thereto, (d) all rights to obtain any reissues
or extensions of the foregoing, and (e) all licenses for any of the foregoing.
- INTELLECTUAL PROPERTY COLLATERAL AGREEMENT: the meaning specified
in Section 7.27.
- INTEREST EXPENSE: for any period, the sum of (a) the amount of
interest accrued on, or with respect to, Consolidated Indebtedness for such
period, including without limitation imputed interest on Capital Leases and
imputed or accreted interest in respect of deep discount or zero coupon
obligations, plus (b) the net amount payable under all Interest Rate Protection
Agreements in respect of such period (or minus the net amount receivable under
Interest Rate Protection Agreements in respect of such period), plus (c)
Commitment Fees payable during such period. For purposes of calculating Interest
Expense, it shall be assumed that any Guaranties constituting Indebtedness will
require payments of interest, if any, in the amounts as called for in the
underlying obligation which is the subject of the Guaranty.
- INTEREST PERIOD: the meaning specified in Subsection 1.7.4.
- INTEREST RATE PROTECTION AGREEMENT: an interest rate swap, cap or
collar agreement or similar arrangement between any Person and a financial
institution providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
- INVENTORY: the meaning specified for such term under the Uniform
Commercial Code, but in any event shall include, but not be limited to, tangible
personal property held by or on behalf of Borrower (or in which Borrower has an
interest in mass or a joint or other interest) for sale or lease or to be
furnished under contracts of service, tangible personal property which Borrower
has so leased or furnished, and raw materials, work in process and materials
used, produced or consumed in Borrower's business, and shall include tangible
personal property returned to Borrower by the purchaser following a sale thereof
by Borrower and tangible personal property represented by documents or
instruments. Without limiting the foregoing, all equipment, accessories and
parts at any time attached or added to items of Inventory or used in connection
therewith shall be deemed to be part of the Inventory.
- INVESTMENT: as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, including all Indebtedness and accounts
receivable from such other Person which are not current assets or did not arise
from sales to such other Person in the ordinary course of business.
- ISSUER: Bank so long as it is a Lender, or if Bank is no longer a
Lender, a Lender designated by the Borrower and acceptable to the Agent.
- K-TRON: K-Tron International, Inc., a New Jersey corporation.
- LANDLORD WAIVER: the meaning specified in Subsection 3.1.7.
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- LAW: all common law and all applicable provisions of
constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of courts or
Governmental Authorities and all orders and decrees of all courts and
arbitrators
LEASEHOLD MORTGAGES: the meaning specified in Section 7.9.
- LENDERS: each of the Persons that execute this Agreement as a
Lender together with any other Persons which become parties to this Agreement as
a Lender from time to time.
- LENDER REQUIRED PAYMENT: the meaning specified in Section 1.11.1.
- LETTER OF CREDIT FEES: the meaning specified in Subsection 2.1.5.
- LETTER OF CREDIT SUBLIMIT: the meaning specified in Section 2.1.1.
- LETTERS OF CREDIT: letters of credit issued pursuant to this
Agreement.
- LIBOR: the per annum rate (rounded to the next higher one
sixteenth of one percent) for deposits in Dollars for a period equal to the
relevant Interest Period as reported on Telerate Page 3750 as of 11:00 a.m.
(London time), on the day that is two (2) Business Days prior to the
commencement of such Interest Period and, if such rate is not published, then
the rate of interest per annum (rounded upwards if necessary to the nearest
one-sixteenth of one percent) at which deposits of Dollars, for periods equal to
the Interest Period designated by the Borrower and in amounts substantially
similar to the outstanding principal amount of the LIBOR Loan, are available to
the Agent from prime banks in the London Interbank Eurocurrency Market on or
about 11:00 a.m. (London time) two (2) Business Days prior to the first day of
the relevant Interest Period or such other method as the Agent may reasonably
use to determine LIBOR.
- LIBOR LOANS: Loans bearing interest at a rate equal to Adjusted
LIBOR plus the Applicable Margin.
- LIEN: any mortgage, lien, pledge, adverse claim, charge, security
interest or other encumbrance.
- LOAN DOCUMENTS: this Agreement, the Notes, the Subsidiary
Suretyships, the Pledge Agreements, the Subordination Agreements, the Security
Agreement, the Mortgages, the Landlord Waivers, the Leasehold Mortgages, the
Intellectual Property Collateral Agreements and any and all agreements,
documents and instruments executed, delivered or filed pursuant to this
Agreement, as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof, provided, however, Interest Rate
Protection Agreements and Letters of Credit are not Loan Documents.
- LOANS: the amounts loaned to the Borrower pursuant to this
Agreement. Loans may be RC Loans or Term Loans.
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- MAJORITY LENDERS: at any time, Lenders having greater than or
equal to sixty-six and 2/3 of one percent (66-2/3%) of the Total Facility. For
purposes of this definition, "Total Facility" means, collectively, at any time
(a) the RC Commitment and (b) the outstanding principal amount of the Term
Loans, but shall exclude any RC Commitment or Term Loans of Lenders who have
forfeited their right to vote under the terms of this Agreement.
- MANAGEMENT AGREEMENT: that certain Management Services Agreement
dated on or about January 3, 2003 between Borrower and K-Tron for provision of
management-related services, as amended, restated, modified or otherwise
supplemented from time to time, and in all instances in form and substance
satisfactory to Agent.
- MATERIAL ADVERSE CHANGE: any material adverse change in
(a) the business, condition (financial or otherwise), operations,
properties or prospects of (i) the Borrower, (ii) the Borrower and its
Subsidiaries taken as a whole, or (iii) of the Borrower or any of its
Subsidiaries, individually, if such change could result in the insolvency or
dissolution (other than pursuant to a merger or dissolution permitted by this
Agreement) of such Person or in the loss of control (by the current holder
thereof) over such Person's assets;
(b) the binding nature, validity or enforceability of any of the
Loan Documents; or
(c) the validity, perfection, priority or enforceability of the
Liens granted to Agent in respect of the property of the Borrower and its
Subsidiaries.
- MATURITY DATE: the latest of the RC Maturity Date, the Term Loan A
Maturity Date and the Term Loan B Maturity Date.
- MORTGAGES: the meaning specified in Subsection 3.1.7.
- MULTIEMPLOYER PLAN: means a multiemployer pension plan as defined
in Section 3(37) of ERISA to which Borrower, any of its Subsidiaries or any
ERISA Affiliate is or has been required to contribute.
- NET INCOME: means, for any period, the aggregate net income (or
loss) of the Borrower and its Subsidiaries for such period on a Consolidated
basis, provided, the following items shall be excluded from the calculation of
Net Income:
(a) after-tax gains and losses from asset sales or abandonment or
reserves relating thereto;
(b) items classified as extraordinary, nonrecurring or unusual
gains, losses or charges, and the related tax effects, each determined in
accordance with GAAP;
-69-
(c) the net income of any Person acquired in a "pooling of
interests" transaction accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged or consolidated with the Borrower or any Subsidiary of the
Borrower;
(d) the net income (but not loss) of any Subsidiary of the Borrower
to the extent that the declaration of dividends, the making of intercompany
loans or similar payments by that Subsidiary of that income is restricted by a
contract, operation of law or otherwise;
(e) the net income of any Person, other than the Borrower or a
Subsidiary of the Borrower, except to the extent of cash dividends or
distributions paid to the Borrower or a Subsidiary of the Borrower by such
Person;
(f) any restoration to income of any contingency reserve; and
(g) income or loss attributable to discontinued operations
(including operations disposed of during such period whether or not such
operations were classified as discontinued).
- NOTES: the promissory notes delivered by the Borrower to the
Lenders (including any successors or assigns thereof) pursuant to this Agreement
(including any amendments, modifications or supplements which may from time to
time, be created in respect of such notes), and any replacement promissory notes
issued in lieu of the foregoing.
- OBLIGATIONS: shall mean and include any and all indebtedness,
obligations and liabilities of any type or nature, direct or indirect, absolute
or contingent, related or unrelated, due or not due, liquidated or unliquidated,
arising by operation of law or otherwise, now existing or hereafter arising or
created of the Borrower, and/or any Subsidiary of the Borrower, and/or any other
Person, to any Secured Party, represented by or incurred pursuant or relating to
the Loan Documents. Without limiting the generality of the foregoing, the term
"Obligations" shall include:
(a) principal of, and interest on, the Loans and the Notes;
(b) any and all other fees, indemnities, costs, obligations and
liabilities of the Borrower and its Subsidiaries from time to time under or in
connection with the Loan Documents;
(c) all obligations of the Borrower owing to any Issuer or Lender
under Letters of Credit or other debt instruments issued by any Issuer or Lender
under the terms of this Agreement; and
(e) all amounts (including but not limited to post-petition
interest) in respect of the foregoing that would be payable but for the fact
that the obligations to pay such amounts are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
the Borrower or any Subsidiary.
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- OFFICER'S COMPLIANCE CERTIFICATE: an Officer's certificate in the
form of Exhibit J.
- OLD PA CRUSHER: the meaning specified in Subsection 1.9.
- OLD PA CRUSHER LETTER OF CREDIT INDEBTEDNESS: reimbursement
obligations owing to First Union National Bank/Wachovia Bank, N.A. in connection
with the letter of credit facility described on Schedule 7.1.1 annexed hereto.
- OTHER TAXES: the meaning specified in Subsection 1.12.2.
- PARENT: K-Tron Investment Co., a Delaware corporation.
- PARENT PLEDGE: the meaning specified in Subsection 3.1.5(a).
- PARTICIPANT: the meaning specified in Subsection 11.7.4.
- PENNSYLVANIA PROPERTY: the leased premises utilized by the
Borrower located at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx.
- PBGC: means Pension Benefit Guaranty Corporation, or any
governmental agency or instrumentality succeeding to the functions thereof.
- PERMITTED BUSINESSES: means owning, operating, managing and
maintaining businesses engaged in producing, selling and servicing equipment to
crush various materials, including coal and wood, and business directly related
thereto.
- PERMITTED LIEN: the meaning specified in Subsection 7.2.1.
- PERSON: any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
- PLAN: means an "Employee Pension Benefit Plan" (as defined in
Section 3(2) of ERISA) or an "Employee Welfare Benefit Plan" (as defined in
Section 3(1) of ERISA) - or other pension or welfare benefit plan which is or
has been established or maintained, or to which contributions are or have been
made, by the Borrower, any of its Subsidiaries or any ERISA Affiliate (or any
predecessor thereof).
- PLEDGE AGREEMENTS: the Borrower Pledge, the Subsidiary Pledge(s),
if any, and the Parent Pledge, collectively.
- PREDECESSOR INDEBTEDNESS: the meaning specified in Subsection
3.1.8.
PROHIBITED TRANSACTION: means a transaction described in Section
4975 of the Code or in Part 4 of Subtitle B of Title I of ERISA.
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- QUARTERLY PAYMENT DATE: the last Business Day of each March, June,
September and December.
- RC COMMITMENT: the meaning specified in Subsection 1.1.1.
- RC LENDER: each Lender designated as an "RC Lender" on Schedule
1.1 hereto and each successor and assign thereof.
- RC LOANS: the meaning specified in Subsection 1.1.1.
- RC MATURITY DATE: the fifth anniversary of the Closing Date or
such earlier date as the RC Commitment is terminated hereunder.
- RCRA: the Resource Conservation and Recovery Act of 1976, as
amended, and any rules and regulations issued in connection therewith.
- REGISTER: the meaning specified in Subsection 11.7.3.
- RELATED PARTIES: with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
- RELEASE: a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment or into or out of any property, including the movement of
Hazardous Substances through or in the air, soil, surface water, groundwater or
property.
- REMEDIAL ACTION: actions necessary to comply with any
Environmental Law with respect to (a) clean up, removal, treatment or handling
Hazardous Substances in the indoor or outdoor environment; (b) prevention of
Releases or threats of Releases or minimization of further Releases of Hazardous
Substances so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; or (c) performance of
pre-remedial studies and investigations and post-remedial monitoring and care.
- REORGANIZATION: any reorganization as defined in Section 4241(a)
of ERISA.
- REPORTABLE EVENT: means, with respect to any Employee Pension
Plan, an event described in Section 4043(c) of ERISA.
- RESERVE PERCENTAGE: for any day, the percentage (expressed as a
decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Federal Reserve Board (or
any successor) for determining the maximum reserve requirement (including
without limitation any basic, supplemental or emergency reserves) in respect of
Eurocurrency Liabilities or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
-72-
- RESTRICTED PAYMENT: (a) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock or ownership
interest of the Borrower or any of its Subsidiaries, as the case may be, now or
hereafter outstanding, except dividends and other distributions payable solely
in shares of stock (other than Disqualified Stock) of the Borrower or such
Subsidiary, as the case may be;
(b) any redemption, retirement, purchase or other acquisition,
direct or indirect, of any shares of any class of stock or ownership interest of
the Borrower or any of its Subsidiaries, as the case may be, now or hereafter
outstanding, or of any warrants, rights or options to acquire any such shares or
interests, except to the extent that the consideration therefor consists solely
of shares of stock (other than Disqualified Stock) of the Borrower or such
Subsidiary;
(c) any sinking fund, other prepayment or installment payment on
account of any shares of stock or ownership interests of the Borrower or any of
its Subsidiaries;
(d) any other payment, loan or advance to a stockholder or other
direct or indirect equity holder of the Borrower or of any of its Subsidiaries
whether in the capacity of such Person as a stockholder or otherwise, including
Tax Distributions, except management fees paid to Parent not in excess of
$500,000.00 in any calendar year pursuant to the Management Agreement and
reasonable salaries and other reasonable compensation, the payment of which is
not otherwise restricted under the Loan Documents, paid in the ordinary course
of business, consistent with past practice; or
(e) any forgiveness or release without adequate consideration by the
Borrower or any of its Subsidiaries of any Indebtedness or other obligation
owing to the Borrower or such Subsidiary by a stockholder or other direct or
indirect equity holder of the Borrower or such Subsidiary.
- SECURED OBLIGATIONS: collectively, (a) the Obligations and (b) any
obligations under or arising out of Interest Rate Protection Agreements that
have been or will be entered into with any Lender or Affiliate of a Lender, from
time to time consistent with the terms of this Agreement.
- SECURED PARTY: the Agent, the Lenders, the Issuer, the Indemnitees
and all other Persons referred to in any Loan Documents as a beneficiary of the
Lien granted therein and all other holders of Secured Obligations, including
Lenders and Affiliates thereof party to Interest Rate Hedging Agreements
obligation under which constitute Secured Obligations.
- SECURITY AGREEMENT: the meaning specified in Subsection 3.1.3.
- SOLVENT: a condition of a Person on a particular date, whereby on
such date (a) the fair value of the property of such Person is greater than the
total amount of liabilities, including, but not limited to, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not
-73-
intend to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
an unreasonably small capital. In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be computed at the amount
that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
- SOUTH CAROLINA PROPERTY: the real property and fixtures thereto
located at 000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000.
- SPFV: the meaning specified in Subsection 1.11.2.
- SUBORDINATION AGREEMENT: the meaning specified in Subsection
3.1.6.
- SUBSIDIARY: with respect to any Person (referred to in this
definition as the "parent"),
(a) any other Person of which more than 50% of the issued and
outstanding equity having ordinary voting power to elect a majority of the Board
of Directors or other governing body is directly or indirectly owned or
controlled by such parent,
(b) any other Person of which more than 50% of the voting equity
interests are directly or indirectly owned or controlled by such parent, or
(c) any other Person which is Consolidated with such parent.
- SUBSIDIARY PLEDGE: the meaning specified in Section 7.26.
- SUBSIDIARY SURETYSHIPS: the meaning specified in Subsection 3.1.4.
- TANGIBLE NET WORTH: the excess of total assets over total
liabilities, total assets and total liabilities each to be determined in
accordance with GAAP, excluding, however, from the determination of total assets
(a) goodwill, organizational expenses, research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other similar intangibles, (b) all prepaid expenses,
deferred charges or unamortized debt discounts and expenses, (c) all reserves
carried and not deducted from assets, (d) debt or equity interests in (including
without limitation capital contributions to, and investments in) any Subsidiary,
(e) securities which are not readily marketable, (f) cash held in a sinking or
other analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Indebtedness, (g) any write-up in the book value
of any asset resulting from a revaluation thereof subsequent to the date of the
financial statements referred to in Subsection 3.1.12 (Financial Statements;
Projections), and (h) any items not included in clauses (a) through (g) above
which are treated as intangibles in conformity with GAAP, all for Borrower and
its Subsidiaries on a Consolidated basis.
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- TAX DISTRIBUTIONS: collectively, any and all payments, loans,
distributions and advances made by the Borrower to K-Tron (or the relevant
Subsidiary thereof) for payment of federal, state and local income taxes
(assuming the maximum individual combined tax rate) in respect of income of the
Borrower and its Subsidiaries (including gain from any disposition of assets)
allocable to the Borrower and its Subsidiaries. Any Tax Distributions allowable
pursuant to this definition shall (a) in the case of quarterly Tax
Distributions, be computed on the basis of the estimated taxable income of the
Borrower (as estimated in good faith by the Borrower using reasonable
assumptions) for the relevant fiscal quarter and shall be paid not more than ten
(10) days prior to the date that the Borrower is required to pay estimated
income taxes in respect of such income, (b) in the case of additional income
taxes for any fiscal year that would be owed by the Borrower, computed based
upon the actual taxable income of the Borrower for such fiscal year and shall be
paid not more than ten (10) days prior to the date that the Borrower is required
to pay income taxes in respect of such actual income and (c) be consistent with
the terms of the Tax Sharing Agreement.
- TAXES: the meaning specified in Subsection 1.12.1.
- TAX SHARING AGREEMENT: the meaning specified in Subsection 3.1.25.
- TERM LENDER: each Lender designated as a "Term Lender" on Schedule
1.1 hereto and each successor and assign thereof.
- TERM LOAN A: the meaning specified in Subsection 1.2.1.
- TERM LOAN A COMMITMENT: the meaning specified in Subsection 1.2.1.
- TERM LOAN A MATURITY DATE: the fifth anniversary of the Closing
Date or such earlier date as the Term Loan A is due and payable hereunder.
- TERM LOAN B: the meaning specified in Subsection 1.2.3.
- TERM LOAN B COMMITMENT: the meaning specified in Subsection 1.2.3.
- TERM LOAN B MATURITY DATE: the (a) later of the sixth anniversary
of the Closing Date or January 5, 2009, or (b) such earlier date as the Term
Loan B is due and payable hereunder.
- TERM LOANS: together, the Term Loan A and the Term Loan B.
- TRANSFEREE SUBSIDIARY: the meaning specified in Section 7.9.
- TREATY: the Treaty establishing the European Economic Community,
being the Treaty of Rome of March 25, 1957 as amended by the Single Xxxxxxxx Xxx
0000 and the Maastricht Treaty (the Treaty on European Union) (which was signed
on February 7, 1992 and came into force on November 1, 1993) and as may, from
time to time, be further amended, supplemented or otherwise modified.
-75-
- UNIFORM COMMERCIAL CODE: the Uniform Commercial Code in effect on
the date hereof and as amended from time to time, and as enacted in the
Commonwealth of Pennsylvania or in any state or states which, pursuant to the
Uniform Commercial Code as enacted in the Commonwealth of Pennsylvania, has
jurisdiction with respect to all, or any portion of, the Collateral or this
Agreement, from time to time. It is the intent of the parties that the
definitions set forth above should be construed in their broadest sense so that
Collateral will be construed in its broadest sense. Accordingly if there are,
from time to time, changes to defined terms in the Uniform Commercial Code that
broaden the definitions, they are incorporated herein and if existing
definitions in the Uniform Commercial Code are broader than the amended
definitions, the existing ones shall be controlling. Similarly, where the phrase
"as defined in the Uniform Commercial Code, but in any event shall include, but
not be limited to . . ." is used above, it means as defined in the Uniform
Commercial Code except that if any of the enumerated types of items specified
thereafter would not fall within the Uniform Commercial Code definition, they
shall nonetheless be included in the applicable definition for purposes of this
Agreement.
- UNREIMBURSED DRAWINGS: drawings made under Letters of Credit which,
for any reason, have not been reimbursed by or on behalf of the Borrower whether
through borrowings of Loans hereunder or otherwise.
- WITHDRAWAL LIABILITY: any withdrawal liability as defined in Section
4201 of ERISA.
ARTICLE 10
AGENT
10.1 AUTHORITY.
The Lenders and the Issuer (for themselves and their successors and
assigns) hereby irrevocably appoint Bank to act as Agent as specified herein and
in the other Loan Documents. Each such Person hereby irrevocably authorizes Bank
to execute and take such action on its behalf under the provisions of this
Agreement, the Notes, and the other Loan Documents and to exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of the Loan Documents and such powers as are reasonably incidental thereto.
- 76 -
10.2 EXPENSES.
In default of reimbursement or indemnification by the Borrower, the
Lenders will, in proportion to their respective portions of the Commitment,
reimburse the Agent for and against all expense, liability, penalty and damage
of any nature whatsoever (including but not limited to reasonable attorneys'
fees) which may be incurred or sustained by the Agent in any way in connection
with the Loan Documents or its duties under the Loan Documents provided that no
Lender shall be liable for any portion of the foregoing items resulting from the
gross negligence or willful misconduct of the Agent. Without limiting the
generality of any other provision excusing the Agent form taking any actions,
the Agent shall not have any obligation to take any action in connection with
the performance of its duties as Agent under the Loan Documents which, in its
opinion, requires the payment of expenses or the incurrence of liability, if
there is any ground for belief that reimbursement of such expenses or liability
is not reasonably assured to it.
10.3 ACTION BY AGENT.
The Agent is authorized to take any action specified in this Agreement and
all actions reasonably related thereto. However, except for actions expressly
required to be taken by the Agent in this Agreement (which actions the Agent
will take as required subject to all of the exculpatory provisions herein), the
Agent is not required to take actions that it may be authorized to take.
10.4 EXCULPATORY PROVISIONS.
10.4.1 GENERAL STANDARD. Neither the Agent nor any of its officers,
directors, employees or agents, shall be liable for any action taken or omitted
under the Loan Documents or in connection with the Loan Documents unless caused
by its or their gross negligence or willful misconduct. Neither the Agent nor
any of its officers, directors, employees or agents, shall be liable for any
action taken or omitted by it at the direction of the Majority Lenders. The
Agent shall not be responsible for any recitals, warranties or representations
in the Loan Documents or for the validity, enforceability, collectibility or due
execution of this Agreement or any of the other Loan Documents.
10.4.2 AGENTS AND EMPLOYEES. The Agent may execute any of its duties
by or through agents or employees, all of whom shall be entitled to the benefits
of any exculpatory provision herein.
10.4.3 ADVICE OF PROFESSIONALS. Agent shall be entitled to advice of
counsel, accountants or other professionals of its selection concerning all
matters pertaining to the Loan Documents and its duties under the Loan
Documents. Agent is entitled to rely on the advice of its professionals whether
or not the advice is correct.
10.4.4 RELIANCE ON INFORMATION BELIEVED TO BE GENUINE. The Agent
shall be entitled to rely upon any writing or other document, telegram or
telephone conversation believed by it to have been signed, sent or made by the
proper person or persons.
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10.5 INVESTIGATION BY LENDERS.
Each Lender expressly acknowledges that the Agent has not made any
representation or warranty to it and that no act taken by the Agent shall be
deemed to constitute a representation or warranty by the Agent to the Lenders.
Each Lender further acknowledges that it has taken and will continue to take
such action and to make such investigation as it deems necessary to inform
itself of the affairs of the Borrower and its Subsidiaries. Each Lender further
acknowledges that it has made and will continue to make its own independent
investigation of the creditworthiness and the business and operations of the
Borrower and its Subsidiaries. In entering into this Agreement, and in making an
advance under this Agreement, each Lender represents that it has not relied and
will not rely upon any information or representations furnished or given by the
Agent or by any other Lender. The Agent shall be under no duty or responsibility
to the Lenders to ascertain or to inquire into the performance or observance by
the Borrower of any of the provisions of this Agreement or any document or
instrument now or hereafter executed in connection with this Agreement.
10.6 NOTICE OF EVENTS OF DEFAULT.
Without limiting the generality of the provisions of the preceding Section
10.5, it is expressly understood and agreed that the Agent shall not be deemed
to have knowledge of the existence, occurrence or continuance of an Event of
Default or Default, unless the Agent shall have been notified in writing of such
Event of Default by any Lender or the Borrower pursuant to a writing designated
as a "Notice of Event of Default". For the avoidance of doubt, the provisions of
this Section 10.6 are expressly not for the benefit of the Borrower.
10.7 RESIGNATION; TERMINATION.
The Agent may resign at any time by giving prior written notice to
the Borrower and the Lenders and the Agent may be removed at any time with or
without cause by the Majority Lenders. Such resignation or removal shall take
effect at the end of the sixty (60) day period after such notice of resignation
or removal has been given or upon the earlier appointment of a successor agent.
The Lenders shall (with the consent of the Borrower so long as no Event of
Default has occurred and is then continuing), upon receipt of such notice,
appoint a successor agent from among the Lenders. The Lenders and the Borrower
shall execute such documents as shall be necessary to effect such appointment.
During any period that there shall not be a duly appointed and acting Agent, the
Borrower agrees to make each payment due under this Agreement and under the
Notes directly to each Lender entitled thereto and to provide copies of each
certificate or other document required under this Agreement directly to each
Lender.
10.8 SHARING.
If any Lender shall at any time receive payment of principal on
account of all or a part of any Note held by it, whether by set-off or
otherwise, in a greater proportion than the principal payments made on the Notes
held by the other Lenders, such Lender shall simultaneously purchase, without
recourse, for cash, ratably from each of the other Lenders, such
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portion of the Notes held by such other Lenders so that, after such purchase,
each Lender will hold an unpaid principal amount of Notes in the same proportion
that the outstanding principal balance due to such Lender immediately prior to
such payment bore to the aggregate outstanding principal balance due to all
Lenders immediately prior to such payment. In the event that, at any time, any
Lender shall be required to refund any amount which has been paid to or received
by it on account of any Note held by it, and which has been applied to the
purchase of a portion of the Notes held by other Lenders pursuant to this
Section, then, upon notice from such Lender, each of the other Lenders shall
simultaneously purchase, without recourse, its portion for cash, to the extent
of its ratable share thereof, of the Notes held by the Lender required to make
such refund.
10.9 OTHER RELATIONSHIPS.
It is acknowledged that the Agent, the Issuer, the Lenders and/or
any of their Affiliates may now or hereafter have lending or other relationships
with the Borrower and Affiliates of the Borrower. It is agreed that the Agent
and the Lenders are free to act with respect thereto without consulting with one
another and without regard to the effect of any such action or relationship upon
the Loans or other Secured Obligations. With respect to the portion of the Loans
made by it and Notes issued to it, the Agent shall have the same rights and
powers under the Loan Documents as any other Lender or holder of a Note and may
exercise the same as though it were not the Agent, and the term "Lenders" or
"holders of Notes" or any similar term shall, unless the context otherwise
indicates, include the Agent in its capacity as a Lender
ARTICLE 11
MISCELLANEOUS
11.1 NOTICES.
All notices, requests, demands, directions and other communications
(collectively "notices") given to or made upon any party under the provisions of
this Agreement shall be by telephone or in writing (including facsimile
communication) unless otherwise expressly provided under this Agreement. It
shall be delivered or sent by facsimile or telephoned to the respective parties
at the addresses and numbers set forth under their respective names on the
signature pages of this Agreement or in accordance with any subsequent unrevoked
written direction from any party to the others. All notices shall, except as
otherwise expressly provided in this Agreement, be effective (a) in the case of
facsimile, when received as set forth on a confirmation thereof, (b) in the case
of hand-delivered notice, when hand delivered, (c) in the case of telephone,
when telephoned, provided, however, that in order to be effective, telephonic
notices must be confirmed in writing no later than the next day by letter,
facsimile or telex, (d) if given by mail, four (4) days after such communication
is deposited in the mails with first class postage prepaid, return receipt
requested, and (e) if given by any other means (including by air courier), when
delivered; provided, that notices to the Agent shall not be effective until
received. Any Lender giving any notice to the Borrower shall simultaneously send
a copy of such notice to the Agent. In the event of a discrepancy between any
telephonic or written notice, the written notice shall control.
11.2 SURVIVAL OF REPRESENTATIONS.
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All representations and warranties contained in the Loan Documents
shall survive the making of the Loans and shall not be waived by the execution
and delivery of this Agreement, or by any investigation by the Agent or the
Lenders.
11.3 NO IMPLIED WAIVERS.
No failure or delay on the part of the Agent, the Issuer or any
Lender in exercising any right, power or privilege under the Loan Documents and
no course of dealing between the Borrower or any of its Subsidiaries, on the one
hand, and the Agent, the Issuer or any Lender, on the other hand, shall operate
as a waiver of any such right, power or privilege. No single or partial exercise
of any right, power or privilege under the Loan Documents preclude any other or
further exercise of any such right, power or privilege or the exercise of any
other right, power or privilege. The rights and remedies expressly provided in
the Loan Documents are cumulative and not exclusive of any rights or remedies
which the Agent, the Issuer or any Lender would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or shall constitute a
waiver of the right of the Agent, the Issuer or any Lender to take any other or
further action in any circumstances without notice or demand. Any waiver that is
given shall be effective only if in writing and only for the limited purposes
expressly stated in the applicable waiver.
11.4 ENTIRE AGREEMENT.
This Agreement, the Letters of Credit and related documents and the
other Loan Documents represent the entire agreement between the parties to this
Agreement with respect to the Commitment, the Letters of Credit, the Loans and
the transactions contemplated under the Loan Documents and, except as expressly
provided in the Loan Documents, shall not be affected by reference to any other
documents; provided, however, the fee and indemnification obligations set forth
in the Commitment Letter shall survive.
11.5 SEVERABILITY.
Every provision of the Loan Documents is intended to be severable.
If any term or provision of the Loan Documents shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions shall not be affected or impaired thereby. Any invalidity,
illegality or unenforceability in any jurisdiction shall not affect the
validity, legality or enforceability of any such term or provision in any other
jurisdiction.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
With the written consent of the Majority Lenders, the Agent may, on
behalf of the Lenders, enter into agreements which change, amend or supplement
this Agreement or any other Loan Document, and with such consent, the Agent may
waive compliance with any provision of any of the Loan Documents, all as
referred to in this Section 11.6. However, no such change, amendment, supplement
or waiver shall, without the consent of each Lender:
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(a) increase the maximum amount of the RC Commitment, the Term
Loan A Commitment or the Term Loan B Commitment,
(b) extend the RC Maturity Date, the Term Loan A Maturity
Date, the Term Loan B Maturity Date, the Maturity Date or any scheduled
amortization or date for payment of interest on the Loans,
(c) decrease the rate of interest, provided that the written
consent of the Majority Lenders, rather than the consent of all Lenders, shall
be sufficient to waive imposition of the Default Rate pursuant to Subsection
1.7.6 (Default Rate),
(d) reduce the amount of the fees payable under Subsection
1.6.1 (Commitment Fees) or other fees, other than any fee payable solely to
Agent,
(e) modify the provisions of this Section,
(f) amend the definition of "Majority Lenders",
(g) release all or substantially all of the guaranties or all
or a substantial portion of the Collateral that secures the Secured Obligations;
provided however, the Agent may without the consent of any Person release any
guarantor or any Collateral security granted pursuant to the Loan Documents and
file UCC-3 termination statements or statements of amendment or take other
appropriate action (i) as a court of competent jurisdiction may direct, (ii) in
connection with a disposition (other than to the Borrower or a Subsidiary
thereof) permitted under Subsection 7.7.2 (Sales and Other Dispositions) (which
subsection may be amended by the Majority Lenders) or as otherwise provided
under the Loan Documents, or (iii) if in accordance with this Agreement cash
proceeds from any sale or transfer of the Collateral are used to prepay
outstanding sums due under the Loans or are reinvested in the Borrower and its
Subsidiaries, or
(h) waive an Event of Default under Subsection 8.1.1 (Failure
to Pay Principal) or 8.1.2 (Failure to Pay Interest, Fees, Reimbursement
Obligations, Etc.) other than in respect of the imposition of the Default Rate,
after such Event of Default shall have occurred (but the Majority Lenders may
direct the Agent to forbear under such circumstances).
11.7 SUCCESSORS AND ASSIGNS.
11.7.1 IN GENERAL; THE BORROWER. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (a) to an
Eligible Assignee in accordance with the provisions of Subsection 11.7.2
(Assignment), (b) by way of participation in accordance with the provisions of
Subsection 11.7.4 (Participations) or (c) by way of pledge or assignment of a
security interest subject to the restrictions of Subsection 11.7.5 (Certain
Permitted Pledges) (and any attempted assignment or transfer by any party hereto
without such consent shall be null and void). Nothing in this Agreement,
expressed or implied,
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shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby Participants to the
extent provided in Subsection 11.7.4 (Participations) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
11.7.2 ASSIGNMENT. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that:
(a) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the applicable Commitment is not then in effect, the principal outstanding
balance of the Loan of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $2,500,000.00, unless the Agent and, so long as no Event of Default
has occurred and is continuing, the Borrower otherwise consents (each such
consent not to be unreasonably withheld or delayed);
(b) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan or Commitment assigned, except that this
clause (b) shall not prohibit any Lender from assigning all or a portion of its
rights and obligations in respect to the RC Loans and RC Commitment on a non-pro
rata basis with the Term Loans and vice versa;
(c) any assignment of a RC Commitment must be approved by the
Agent and the Issuer unless the Person that is the proposed assignee is itself a
Lender with a RC Commitment (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and
(d) the parties to each assignment shall execute and deliver
to the Agent an Assignment and Assumption, together with a service, processing
and recordation fee of $3,500.00.
(e) Subject to acceptance and recording thereof by the Agent
pursuant to Subsection 11.7.3 (Register), from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Subsection 1.7.5
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(Breakage), Section 1.8 (Additional Costs; Unavailability) and Section 11.15
(Indemnification) with respect to the facts and circumstances occurring prior to
the effective date of the assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Subsection 11.7.4 (Participations) below.
11.7.3 REGISTER. The Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in the United States
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
11.7.4 PARTICIPATIONS.
(a) Any Lender may, without the consent of, or notice to, the
Borrower or the Agent, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrower's Affiliates or Subsidiaries)
(each a "PARTICIPANT") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver with
respect to the matters specifically referred to in clauses (a), (b), (c) and (g)
of Section 11.6 (Amendments, Waivers and Consents) hereof. Subject to Subsection
11.7.4(b), the Borrower agrees that each Participant shall be entitled to the
benefits of Subsections 1.8.5 (Breakage), 1.9.3 (Capital Adequacy) and 1.9.4
(Other Increased Costs) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Subsection 11.7.2 (Assignment).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.12 (Set-off) as though it were a Lender, provided such
Participant agrees to be subject to Section 10.8 (Sharing) as though it were a
Lender.
(b) A Participant shall not be entitled to receive any greater
payment under Subsections 1.9.3 (Capital Adequacy) and 1.9.4 (Other Increased
Costs) than the applicable Lender would have been entitled to receive with
respect to the participation sold to
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such Participant, unless the sale of the participation to such Participant is
made with the Borrower's prior written consent. A Participant that is a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 1.12
(Taxes) unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Subsection 1.12.5 (Tax Forms) as though it were a Lender.
11.7.5 CERTAIN PERMITTED PLEDGES. Any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including without limitation any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
11.8 DESCRIPTIVE HEADINGS.
The descriptive headings of the several sections of this Agreement
are inserted for convenience only and shall not affect the meaning or
construction of any of the provisions of this Agreement.
11.9 GOVERNING LAW.
This Agreement and the other Loan Documents shall be construed in
accordance with the Commonwealth of Pennsylvania (without giving effect to the
choice of law provisions thereof).
11.10 MAXIMUM LAWFUL INTEREST RATE.
Notwithstanding any provision contained in this Agreement or the
Notes, the total liability of the Borrower for payment of interest pursuant to
this Agreement and the Notes shall not exceed the maximum amount of such
interest permitted by Law to be charged, collected, or received from the
Borrower. If any payments by the Borrower include interest in excess of such a
maximum amount, each Lender shall apply such excess to the reduction of the
unpaid principal amount due pursuant to this Agreement and the Notes, or if none
is due, such excess shall be refunded to the Borrower.
11.11 SET-OFF.
The Borrower hereby pledges and gives to each Lender a Lien upon and
in the balance of any account maintained by the Borrower with such Lender or any
other liability of Lender to the Borrower for the amount of the Secured
Obligations owing to such Lender. Upon the occurrence of and throughout the
period in which there is continuing an Event of Default, in such Lender's sole
option, at any time and from time to time, the Borrower hereby authorizes such
Lender to apply any such account balances now or hereafter in the possession of
such Lender and/or a credit in the amount of any such other liability to the
payment of the Indebtedness owing to Lender under the Loan Documents. The
provisions of this Section shall not be deemed or construed
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to limit rights of set-off or liens or similar rights which any Lender may
otherwise have by reason of applicable Law.
11.12 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall constitute an original, and all of which, when taken together, shall
constitute one instrument. Delivery of a photocopy or telecopy of an executed
counterpart of a signature page to this Agreement shall be effective as delivery
of a manually executed counterpart.
11.13 CONFIDENTIALITY.
The Agent and each Lender hereby acknowledges that it may from time
to time receive from the Borrower information about the Borrower and its
Subsidiaries or K-Tron pursuant to or in connection with this Agreement and the
other Loan Documents that is confidential in nature. Each Lender agrees to keep
confidential any such information delivered or made available to it and
specifically marked "Confidential non-public information"; provided, that
nothing herein shall prevent the Agent or any Lender from disclosing such
information (i) to the Agent or any other Lender or their Affiliates, (ii) upon
the order of any court or administrative agency of competent jurisdiction, (iii)
upon the request or demand of any regulatory agency or authority, (iv) which has
been publicly disclosed other than as a result of a disclosure by the Agent or
any Lender which is not permitted hereunder, (v) in connection with any
litigation to which any Agent, any Lender, or any of their respective Affiliates
may be a party to the extent reasonably required, (vi) to the Agent's or any
Lender's legal counsel and independent auditors and other professional advisors,
and (vii) to any actual or proposed participant or assignee of all or part of
the Agent's or any Lender's rights under this Agreement; provided, that prior to
any such disclosure under clause (vii) of this paragraph, each such assignee or
participant or proposed assignee or participant shall have agreed in writing to
be bound by the terms of this agreement (or a confidentiality agreement with
substantially similar terms). Each Lender further agrees to use reasonable
efforts to notify the Agent and the Borrower of any required disclosure under
clauses (ii) or (v) of this paragraph.
11.14 COSTS AND EXPENSES OF THE AGENT.
Whether or not any Loans are made or Letters of Credit are issued
pursuant to this Agreement, the Borrower shall, unconditionally upon demand, pay
or reimburse the Agent for all costs, expenses, claims, charges and/or other
liabilities (including without limitation fees and disbursements of legal
counsel, accountants, investigators and other experts, whether or not they are
employees of the Agent) imposed on, incurred by or asserted against the Agent
arising out of, relating to or connected with:
(a) the negotiation, preparation, execution and delivery of
(i) the Loan Documents and (ii) whether or not executed, any waiver, amendment
or consent under or with respect to any of the Loan Documents,
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(b) consulting with respect to any matter in any way arising
out of, related to, or connected with, the Loan Documents, including (i) the
protection or preservation of the Collateral, (ii) the protection, preservation,
exercise or enforcement of any of the rights of the Agent or any other Person
in, under or related to such Collateral or the Loan Documents or (iii) the
performance of any of the obligations of the Agent under or related to the Loan
Documents,
(c) protecting or preserving the Collateral, or
(d) protecting, preserving, exercising or enforcing any of the
rights of the Agent and Lenders in, under or related to such Collateral or the
Loan Documents, including defending the security interest granted to Lenders as
a valid, perfected, first priority security interest in such Collateral.
11.15 INDEMNIFICATION
11.15.1 INDEMNIFICATION AND REIMBURSEMENT IN GENERAL. Whether or not
any Loans are made or Letters of Credit are issued under this Agreement, the
Borrower shall, unconditionally upon demand, pay or reimburse the Agent and
Lenders for, and indemnify and save the Agent, Lenders, and their respective
Affiliates, officers, directors, employees, agents, attorneys, stockholders,
partners and consultants (collectively, "INDEMNITEES") harmless against, any all
liabilities, losses, costs, expenses, claims and/or charges (including without
limitation fees and disbursements of legal counsel) imposed on, incurred by or
asserted against such Indemnitees (whether direct, indirect or consequential and
whether based on any federal, state, or local laws and regulations, under common
law or at equity, or on contract, tort or otherwise, arising from or connected
with the past, present or future operations of the Borrower, its Subsidiaries or
their respective predecessors in interest, or the past, present or future
environmental condition of property of the Borrower and its Subsidiaries) and
arising out of, relating to or connected with:
(a) ll transfer, documentary, stamp and similar taxes, and all
recording and filing fees and taxes payable in connection with, arising out of,
or in any way related to, the execution, delivery and performance of the Loan
Documents or the making of the Loans;
(b) (i) the Loan Documents, or any act, event or transaction
or alleged act, event or transaction relating or attendant thereto; (ii) any
acquisition or proposed acquisition of stock or assets by the Borrower or any of
its Subsidiaries; and/or (iii) any use made or proposed to be made by the
Borrower or any of its Subsidiaries of all or any portion of the Loans; or
(c) commissions or claims by or on behalf of brokers, finders
or agents not retained by Lenders. The Borrower represents that it has not
engaged or used any such broker, finder or agent in connection with this
Agreement.
11.15.2 LIMITATIONS ON INDEMNIFICATION. Notwithstanding the
foregoing, the Borrower shall not be required to indemnify any Indemnitee with
respect to a claim or liability
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that arises as the result of the gross negligence or willful misconduct of any
Indemnitee as shall have been determined in a nonappealable judgment of a court
of competent jurisdiction.
11.16 CERTIFICATION OF AMOUNTS. The certification by the Agent or a Lender
hereunder of the amount of liabilities, losses, costs, expenses, claims and/or
charges pursuant to Section 11.14 (Costs and Expenses of the Agent) and 11.15
(Indemnification) shall be conclusive if such amounts have been computed or
reached in a reasonable manner.
11.17 CONSENT TO JURISDICTION, SERVICE AND VENUE; WAIVER OF JURY TRIAL.
(a) The Borrower hereby consents to the jurisdiction and venue
of the courts of the Commonwealth of Pennsylvania or of any federal court
located in such state, waives personal service of any and all process upon it
and consents that all such service of process be made by certified or registered
mail directed to the Borrower at the address provided for in Section 11.1
(Notices). Service so made shall be deemed to be completed upon actual receipt.
The Borrower hereby waives the right to contest the jurisdiction and venue of
the courts located in the county of Philadelphia, Commonwealth of Pennsylvania
on the ground of inconvenience or otherwise and, further, waives any right to
bring any action or proceeding against (a) the Agent in any court outside the
county of Philadelphia, Commonwealth of Pennsylvania, or (b) any other Lender
other than in a state within the United States designated by such Lender. The
provisions of this Section 11.17 shall not limit or otherwise affect the right
of the Agent, any Lender or other Secured Party to institute and conduct an
action in any other appropriate manner, jurisdiction or court.
(b) NO PARTY TO THIS AGREEMENT, NOR ANY ASSIGNEE, SUCCESSOR,
HEIR OR PERSONAL REPRESENTATIVE OF THE FOREGOING SHALL SEEK A JURY TRIAL IN ANY
PROCEEDING BASED UPON OR ARISING OUT OF THIS AGREEMENT, OR ANY OTHER LOAN
DOCUMENT OR ANY GUARANTY RELATING TO SUCH INDEBTEDNESS OR THE RELATIONSHIP
BETWEEN OR AMONG SUCH PERSONS OR ANY OF THEM. NO SUCH PERSON WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED.
(c) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO WAIVES ANY
RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY ARBITRATION OR OTHER LITIGATION,
ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS AGREEMENT (i)
CERTIFIES THAT NEITHER THE AGENT NOR ANY REPRESENTATIVE, OR ATTORNEY OF THE
AGENT NOR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR
SUCH LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.17. THE PROVISIONS OF THIS SECTION
11.17 HAVE BEEN FULLY DISCLOSED TO THE PARTIES AND THE
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PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION 11.17
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
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IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have
caused this Credit Agreement to be duly executed by their respective, duly
authorized officers as of the date first above written.
PENNSYLVANIA CRUSHER CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
Notice Information
Address: Xxxxxx 00 & 000
X.X. Xxx 000
Xxxxxx, Xxx Xxxxxx 00000-0000
Phone No.: (000)000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Vice President
and Treasurer
NATIONAL CITY BANK, in its capacity as
Agent and a Lender
By: /s/ Xxxx Xxxxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxxxx
Title: Senior Vice President
Notice Information
Address: One South Broad Street
13th Floor, Locator 01-5997
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Phone No.:
Fax No.:
Attention:
Wire Transfer Information
Bank Name: National City Bank
City & State: Cleveland, Ohio
ABA Routing Number: 41000124
Account Name: Commercial Loan Operations
Account Number: 151804
Re: Pennsylvania Crusher Corporation
LIST OF ADDENDA (EXHIBITS AND SCHEDULES)
EXHIBITS
Exhibit A-1 Form of RC Note (Section 1.4)
Exhibit A-2 Form of Term Loan A Note (Section 1.4)
Exhibit A-3 Form of Term Loan B Note (Section 1.4)
Exhibit B Request for Advance (Section 1.5)
Exhibit C LIBOR Election (Section 1.7.4)
Exhibit D Form of Security Agreement (Section 3.1.3)
Exhibit E Form of Guaranty and Suretyship Agreement (Section 3.1.4)
Exhibit F-1 Form of Parent Pledge Agreement (Section 3.1.5(a))
Exhibit F-2 Form of Borrower Pledge Agreement (Section 3.1.5(b))
Exhibit F-3 Form of Subsidiary Pledge Agreement (Section 7.27)
Exhibit G Form of Subordination Agreement (Section 3.1.6)
Exhibit I Form of Mortgage (Section 3.1.7)
Exhibit J Form of Officer's Compliance Certificate (Section 9.1;
Section 5.1.3)
Exhibit K Form of Assignment and Assumption (Section 11.7.2(c))
Exhibit L Form of Borrowing Base Report (Section 5.1.6)
SCHEDULES
Schedule 1.1 Lenders' Commitments
Schedule 4.1 Equity Ownership, List of Subsidiaries of Borrower and States
of Formation
Schedule 4.6 Additional Inventory Locations
Schedule 4.10 Intellectual Property
Schedule 4.19 ERISA
Schedule 7.1.1 Old PA Crusher Letter of Credit Indebtedness
Schedule 7.2.1 Liens
Schedule 7.2.3 Sublicenses of Intellectual Property
Schedule 7.3 Other Investments
Schedule 7.6 Affiliate Transactions
TABLE OF CONTENTS
PAGE
ARTICLE 1 THE LOANS .......................................................................... 2
1.1 Revolving Credit Loans. ................................................................ 2
1.1.1 Commitment to Make RC Loans ................................................... 2
1.1.2 Available Commitment .......................................................... 2
1.1.3 Voluntary Commitment Reductions ............................................... 2
1.1.4 Mandatory Commitment Reductions ............................................... 2
1.1.5 Repayment In Connection With Commitment Reductions and on RC Maturity Date .... 2
1.1.6 Voluntary Prepayment .......................................................... 3
1.2 Term Loans ............................................................................. 3
1.2.1 Commitment for Term Loan A .................................................... 3
1.2.2 Repayment of Term Loan A ...................................................... 3
1.2.3 Commitment for Term Loan B .................................................... 4
1.2.4 Repayment of Term Loan B ...................................................... 4
1.2.5 Voluntary Prepayments ......................................................... 5
1.2.6 Mandatory Prepayments ......................................................... 6
1.2.7 Holding of Mandatory Prepayments in Cash Collateral Account ................... 7
1.2.8 Relationship of Voluntary and Other Mandatory Prepayments to Scheduled Payments 7
1.3 Lenders' and Issuer's Obligations Several .............................................. 7
1.4 Notes .................................................................................. 8
1.5 Borrowing Notice ....................................................................... 8
1.6 Fees to Lenders ........................................................................ 9
1.6.1 Commitment Fees ............................................................... 9
1.6.2 Letter of Credit Fees and Facing Fees ......................................... 9
1.6.3 Other Fees .................................................................... 9
1.6.4 Miscellaneous ................................................................. 9
1.7 Interest ............................................................................... 9
1.7.1 The Rates ..................................................................... 9
1.7.2 Applicable Margin ............................................................. 9
1.7.3 Adjustments to Applicable Margin .............................................. 10
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TABLE OF CONTENTS
(continued)
PAGE
1.7.4 LIBOR Election ................................................................ 10
1.7.5 Breakage ...................................................................... 11
1.7.6 Default Rate .................................................................. 11
1.7.7 Source of Funds ............................................................... 11
1.8 Additional Costs; Unavailability ....................................................... 12
1.8.1 Inability to Determine LIBOR .................................................. 12
1.8.2 Laws Affecting LIBOR Availability ............................................. 12
1.8.3 Capital Adequacy .............................................................. 12
1.8.4 Other Increased Costs ......................................................... 12
1.8.5 Determinations and Notice ..................................................... 13
1.9 Purpose ................................................................................ 13
1.10 Mechanics of Payments: Borrower Payments .............................................. 14
1.10.1 Manner of Making Payments ..................................................... 14
1.10.2 Permitted Assumptions by Agent as to Borrower Payments ........................ 14
1.10.3 Disbursements from Agent to Lenders ........................................... 14
1.10.4 Authorization to Make Loans In Satisfaction of Secured Obligations ............ 14
1.10.5 Payments Due on Non-Business Days ............................................. 15
1.11 Mechanics of Payments: Lender Payments ................................................ 15
1.11.1 Permitted Assumptions by Agent as to Lender Payments .......................... 15
1.11.2 Special Purpose Funding Vehicle ............................................... 15
1.12 Taxes .................................................................................. 16
1.12.1 Payments Free and Clear ....................................................... 16
1.12.2 Stamp and Other Taxes ......................................................... 16
1.12.3 Indemnity ..................................................................... 17
1.12.4 Evidence of Payment ........................................................... 17
1.12.5 Tax Forms ..................................................................... 17
1.12.6 Survival ...................................................................... 18
ARTICLE 2 LETTERS OF CREDIT .................................................................. 18
2.1 Letters of Credit ...................................................................... 18
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TABLE OF CONTENTS
(continued)
PAGE
2.1.1 Commitment to Issue Letters of Credit ......................................... 18
2.1.2 Limitation on Amount .......................................................... 18
2.1.3 Obligations Absolute .......................................................... 18
2.1.4 Reliance by Issuer ............................................................ 19
2.1.5 Fees .......................................................................... 19
2.1.6 Participation by RC Lenders ................................................... 19
2.1.7 Standard of Conduct ........................................................... 20
2.1.8 Cash Collateral Account ....................................................... 20
2.1.9 Obligations Secured ........................................................... 20
ARTICLE 3 CONDITIONS TO FUNDINGS AND ISSUANCE OF LETTERS OF CREDIT ........................... 20
3.1 Conditions to Initial Funding .......................................................... 20
3.1.1 Execution of this Agreement ................................................... 21
3.1.2 The Notes ..................................................................... 21
3.1.3 Security Agreement ............................................................ 21
3.1.4 Guaranty and Suretyship Agreement ............................................. 21
3.1.5 Pledge Agreements. ............................................................ 21
3.1.6 Subordination Agreement ....................................................... 22
3.1.7 Mortgages and Landlord Waivers ................................................ 22
3.1.8 Repayment of Existing Indebtedness ............................................ 22
3.1.9 Payment of Fees and Costs ..................................................... 22
3.1.10 No Default .................................................................... 23
3.1.11 Correctness of Representations and Warranties ................................. 23
3.1.12 Financial Statements; Projections. ............................................ 23
3.1.13 Legal Proceedings ............................................................. 23
3.1.14 Consents and Approvals ........................................................ 23
3.1.15 Material Adverse Change; Compliance With Law .................................. 24
3.1.16 Opinions of Counsel ........................................................... 24
3.1.17 Officer's Compliance Certificate .............................................. 24
3.1.18 Good Standing ................................................................. 24
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TABLE OF CONTENTS
(continued)
PAGE
3.1.19 Lien Searches ................................................................. 24
3.1.20 Evidence of Insurance ......................................................... 24
3.1.21 Stock Purchase and Merger Documents, Instruments and Agreements ............... 25
3.1.22 Capital Structure and Equity Investments ...................................... 25
3.1.23 Initial Borrowing Base Report and Availability under Borrowing Base ........... 25
3.1.24 Material Contracts ............................................................ 25
3.1.25 Tax Sharing Agreement ......................................................... 25
3.1.26 Pro Forma EBITDA .............................................................. 25
3.1.27 Consolidated Total Debt to Pro Forma EBITDA Ratio ............................. 25
3.1.28 Primary Deposit Accounts ...................................................... 26
3.1.29 Other Requirements ............................................................ 26
3.2 Requirements for Each Loan/Letter of Credit ............................................ 26
3.2.1 No Default .................................................................... 26
3.2.2 Request for Advance/Letter of Credit .......................................... 26
3.2.3 Representations and Warranties ................................................ 26
3.2.4 Material Adverse Change ....................................................... 26
3.2.5 Method of Certifying Certain Conditions ....................................... 26
ARTICLE 4 REPRESENTATIONS AND WARRANTIES ..................................................... 26
4.1 Status. ................................................................................ 27
4.1.1 Organization and Qualification ................................................ 27
4.1.2 Stock Ownership ............................................................... 27
4.2 Power and Authority; Enforceability. ................................................... 28
4.3 No Violation of Agreements; Absence of Conflicts ....................................... 28
4.4 Recording, Enforceability and Consent .................................................. 28
4.5 Lines of Business ...................................................................... 29
4.6 Security Interest in Collateral ........................................................ 29
4.7 Litigation; Compliance with Laws ....................................................... 29
4.8 No Burdensome Agreements. .............................................................. 30
4.9 Condition of Property. ................................................................. 30
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TABLE OF CONTENTS
(continued)
PAGE
4.10 Licenses; Intellectual Property ........................................................ 30
4.11 Title to Properties; Liens ............................................................. 30
4.12 Management Agreements .................................................................. 31
4.13 Financial Statements and Projections ................................................... 31
4.13.1 Financial Statements .......................................................... 31
4.13.2 Undisclosed Liabilities ....................................................... 31
4.13.3 Absence of Material Adverse Change ............................................ 31
4.13.4 Projections ................................................................... 31
4.14 Tax Returns and Payments; Other Fees ................................................... 31
4.15 Fiscal Year ............................................................................ 32
4.16 Federal Reserve Regulations ............................................................ 32
4.17 Investment Company Act. ................................................................ 32
4.18 Public Utility Holding Company Act ..................................................... 32
4.19 Benefit Plan Compliance ................................................................ 32
4.19.1 Plans ......................................................................... 32
4.19.2 Favorable Determination Letters ............................................... 33
4.19.3 Compliance with Law ........................................................... 33
4.19.4 Absence of Certain Conditions ................................................. 33
4.19.5 Absence of Certain Liabilities ................................................ 34
4.20 Accuracy and Completeness of Disclosure. ............................................... 34
4.21 Adequacy of Capital; Solvency .......................................................... 34
4.22 Absence of Restrictive Provisions ...................................................... 34
4.23 Environmental Compliance ............................................................... 34
4.24 Insurance .............................................................................. 35
ARTICLE 5 REPORTING REQUIREMENTS AND NOTICES ................................................. 35
5.1 Financial Data and Reporting Requirements; Notice of Certain Events. ................... 36
5.1.1 Delivery of Quarterly Financial Statements .................................... 36
5.1.2 Delivery of Annual Financial Statements ....................................... 36
5.1.3 Delivery of Officer's Compliance Certificates ................................. 36
5.1.4 Auditors' Reports ............................................................. 36
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TABLE OF CONTENTS
(continued)
PAGE
5.1.5 SEC Filings, Etc .............................................................. 37
5.1.6 Monthly Certificates and Reports .............................................. 37
5.1.7 Annual Budget ................................................................. 37
5.2 Notice of Defaults. .................................................................... 38
5.3 Notice of Disputes and Other Matters ................................................... 38
5.3.1 Certain Litigation ............................................................ 38
5.3.2 Conditions Affecting Collateral ............................................... 38
5.3.3 Material Adverse Change ....................................................... 38
5.3.4 Representations and Warranties ................................................ 38
5.4 ERISA Notices. ......................................................................... 38
5.5 Miscellaneous .......................................................................... 39
5.6 Authorization of Third Parties to Deliver Information .................................. 39
ARTICLE 6 FINANCIAL COVENANTS ................................................................ 39
6.1 Minimum Tangible Net Worth ............................................................. 39
6.2 Fixed Charge Coverage Ratio ............................................................ 39
6.3 Consolidated Total Debt to EBITDA Ratio ................................................ 39
6.4 Limitation on Capital Expenditures ..................................................... 40
6.5 Additional Provisions Respecting Calculation of Financial Covenants .................... 40
ARTICLE 7 BUSINESS COVENANTS ................................................................. 41
7.1 Indebtedness. .......................................................................... 41
7.1.1 In General .................................................................... 41
7.1.2 Limitation on Incurrence ...................................................... 41
7.1.3 No Default .................................................................... 41
7.2 Liens; Licenses. ....................................................................... 42
7.2.1 In General .................................................................... 42
7.2.2 Negative Pledge ............................................................... 43
7.2.3 Licenses ...................................................................... 43
7.3 Investments, Loans, Acquisitions, etc. ................................................. 43
7.4 Restricted Payments .................................................................... 44
7.5 Sale-Leasebacks. ....................................................................... 44
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TABLE OF CONTENTS
(continued)
PAGE
7.6 Transactions with Affiliates. .......................................................... 44
7.7 Mergers and Dispositions. .............................................................. 44
7.7.1 Consolidations and Mergers .................................................... 44
7.7.2 Sales and Other Dispositions .................................................. 45
7.8 Management Arrangements. ............................................................... 45
7.9 Existence. ............................................................................. 45
7.10 Compliance with Law .................................................................... 46
7.11 Payment of Taxes and Claims. ........................................................... 46
7.12 Tax Consolidation. ..................................................................... 46
7.13 Compliance with ERISA .................................................................. 46
7.14 Insurance. ............................................................................. 48
7.14.1 Liability, Property Damage, Etc ............................................... 48
7.14.2 PBGC .......................................................................... 48
7.15 Maintenance of Properties. ............................................................. 48
7.16 Maintenance of Records; Fiscal Year .................................................... 48
7.17 Inspection. ............................................................................ 48
7.18 Exchange of Notes ...................................................................... 49
7.19 Further Assurances ..................................................................... 49
7.20 Consistent Action - Voting. ............................................................ 49
7.21 Issuance of Equity ..................................................................... 49
7.22 Change in Documents; New Documents ..................................................... 49
7.23 Limitations on Certain Restrictive Provisions .......................................... 50
7.24 Environmental Matters. ................................................................. 50
7.25 Corporate Separateness. ................................................................ 50
7.26 Subsidiaries, Subsidiary Pledges and Subsidiary Suretyships. ........................... 50
7.27 Intellectual Property Collateral Agreements ............................................ 51
7.28 Real Property Leased and Owned; Other Locations ........................................ 51
7.28.1 In General .................................................................... 51
7.28.2 Other Locations ............................................................... 51
ARTICLE 8 EVENTS OF DEFAULT .................................................................. 52
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TABLE OF CONTENTS
(continued)
PAGE
8.1 Events of Default ...................................................................... 52
8.1.1 Failure to Pay Principal ...................................................... 52
8.1.2 Failure to Pay Interest, Fees, Reimbursement Obligations, Etc ................. 52
8.1.3 Cross-Default to Indebtedness ................................................. 52
8.1.4 Other Cross-Defaults .......................................................... 52
8.1.5 Misrepresentations ............................................................ 52
8.1.6 Certain Covenant Defaults ..................................................... 52
8.1.7 Other Covenant Defaults ....................................................... 53
8.1.8 Other Loan Document Defaults; Security ........................................ 53
8.1.9 Custody or Control of Assets .................................................. 53
8.1.10 Discontinuance of Business .................................................... 53
8.1.11 Insolvency .................................................................... 53
8.1.12 Material Adverse Effect ....................................................... 54
8.1.13 Judgments ..................................................................... 54
8.1.14 Change of Control ............................................................. 54
8.1.15 Lease Termination ............................................................. 54
8.1.16 Subordination ................................................................. 54
8.2 Acceleration; Remedies. ................................................................ 54
8.2.1 Acceleration Upon Insolvency .................................................. 54
8.2.2 Acceleration Upon Other Defaults .............................................. 54
8.2.3 Remedies in General ........................................................... 55
8.3 Proceeds of Collateral ................................................................. 55
ARTICLE 9 DEFINITIONS ........................................................................ 56
9.1 Defined Terms .......................................................................... 56
ARTICLE 10 AGENT .............................................................................. 76
10.1 Authority. ............................................................................. 76
10.2 Expenses ............................................................................... 77
10.3 Action by Agent. ....................................................................... 77
10.4 Exculpatory Provisions ................................................................. 77
10.4.1 General Standard .............................................................. 77
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TABLE OF CONTENTS
(continued)
PAGE
10.4.2 Agents and Employees .......................................................... 77
10.4.3 Advice of Professionals ....................................................... 77
10.4.4 Reliance on Information Believed to Be Genuine ................................ 77
10.5 Investigation by Lenders ............................................................... 78
10.6 Notice of Events of Default ............................................................ 78
10.7 Resignation; Termination ............................................................... 78
10.8 Sharing ................................................................................ 78
10.9 Other Relationships .................................................................... 79
ARTICLE 11 MISCELLANEOUS ...................................................................... 79
11.1 Notices ................................................................................ 79
11.2 Survival of Representations ............................................................ 79
11.3 No Implied Waivers ..................................................................... 80
11.4 Entire Agreement ....................................................................... 80
11.5 Severability ........................................................................... 80
11.6 Amendments, Waivers and Consents ....................................................... 80
11.7 Successors and Assigns ................................................................. 81
11.7.1 In General; The Borrower ...................................................... 81
11.7.2 Assignment .................................................................... 82
11.7.3 Register ...................................................................... 83
11.7.4 Participations ................................................................ 83
11.7.5 Certain Permitted Pledges ..................................................... 84
11.8 Descriptive Headings ................................................................... 84
11.9 Governing Law .......................................................................... 84
11.10 Maximum Lawful Interest Rate ........................................................... 84
11.11 Set-off ................................................................................ 84
11.12 Counterparts ........................................................................... 85
11.13 Confidentiality ........................................................................ 85
11.14 Costs and Expenses of the Agent ........................................................ 85
11.15 Indemnification ................................................................ 86
11.15.2 Limitations on Indemnification ................................................. 86
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TABLE OF CONTENTS
(continued)
PAGE
11.16 Certification of Amounts ............................................................... 87
11.17 Consent to Jurisdiction, Service and Venue; Waiver of Jury Trial ....................... 87
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