Exhibit 10.2
CREDIT AGREEMENT
By and Among
iGATE CAPITAL CORPORATION,
as Borrower
and
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders
and
PNC BANK, NATIONAL ASSOCIATION,
as Agent and as Swing Loan Lender and Issuing Bank
Dated as of August 1, 2000
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS; CONSTRUCTION.......................................................... 1
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1.01 Certain Definitions...................................................................... 1
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1.02 Construction............................................................................. 21
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1.03 Accounting Principles.................................................................... 22
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ARTICLE II REVOLVING CREDIT AND SWING LOAN FACILITIES................................................ 23
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2.01 Commitments.............................................................................. 23
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2.02 Nature of Lenders' Obligations with Respect to Revolving Credit Loans.................... 23
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2.03 Commitment Fees.......................................................................... 24
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2.04 Reduction of Revolving Credit Commitment................................................. 24
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2.05 Loan Requests............................................................................ 24
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2.06 Making Loans............................................................................. 25
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2.07 Notes.................................................................................... 26
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2.08 Interest Payments, Interest Rates and Certain Related Payments Pertaining to the Loans... 26
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2.09 Prepayments: Allocation of Repayments.................................................... 29
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2.10 Yield Protection......................................................................... 30
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2.11 Special Provisions Relating to the Euro-Rate Option...................................... 32
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2.12 Capital Adequacy......................................................................... 33
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2.13 Utilization of Commitments in Optional Currencies........................................ 34
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2.14 Market Presumption....................................................................... 37
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2.15 Loan Account............................................................................. 38
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2.16 All Advances to Constitute One Loan...................................................... 38
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2.17 Use of Proceeds.......................................................................... 38
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2.18 Letter of Credit Subfacility............................................................. 38
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2.19 Taxes.................................................................................... 46
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2.20 Payments................................................................................. 47
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2.21 Judgment Currency........................................................................ 47
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2.22 Borrowings to Repay Swing Loans.......................................................... 48
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2.23 Extension of Expiration Date............................................................. 48
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ARTICLE III LOAN DISBURSEMENT ACCOUNT, GUARANTEES, ETC............................................... 49
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3.01 Loan Disbursement Account................................................................ 49
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3.02 Designation of Subsidiary Guarantors..................................................... 49
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3.03 Pledge of Subsidiary Interests........................................................... 49
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3.04 Further Cooperation...................................................................... 49
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ARTICLE IV REPRESENTATIONS AND WARRANTIES .......................................................... 50
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4.01 Organization and Qualification........................................................... 50
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4.02 Capitalization and Ownership............................................................. 50
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4.03 Subsidiaries............................................................................. 50
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4.04 Power and Authority...................................................................... 50
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4.05 Validity and Binding Effect.............................................................. 51
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4.06 No Conflict.............................................................................. 51
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4.07 Litigation............................................................................... 51
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4.08 Financial Statements..................................................................... 51
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4.09 Margin Stock; Section 20 Subsidiaries.................................................... 52
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4.10 Full Disclosure.......................................................................... 52
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4.11 Tax Returns and Payments................................................................. 52
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4.12 Consents and Approvals................................................................... 52
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4.13 No Event of Default; Compliance with Instruments......................................... 53
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4.14 Compliance with Laws..................................................................... 53
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4.15 Investment Company; Public Utility Holding Company....................................... 53
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4.16 Plans and Benefit Arrangements........................................................... 53
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4.17 Title to Properties...................................................................... 54
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4.18 Insurance................................................................................ 54
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4.19 Employment Matters....................................................................... 55
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4.20 Environmental Matters.................................................................... 55
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4.21 Senior Debt Status....................................................................... 56
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4.22 Solvency................................................................................. 56
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4.23 Material Contracts; Burdensome Restrictions.............................................. 56
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4.24 Patents, Trademarks, Copyrights, Licenses, Etc. ......................................... 56
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4.25 Year 2000 Problem........................................................................ 57
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4.26 Brokers.................................................................................. 57
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4.27 No Material Adverse Change............................................................... 57
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4.28 Security Interests....................................................................... 57
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4.29 Status of Pledged Collateral............................................................. 57
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ARTICLE V CONDITIONS OF LENDING OR ISSUANCE OF LETTER OF CREDIT...................................... 58
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5.01 Conditions to Initial Borrowings......................................................... 58
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5.02 Each Additional Loan or Issuance of a Letter of Credit................................... 61
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5.03 Location of Closing...................................................................... 61
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ARTICLE VI AFFIRMATIVE COVENANTS..................................................................... 61
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6.01 Preservation of Existence, Etc........................................................... 62
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6.02 Accounting System; Reporting Requirements................................................ 62
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6.03 Notices Regarding Plans and Benefit Arrangements......................................... 64
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6.04 Payment of Liabilities, Including Taxes, etc............................................. 65
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6.05 Maintenance of Insurance................................................................. 65
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6.06 Maintenance of Properties and Leases..................................................... 66
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6.07 Maintenance of Permits and Franchises.................................................... 66
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6.08 Visitation Rights........................................................................ 66
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6.09 Keeping of Records and Books of Account.................................................. 66
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6.10 Plans and Benefit Arrangements........................................................... 67
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6.11 Compliance with Laws..................................................................... 67
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6.12 Use of Proceeds.......................................................................... 67
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6.13 Environmental Laws....................................................................... 67
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6.14 Senior Debt Status....................................................................... 68
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6.15 Further Assurances....................................................................... 68
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6.16 Post Closing Items....................................................................... 68
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6.17 GE Contract...................................................... ERROR! BOOKMARK NOT DEFINED.
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ARTICLE VII NEGATIVE COVENANTS....................................................................... 68
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7.01 Indebtedness............................................................................. 69
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7.02 Liens.................................................................................... 69
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7.03 Loans, Acquisitions and Investments...................................................... 70
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7.04 Liquidations, Mergers and Consolidations................................................. 71
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7.05 Dispositions of Assets or Subsidiaries................................................... 71
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7.06 Affiliate Transactions................................................................... 72
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7.07 Subsidiaries, Partnerships and Joint Ventures............................................ 72
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7.08 Continuation of or Change in Business.................................................... 72
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7.09 Plans and Benefit Arrangements........................................................... 72
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7.10 Distributions to Shareholders............................................................ 73
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7.11 Fiscal Year.............................................................................. 73
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7.12 Changes in Organizational Documents...................................................... 73
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7.13 Financial Covenants...................................................................... 73
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7.14 Change of Control........................................................................ 74
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ARTICLE VIII DEFAULT................................................................................. 74
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8.01 Events of Default........................................................................ 74
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8.02 Consequences of Event of Default......................................................... 77
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ARTICLE IX THE AGENT................................................................................. 79
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9.01 Appointment and Grant of Authority....................................................... 79
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9.02 Delegation of Duties..................................................................... 79
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9.03 Reliance by Agent on Lenders for Funding................................................. 79
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9.04 Non-Reliance on Agent.................................................................... 79
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9.05 Responsibility of Agent and Other Matters................................................ 80
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9.06 Actions in Discretion of Agent; Instructions from the Lenders............................ 81
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9.07 Indemnification.......................................................................... 81
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9.08 Agent's Rights as Lender................................................................. 81
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9.09 Notice of Default........................................................................ 82
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9.10 Payment to Lenders....................................................................... 82
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9.11 Holders of Notes......................................................................... 82
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9.12 Equalization of Lenders.................................................................. 82
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9.13 Successor Agent.......................................................................... 83
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9.14 Calculations............................................................................. 83
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9.15 Beneficiaries............................................................................ 83
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9.16 Additional Lenders....................................................................... 83
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ARTICLE X GENERAL PROVISIONS......................................................................... 84
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10.01 Amendments and Waivers................................................................... 84
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10.02 Costs and Expenses, etc.................................................................. 85
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10.03 Notices.................................................................................. 85
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10.04 Participation and Assignment............................................................. 86
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10.05 Successors and Assigns................................................................... 88
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10.06 No Implied Waivers; Cumulative Remedies; Writing Required................................ 88
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10.07 Severability............................................................................. 88
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10.08 Indemnity................................................................................ 89
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10.09 Confidentiality.......................................................................... 89
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10.10 Survival................................................................................. 90
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10.11 GOVERNING LAW............................................................................ 90
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10.12 FORUM.................................................................................... 90
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10.13 Non-Business Days........................................................................ 91
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10.14 Integration.............................................................................. 91
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10.15 Counterparts............................................................................. 91
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10.16 Funding by Branch, Subsidiary or Affiliate............................................... 91
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10.17 WAIVER OF JURY TRIAL..................................................................... 92
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SCHEDULES
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SCHEDULE 1.01(a) - Lenders
SCHEDULE 1.01(b) - Permitted Liens
SCHEDULE 4.01 - Organization and Qualification
SCHEDULE 4.02 - Capitalization and Ownership
SCHEDULE 4.03 - Subsidiaries
SCHEDULE 4.07 - Litigation
SCHEDULE 4.11 - Tax Returns and Payments
SCHEDULE 4.12 - Consents and Approvals
SCHEDULE 4.16 - Plans and Benefit Arrangements
SCHEDULE 4.20 - Environmental Matters
SCHEDULE 4.29 - Partnership and LLC Agreements
SCHEDULE 7.01 - Existing Indebtedness
SCHEDULE 7.03 - Investments, Capital Contributions and Advances
SCHEDULE 7.06 - Affiliate Transactions
SCHEDULE 10.03 - Notices
EXHIBITS
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EXHIBIT A - Form of Assignment and Assumption Agreement
EXHIBIT B - Form of Borrowing Base Certificate
EXHIBIT C - Form of Compliance Certificate
EXHIBIT D-1 - Form of Revolving Loan Request
EXHIBIT D-2 Form of Swing Loan Request
EXHIBIT E - Form of Revolving Credit Note
EXHIBIT F - Form of Swing Loan Note
EXHIBIT G - Form of Pledge Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Opinion of Borrower's Counsel
EXHIBIT J - Form of Guarantor Joinder
EXHIBIT K - Form of Lender Joinder
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August 1, 2000, is made by and
among iGATE CAPITAL CORPORATION, a Pennsylvania corporation (the "Borrower"),
the undersigned Lenders, and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
Issuing Bank or Swing Loan Lender ("PNC Bank"), and as agent for the Issuing
Bank and the Lenders under this Agreement (in such capacity, the "Agent"). Each
of the Borrower, the Lenders, the Issuing Bank and the Agent are more fully
defined in Article I below.
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower Loans in an aggregate principal amount not exceeding Fifty Million
Dollars ($50,000,000) at any one time outstanding and to provide for the
issuance for the account of the Borrower Letters of Credit with an aggregate
Stated Amount not exceeding Fifteen Million Dollars ($15,000,000) at any one
time outstanding; provided, that at no time shall Total Utilization exceed Fifty
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Million Dollars ($50,000,000); and
WHEREAS, the Lenders are willing to make the Loans available to the
Borrower, the Issuing Bank is willing to issue Letters of Credit for the account
of the Borrower and its Subsidiaries, and the Lenders are willing to purchase
risk participations with respect to each Letter of Credit issued by the Issuing
Bank, in each case according to the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises (each of which is
incorporated herein by reference) and the mutual covenants and agreements set
forth below, and other valuable consideration, and intending to be legally bound
hereby, the parties hereby covenant and agree as follows:
ARTICLE I
CERTAIN DEFINITIONS; CONSTRUCTION
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1.01 Certain Definitions. In addition to words and terms defined
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elsewhere in this Agreement, the following words and terms shall have the
following meanings, respectively, unless the context of this Agreement clearly
requires otherwise:
"Account" shall mean an "account" or a "general intangible" as defined
in the Uniform Commercial Code as in effect in the jurisdiction whose Law
governs the perfection of the Agent's security interest therein, whether now
owned or hereafter acquired or arising.
"Account Debtor" shall mean, with respect to any Account, each Person
who is obligated to make payments to any of the Loan Parties on such Account.
"Affiliate," as to any Person, shall mean any other Person (a) which
directly or indirectly Controls, is Controlled by, or is under common Control
with such Person, (b) which beneficially owns or holds ten percent (10 %) or
more of any class of the voting or other equity interests of such Person, or (c)
ten percent (10 %) or more of any class of voting interests or other equity
interests of which is beneficially owned or held, directly or indirectly, by
such Person.
"Agent" shall mean PNC Bank, National Association, a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Issuing Bank and the Lenders pursuant to this
Agreement, and its successors and assigns in such capacity.
"Agent's Fees" shall mean the fees payable to the Agent for acting as
Agent under this Agreement, as more fully set forth in the Agent's Letter.
"Agent's Letter" shall mean the letter from the Agent to the Borrower
dated August 1, 2000, as the same may be amended from time to time or otherwise
modified or supplemented.
"Agreement" shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
"Applicable Standby Letter of Credit Fee" shall have the meaning
ascribed to it in Section 2.18(b).
"Application for Letter of Credit" shall mean the then current
application for standby letter of credit or commercial letter of credit used by
the Issuing Bank.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement by and among a Purchasing Lender, a Transferor Lender and
the Agent, as the Agent and on behalf of the remaining Lenders, substantially in
the form of Exhibit A.
"Assignment Fee" shall have the meaning ascribed to it in Section
10.04(b).
"Authorized Officer" shall mean each and any of those individuals
designated initially in the several incumbency certificates delivered pursuant
to Section 5.01 by the Borrower or a Subsidiary Guarantor, as the case may be.
The Borrower, or a Subsidiary Guarantor, as the case may be, may amend such list
of persons from time to time by giving written notice of such amendment to the
Agent.
"Base Rate" shall mean the greater of (a) the Federal Funds Effective
Rate plus fifty basis points (0.5%) and (b) the Prime Rate per annum. The
"Prime Rate" shall mean for any day, a fluctuating interest rate per annum equal
to the rate of interest which the Agent announces from time to time as its prime
lending rate, which rate may not be the lowest rate then being charged by the
Agent to commercial borrowers.
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"Base Rate Option" shall mean the interest rate option described in
Section 2.08(b)(i).
"Base Rate Portion" shall mean the portion of the Loans which bears,
or is to bear, interest under the Base Rate Option.
"Benefit Arrangement" shall mean at any time an "employee benefit
plan", within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to, by any member of the ERISA Group.
"Borrower" shall mean iGate Capital Corporation, a corporation
organized and subsisting under the laws of the Commonwealth of Pennsylvania, and
its successors and permitted assigns.
"Borrowing Base" shall mean the lesser of (a) $50,000,000 and (b) 85%
of Qualified Accounts at such time.
"Borrowing Base Certificate" shall mean each Borrowing Base
Certificate, in substantially the form of Exhibit B, to be delivered by the
Borrower to the Agent pursuant to Section 2.02(b) with blanks appropriately
completed, as amended, supplemented, or otherwise modified from time to time.
"Borrowing Date" shall mean, with respect to any Loan, the date for
the making thereof, or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.
"Business Day" shall mean, (a) when used in any context other than in
reference to or in connection with Euro-Rate, any day, other than a Saturday or
Sunday, on which commercial banks are open for business in Pittsburgh,
Pennsylvania, (b) when used in the context of a Euro-Rate, any day, other than a
Saturday or Sunday, on which (i) commercial banks are open for business in
Pittsburgh, Pennsylvania and (ii) dealings are carried on in the London
interbank market, and (c) when used with respect to advances or payments of
Loans or any other matters relating to Loans denominated in an Optional
Currency, such day also shall be a day on which dealings in deposits in the
relevant Optional Currency are carried on in the applicable interbank market or
on which all applicable banks into which Loan proceeds may be deposited are open
for business and foreign exchange markets are open for business in the principal
financial center of the country of such currency.
"Capital Adequacy Event" shall have the meaning ascribed to it in
Section 2.12.
"Capital Compensation Amount" shall have the meaning ascribed to it in
Section 2.12.
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"Cash Equivalents" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits, certificates of deposit and
eurodollar time deposits, bankers' acceptances and overnight bank deposits, in
each case with any Lender or with any domestic commercial bank having capital
and surplus in excess of $500,000,000 (c) notes and bonds issued by domestic
corporations, (d) tax-exempt money market securities, (e) notes and bonds issued
by state and municipal governments, and (f) money market mutual funds; provided
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however, that (x) at least one-third of the value of the Cash Equivalents shall
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have a maximum weighted average to maturity of not more than six (6) months and
the remaining value of the Cash Equivalents shall have a maximum weighted
average to maturity of not more than eighteen (18) months and (y) the Cash
Equivalents which are of a type customarily rated by S&P and Xxxxx'x, must have
a rating of at least A-1 by S&P or P-1/VMG-1 by Xxxxx'x, if short term, or
double "A" or higher by S&P and Xxxxx'x, if long term.
"Change of Control" shall mean that (a) Xxxxx X. Xxxxxx and Xxxxx
Xxxxxxx shall fail to collectively own at least thirty percent (30%) of the
voting capital stock of the Borrower, (b) any "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
other than Xxxxx X. Xxxxxxx or Xxxxx Xxxxxxxx becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or
indirectly, of twenty percent (20%) or more of the voting power of the then
outstanding capital stock of the Borrower entitled to vote generally in the
election of the directors of the Borrower, or (c) during any period of twelve
(12) consecutive calendar months, the board of directors of the Borrower shall
cease to have as a majority of its members individuals who either:
(i) were directors of the Borrower on the first day of such
period; or
(ii) were elected or nominated for election to the board of
directors of the Borrower at the recommendation of or other approval by at least
a majority of the directors then still in office at the time of such election or
nomination who were directors of the Borrower on the first day of such period,
or whose election or nomination for election was so approved.
"Closing" shall mean the execution and delivery of this Agreement and
the other Loan Documents by the parties hereto and thereto on the Closing Date.
"Closing Date" shall mean August 10, 2000.
"Collateral" shall mean the existing and after acquired assets of the
Loan Parties in which the Agent has a security interest, lien or other
encumbrance pursuant to any of the Security Agreements, the Pledge Agreements or
the Patent, Trademark and Copyright Assignments.
"Commercial Letter of Credit" shall mean a Letter of Credit directly
related to the sale of goods or similar transaction in which it is intended by
the account party and
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beneficiary that payment shall be made, in the ordinary course, by a draw on the
Letter of Credit in accordance with its terms.
"Commercial Letter of Credit Fee" shall have the meaning ascribed to
it in Section 2.18(b).
"Commitment" shall mean as to any Lender the aggregate of its
Revolving Credit Commitment and, in the case of PNC Bank, its Swing Loan
Commitment, and "Commitments" shall mean the aggregate of the Revolving Credit
Commitments and Swing Loan Commitment of all of the Lenders.
"Commitment Fee" shall have the meaning ascribed to it in Section
2.03.
"Compliance Certificate" shall mean a certificate executed by the
chief financial officer, the treasurer or the controller of the Borrower,
substantially in the form of Exhibit C.
"Computation Date" shall have the meaning ascribed to it in Section
2.13(a).
"Consolidated EBITDA" shall mean, for any period, the consolidated net
income (or net loss) of any Person for such period as determined in accordance
with GAAP plus the sum of (a) consolidated interest expense, (b) total income
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tax expense, (c) consolidated amortization and depreciation expense, and (d) any
extraordinary or unusual losses, minus any extraordinary or non-recurring gains.
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"Consolidated Tangible Net Worth" shall mean stockholders' equity
minus intangible assets of any Person determined on a consolidated basis in
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accordance with GAAP.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be, and the terms "Controlled" and
"Controlling" shall have correlative meanings.
"Default" shall mean any event or condition which with notice or
passage of time or both, would constitute an Event of Default.
"Dollar, Dollars, U.S. Dollars" and the symbol $ shall mean lawful
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money of the United States of America.
"Dollar Equivalent" shall mean, with respect to any amount of any
currency, the Equivalent Amount of such currency expressed in Dollars.
"Domestic Subsidiary" shall mean a Subsidiary organized under the laws
of the United States, any State thereof or the District of Columbia.
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"Environmental Complaint" shall mean any written complaint setting
forth a cause of action for personal or property damage or natural resource
damage or equitable relief, order, notice of violation, citation, request for
information issued pursuant to any Environmental Laws by an Official Body,
subpoena or other written notice of any type relating to, arising out of, or
issued pursuant to, any of the Environmental Laws or any Environmental
Conditions, as the case may be.
"Environmental Conditions" shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, emptying, discharging,
injecting, escaping, leaching, disposal, dumping, threatened release or other
management or mismanagement of Regulated Substances resulting from the use of,
or operations on, any Property.
"Environmental Laws" shall mean all federal, state, local and foreign
Laws and regulations, including permits, licenses, authorizations, bonds,
orders, judgments, and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of the environment.
"Equivalent Amount" shall mean, at any time, as determined by the
Agent (which determination shall be conclusive absent manifest error), with
respect to an amount of any currency (the "Reference Currency") which is to be
computed as an equivalent amount of a different currency (the "Equivalent
Currency"), the amount of such Equivalent Currency converted from such Reference
Currency at the Agent's spot selling rate (based on the market rates then
prevailing and available to the Agent) for the sale of such Equivalent Currency
for such Reference Currency at a time determined by the Agent on the second
Business Day immediately preceding the event for which such calculation is made.
"Equivalent Currency" shall have the meaning assigned to such term in
the definition of Equivalent Amount.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
in each case as from time to time in effect.
"ERISA Group" shall mean, at any time, the Borrower and all members of
a controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
the Borrower, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro" shall have the meaning ascribed to it in Section 2.13(i).
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"Euro-Rate" shall mean: (a) with respect to any Loans denominated in
Dollars comprising any Portion to which the Euro-Rate Option applies for any
Euro-Rate Interest Period, the interest rate per annum determined by the Agent
by dividing (the resulting quotient rounded upward to the nearest 1/100 of 1%)
(i) the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive and binding upon the
Borrower, absent manifest error on the part of the Agent) to be equal to the
offered rates for deposits in Dollars for the applicable Euro-Rate Interest
Period quoted by the British Bankers Association ("BBA") which appear on Page
3750 of the Dow Xxxxx Market Service display page (or, if such quotation is not
available, an appropriate successor as determined by the Agent) reporting system
as of approximately 11:00 a.m., Greenwich Mean Time, two (2) Business Days prior
to the first day of such Euro-Rate Interest Period for an amount comparable to
such Loan and having a borrowing date and a maturity comparable to such Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
Such Euro-Rate may also be expressed by the following formula:
Euro-Rate = Offered rate on Dow Xxxxx Market Service
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1.00 - Euro-Rate Reserve Percentage
If more than one offered rate appears on Page 3750 of the Dow Xxxxx Market
Service rate reporting system or similar system, the rate shall be the
arithmetic mean of such offered rates; and
(b) with respect to any Loans denominated in Optional Currency
comprising any Portion to which the Euro-Rate Option applies for any Euro-Rate
Interest Period, the interest rate per annum determined by Agent by dividing
(the resulting quotient rounded upward to the nearest 1/100 of 1% percent) (i)
the rate of interest per annum determined by Agent in accordance with its usual
procedures (which determination shall be conclusive and binding upon the
Borrower absent manifest error) to be the rate of interest per annum for
deposits in the relevant Optional Currency quoted by BBA which appears on the
relevant Dow Xxxxx Market Service display page (or, if such quotation is not
available, an appropriate successor as determined by the Agent) at approximately
9:00 a.m., Pittsburgh time, two (2) Business Days prior to the first day of such
Interest Period for delivery on the first day of such Interest Period for a
period, and in an amount, comparable to such Interest Period and principal
amount of such disbursement ("LIBO Rate") by (ii) a number equal to 1.00 minus
the Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the
following formula:
Euro-Rate = LIBO Rate
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1 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error. The Euro-Rate for any Loans shall be
based upon the Euro-Rate for the currency in which such Loans are requested.
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"Euro-Rate Interest Period" shall mean any individual period equal to
one (1), two (2), three (3), or six (6) months selected by the Borrower or
twelve (12) months if requested by the Borrower and available to the Agent and
the Lenders in each case commencing on the Borrowing Date, a conversion date or
a renewal date of a Euro-Rate Portion to which such period shall apply;
provided, however, that prior to the date which is the Business Day following
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the Syndication Date, only one (1) month periods shall be available.
"Euro-Rate Option" shall mean the interest rate option described in
Section 2.08b(ii).
"Euro-Rate Portion" shall mean each portion of the Loans which bears,
or is to bear, interest under the Euro-Rate Option; and the term Euro-Rate
Portions shall mean collectively all such portions of the Loans which bear, or
are to bear, interest under the Euro-Rate Option.
"Euro-Rate Reserve Percentage" shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
"Event of Default" shall have the meaning ascribed to it in Section
8.01.
"Expiration Date" shall mean October 1, 2001, as the same may be
extended pursuant to Section 2.23.
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
--------
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Fees" shall mean collectively any of the Agent's Fees, the Commitment
Fee, the Letter of Credit Fee, the Fronting Fee, any administration fee payable
to the Agent, and any other fee payable under any of the other Loan Documents.
-8-
"Fiscal Quarter" shall mean each three month fiscal period of the
Borrower beginning respectively on each January 1, April 1, July 1 and October 1
during the term hereof and ending on the immediately succeeding March 31, June
30, September 30 and December 31.
"Fiscal Year" shall mean each 12-month fiscal period of the Borrower
beginning January 1 and ending on the immediately succeeding December 31.
"Fronting Fee" shall have the meaning ascribed to it in Section
2.18(b).
"GAAP" shall mean, subject to the provisions of Section 1.03,
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be recognized by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.
"GE Capital Agreement" shall mean the Note Purchase Agreement dated as
of July 22, 1999 by and between the Borrower and GE Capital Equity Investments,
Inc.
"Guaranty" of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person (excluding indemnities (but not
guaranties for the payment of money) incurred in the ordinary course of
business), any performance bond or other suretyship arrangement and any other
form of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.
"Indebtedness" shall mean as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent or joint
and several) of such Person for or in respect of: (a) borrowed money, (b)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (c) reimbursement obligations (contingent or
otherwise) under any letter of credit, forward exchange agreement, currency swap
agreement, hedging contracts, Interest Rate Hedge Agreement or other interest
rate management device, raw materials management device, (d) any other
transaction (including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness), (e) any obligation or liability as a general
partner in any general or limited partnership, or (f) any Guaranty of any of the
foregoing.
"Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
-9-
"Interest Rate Hedge Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate insurance or any other agreement or arrangement designed to provide
protection against fluctuations in interest rates.
"Interest Rate Option" shall mean any Euro-Rate Option or the Base
Rate Option.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as from
time to time in effect.
"Issuing Bank" shall mean PNC Bank, National Association, and any
successor to PNC Bank, National Association as the issuer of Letters of Credit
hereunder.
"Labor Contracts" shall have the meaning ascribed to it in Section
4.19.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
"Lenders" shall mean the financial institutions named on Schedule
1.01(a) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Lender.
"Letter of Credit" shall mean any Standby Letter of Credit or
Commercial Letter of Credit issued by the Issuing Bank for the account of the
Borrower upon the application of the Borrower (for itself or on behalf of a
Subsidiary) pursuant to this Agreement and all extensions, renewals, amendments,
substitutions and replacements thereto and thereof.
"Letter of Credit Cash Collateral Account" shall have the meaning
ascribed to it in Section 8.02(e).
"Letter of Credit Fee" shall have the meaning ascribed to it in
Section 2.18(b).
"Leverage Ratio" shall mean the ratio of (a) the consolidated
Indebtedness of the Borrower and its Subsidiaries, to (b) the sum of (i) the
Consolidated Tangible Net Worth of the Borrower and its Subsidiaries and (ii)
the consolidated Indebtedness of the Borrower and its Subsidiaries, all
calculated in accordance with GAAP.
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including but not
limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having
-10-
the effect of, security and any filed financing statement or other notice of any
of the foregoing (whether or not a lien or other encumbrance is created or
exists at the time of the filing).
"Loans" shall mean collectively and "Loan" shall mean separately any
Revolving Credit Loans made by the Lenders pursuant to Section 2.01(a) and any
Swing Loans made by PNC Bank pursuant to Section 2.01(b).
"Loan Account" shall mean the loan account maintained by a Lender as
more fully described in Section 2.15.
"Loan Disbursement Account" shall have the meaning ascribed to it in
Section 3.01.
"Loan Documents" shall mean this Agreement, the Notes, any Application
for Letter of Credit (and any reimbursement agreement executed in connection
therewith), the Subsidiary Guarantees, the Pledge Agreements, the Security
Agreements, any Interest Rate Hedge Agreement executed by a Lender or an
Affiliate of a Lender and the Borrower, any foreign exchange contract executed
by a Lender or an Affiliate of a Lender and the Borrower, and any other
agreements, instruments, certificates or documents contemplated thereby, as any
of the same may be supplemented or amended from time to time in accordance
herewith or therewith; and Loan Document shall mean any of the Loan Documents.
"Loan Parties" shall mean the Borrower and each Subsidiary Guarantor
and "Loan Party" shall mean any of the Loan Parties.
"Loan Request" shall mean a request for Loans made in accordance with
Section 2.05 which request shall be substantially in the form of Exhibit D.
"Margin Regulations" shall mean Regulations T, U and X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
"Material Adverse Change" shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect upon the validity or enforceability of this Agreement or any of
the other Loan Documents, (b) is or could reasonably be expected to be material
and adverse to the business, properties, assets, financial condition or results
of operations of the Borrower and its Subsidiaries, taken as a whole, (c)
impairs materially or could reasonably be expected to impair materially the
ability of the Borrower and its Subsidiaries taken as a whole to duly and
punctually pay their Indebtedness, or (d) impairs materially or could reasonably
be expected to impair materially the ability of the Agent or any of the Lenders
to enforce their legal remedies pursuant to this Agreement or any other Loan
Document.
"Moody's" shall mean Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, its successors
and assigns, and, if such corporation shall be dissolved or liquidated or shall
no longer perform the functions of a
-11-
securities rating agency, "Moody's" shall be deemed to refer to any other
nationally recognized securities rating agency designated by the Agent, with the
approval of the Borrower, by notice to the Lenders.
"Multiemployer Plan" shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
"Multiple Employer Plan" shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
"Notes" shall mean collectively all of the Revolving Credit Notes of
the Borrower substantially in the form of Exhibit E and the Swing Loan Note of
the Borrower substantially in the form of Exhibit F and "Note" shall mean
separately each promissory note of the Borrower substantially in the form of
Exhibit E or Exhibit F, as applicable, in each case evidencing Loans together
with all renewals, replacements, refinancings or refundings thereof or thereto
in whole or in part.
"Obligations" shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes or any other Loan Document.
"Official Body" shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Optional Currency" shall mean any of the following currencies: (a)
the Australian dollar, (b) the British Pound Sterling, (c) the Canadian dollar,
(d) the French Franc, (e) the Deutsche Xxxx, (f) the Italian Lira and (g) the
Spanish Pesetas, and any other freely convertible foreign currency, as
determined pursuant to the currency codes in effect from time to time under ISO
International Standard 4217 or any successor thereto, and approved by Agent and
the Required Lenders pursuant to Section 2.13(d).
"Original Currency" shall have the meaning assigned to it in Section
2.21.
"Other Currency" shall have the meaning assigned to it in Section
2.21.
"Other Taxes" shall have the meaning assigned to it in Section 2.19.
-12-
"Overnight Rate" shall mean for any day with respect to any Loans in
an Optional Currency, the rate of interest per annum as determined by the Agent
at which overnight deposits in such currency, in an amount approximately equal
to the amount with respect to which such rate is being determined, would be
offered for such day in the applicable offshore interbank market.
"Participant" shall mean any bank or financial institution which
acquires from any Lender an undivided interest in the Lender's Ratable Share of
the Revolving Credit Commitments, Loans, Letters of Credit and Unreimbursed
Letter of Credit Draws, pursuant to Section 10.04.
"Patent, Trademark and Copyright Assignments" shall mean collectively
the Patent, Trademark and Copyright Collateral Assignments in form and substance
acceptable to the Agent, executed and delivered by each of the Loan Parties to
the Agent for the benefit of the Lenders, and Patent Trademark and Copyright
Assignment shall mean any of the Patent Trademark and Copyright Assignments.
"Participation" shall mean the sale, made in accordance with the
provisions of Section 10.04, by any Lender to any Participant of an undivided
interest in such Lender's Ratable Share of the Revolving Credit Commitments,
Loans, Letters of Credit and Unreimbursed Letter of Credit Draws.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Permitted Liens" shall mean:
(a) Liens for taxes, assessments, governmental levies or similar
charges incurred in the ordinary course of business and which are not yet due
and payable, or if due and payable, (i) are being contested in good faith and by
appropriate and lawful proceedings diligently conducted, but only so long as
such proceedings could not subject the Agent, the Lenders or the Issuing Bank to
any civil or criminal penalties or liabilities and (ii) for which such reserves
or other appropriate provisions, if any, as shall be required by GAAP shall have
been made and (iii) which shall be paid in accordance with the terms of any
final judgments or orders relating thereto within thirty (30) days after the
entry of such judgments or orders;
(b) Pledges or deposits made in the ordinary course of business to
secure payment of workmen's compensation, or to participate in any fund in
connection with workmen's compensation, unemployment insurance, old-age
pensions, other social security programs or similar program or to secure
liability to insurance carriers under insurance or self insurance agreements or
arrangement;
(c) Liens of mechanics, materialmen, warehousemen, carriers, or other
like Liens, securing obligations incurred in the ordinary course of business
that are not yet due and payable and Liens of landlords securing obligations to
pay lease payments that are not yet due
-13-
and payable or in default, or if such Liens are due and payable, (i) are being
contested in good faith and by appropriate and lawful proceedings diligently
conducted and (ii) for which such reserves or other appropriate provisions, if
any, as required by GAAP shall have been made and (iii) which shall be paid in
accordance with the terms of any final judgments or orders relating thereto
within thirty (30) days after the entry of such judgments or orders;
(d) Pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of the aggregate amounts due
thereunder, or to secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary course of business;
(e) (i) Encumbrances consisting of zoning restrictions, easements,
rights-of-way, or other restrictions on the use of real property, (ii) defects
in title to real property, and (iii) Liens, encumbrances and title defects
affecting real property not known by the Borrower or a Subsidiary, as
applicable, and not discoverable by a search of the public records, none of
which materially impairs the use of such property;
(f) (i) Liens on assets of a Person which is merged into or acquired
by the Borrower or a Subsidiary of the Borrower on or after the date of this
Agreement, and (ii) Liens on assets acquired after the date of this Agreement;
provided that (A) such Liens existed at the time of such merger or acquisition
--------
and were not created in anticipation thereof, (B) no such Lien spreads to cover
any property or assets of the Borrower or any Subsidiary of the Borrower; and
(C) the principal amount of Indebtedness secured thereby is not increased from
the amount outstanding immediately prior to such merger or acquisition;
(g) Liens created by or resulting from any litigation or legal
proceedings which are currently being contested in good faith by appropriate and
lawful proceedings diligently conducted and for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made and Liens arising out of judgments or orders for the payment of money which
do not constitute an Event of Default hereunder;
(h) Other Liens incidental to the conduct of the Borrower's or any
Subsidiary's business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit, and which do not in the aggregate materially detract from the value
of the Borrower's or any Subsidiary's property or assets or which do not
materially impair the use thereof in the operation of the Borrower's business;
(i) Any Lien existing on the date of this Agreement and identified on
Schedule 1.01(b); provided that the principal amount secured thereby is not
--------
hereafter increased;
(j) Purchase Money Security Interests; provided that the aggregate
--------
amount of loans and deferred payments secured by such Purchase Money Security
Interest shall not at any
-14-
time exceed $2,500,000 (excluding for the purpose of this computation any loans
or deferred payments secured by Liens described on Schedule 1.01(b));
(k) Leases or subleases not otherwise prohibited by this Agreement;
provided, however, except as set forth in items (a) through (j) of this
-------- -------
definition the Borrower shall not permit or authorize Liens on any of the
Borrower's or any of its Subsidiaries' properties, except in favor of the Agent
for the benefit of the Agent, the Lenders and the Issuing Bank; and
(l) Liens granted to any Lender pursuant to an Interest Rate Hedge
Agreement with the Borrower; provided, however, that (i) the aggregate amount of
-------- -------
such Interest Rate Hedge Agreements shall not exceed fifty percent (50%) of the
maximum amount of Loans permitted under this Agreement, and (ii) each Lender
party to an Interest Rate Hedge Agreement shall calculate the credit exposure
covered by such Interest Rate Hedge Agreement in a reasonable and customary
manner, and (iii) each Interest Rate Hedge Agreement must conform to ISDA
regulations and be acceptable to the Agent with respect to intercreditor issues;
(m) Liens securing Indebtedness of a non-Domestic Subsidiary which
Indebtedness is permitted hereunder; provided such Lien encumbers only the
--------
assets of the Subsidiary incurring such Indebtedness; and
(n) Any Liens other than those specifically excepted pursuant to
clauses (a) through (m) above, provided, that the aggregate amount of such Liens
--------
permitted by this clause (n) shall not exceed $2,500,000 at any one time
outstanding.
"Person or person" shall mean any individual, corporation,
partnership, limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
"Plan" shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (a) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(b) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
"Pledge Agreement" shall mean a pledge agreement executed by the
Borrower or by any Subsidiary Guarantor holding the capital stock of another
Subsidiary substantially in the form of Exhibit G, together in each case with
all extensions, renewals, amendments, substitutions, and replacements thereto
and thereof.
"Portions" shall mean collectively the Base Rate Portion and the Euro-
Rate Portions; and the term "Portion" shall mean individually any of the
Portions.
-15-
"Principal Office" shall mean the principal commercial banking office
of the Agent in Pittsburgh, Pennsylvania.
"Prior Security Interest" shall mean a valid and enforceable perfected
first priority security interest under the Uniform Commercial Code which is
subject only to Permitted Liens.
"Prohibited Transaction" shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
"Property" shall mean, and refer to, each parcel of real property,
whether owned in fee or leased, of any Loan Party.
"Purchase Money Security Interest" shall mean Liens upon tangible
personal property securing financings to the Borrower or any Subsidiary of the
Borrower or deferred payments by the Borrower or such Subsidiary for the
acquisition of such tangible personal property.
"Purchasing Lender" shall mean a Lender which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
"Qualified Accounts" shall mean Accounts which are and at all times
continue to meet the following conditions:
(a) The Account duly complies with all applicable Laws, whether
Federal, state or local, including but not limited to usury Laws,
the Federal Truth in Lending Act, the Federal Consumer Credit
Protection Act, the Fair Credit Billing Act, and Regulation Z of
the Board of Governors of the Federal Reserve Systems;
(b) The Account was not originated in or subject to the Laws of a
jurisdiction whose Laws would make the account or the grant of
the security interest in the Account to the Agent unlawful,
invalid or unenforceable;
(c) The Account was originated by a Loan Party in connection with the
sale of goods or the rendering of services by a Loan Party in the
ordinary course of business under an enforceable contract, and
such sale has been consummated and such goods have been delivered
or such services have been rendered so that the performance of
such contracts has been completed by such Borrower and by all
parties other than the Account Debtor;
-16-
(d) The Account is evidenced by a written invoice or other
documentation and arises from a contract, all of which are in
form and substance satisfactory to the Agent;
(e) The Account does not arise out of a contract with, or order from,
an Account Debtor that, by its terms, forbids or makes void or
unenforceable the grant of the security interest by a Loan Party
to the Agent in and to the Account arising with respect thereto;
(f) The title of a Loan Party to the Account and, except as to the
Account Debtor, to any related goods is absolute and is not
subject to any Lien except Liens in favor of the Agent;
(g) The Account Debtor's principal place of business is in the United
States and the Account provides for payment by the Account Debtor
in United States Dollars;
(h) The Account shall have amounts owing that are not less than the
amounts represented by a Loan Party;
(i) The portion of the Account for which income has not yet been
earned or which constitutes unearned discount, services charges
or deferred interest shall be ineligible;
(j) The Account shall be eligible only to the extent that it is not
subject to any defense, claim of reduction, counterclaim, set-
off, recoupment, or any dispute or claim for credits, allowances
or adjustments by the Account Debtor because of returned,
inferior, damaged goods or unsatisfactory service, or for any
other reason; provided, however, that Accounts of General
Electric Company will not be deemed ineligible because of a right
of set-off as long as General Electric Company has not exercised
or attempted to exercise such right;
(k) The goods the sale of which gave rise to the Account were shipped
or delivered or provided to the Account Debtor on an absolute
sale basis and not on a xxxx and hold sale basis, a consignment
sale basis, a guaranteed sale basis, a sale or return basis or on
the basis of any other similar terms making the Account Debtor's
payment obligations conditional;
(l) The Account Debtor has not returned, rejected or refused to
retain, or otherwise notified a Loan Party of any dispute
concerning, or claimed nonconformity of, any of the goods from
the sale of which the Account arose;
-17-
(m) No default exists under the Account by any party thereto, and all
rights and remedies of a Loan Party under the Account are freely
assignable by a Loan Party;
(n) The Account has not been outstanding for more than 120 days past
the invoice date and is not subject to "dating" terms; provided,
--------
however, that no more than 10% of the Borrowing Base may be
-------
comprised of Accounts between 91 and 120 days past the invoice
date;
(o) None of the Accounts of any Account Debtor shall be eligible if
more than 15% of the Accounts of such Account Debtor have been
outstanding for more than 120 days;
(p) Accounts from General Electric Company and its Affiliates shall
be ineligible to the extent that they exceed 10% of the Qualified
Accounts; any other Account shall be ineligible to the extent
that the aggregate amount of all the Accounts of the Account
Debtor and its Affiliates exceed 10% of all of a Loan Party's
Accounts.
(q) A Loan Party has not received any note, trade acceptance, draft,
chattel paper or other instrument with respect to, or in payment
of, the Account, unless, if any such instrument has been
received, a Loan Party immediately notifies the Agent and, at the
Agent's request, endorses or assigns and delivers such instrument
to the Agent;
(r) A Loan Party has not received any notice of (i) the filing by or
against the Account Debtor of any proceeding in bankruptcy,
receivership, insolvency, reorganization, liquidation,
conservatorship or any similar proceeding, or (ii) any assignment
by the Account Debtor for the benefit of creditors. Upon receipt
by a Loan Party of any such notice, it will give the Agent prompt
written notice thereof;
(s) The Account Debtor is not an Affiliate of a Loan Party (other
than an Affiliate that is a customer of a Loan Party on the date
of this Agreement on terms that satisfy the requirements of
Section 7.06);
(t) The Account shall be ineligible if the Account Debtor is an
Official Body, unless a Loan Party shall have taken all actions
deemed necessary by the Agent in order to perfect the Agent's
security interest therein, including but not limited to any
notices or filings required under the Assignment of Claims Act of
1940, as amended, or other applicable Laws; and
(u) The Agent has not deemed such Account ineligible because of
uncertainty about the creditworthiness of the Account Debtor
(including, without limitation, unsatisfactory past experiences
of a Loan Party or the Agent with the Account Debtor) or because
the Agent otherwise makes a
-18-
reasonable determination that the collateral value of the Account
to the Agent is impaired or that the Agent's ability to realize
such value is insecure.
(v) With respect to an Account originated by iGate Venture Management
LLC, iGate Venture Partners I, and iGate Ventures I, L.P., the
Account shall be ineligible to the extent, if any, that the
amount of such entity's Accounts aggregates more than such
entity's Guaranteed Obligations.
Standards of acceptability shall be fixed and may be revised from time to time
by mutual agreement of Agent and a Loan Party. In the case of any dispute about
whether an Account is or has ceased to be a Qualified Account, the decision of
the Agent shall be final.
"Ratable Share" shall mean the proportion that a Lender's Revolving
Credit Commitment bears to the Revolving Credit Commitments of all of the
Lenders.
"Reference Currency" shall have the meaning assigned to it in the
definition of Equivalent Amount.
"Register" shall have the meaning ascribed to it in Section 10.04(c).
"Regulated Substances" shall mean any substance, including any solid,
liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse,
garbage, wastes, chemicals, petroleum products, by-products, coproducts,
impurities, dust, scrap, heavy metals, defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic substance,"
"extremely hazardous substance," "toxic chemical," "toxic chemical," "toxic
waste," "hazardous waste," "industrial waste," "residual waste," "medical
waste," or "regulated substance" or any related materials, substances or wastes
as now or hereafter defined pursuant to any Environmental Laws, ordinances,
rules, regulations or other directives of any Official Body, the generation,
manufacture, extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
"Reportable Event" shall mean a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or Multiemployer
Plan.
"Required Lenders" shall mean Lenders whose Revolving Credit
Commitments aggregate at least 51% of the Revolving Credit Commitments of all of
the Lenders.
"Revolving Credit Commitment" shall mean, as to any Lender at any
time, the aggregate amount initially set forth opposite its name on Schedule
1.01(a), and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, as the same may be reduced pursuant to Sections 2.04 or
2.10(a), and "Revolving Credit Commitments" shall mean the aggregate Revolving
Credit Commitments of all of the Lenders.
-19-
"Revolving Credit Loans" shall have the meaning ascribed to it in
Section 2.01(a).
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill Corporation, and, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, "S&P" shall
be deemed to refer to any other nationally recognized securities rating agency
designated by the Agent, with the approval of the Borrower, by notice to the
Lenders.
"Section 20 Subsidiary" shall mean the Subsidiary of the bank holding
company controlling any Lender, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.
"Security Agreements" shall mean collectively the Security Agreements
in form and substance acceptable to the Agents executed and delivered by each of
the applicable Loan Parties to the Agent for the benefit of the Lenders and
Security Agreement shall mean any of the Security Agreements.
"Security Documents" shall mean the Security Agreements, the Pledge
Agreements and the Patent, Trademark and Copyright Assignments.
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that shall be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it shall, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities shall be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Staffing Divestiture" shall mean the disposition, approved by the
Board of Directors of the Borrower, of the following entities: Mastech Quantum
Information Resources, Ltd.; Goldstar Computer Systems, Inc.; Silverside
Computer Systems, Inc.; Quantum Group Inc.; Quantum Information Resources, Inc.;
Mastech Asia Pacific Pty. Ltd.; Mastech Asia Pacific (NT) Pty. Ltd.; MC Computer
Services Pty. Ltd.; Direct Resources Scotland Ltd.; Chen & XxXxxxxx, Inc.;
Mastech Application Services, Inc.; and the "Staffing" division of Emplifi, Inc.
-20-
"Standby Letter of Credit" shall mean a Letter of Credit which is not
a Commercial Letter of Credit.
"Standby Letter of Credit Fee" shall have the meaning ascribed to it
in Section 2.18(b).
"Stated Amount" shall mean as to any Letter of Credit, the lesser of
(a) the face amount thereof or (b) the remaining available undrawn amount
thereof (regardless of whether any conditions for drawing could then be met).
"Subsidiary" of any Person at any time shall mean (a) any corporation
or trust of which 51% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, (b) any partnership of which 51% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person's Subsidiaries or (c) any limited liability company of which
such Person is a member or of which 51% or more of the limited liability company
interests is at the time directly or indirectly owned by such Person or one or
more of such Person's Subsidiaries.
"Subsidiary Guarantor" shall mean each Domestic Subsidiary of the
Borrower whether now existing or hereafter created or acquired.
"Subsidiary Guaranty" shall mean guaranty agreement substantially in
the form of Exhibit H, together in each case with all extensions, renewals,
amendments, substitutions and replacements thereto and thereof.
"Swing Loan Commitment" shall mean PNC Bank's commitment to make Swing
Loans to the Borrower pursuant to Section 2.01(b) hereof, in an aggregate
principal amount up to $5,000,000.
"Swing Loan Note" shall mean the Swing Loan Note of the Borrower in
the form of Exhibit F evidencing the Swing Loans, together with all amendments,
extensions, renewals, replacements, refinancings or refundings thereof in whole
or in part.
"Swing Loan Request" shall mean a request for Swing Loans made in
accordance with Section 2.05(b) hereof.
"Swing Loans" shall have the meaning ascribed to it in Section
2.01(b).
"Syndication Date" shall mean the earlier of (a) the date of
completion of syndication hereunder, as determined by the Agent, and (b) ninety
(90) days after the Closing Date.
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"Taxes" shall have the meaning ascribed to it in Section 2.19.
"Total Utilization" shall mean as of the time of determination the sum
of Loans outstanding, the Unreimbursed Letter of Credit Draws outstanding and
the aggregate Stated Amount of the Letters of Credit outstanding.
"Transfer Effective Date" shall have the meaning ascribed to it in the
applicable Assignment and Assumption Agreement.
"Transferor Lender" shall mean the selling Lender pursuant to an
Assignment and Assumption Agreement.
"Unreimbursed Letter of Credit Draw" shall have the meaning ascribed
to it in Section 2.18(f).
"Year 2000 Problem" shall have the meaning ascribed to it in Section
4.25.
1.02. Construction.
------------
(a) Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and
each of the other Loan Documents:
(i) Number: Inclusion. References to the plural include
-----------------
the singular, the singular the plural and the part the whole, "or" has the
inclusive meaning represented by the phrase "and/or," and "including" has the
meaning represented by the phrase "including without limitation".
(ii) Determination. References to "determination" of or
-------------
by the Agent, the Issuing Bank or the Lenders shall be deemed to include good
faith estimates by the Agent, the Issuing Bank or the Lenders (in the case of
quantitative determinations) and good faith beliefs by the Agent, the Issuing
Bank or the Lenders (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error.
(iii) Discretion and Consent. Whenever the Agent, the
----------------------
Issuing Bank, PNC Bank or the Lenders are granted the right herein to act in its
or their sole discretion or to grant or withhold consent such right shall be
exercised in good faith.
(iv) Documents Taken as a Whole. The words "hereof,"
--------------------------
"herein," "hereunder", "hereto" and similar terms in this Agreement or any other
Loan Document refer to this Agreement or such other Loan Document as a whole and
not to any particular provision of this Agreement or such other Loan Document.
(v) Headings. The article, section and other headings
--------
contained in this Agreement or such other Loan Documents and the Table of
Contents (if any)
-22-
preceding this Agreement or such other Loan Document are for reference purposes
only and shall not control or affect the construction of this Agreement or such
other Loan Document or the interpretation thereof in any respect.
(vi) Implied References. Article, section, subsection,
------------------
item, clause, schedule and exhibit references are to this Agreement unless
otherwise specified.
(vii) Persons. Reference to any Person includes such
-------
Person's successors and assigns, but, if applicable, only if such successors and
assigns are permitted by this Agreement or such other Loan Document, as the case
may be, and reference to a Person in a particular capacity excludes such Person
in any other capacity.
(viii) Laws and Agreements. Reference to any Law, agreement
-------------------
or contract includes such Law, agreement or contract as the same may be amended,
supplemented, modified, extended, waived, consolidated, replaced or renewed from
time to time, but only to the extent permitted by, and effected in accordance
with, the terms thereof and of this Agreement and the other Loan Documents.
(ix) From, To and Through. Relative to the determination
--------------------
of any period of time, "from" means "from and including", "to" means "to but
excluding", and "through" means "through and including".
(x) UCC Terms. All terms used in Article 9 of the
---------
Uniform Commercial Code and not specifically defined in this Agreement or in any
other Loan Document shall herein have the meanings assigned to such terms in the
Uniform Commercial Code as from time to time in effect in the Commonwealth of
Pennsylvania.
(xi) Writing; Written. References to "writing" include
----------------
printing, typing, lithography and other means of reproducing words in a tangible
visible form. References to "written" include "printed", "typed", "lithographed"
and other adjectives relating to words reproduced in a tangible visible form
consistent with the preceding sentence and also include electronic images and
images stored on computer disks, magnetic tape and like media.
1.03 Accounting Principles. Except as otherwise provided in this
---------------------
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
ARTICLE II
REVOLVING CREDIT AND SWING LOAN FACILITIES
------------------------------------------
2.01 Commitments.
-----------
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(a) Revolving Credit. Subject to the terms and conditions hereof
----------------
and relying upon the representations and warranties set forth below, each Lender
severally agrees to make Revolving Credit Loans (the "Revolving Credit Loans")
in Dollars or Optional Currency to the Borrower at any time or from time to time
on or after the date hereof to the Expiration Date, provided, that the aggregate
--------
principal Equivalent Amount in Dollars of each Lender's Revolving Credit Loans
outstanding hereunder to the Borrower shall not exceed at any one time such
Lender's Ratable Share of the aggregate Revolving Credit Commitments.
Notwithstanding the foregoing, the aggregate principal amount of Revolving
Credit Loans outstanding at any time shall not exceed (i) the lesser of (x) the
aggregate Revolving Credit Commitments and (y) the Borrowing Base minus (ii) the
aggregate Stated Amount of outstanding Letters of Credit, (iii) the aggregate
amount of Unreimbursed Letter of Credit Draws, and (iv) all accrued interest,
fees and expenses at such time. Within such limits of time and amount and
subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.01. All Revolving Credit
Commitments shall expire on the Expiration Date, and all Revolving Credit Loans
outstanding on the Expiration Date shall become due and payable in full on such
date.
(b) Swing Loan. Subject to the terms and conditions hereof and
----------
relying upon the representations and warranties herein set forth, PNC Bank
agrees to make Swing Loans (the "Swing Loans") to the Borrower at any time or
from time to time after the date hereof to, but not including, the Expiration
Date, in an aggregate principal amount of up to but not in excess of $5,000,000
(the "Swing Loan Commitment"), provided that the Total Utilization, at any time,
--------
shall not exceed the Revolving Credit Commitments of all the Lenders. Within
such limits of time and amount and subject to the other provisions of this
Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section
2.01(b).
2.02 Nature of Lenders' Obligations with Respect to Revolving Credit
---------------------------------------------------------------
Loans.
-----
(a) Loans. Each Lender shall be obligated to participate in each
-----
request for Revolving Credit Loans pursuant to Section 2.05 hereof in accordance
with its Ratable Share. The aggregate principal Equivalent Amount in Dollars of
each Lender's Revolving Credit Loans outstanding hereunder to the Borrower at
any time shall never exceed such Lender's Ratable Share of the aggregate
Revolving Credit Commitments minus such Lender's Ratable Share of the sum of (i)
the aggregate Stated Amount of outstanding Letters of Credit and (ii) the
aggregate amount of Unreimbursed Letter of Credit Draws. The obligations of
each Lender hereunder are several. The failure of any Lender to perform its
obligations hereunder shall not affect the obligations of the Borrower, or any
other Lender, to any other party nor shall the Borrower, or any other Lender, be
liable for the failure of such Lender to perform its obligations hereunder. The
Lenders shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
(b) Borrowing Base. In addition to any and all provisions of the
--------------
other Loan Documents which establish conditions to the Borrower's ability to
request and obtain any Loan, the Borrower shall deliver an updated Borrowing
Base Certificate on the Closing Date and thereafter on the first Business Day of
each month; provided, however, that if the sum of the cash
-24-
and Cash Equivalents of the Borrower and its Subsidiaries is less than
$40,000,000, the Borrower will deliver updated Borrowing Base Certificates to
the Agent on Monday of each week.
2.03 Commitment Fees. The Borrower shall pay to the Agent for the
---------------
account of each Lender, as consideration for such Lender's Revolving Credit
Commitment, a nonrefundable commitment fee (the "Commitment Fee"), accruing from
the Closing Date until the Expiration Date equal to a rate per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to 37.5 basis points, on the average daily Equivalent Amount in
Dollars equal to such Lender's Revolving Credit Commitment minus such Lender's
Ratable Share of Total Utilization. All Commitment Fees shall be payable in
arrears on the last Business Day of each Fiscal Quarter occurring during the
term of this Agreement.
2.04 Reduction of Revolving Credit Commitment. Subject to the
----------------------------------------
provisions of Section 2.09 hereof, at any time and from time to time upon at
least five (5) Business Days' prior written notice to the Agent, the Borrower
may terminate, in whole or in part, without penalty, the then unused portion of
the Revolving Credit Commitments, thereby causing a corresponding abatement of
the Commitment Fee. Each such reduction shall be in a minimum principal amount
of $10,000,000 and, if in excess of $10,000,000, in integral multiples of
$1,000,000. The Commitment Fee shall cease to accrue with respect to any unused
portion of the Revolving Credit Commitments so terminated five (5) Business Days
after receipt of such notice. Notice of termination once given shall be
irrevocable and the portion of the Revolving Credit Commitments so terminated
shall not be available for borrowing once such notice has been given under the
terms hereof. The Agent shall promptly notify each Lender of its Ratable Share
of such terminated unused portion and the date of each such termination.
2.05 Loan Requests.
-------------
(a) Revolving Credit. Each request for a Revolving Credit
-----------------
disbursement shall be made to the Agent by an Authorized Officer of the Borrower
orally or in writing pursuant to the execution and delivery by the Borrower to
the Agent of a Loan Request, substantially in the form of Exhibit D-1, (a) by
11:00 a.m., Pittsburgh time, on the date of the proposed disbursement if the
disbursement is initially to bear interest at the Base Rate Option, (b) by 11:00
a.m., Pittsburgh time, at least three (3) Business Days prior to the proposed
disbursement with respect to Revolving Credit Loans made in Dollars if the
disbursement or any part thereof is to initially bear interest at the Euro-Rate
Option, or (c) by 11:00 a.m., Pittsburgh time, at least four (4) Business Days
prior to the proposed disbursement with respect to Revolving Credit Loans funded
in an Optional Currency (which Revolving Credit Loans must bear interest at the
Euro-Rate Option), in each case specifying the date and the Dollar or Dollar
Equivalent (if applicable) amount thereof, selecting the Interest Rate Option
therefor pursuant to Section 2.08(b) hereof, for Revolving Credit Loans to be
funded under the Euro-Rate Option, selecting the Euro-Rate Interest Period
therefor and for Revolving Credit Loans to be funded in an Optional Currency,
the currency in which the disbursement is to be funded. Any oral request for a
disbursement hereunder shall be followed immediately by the Borrower's written
Loan Request. Each Request for a Loan to be funded under the Base Rate Option
shall be in the minimum principal amount of $500,000. A request from the
Borrower pursuant to this
-25-
Section 2.05(a) with respect to a disbursement or any part thereof which is
initially to bear interest at the Euro-Rate Option, shall irrevocably commit the
Borrower to accept such disbursement on the date specified in such request.
Promptly upon receipt of such notice, the Agent shall notify each Lender of the
Borrower's request and the amount of such requested disbursement which is to be
advanced by such Lenders. Each such Lender shall make its Ratable Share of such
disbursement available at the Agent's principal office in immediately available
funds no later than 3:00 p.m., Pittsburgh time, on the date of the requested
disbursement.
(b) Swing Loan. Except as otherwise provided herein, the
-----------
Borrower may from time to time prior to the Expiration Date request PNC Bank to
make a Swing Loan by delivery to PNC Bank, not later than 12:00 noon Pittsburgh
time, on the proposed Borrowing Date of a duly completed request therefor
substantially in the form of Exhibit D-2 hereto or a request by telephone
immediately confirmed in writing by letter, facsimile or telex (each, a "Swing
Loan Request"), it being understood that PNC Bank may rely on the authority of
any individual making such a telephonic request without the necessity of receipt
of such written confirmation. Each Swing Loan Request shall be irrevocable and
shall specify (i) the proposed Borrowing Date, (ii) the term of the proposed
Swing Loan, which shall be no less than one day and no longer than three days,
and (iii) the principal amount of such Swing Loan, which shall be not less than
$1,000,000 and shall be an integral multiple of $100,000.
2.06 Making Loans.
------------
(a) Revolving Credit. Subject to Section 9.03, the Agent shall,
-----------------
promptly after receipt by it of a Loan Request pursuant to Section 2.05 (but not
later than noon, Pittsburgh time, on the Borrowing Date for same day funding,
2:00 p.m., Pittsburgh time, on the third Business Day preceding any Borrowing
Date for which any Portion of the Loans to be made on such Borrowing Date is to
bear interest at the Euro-Rate Option and 2:00 p.m., Pittsburgh time, on the
fourth Business Day preceding any Borrowing Date of the Loans to be made in an
Optional Currency), notify the Lenders of its receipt of such Loan Request
specifying: (a) the proposed Borrowing Date and the time and method of
disbursement of such Loan; (b) the amount and type of such Loan and the
applicable Euro-Rate Portions and Euro-Rate Interest Periods (if any) and the
Optional Currency (if any); and (c) the apportionment among the Lenders of the
Loans as determined by the Agent in accordance with Section 2.02 hereof.
Subject to Section 9.03, each Lender shall remit the principal amount of each
Loan to the Agent such that the Agent is able to, and the Agent shall, to the
extent the Lenders have made funds available to it for such purpose, fund such
Loan to the Borrower in immediately available funds prior to 2:00 p.m.,
Pittsburgh time, on the Borrowing Date, provided that if any Lender fails to
remit such funds to the Agent in a timely manner, or any Lender fails to advise
the Agent of its intention not to fund, then the Agent may elect in its sole
discretion to fund with its own funds the Loan of such Lender on the Borrowing
Date.
(b) Swing Loan. PNC Bank shall, after receipt by it of a Swing
-----------
Loan Request pursuant to Section 2.05(b), fund such Swing Loan to the Borrower
in Dollars and immediately available funds prior to 3:00 p.m., Pittsburgh time,
on the Borrowing Date.
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2.07 Notes.
-----
(a) Revolving Credit Note. The obligation of the Borrower to
----------------------
repay the aggregate unpaid principal amount of the Loans made to the Borrower by
each Lender, together with interest thereon, shall be evidenced by the Revolving
Credit Notes.
(b) Swing Loan Note. The obligation of the Borrower to repay the
----------------
unpaid principal amount of the Swing Loans made to it by PNC Bank together with
interest thereon shall be evidenced by a demand promissory note of the Borrower
dated the Closing Date in substantially the form attached hereto as Exhibit F
payable to the order of PNC Bank in a face amount equal to the Swing Loan
Commitment of PNC Bank.
2.08 Interest Payments, Interest Rates and Certain Related Payments
--------------------------------------------------------------
Pertaining to the Loans.
-----------------------
(a) Interest. The Notes shall bear interest on the actual unpaid
--------
principal amount thereof from time to time outstanding from the date thereof
until payment in full at the rates of interest set forth in Section 2.08(b).
The Borrower shall pay accrued interest on the unpaid principal balance of the
Notes in arrears:
(i) with respect to the Base Rate Portion, at the rate
specified in the Base Rate Option, (A) on the last Business Day of each Fiscal
Quarter during the term of the Revolving Credit Commitment, (B) at maturity,
whether by acceleration or otherwise, of the Notes and (C) after maturity on
demand until all amounts evidenced by the Notes are paid in full whether or not
judgment has been entered on the Notes; and
(ii) with respect to each Euro-Rate Portion, at the rate
specified in each Euro-Rate Option, (A) on the last day of the Euro-Rate
Interest Period applicable thereto; provided, however, if the Euro-Rate Interest
-------- -------
Period chosen for any Euro-Rate Portion exceeds three (3) months, interest on
that Euro-Rate Portion shall be due and payable at the end of every three (3)
months during such Euro-Rate Interest Period and on the last day of such Euro-
Rate Interest Period, (B) at the maturity, whether by acceleration or otherwise,
of the Notes and (C) after maturity on demand until all amounts evidenced by the
Notes are paid in full whether or not judgment has been entered on the Notes.
(b) Interest Rate Options. During the term hereof, the Borrower
---------------------
shall have the option of electing, from time to time, one or more of the
Interest Rate Options set forth below to be applied to the Loans.
(i) Base Rate Option. Interest under this Interest Rate
----------------
Option shall accrue, for the Base Rate Portion of the Loans outstanding, at a
rate per annum equal to the sum of (A) the Base Rate plus one-half percent
(0.5%). The Base Rate shall be adjusted automatically from time to time upon
each change in the Prime Rate or the Federal Funds Effective Rate, as the case
may be, and in accordance with the provisions of Section 2.08(d).
-27-
(ii) Euro-Rate Option. Interest under this Interest Rate
----------------
Option shall accrue, for each Euro-Rate Portion of the Loans outstanding, for
any Euro-Rate Interest Period selected, at a rate per annum equal to the sum of
(A) the Euro-Rate plus (B) two percent (2%). The rate of interest established
pursuant to the preceding sentence of this Section 2.08(b)(ii) for each Euro-
Rate Portion shall be adjusted from time to time in accordance with the
provisions of Section 2.08(d).
(iii) Swing Loans. Interest shall accrue on all Swing Loans
-----------
at a rate per annum equal to (A) PNC Bank's overnight offered rate plus (B) the
Applicable Euro-Rate Margin.
(c) Optional Currency Interest. Each Portion of each Optional
--------------------------
Currency funded Loan shall bear interest at the Euro-Rate Option, subject,
however, to the other provisions of this Agreement.
(d) Interest After Maturity. After the occurrence of an Event of
-----------------------
Default and during the continuation thereof, the Base Rate Portion shall bear
interest at a rate per annum which shall be two and one-half percent (2.5%)
above the Base Rate. After the occurrence of an Event of Default and during the
continuation thereof, all Euro-Rate Portions shall bear interest (i) until the
end of the then current Euro-Rate Interest Period for each such Euro-Rate
Portion, at a rate per annum which shall be four percent (4%) above the Euro-
Rate and (ii) at the end of the then current Euro-Rate Interest Period for each
such Euro-Rate Portion, such Euro-Rate Portions shall automatically be converted
to the Base Rate Portion, and thereafter the interest rate shall be calculated
in accordance with the initial sentence of this Section 2.08(d).
(e) Interest Periods; Limitations on Elections. At any time
------------------------------------------
when the Borrower shall select, convert to or renew the Euro-Rate Option to
apply to all or any portion of the outstanding Loans, it shall elect one or more
Euro-Rate Interest Periods as the case may be. All the foregoing, however, is
subject to the following:
(i) any Euro-Rate Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next Business Day
unless such Business Day falls in the succeeding calendar month in which case
such Euro-Rate Interest Period shall end on the next preceding Business Day; and
(ii) any Euro-Rate Interest Period which begins on the last
day of a calendar month or on a day for which there is no numerically
corresponding day in the subsequent calendar month during which such Euro-Rate
Interest Period is to end shall end on the last Business Day of such subsequent
month.
Elections by the Borrower of the Euro-Rate Option shall be subject to the
following limitations:
(v) The Euro-Rate Portion for each Euro-Rate Interest
Period shall be in an aggregate principal Equivalent Amount of $5,000,000 or
more; provided, however, that each increment in excess of $5,000,000 shall be
-------- -------
$1,000,000 or an integral multiple thereof;
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(w) No Euro-Rate Interest Period may be elected at any time
that a Default or an Event of Default shall have occurred and be continuing;
(x) No Euro-Rate Interest Period may be elected which would
end later than the relevant Expiration Date;
(y) No Euro-Rate Interest Period may be elected with regard
to amounts outstanding which would be in excess of the Revolving Credit
Commitment; and
(z) At no time may there be more than eight (8) separate
Euro-Rate Interest Periods in effect.
(f) Election, Renewal or Conversion of Interest Rate Options.
--------------------------------------------------------
Elections or renewals of, or conversions to, the Base Rate Option shall continue
in effect until converted or renewed as hereinafter provided. Elections or
renewals of, or conversions to, the Euro-Rate Option shall expire as to each
Euro-Rate Portion at the expiration of the applicable Euro-Rate Interest Period.
At any time with respect to the Base Rate Portion or at the expiration of the
applicable Euro-Rate Interest Period with respect to any Euro-Rate Portion, the
Borrower may cause (subject to Subsection 2.08(e)) all or any part of the
principal amount of such Portion to be converted to, or to be renewed under, the
Euro-Rate Option by notice to the Agent as hereinafter provided. Such notice
(i) shall be irrevocable, (ii) shall be given not later than noon (Pittsburgh,
Pennsylvania time) in the case of a conversion to or renewal of, either in whole
or in part, the Euro-Rate Option, not less than three (3) Business Days prior to
the proposed effective date for such conversion or renewal, and (iii) shall set
forth:
(A) the effective date of such conversion or renewal, which
shall be a Business Day;
(B) the new Euro-Rate Interest Period(s) selected; and
(C) with respect to each such Euro-Rate Interest Period, the
aggregate principal amount of the corresponding Euro-Rate Portion.
At the expiration of each Euro-Rate Interest Period, any part (including the
whole) of the principal amount of the corresponding Euro-Rate Portion as to
which no notice of conversion or renewal has been received shall automatically
be converted to the Base Rate Option. The Agent shall promptly notify the
Borrower and the Lenders of any such automatic conversion.
(g) Notification of Election of an Interest Rate Option. The
---------------------------------------------------
Borrower, by an Authorized Officer, shall notify the Agent of each election of
an Interest Rate Option, each conversion from one Interest Rate Option to
another, the amount of the Loans then outstanding to be allocated to each
Interest Rate Option and, where relevant, the Euro-Rate Interest Periods as
provided for in this Agreement. Any such communication may be oral or written
and if oral it
-29-
shall be followed promptly by written confirmation of such Interest Rate Option
election executed by an Authorized Officer of the Borrower.
(h) Calculation of Interest. Interest on the Base Rate Portion
-----------------------
shall be calculated on the basis of a 365 or 366 day year, as the case may be,
and the actual days elapsed. Interest on each Euro-Rate Portion shall be
calculated on the basis of a 360-day year and the actual days elapsed. The
calculation of the amount of interest due and owing to the Lenders shall be
evidenced by posting the amount of interest due under the Revolving Credit Notes
to the Loan Account established by the Agent pursuant to Section 2.15.
(i) Lawful Interest Rates Intended. In no event whatsoever
------------------------------
shall the interest rates charged hereunder exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto. In the event that such a court determines
that any Lender has received interest hereunder in excess of the highest
applicable rate, such Lender shall promptly refund such excess to the Borrower,
or at such Lender's option, apply such excess in reduction of the principal
balance of the Obligations owing to the affected Lender.
2.09 Prepayments: Allocation of Repayments.
-------------------------------------
(a) Elimination of Overadvance. If at any time the aggregate
--------------------------
amount of all outstanding Revolving Credit Loans, the aggregate Stated Amount of
outstanding Letters of Credit, the aggregate amount of Unreimbursed Letter of
Credit Draws and accrued interest, fees and expenses exceeds the lesser of the
aggregate amount of the Revolving Credit Commitments and the Borrowing Base, the
Borrower will immediately make a prepayment sufficient to eliminate that
overadvance. Any prepayments required by this clause (a) shall be applied to
Loans subject to the Base Rate Option up to the full amount thereof before they
are applied to Loans subject to a Euro-Rate Option; provided, however, that the
Borrower shall not be required to prepay any part of a Loan subject to a Euro-
Rate Option until the last day of the applicable Euro-Rate Interest Period as
long as an amount equal to such prepayment is deposited by the Borrower in a
cash collateral account with the Agent for the benefit of the Lenders and the
Issuing Bank, to be applied to the prepayment of the Loan on the last day of
such Euro-Rate Interest Period.
(b) Prepayments of Base Rate Portion. The Borrower, upon oral or
--------------------------------
written notice to the Agent by an Authorized Officer of Borrower given not later
than 12:00 noon, Pittsburgh time, on the proposed date for prepayment, may
prepay without penalty or premium any or all of the Base Rate Portion; provided,
--------
that any such prepayment shall be in the minimum amount of $500,000. Any oral
notice of election hereunder shall be followed immediately by written
confirmation of such prepayment election executed by an Authorized Officer of
Borrower.
(c) Prepayments of Euro-Rate Portions. Except as otherwise
---------------------------------
provided in Section 2.10(c), the Borrower, upon oral or written notice to the
Agent by an Authorized Officer of Borrower given at least three (3) Business
Days prior to the proposed date for
-30-
repayment, may prepay, all or any part of such Euro-Rate Portion; provided, that
--------
any such prepayment shall be in the minimum amount of $1,000,000. If such Euro-
Rate Portion is prepaid on the last day of the Euro-Rate Interest Period
applicable thereto, such prepayment shall be without premium or penalty. If the
Borrower prepays a Euro-Rate Portion other than on the last day of the Euro-Rate
Interest Period applicable thereto, the Borrower agrees to pay, in addition to
the other amounts set forth in this Section 2.09(b), such additional amounts as
may be necessary to compensate each Lender for any direct loss and any direct or
indirect costs, including the costs of reemployment of funds prepaid at rates
lower than the cost to such Lender of such funds. Such losses and costs shall be
specified in writing to the Borrower by the affected Lenders (and such
specifications shall set forth in reasonable detail the calculation of such
losses and costs) and such specifications shall, absent manifest error, be
binding and conclusive on the Borrower. Such prepayment shall include the then
outstanding principal Equivalent Amount in Dollars of the Euro-Rate Portion
being prepaid together with accrued interest, fees and other amounts then due
and payable on the amount prepaid, to the day of such prepayment. Except as
provided in this Section 2.09(b), there shall be no voluntary prepayment of any
Euro-Rate Portion.
(d) Allocation of Repayments of Principal. Except as otherwise
-------------------------------------
specified by the Borrower, any voluntary prepayment pursuant to this Section
2.09 shall be applied first to the repayment of any Euro-Rate Portion of the
Loans for which its associated Euro-Rate Interest Period expires on the date of
such payment, second, to the reduction of the Base Rate Portion of the Loans,
and third, to the reduction of such Euro-Rate Portions of the Loans as directed
by the Borrower, and if the Borrower fails to give such directions, or if a
Default or Event of Default has occurred and is continuing, to the reduction of
such Euro-Rate Portions of the Loans as the Agent may select in its sole and
absolute discretion. Any reduction in any Euro-Rate Portion on a date other
than the date on which its associated Euro-Rate Interest Period expires may
result in a funding loss for which the Borrower shall owe the Lenders an
indemnity payment pursuant to Section 2.09(b).
2.10 Yield Protection.
----------------
(a) If any change subsequent to the Closing Date in any Law or in
the interpretation or application thereof by any Official Body or in the
compliance with any guideline or request from any Official Body, shall make it
unlawful for any Lender to maintain or give effect to its obligations as
contemplated under the Revolving Credit Commitment, such Lender shall notify the
Borrower and the Agent in writing of its determination of such unlawfulness and
an explanation thereof. Thereafter, such Lender's obligation to make available
any further Loans hereunder shall forthwith be canceled and the Borrower, within
thirty (30) days, or within such longer period as may be allowed by Law, if any,
shall repay to such Lender so affected its Ratable Share of the outstanding
principal amount of all Loans, together with interest thereon to the date of
repayment and fees, if any, due as of the date of termination; provided,
--------
however, that the affected Lender's obligations which are lawful, if severable
-------
from those which are unlawful, shall continue, and with respect to those
obligations, this Agreement shall not terminate.
-31-
(b) If any Law issued after the Closing Date (including, without
limitation, Regulation D of the Federal Reserve Board), or if any change on or
after the Closing Date in any Law (including, without limitation, Regulation D)
or in the interpretation thereof by any Official Body charged with the
administration thereof, shall
(i) subject any Lender to any tax, levy, impost, charge,
fee, duty, deduction or withholding of any kind hereunder (other than any tax
imposed or based upon the income of such Lender and payable to (A) any
governmental or taxing authority in the United States of America, any state or
any municipality thereof, (B) the jurisdiction under the laws of which the Agent
or such Lender is organized, or in which its principal executive office may be
located, or in which it is doing business, or any nation within which such
jurisdiction is located or any political subdivision thereof, or (C) the
jurisdiction in which the lending office or other branch or subsidiary of such
Lender is located or doing business, or under the laws of which it is organized,
or by any nation within which any such jurisdiction is located or any political
subdivision thereof);
(ii) change the basis of taxation of any Lender with respect
to payments of principal or interest or other amounts due hereunder (other than
any change which affects, and only to the extent that it affects, the taxation
based upon the income of such Lender by (A) the United States, any state or any
municipality thereof; (B) the jurisdiction under the laws of which the Agent or
such Lender is organized, or in which its principal executive office may be
located, or in which it is doing business, or any nation within which such
jurisdiction is located or any political subdivision thereof, or (C) the
jurisdiction in which the lending office or other branch or subsidiary of such
Lender is located or doing business, or under the laws of which it is organized,
or by any nation within which any such jurisdiction is located or any political
subdivision thereof);
(iii) impose, modify or deem applicable any reserve, special
deposit or similar requirements against assets held by any Lender (other than
such requirements which result solely from a change in the credit quality of the
Borrower or which are included in the determination of the applicable rate of
interest hereunder); or
(iv) impose upon any Lender any other obligation or
condition with respect to this Agreement, and the result of any of the foregoing
is to increase the cost to any Lender, to decrease the yield to any Lender with
respect to the Loans or any Letters of Credit, to reduce the income receivable
by any Lender or to impose any expenses upon any Lender with respect to the
Loans or any Letters of Credit by an amount which any Lender reasonably deems
material, then and in any such case:
(A) the Lender so affected shall promptly notify the
Borrower and the Agent of the happening of such event;
(B) the Borrower shall pay to the affected Lender,
within five (5) Business Days of written demand such amount as shall compensate
such Lender
-32-
for such additional cost or reduced amount, calculated from the date of the
notification by such Lender; and
(C) the Borrower may pay to such affected Lender the
affected Loan in full without the payment of any additional amount other than on
account of such Lender's out-of-pocket losses (including funding losses, if any,
as provided in paragraph (c) below) not otherwise provided for in subparagraph
(B) immediately above.
The Lender so affected shall present to the Borrower and the Agent a certificate
setting forth such increased cost or reduced amount. Such certificate shall set
forth in reasonable detail the calculation of the amount due and such Lender's
reasons for invoking the provisions of this Section 2.10(b). Such certificate
shall be conclusive evidence of the amount due thereunder except in the case of
manifest error in computation.
(c) The Borrower agrees to indemnify each Lender, on demand,
against any direct loss or expense which such Lender may sustain or incur in
liquidating or employing deposits from third parties acquired to effect, fund or
maintain such Euro-Rate Portions or any part thereof as a consequence of (i) the
failure of the Borrower to make a payment on the due date thereof, (ii) the
failure of the Borrower to borrow under, convert to or renew under the Euro-Rate
Option on the proposed effective date of such borrowing, conversion or renewal,
or (iii) the payment, prepayment or conversion by the Borrower of any Euro-Rate
Portions for any reason on a day other than the last day of the applicable Euro-
Rate Interest Period. Any Lender's determination of an amount payable under this
paragraph (c) shall be conclusive absent manifest error.
(d) The foregoing notwithstanding, if the affected Lender
can mitigate or eliminate such increased cost or reduced yield by transferring
the Loans to another existing lending office of such Lender, such Lender agrees
to so transfer the Loans; provided, such transfer would not subject such Lender
--------
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.
2.11 Special Provisions Relating to the Euro-Rate Option.
---------------------------------------------------
(a) Euro-Rate Unascertainable. In the event that on any date on
-------------------------
which a Euro-Rate Option would otherwise be set, the Agent shall have determined
(which determination shall be final and conclusive) that, by reason of
circumstances affecting the London interbank market, adequate, reasonable means
do not exist for ascertaining the Euro-Rate, the Agent shall give prompt notice
of such determination to the Borrower and the Lenders. Until the Agent notifies
the Borrower and the Lenders that the circumstances giving rise to such
determination no longer exist (which notice shall be given promptly following
receipt of knowledge thereof by the Agent), the right of the Borrower to borrow
under, convert to or renew the Euro-Rate Option shall be suspended. Any notice
of borrowing under, conversion to or renewal of the Euro-Rate Option which was
to become effective during the period of such
-33-
suspension shall be treated as a request to borrow under, convert to or renew
the Base Rate Option with respect to the principal amount therein specified.
(b) Inability to Offer Euro-Rate. In the event that any Lender
----------------------------
shall determine, in its sole discretion, that it is unable to obtain deposits in
the London interbank market in sufficient amounts and with maturities related to
such Euro-Rate Portions which would enable such Lender to fund such Euro-Rate
Portions, then such Lender shall notify the Borrower and the Agent that the
right of the Borrower to borrow under, convert to or renew the Euro-Rate Option,
shall be suspended with respect to such Lender. Such notice shall set forth in
reasonable detail such Lender's reasons for invoking the provisions of this
Section 2.11(b). Following notification of the suspension of the Euro-Rate
Option with respect to such Lender, the Borrower agrees to negotiate with such
Lender for a modified or alternative fixed rate of interest, which shall allow
such Lender to realize its anticipated and bargained-for yield. In the event
that the Borrower and such Lender cannot agree on a modified or alternative
fixed rate of interest, any notice of borrowing under, conversion to or renewal
of the Euro-Rate Option which was to become effective during the period of
suspension shall be treated as a request to borrow under, convert to or renew
the Base Rate Option with respect to the principal amount specified therein
attributable to such Lender.
(c) Illegality. If any Lender shall determine in good faith
----------
(which determination shall be final and conclusive) that compliance with any Law
(whether or not having the force of law) or the interpretation or application
thereof by any Official Body, has made it unlawful or impractical for such
Lender to make or maintain the Loans under the Euro-Rate Option, such Lender
shall give notice of such determination to the Borrower and the Agent, which
notice shall set forth in reasonable detail such Lender's reasons for invoking
the provisions of this Section 2.11(c). Notwithstanding any provision of this
Agreement to the contrary, unless and until such Lender shall have given notice
to the Borrower and the Agent that the circumstances giving rise to such
determination no longer apply (which notice shall be given promptly following
receipt of knowledge thereof by such Lender):
(i) with respect to any Euro-Rate Interest Periods
thereafter commencing, interest in an amount equal to such Lender's Ratable
Share of the corresponding Euro-Rate Portion shall be computed and payable under
the Base Rate Option; and
(ii) on such date, if any, as shall be required by law, an
amount equal to such Lender's Ratable Share of any Euro-Rate Portion, as the
case may be, then outstanding shall be automatically converted to the Base Rate
Option and the Borrower shall pay to such Lender the accrued and unpaid interest
on such amounts to (but not including) such conversion date.
The Borrower shall pay any such Lender any additional amounts reasonably
necessary to compensate such Lender for any costs incurred by such Lender as a
result of any conversion pursuant to clause (ii) above which occurs on a day
other than the last day of the relevant Euro-Rate Interest Period, including,
but not limited to, any interest or fees payable by such Lender to lenders of
funds obtained by them to loan or maintain the lending of the Loans so
converted.
-34-
Such Lender shall furnish to the Borrower and the Agent a certificate as to the
amount necessary to compensate it for such costs, which certificate shall set
forth in reasonable detail the calculation of the amount due. Such certificate
shall constitute conclusive evidence of the amount due thereunder absent any
manifest error in computation. The Borrower shall pay such amount to such
Lender, as additional consideration hereunder, within ten (10) days of the
Borrower's receipt of such certificate.
(d) The foregoing notwithstanding, if the affected Lender can
continue to offer the Euro-Rate Option to the Borrower by transferring the Loans
to another existing lending office of such Lender, such Lender agrees to so
transfer the Loans; provided, such transfer would not subject such Lender to any
--------
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.
2.12 Capital Adequacy. If after the Closing Date (a) any adoption of
----------------
or any change in or in the interpretation by an Official Body of any Law or (b)
compliance with any Law, guideline or request of any Official Body exercising
control over banks or financial institutions generally or any court (whether or
not having the force of law), affects or would affect the amount of capital
required or expected to be maintained by any Lender or any corporation
controlling such Lender other than those resulting solely from a change in the
credit quality of the Borrower (a "Capital Adequacy Event"), and the result of
such Capital Adequacy Event is to reduce the rate of return on capital of such
Lender or any corporation controlling such Lender as a consequence thereof to a
level below that which such Lender could have achieved but for such Capital
Adequacy Event, taking into consideration such Lender's policies with respect to
capital adequacy, by an amount which such Lender deems to be material, such
Lender shall promptly deliver to the Borrower and the Agent a statement of the
amount necessary to compensate such Lender for the reduction in the rate of
return on its capital attributable to the commitments under this Agreement or
any of the Loan Documents (the "Capital Compensation Amount"). Each Lender shall
determine the Capital Compensation Amount in good faith, using reasonable
attribution and averaging methods. Each Lender shall, from time to time, furnish
to the Borrower and the Agent a certificate setting forth the amount so
determined and the calculations of such amount. Such certificate shall
constitute conclusive evidence of the amount due thereunder absent any manifest
error in computation. Such amount shall be due and payable by the Borrower to
such Lender ten (10) days after such notice is given. As soon as practicable
after any Capital Adequacy Event, such Lender shall submit to the Borrower and
the Agent estimates of the Capital Compensation Amounts that would be payable as
a function of such Lender's Revolving Credit Commitment hereunder.
2.13 Utilization of Commitments in Optional Currencies.
-------------------------------------------------
(a) Periodic Computations of Dollar Equivalent Amounts of Loans
-----------------------------------------------------------
and Letters of Credit Outstanding. The Agent shall determine the Dollar
---------------------------------
Equivalent amount of (i) proposed Loans or Letters of Credit to be denominated
in an Optional Currency as of the date of the requested disbursement or date of
issuance, as the case may be, (ii) outstanding Loans or Letters of Credit
Outstanding denominated in an Optional Currency as of the last Business Day
-35-
of each month, and (iii) outstanding Loans denominated in an Optional Currency
as of the end of each Interest Period (each such date under clauses (i) through
(iii), a "Computation Date").
(b) Notices From Lenders That Optional Currencies Are
-------------------------------------------------
Unavailable To Fund New Loans. The Lenders shall be under no obligation to
-----------------------------
make the Loans or issue the Letters of Credit requested by the Borrower which
are denominated in an Optional Currency if any Lender notifies the Agent by 5:00
p.m., Pittsburgh time, four (4) Business Days prior to the borrowing or issuance
date for such Loans or Letters of Credit that such Lender cannot provide its
share of such Loans in such Optional Currency. In the event the Agent timely
receives a notice from a Lender pursuant to the preceding sentence, the Agent
shall notify the Borrower no later than 12:00 noon, Pittsburgh time, three (3)
Business Days prior to the disbursement for such Loans or the issuance of such
Letter of Credit that the Optional Currency is not then available for such Loans
or such Letters of Credit, and the Agent shall promptly thereafter notify the
Lenders of the same. If the Borrower receives a notice described in the
preceding sentence, the Borrower may, by notice to the Agent not later than 5:00
p.m., Pittsburgh time, three (3) Business Days prior to the borrowing or
issuance date for such Loans or such Letters of Credit, withdraw the Loan
Request for such Loans or the issuance of such Letters of Credit. If the
Borrower withdraws such Loan Request, the Agent shall promptly notify each
Lender of the same and the Lenders shall not make such Loans or issue such
Letters of Credit. If the Borrower does not withdraw such Loan Request before
such time, (i) the Borrower shall be deemed to have requested that (A) the Loans
referred to in its Loan Request shall be made in Dollars in an amount equal to
the Dollar Equivalent amount of such Loans and (B) the Letters of Credit
referred to in its Loan Request shall be issued in Dollars in an amount equal to
the Dollar Equivalent amount of such Letters of Credit and shall bear interest
under the Base Rate Option, and (ii) the Agent shall promptly deliver a notice
to each Lender stating: (A) that such Loans or such Letters of Credit shall be
made in Dollars and the Loans shall bear interest under the Base Rate Option,
(B) the aggregate amount of such Loans or such Letters of Credit, and (C) such
Lender's Ratable Share of such Loans or such Letters of Credit.
(c) Notices from Lenders that Optional Currencies Are
-------------------------------------------------
Unavailable to Fund Renewals of Euro-Rate Option Loans. If the Borrower
------------------------------------------------------
delivers a Loan Request requesting that the Lenders renew the Euro-Rate Option
with respect to an outstanding Portion of Loans or Letters of Credit denominated
in an Optional Currency, the Lenders shall be under no obligation to renew such
Euro-Rate Option if any Lender delivers to the Agent a notice by 5:00 p.m.,
Pittsburgh time, four (4) Business Days prior to effective date of such renewal
that such Lender cannot continue to provide Loans or Letters of Credit in such
Optional Currency. In the event the Agent timely receives a notice from a Lender
pursuant to the preceding sentence, the Agent shall notify the Borrower no later
than 12:00 noon, Pittsburgh time, three (3) Business Days prior to the renewal
date that the renewal of such Loans or such Letters of Credit in such Optional
Currency is not then available, and the Agent shall promptly thereafter notify
the Lenders of the same. If the Agent shall have so notified the Borrower that
any such continuation of Loans denominated in an Optional Currency or Letters of
Credit issued in an Optional Currency is not then available, any notice of
renewal with respect thereto shall be deemed withdrawn, and such Loans
denominated in an Optional Currency or Letters of Credit issued in an Optional
Currency shall be re-denominated into Base Rate Loans or Letters of Credit in
Dollars with effect from the
-36-
last day of the Interest Period with respect to any such Loans denominated in an
Optional Currency or Letters of Credit issued in an Optional Currency. The Agent
shall promptly notify the Borrower and the Lenders of any such re-denomination,
and in such notice, the Agent shall state the aggregate Dollar Equivalent amount
of the re-denominated Loans denominated in an Optional Currency or Letters of
Credit issued in an Optional Currency as of the Computation Date with respect
thereto and such Lender's Ratable Share thereof.
(d) Requests for Additional Optional Currencies. The Borrower
-------------------------------------------
may deliver to the Agent a written request that Loans hereunder also be
permitted to be made in any other lawful currency (other than Dollars), in
addition to the currencies specifically identified in the definition of
"Optional Currency"; provided that such currency must be freely traded in the
--------
offshore interbank foreign exchange markets, freely transferable, freely
convertible into Dollars and available to the Lenders in the applicable
interbank market. The Agent shall promptly notify the Lenders of any such
request promptly after the Agent receives such request. Each Lender may grant or
deny such request in its sole discretion. The Agent shall promptly notify the
Borrower of the acceptance or rejection by each of the Lender of the Borrower's
request. The requested currency shall be approved as an Optional Currency only
if the Required Lenders approve the Borrower's request.
(e) Optional Currency Fee. The Borrower shall pay to the Agent
---------------------
in Dollars for the Agent's sole account the Agent's then in effect customary
fees and administrative expenses payable with respect to Loans denominated in an
Optional Currency or Letters of Credit issued in an Optional Currency as the
Agent may generally charge or incur in connection with the funding, maintenance,
modification (if any), assignment or transfer (if any), negotiation, and
administration of Loans denominated in an Optional Currency or Letters of Credit
issued in an Optional Currency.
(f) Currency Repayments. Notwithstanding anything contained
-------------------
herein to the contrary, the entire amount of principal of and interest on any
Loan made in an Optional Currency shall be repaid in the same Optional Currency
in which such Loan was made, provided, however, that if it is impossible or
-------- -------
illegal for the Borrower to effect payment of a Loan in the Optional Currency in
which such Loan was made, or if the Borrower defaults in its obligation to do
so, the Lenders may at their option permit such payment to be made (i) at and to
a different location, Subsidiary, Affiliate or correspondent of the Agent, or
(ii) in the Equivalent Amount of Dollars or (iii) in an Equivalent Amount of
such other currency (freely convertible into Dollars) as the Lenders may solely
at their option designate. Upon any events described in (i) through (iii) of the
preceding sentence, the Borrower shall make such payment and the Borrower agrees
to hold each Lender harmless from and against any loss incurred by any Lender
arising from the cost to such Lender of any premium, any costs of exchange, the
cost of hedging and covering the Optional Currency in which such Loan was
originally made, and from any change in the value of Dollars, or such other
currency, in relation to the Optional Currency that was due and owing. Such loss
shall be calculated for the period commencing with the first day of the Interest
Period for such Loan and continuing through the date of payment thereof. Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
Borrower's obligations under this Section 2.13 shall survive termination of this
Agreement.
-37-
(g) Optional Currency Amounts. Notwithstanding anything contained
-------------------------
herein to the contrary, the Agent may, with respect to notices by the Borrower
for Loans in an Optional Currency or voluntary prepayments of less than the full
amount of an Optional Currency Disbursement, engage in reasonable rounding of
the Optional Currency amounts requested to be loaned or repaid; and, in such
event, the Agent shall promptly notify the Borrower and the Lenders of such
rounded amounts and the Borrower's request or notice shall thereby be deemed to
reflect such rounded amounts.
(h) Currency Fluctuations. If on any Computation Date the sum
---------------------
of the Dollar Equivalent of all Loans and the Stated Amount of all Letters of
Credit is greater than the sum of the Revolving Credit Commitments, as a result
of a change in exchange rates between one or more Optional Currencies and
Dollars, then the Agent shall notify the Borrower of the same. Within one (1)
Business Day after receiving such notice, the Borrower shall either (i) pay or
prepay (subject to the Borrower's indemnity obligations under this Agreement)
Loans denominated in an Optional Currency and Letters of Credit issued in an
Optional Currency or (ii) pay or prepay Loans denominated in Dollars (subject to
the Borrower's indemnity obligations under this Agreement), in either case in
amounts such that the sum of the Dollar Equivalent of all Loans and the Stated
Amount of all Letters of Credit and all Unreimbursed Letter of Credit Draws does
not exceed the Revolving Credit Commitments, all after giving effect to such
payments or prepayments.
(i) European Monetary Union.
-----------------------
(i) (A) If, as a result of the implementation of the
European monetary union, any Optional Currency ceases to be lawful currency of
the nation issuing the same and is replaced by a European common currency (the
"Euro") or (B) any Optional Currency and the Euro are at the same time
recognized by any governmental authority of the nation issuing such currency as
lawful currency of such nation and the Required Lenders shall so request in a
notice delivered to the Borrower, then any amount payable hereunder by any party
hereto in such Optional Currency shall instead be payable in the Euro and the
amount so payable shall be determined by translating the amount payable in such
Optional Currency to the Euro at the exchange rate recognized by the European
Central Bank for the purpose of implementing the European monetary union. Prior
to the occurrence of the event or events described in clause (A) or (B) of the
preceding sentence, each amount payable hereunder in any Optional Currency
shall, except as otherwise provided herein, continue to be payable only in that
Optional Currency.
(ii) The Borrower shall, at the request of any Lender,
compensate such Lender for any loss, cost, expense or reduction in return that
such Lender shall reasonably determine shall be incurred or sustained by such
Lender as a result of the implementation of the European monetary union and that
would not have been incurred or sustained but for the transactions provided for
herein. A certificate of the Lender setting forth the Lender's determination of
the amount or amounts necessary to compensate such Lender shall be delivered to
the Borrower, and shall be conclusive absent manifest error so long as such
-38-
determination is made on a reasonable basis. The Borrower shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.
(iii) The parties hereto shall, at the time of or at any
time following the implementation of the European monetary union, use reasonable
efforts to enter into an agreement amending this Agreement in order to reflect
the implementation of such monetary union, to permit (if feasible) the Euro to
qualify as an Optional Currency under the terms and conditions of the definition
of such term and to place the parties hereto in the position with respect to the
settlement of payments of the Euro as they would have been with respect to the
settlement of the Optional Currencies it replaced.
2.14 Market Presumption. For all purposes of this Agreement and each
------------------
Note with respect to any aspects of the Euro-Rate, any Loan under the Euro-Rate
Option or any Optional Currency, each Lender and the Agent shall be presumed to
have obtained rates, funding, currencies, deposits, and the like in the
applicable interbank market regardless whether it did so or not; and, each
Lender's and the Agent's determination of amounts payable under, and actions
required or authorized by this Agreement shall be calculated, at each Lender's
and the Agent's option, as though each Lender and the Agent funded each Portion
of Loans under the Euro-Rate Option through the purchase of deposits of the
types and maturities corresponding to the deposits used as a reference in
accordance with the terms hereof in determining the Euro-Rate applicable to such
Loans, regardless of whether in fact that is the case.
2.15 Loan Account. The Agent shall open and maintain on its books a
------------
Loan Account in the name of the Borrower, with respect to (a) Loans made,
repayments and prepayments of the principal thereof, and the computation and
payment of interest thereon, (b) Letters of Credit issued, or participated in,
as the case may be, and draws and reimbursements thereon or thereof, and (c) the
computation and payment of the Fees due hereunder to the Lenders, the Issuing
Bank and the Agent, and the computation of other amounts due and sums paid to
the Agent hereunder. Upon the request of the Borrower to the Agent, the Agent
shall promptly furnish to the Borrower a statement of the Loan Account. The
failure to record any such amount shall not limit or otherwise affect the
obligations of the Borrower hereunder or under the Notes to repay all amounts
owed hereunder and thereunder together with all interest accrued thereon and all
other fees and charges provided herein. The Loan Account shall be conclusive
evidence as to the amount at any time due to the Lenders, the Issuing Bank and
the Agent from the Borrower except in the case of manifest error.
2.16 All Advances to Constitute One Loan. Notwithstanding the
-----------------------------------
limitations set forth herein, all Loans and all other Obligations shall
constitute one loan and all Indebtedness and obligations of the Borrower to the
Lenders under this Agreement and all other Loan Documents shall constitute a
general obligation of the Borrower. All of the rights of the Agent, the Issuing
Bank, the Lenders and the Borrower set forth in this Agreement and the other
Loan Documents shall apply to any amendment or modification of or supplement to
this Agreement and the other Loan Documents.
-39-
2.17 Use of Proceeds. The proceeds of the Loans shall be used
---------------
exclusively (a) to pay interest, Fees and other costs, and expenses hereunder
and under the other Loan Documents, (b) to repay any Unreimbursed Letter of
Credit Draw (c) to implement a restructuring, including initial public offerings
of securities of some Subsidiaries, investments in certain other companies and
the sale of one or more other lines of business (d) for working capital,
acquisitions and general corporate purposes of the Borrower and its
Subsidiaries. No proceeds of any Loan may be used for any purpose which
contravenes applicable law or any provision of any Loan Document.
2.18 Letter of Credit Subfacility.
----------------------------
(a) Availability. At the request of the Borrower, the Issuing
-------------
Bank shall issue for the account of the Borrower and its Subsidiaries, on the
terms and conditions set forth below, (including without limitation Article V
hereof), one or more Letters of Credit in Dollars or Optional Currency;
provided, however, no Letter of Credit shall have an expiry date later than the
-------- -------
earlier of twelve (12) months from the date of issuance or fifteen (15) days
prior to the Expiration Date; and provided, further, however, that in no event
-------- ------- -------
shall (i) the Dollar Equivalent of the Stated Amount of the Letters of Credit
issued pursuant to this Section 2.18 exceed, at any one time, Fifteen Million
Dollars ($15,000,000) minus the unpaid balance of any unreimbursed Letter of
-----
Credit Draws, or (ii) the Dollar Equivalent sum of aggregate outstanding
principal balance of the Loans, the aggregate unpaid balance of any Unreimbursed
Letter of Credit Draws and the aggregate Stated Amount of the Letters of Credit
issued by the Issuing Bank under this Section 2.18 exceed, at any one time, the
aggregate Revolving Credit Commitments.
(b) Fees.
-----
(i) The Borrower shall pay (A) to the Issuing Bank for its
own account a fronting fee (the "Fronting Fee") in connection with the Letters
of Credit as described in the Agent's Letter, (B) to the Agent for the ratable
account of the Lenders a fee (the "Standby Letter of Credit Fee"), as determined
below, on the aggregate daily (computed at the opening of business and on the
basis of a year of 360 days and actual days elapsed) Stated Amount of the
outstanding Standby Letters of Credit for the period in question, and (C) to the
Agent for the ratable account of the Lenders a fee (the "Commercial Letter of
Credit Fee") equal to the then current standard fee charged by the Issuing Bank
for the issuance of Commercial Letters of Credit (the Standby Letter of Credit
Fee and the Commercial Letter of Credit Fee shall be collectively referred to as
the "Letter of Credit Fee"). The Letter of Credit Fee and the Fronting Fee shall
be payable (x) quarterly in arrears on the last Business Day of each Fiscal
Quarter occurring during the term of this Agreement, (y) on the Expiration Date
or (z) upon acceleration of the Notes. Any issuance of an amendment to extend
the stated expiration date of a Letter of Credit or an amendment to increase the
Stated Amount of a Letter of Credit shall be treated as an issuance of a new
Letter of Credit for purposes of calculation of the Letter of Credit Fee and the
Fronting Fee due and payable hereunder. After the occurrence of an Event of
Default and during the continuation thereof, the rate at which the Letter of
Credit Fee is calculated shall be increased by two percent (2%) above the pre-
default rate.
-40-
(ii) The Borrower shall also pay to the Issuing Bank for
the Issuing Bank's own account the Issuing Bank's customary documentation fees
payable with respect to the Letters of Credit as the Issuing Bank may generally
charge from time to time. Without limitation, the foregoing shall include all
charges and expenses paid or incurred by the Issuing Bank in connection with any
Letter of Credit, including without limitation: (A) correspondents' charges, if
any, (B) any and all reasonable out-of-pocket expenses and charges of the
Issuing Bank in connection with the performance, administration, interpretation,
collection and enforcement of this Agreement and any Letter of Credit, including
all reasonable legal fees and expenses, and (C) any and all applicable reserve
or similar requirements and any and all premiums, assessments, or levies imposed
upon the Issuing Bank by any Official Body.
(iii) If by reason of (A) any change in any Law or any
change in the interpretation or application by any judicial or regulatory
authority of any Law which occurs after the date hereof or (B) compliance by the
Issuing Bank with any direction, request or requirement which occurs after the
date hereof (whether or not having the force of law) of any Official Body:
(1) the Issuing Bank shall be subject to any tax (
other than any tax imposed upon or in respect of the income of such Lender or
its lending office and payable to (i) the United States or any political
subdivision thereof, (ii) the jurisdiction under the laws of which the Agent or
such Lender is organized, or in which its principal executive office may be
located, or in which it is doing business, or any nation within which such
jurisdiction is located or any political subdivision thereof or (iii) the
jurisdiction in which the lending office or other branch or subsidiary of such
Lender is located or doing business, or under the laws of which it is organized,
or by any nation within which any such jurisdiction is located or any political
subdivision thereof), levy, charge or withholding of any nature or to any
variation thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations under this Section 2.18, whether directly or by
such being imposed on or suffered by the Issuing Bank;
(2) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of the Letters of Credit; or
(3) there shall be imposed on the Issuing Bank any
other condition regarding this Section 2.18 or the Letters of Credit;
and if the result of any of the foregoing is to directly or indirectly increase
the cost to the Issuing Bank of issuing or maintaining any Letter of Credit, or
to reduce the amount receivable in respect thereof by, the Issuing Bank, the
Issuing Bank may, at any time after the additional cost is incurred or the
amount receivable is reduced, notify the Borrower and the Agent, and the
Borrower shall pay on demand such amounts as the Issuing Bank may specify to be
necessary to compensate the Issuing Bank for such additional cost or reduced
receipt, together with interest on such amount from the date of the notice of
such event which results in such increased cost or reduction in amount
receivable until payment in full thereof at a rate equal at all times to the
Base Rate. The determination by the Issuing Bank of any amount due pursuant to
this
-41-
Subsection 2.18(b)(iii) as set forth in a certificate setting forth the
calculation thereof, shall, in the absence of manifest error, be final and
conclusive and binding on all of the parties hereto.
For purposes of this Agreement, the term "Standby Letter of Credit Fee" shall
mean two percent (2%) per annum.
(c) Participation by Lenders. Immediately upon the issuance of
-------------------------
each Letter of Credit and each increase in the Stated Amount thereof, each
Lender shall irrevocably purchase and shall be deemed to have irrevocably
purchased from the Issuing Bank an undivided, full risk, non-recourse
participation in such Letter of Credit and drawings thereunder in an amount
equal to such Lender's Ratable Share of the maximum amount which is or at any
time may become available to be drawn thereunder. In the event that the Issuing
Bank is required for any reason to refund or repay to the Borrower, any
guarantor or any other Person all or any portion of any amount remitted to the
Issuing Bank pursuant to this Agreement, the Lenders shall promptly remit to the
Issuing Bank, upon three (3) Business Days' demand therefor, their respective
Ratable Shares of the amount which is so refunded or repaid.
(d) Legal Restrictions. In the event any restrictions are
-------------------
imposed upon the Issuing Bank or any of the Lenders by any Law or any Official
Body having jurisdiction over the banking activities of the Issuing Bank or any
Lender which would prevent the Issuing Bank from issuing the Letters of Credit
or amending the Letters of Credit or would prevent any Lender from honoring its
obligations under this Section 2.18, the commitment of the Issuing Bank to issue
the Letters of Credit or enter into any amendment with respect thereto shall be
immediately suspended. If any Lender believes any such restriction would prevent
such Lender from honoring its obligations under this Section 2.18, it shall
promptly notify the Agent. The Agent shall promptly notify the Borrower, the
Issuing Bank and the other Lenders of the existence and nature of (i) any
restriction which would cause the suspension of the commitment of the Issuing
Bank to issue the Letters of Credit or to enter into amendments with respect
thereto and (ii) any restriction which would prevent any Lender from honoring
its obligations under this Section 2.18. The Borrower shall thereupon undertake
reasonable efforts to obtain the cancellation of all outstanding Letters of
Credit; provided, however, that the refusal of any beneficiary of a Letter of
-------- -------
Credit to surrender such Letter of Credit shall not be an Event of Default
hereunder, provided that the Borrower shall undertake good faith efforts to
obtain substitute letters of credit for the then existing and outstanding
Letters of Credit. Nothing contained in this Section 2.18 shall be deemed a
termination of the Revolving Credit Commitments and, in the event of a
suspension of the commitment of the Issuing Bank to issue Letters of Credit as
set forth above, the Borrower may continue to borrow under the Revolving Credit
Commitments subject to the requirements of Section 5.02.
(e) Issuance. When the Borrower desires the issuance of a Letter
---------
of Credit, the Borrower shall deliver a duly completed Application for Letter of
Credit to the Issuing Bank, with a copy to the Agent, no later than 11:00 a.m.,
Pittsburgh time, at least three (3) Business Days, or such shorter period as may
be agreed to by the Issuing Bank, in advance of the proposed date of issuance.
Upon satisfaction of the conditions set forth in Section 5.01, if applicable,
and Section 5.02, the Issuing Bank shall be obligated to issue the Letter of
Credit and
-42-
shall notify the Agent and each Lender of such issuance. In determining whether
to pay under a Letter of Credit, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under the
Letter of Credit have been delivered and that they comply on their face with the
requirements of the Letter of Credit.
(f) Reimbursement. In the event of any request for drawing
--------------
under a Letter of Credit by the beneficiary thereof, the Issuing Bank shall
immediately notify the Borrower and the Agent, and the Borrower shall reimburse,
or cause the reimbursement of, the Issuing Bank on demand as set forth in the
applicable Application for Letter of Credit in an amount in same day funds equal
to the amount of such drawing; provided, however, that unless the Borrower shall
-------- -------
have notified the Agent and the Issuing Bank prior to such time that the
Borrower intends to reimburse the Issuing Bank for all or a portion of the
amount of such drawing with funds other than the proceeds of Loans, the Borrower
shall be deemed to have given a Loan Request to the Agent requesting the Lenders
to make Loans on the first Business Day immediately following the date on which
such drawing is honored in an aggregate amount equal to the excess of the amount
of such drawing over the amount received by the Issuing Bank from such other
funds in reimbursement thereof (the "Unreimbursed Letter of Credit Draw"), plus
accrued interest on such amount at the rate set forth in Subsection 2.08. Any
such Loan shall be deemed advanced to the Borrower. If the Borrower shall be
deemed to have given a Loan Request, then, subject to satisfaction or waiver of
the conditions specified in Section 5.02, the Lenders shall, all as set forth in
Section 2.18(g) hereof, on the first Business Day immediately following the date
of such drawing, make Loans in the aggregate amount of the Unreimbursed Letter
of Credit Draw plus accrued interest on such amount at the applicable rate set
forth in Section 2.08. The proceeds of any such Loans shall be applied directly
by the Agent upon receipt from the Lenders to reimburse the Issuing Bank for the
Unreimbursed Letter of Credit Draw plus accrued interest on such amount. The
foregoing shall not limit or otherwise affect the obligation of the Borrower to
reimburse the Issuing Bank on demand.
(g) Disbursements by Lenders. In the event that the Borrower
-------------------------
fails to reimburse the Issuing Bank on demand as provided in the applicable
Application for Letter of Credit and Section 2.18(f) above in an amount equal to
the amount of any drawing honored by the Issuing Bank under a Letter of Credit
plus accrued interest, the Issuing Bank shall promptly notify the Agent and each
Lender of the Unreimbursed Letter of Credit Draw plus accrued interest on such
amount of such drawing and of such Lender's respective participation therein.
Each Lender shall make available to the Issuing Bank an amount equal to its
respective participation in same day funds, at the office of the Issuing Bank
specified in such notice, not later than 12:00 noon, Pittsburgh time, on the
first Business Day after the date specified in such notice by the Issuing Bank.
In the event that any Lender fails to make available to the Issuing Bank the
amount of such Lender's participation in such Letter of Credit as provided in
this Section 2.18(g), the Issuing Bank shall be entitled to recover such amount
on demand from such Lender together with interest at the Federal Funds Effective
Rate for three (3) Business Days and thereafter at the Base Rate plus one-half
percent 0.5%. Nothing in this Section 2.18(g) shall be deemed to prejudice the
right of any Lender to recover its Ratable Share of the Unreimbursed Letter of
Credit Draw from the Issuing Bank pursuant to this Section 2.18(g) in the event
that it is determined by a court of competent jurisdiction that payment with
respect to a Letter of Credit
-43-
by the Issuing Bank constituted gross negligence or willful misconduct on the
part of the Issuing Bank. The Issuing Bank shall distribute to each Lender which
has paid all amounts payable by it under this Section 2.18(g) with respect to a
Letter of Credit such other Lender's Ratable Share of all payments received by
the Issuing Bank from the Borrower in reimbursement of drawing honored by the
Issuing Bank under the Letter of Credit when such payments are received.
(h) Reimbursement Obligations Absolute. The obligations of the
-----------------------------------
Borrower under this Agreement to reimburse the Issuing Bank for all drawings
upon the Letters of Credit shall be absolute, unconditional and irrevocable, and
shall not be subject to any right of set-off or counterclaim and shall be paid
or performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any Letter of Credit or any of the Loan Documents;
(ii) any amendment or waiver of any provision of all or any
of the Loan Documents;
(iii) the existence of any claim, set-off, defense or other
rights which the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank, the Agent or any Lender
(other than the defense of payment to the Issuing Bank in accordance with the
terms of this Agreement) or any other Person, whether in connection with this
Agreement, the Loan Documents or any transaction contemplated hereby or thereby
or any unrelated transaction;
(iv) any draft, demand, certificate, statement or document
presented under any Letter of Credit, appearing on its face to be valid and
sufficient, but proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever;
(v) payment by the Issuing Bank under any Letter of Credit
against presentation of any document which does not comply with the terms of the
Letter of Credit, provided that such payment shall not have constituted gross
negligence or willful misconduct of the Issuing Bank;
(vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, not resulting from gross
negligence or willful misconduct of the Issuing Bank; and
(vii) the fact that a Default or Event of Default shall
have occurred and be continuing.
(i) Documentation. This Agreement is intended to supplement
--------------
each Application for Letter of Credit executed by the Borrower and delivered to
the Issuing Bank.
-44-
Whenever possible this Agreement is to be construed as consistent with each
Application for Letter of Credit but, to the extent that the provisions of this
Agreement and each Application for Letter of Credit conflict, the terms of this
Agreement shall control.
(j) Participation Obligations Absolute. Notwithstanding any
----------------------------------
other provision of this Agreement, the obligation of each Lender to participate
in each Letter of Credit issued in accordance herewith and to make the payments
to be made by it under this Section 2.18 is absolute, irrevocable and
unconditional and shall not be affected by any event, condition or circumstance
whatever. The failure of any Lender to make any such payment shall not relieve
any other Lender of its funding obligation hereunder on the date due, but no
Lender shall be responsible for the failure of any other Lender to meet its
funding obligations hereunder.
(k) Indemnification. In addition to amounts payable as elsewhere
----------------
provided in this Section 2.18, the Borrower shall protect, indemnify, pay and
save the Agent or the Issuing Bank harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) which the Agent or the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of the
Letters of Credit or any amendment thereto, other than as a result of the gross
negligence or willful misconduct of the Agent or the Issuing Bank as determined
by a court of competent jurisdiction, (ii) the failure of the Issuing Bank to
honor a draw under any Letter of Credit if the Issuing Bank in good faith and
upon advice of counsel believes that it is prohibited from making such payment
as a result of any requirement of Law or of any Official Body, or (iii) any
material breach by the Borrower of any representation, warranty, covenant, term
or condition in, or the occurrence of any default under, any document related to
the issuance or any amendment of the Letters of Credit. If any proceeding shall
be brought or threatened against the Agent or the Issuing Bank by reason of or
in connection with any event described in clauses (i) through (iii) above, the
Agent shall promptly notify the Borrower in writing, and the Borrower shall
assume the defense thereof, including the employment of counsel and payment of
all costs of litigation. Notwithstanding the preceding sentence, the Agent and
the Issuing Bank shall have the right to employ its own counsel and to determine
its own defense of such action in any such case, but the fees and expenses of
such counsel shall be at the expense of the Agent or the Issuing Bank, as the
case may be, unless (x) the employment of such counsel shall have been
authorized in writing by the Borrower, (y) the Borrower, after the
aforementioned notice of the action, shall not have employed counsel to have
charge of such defense or (z) if the position of the Borrower is adverse or
contrary to the position advocated by the Agent or the Issuing Bank, as the case
may be. In each case described in clauses (x), (y) and (z) immediately above
the reasonable fees and expenses of counsel for the Agent or the Issuing Bank,
as the case may be shall be borne by the Borrower. The Borrower shall not be
liable for any settlement of any such action affected without its consent.
(l) Limitation on the Issuing Bank's Obligations. The Issuing
---------------------------------------------
Bank is hereby expressly authorized and directed to honor any request for
payment which is made under and in compliance with the terms of any Letter of
Credit without regard to, and without any duty on the Issuing Bank's part to
inquire into, the existence of any disputes or controversies between the
Borrower, the beneficiary of any Letter of Credit or any other Person, or the
respective rights,
-45-
duties or liabilities of any of them or whether any facts or occurrences
represented in any of the documents presented under any Letter of Credit are
true or correct. Furthermore, the Issuing Bank's sole obligation to the Borrower
shall be limited to honoring requests for payment made under and in compliance
with the terms of any Letter of Credit, the Application for Letter of Credit
therefor and this Agreement and the Issuing Bank's obligation remains so limited
even if the Issuing Bank may have assisted the Borrower in the preparation of
the wording of any Letter of Credit or any documents required to be presented
thereunder or that the Issuing Bank may otherwise be aware of the underlying
transaction giving rise to any Letter of Credit and this Agreement.
(m) Acts and Omissions of Beneficiaries. As between the
------------------------------------
Borrower and the Issuing Bank, the Borrower assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit by, the beneficiaries of the
Letters of Credit. Without limiting the foregoing, the Issuing Bank shall not be
responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for or the issuance or amendment of any Letter of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) for failure of a beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telecopy, telex or otherwise, whether or
not they be in cipher; (v) for errors in interpretation of technical terms; (vi)
for any loss or delay in the transmission or otherwise of any document required
in order to make a draw under any Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by a beneficiary of any Letter of Credit of the
proceeds of any drawing under such Letter of Credit; (viii) for any consequences
arising from causes beyond the control of the Issuing Bank, including, without
limitation, any Law; and (ix) for any other circumstances whatsoever in making
or failing to make payment under a Letter of Credit, except that the Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to consequential, damages suffered by the Borrower by a court of
competent jurisdiction to be the result of (x) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
a Letter of Credit comply with the terms of the Letter of Credit, (y) the
Issuing Bank's willful misconduct or gross negligence in paying a draw under a
Letter of Credit to any Person other than the beneficiary of such Letter of
Credit or its lawful successor, representative or assign (or as otherwise
directed in writing by the beneficiary of such Letter of Credit) or (z) the
Issuing Bank's willful failure to pay under a Letter of Credit after the
presentation to it by the beneficiary of such Letter of Credit or its lawful
successor, representative or assign of a sight draft and certificate or other
documents strictly complying with the terms and conditions of such Letter of
Credit, unless the Issuing Bank in good faith and upon advice of counsel
believes that it is prohibited by law or other legal authority from making such
payment. None of the above shall affect, impair, or prevent the vesting of any
of the Issuing Bank's rights or powers hereunder.
-46-
(n) Limitation of Liability. Except for the Issuing Bank's
------------------------
obligations to issue Letters of Credit hereunder and its obligations under such
Letters of Credit, the Issuing Bank shall have no liability to the Borrower from
a reduction of the Issuing Bank's credit rating or any deterioration in its
financial condition. Without limiting the foregoing provisions, any action
taken or omitted by the Issuing Bank under or in connection with the Letters of
Credit or the related sight drafts or certificates or documents, if taken or
omitted in good faith, shall not put the Issuing Bank under any resulting
liability to the Borrower.
(o) Reimbursement of Expenses. The Borrower shall bear and pay
--------------------------
all reasonable expenses of every kind (including all reasonable attorneys' fees)
incurred in the enforcement of any of the Issuing Bank's rights under this
Agreement or the Letters of Credit, or of any claim or demand by the Issuing
Bank against the Borrower, or of any actual or attempted sale, exchange,
enforcement, collection, maintenance, retention, insurance, compromise,
settlement, release, delivery on trust receipt, or other security agreement, or
delivery of any such security, and of the receipt of proceeds thereof, and shall
repay to the Issuing Bank any such expenses incurred by the Issuing Bank.
(p) Subrogation. Whenever appropriate to prevent unjust
------------
enrichment and to the end that the Borrower shall bear substantially all of the
risks relative to any Letter of Credit and the underlying transactions, the
Issuing Bank shall be subrogated (for purposes of defending against the
Borrower's claims and proceeding against others to the extent of the Issuing
Bank's liability to the Borrower) to the Borrower's rights against any Person
who may be liable to the Borrower on any underlying transaction, to the rights
of any holder in due course or Person with similar status against the Borrower,
and to the rights of the beneficiary or its assignee or person with similar
status against the Borrower.
(q) Interpretation. Except and to the extent inconsistent with
---------------
the specific provisions hereof, this Agreement, each Letter of Credit hereunder
and all transactions in connection therewith shall be interpreted, construed and
enforced according to: (i) the "Uniform Customs and Practice for Documentary
Credits" (1993 Revision), International Chamber of Commerce Publication No. 500
and subsequent revisions thereof which shall supersede inconsistent provisions
of applicable law to the extent not prohibited by applicable law and (ii) the
laws of the Commonwealth of Pennsylvania, including, without limitation, the
Uniform Commercial Code, and excluding conflict of laws rules.
2.19 Taxes.
-----
(a) No Deductions. All payments made by the Borrower under this
-------------
Agreement and under each Note shall be made free and clear of and without
deduction for any present or future taxes, levies, imposts, deductions, charges,
or withholdings, and all liabilities with respect thereto, excluding taxes
imposed on the net income of any Lender and all income and franchise taxes
applicable to any Lender of the United States (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, (i) the sum payable shall be increased as may be
-47-
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.19(a)), each Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall timely pay the full amount deducted to the relevant tax authority
or other authority in accordance with applicable law.
(b) Other Taxes. In addition to its obligations under Section
-----------
2.19(a), the Borrower agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges, or similar levies which
arise from any payment made hereunder or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or any Note
(hereinafter referred to as "Other Taxes").
(c) Indemnification for Taxes Paid by a Lender. The Borrower
------------------------------------------
shall indemnify each Lender for the full amount of Taxes or Other Taxes
(including without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.19(c)) paid by any Lender
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. This indemnification shall be made within thirty
(30) days from the date a Lender makes written demand therefor.
(d) Certificate. Within thirty (30) days after the date of any
-----------
payment of any Taxes or Other Taxes by the Borrower on behalf of a Lender, the
Borrower shall furnish to each Lender, at its address provided in this
Agreement, the original or a certified copy of a receipt evidencing payment
thereof. If no Taxes are payable in respect of any payment by the Borrower, the
Borrower shall, if so requested by a Lender, provide a certificate of an officer
of the Borrower to that effect.
(e) Withholding. Each Lender that is not incorporated under the
-----------
laws of the United States of America or a state thereof agrees that it shall
deliver to the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form W-9, W-8BEN or W-8ECI or successor applicable
form, as the case may be on or before the date such Lender becomes a Lender
certifying that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and that it
is entitled to an exemption from United States backup withholding tax. Each such
Lender also agrees to deliver to the Borrower and the Agent two further copies
of the said Form X-0, X-0XXX or W-8ECI, or successor applicable forms or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding tax or after the occurrence
of any event requiring a change in the most recent form previously delivered by
it to the Borrower and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Agent, unless in any such case
any change in treaty, law or regulation has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Agent.
-48-
(f) Survival. Without prejudice to the survival of any other
--------
agreement of the Borrower under this Agreement, the agreements and obligations
of the Borrower contained in this Section 2.19 shall survive the payment in full
of principal and interest hereunder and under any instrument delivered
hereunder.
2.20 Payments. All payments and prepayments to be made in respect of
--------
principal, interest, Unreimbursed Letter of Credit Draws, Fees, or other amounts
due from the Borrower hereunder (except those Optional Currency payments and
prepayments made pursuant to Section 2.13(f) hereof) shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without setoff, counterclaim or other deduction of any nature, and
an action therefor shall immediately accrue. Such payments shall be made to the
Agent at the Principal Office for the ratable account of the Lenders or Issuing
Bank, as the case may be, in Dollars and in immediately available funds, and the
Agent shall promptly distribute such amounts to the Lenders or Issuing Bank, as
the case may be, in immediately available funds in accordance with the terms and
provisions of Section 9.10 of this Agreement. The Agent's, the Issuing Bank's
and each Lender's statement of account, ledger or other relevant record shall,
in the absence of manifest error, be conclusive as the statement of the amount
of principal of and interest on the Loans, the Unreimbursed Letter of Credit
Draws, Fees and other amounts owing under this Agreement and shall be deemed an
"account stated," and any conflict between or among the foregoing records shall
be resolved by the Agent. Notwithstanding anything herein to the contrary, (a)
any administration or underwriting fee paid by the Borrower to the Agent shall
be solely for the account of the Agent, (b) any Fronting Fees paid by the
Borrower shall be solely for the account of the Issuing Bank and (c) any
interest paid on any Unreimbursed Letter of Credit Draw to the extent a Lender
has not been required to honor or has not honored its funding obligations
pursuant to Section 2.18(g) hereof shall be solely for the account of the
Issuing Bank.
2.21 Judgment Currency.
-----------------
(a) Currency Conversion Procedures for Judgments. If for the
--------------------------------------------
purposes of obtaining judgment in any court it is necessary to convert a sum due
hereunder or under a Note in any currency (the "Original Currency") into another
currency (the "Other Currency"), the parties hereby agree, to the fullest extent
permitted by Law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures each Lender could purchase the
Original Currency with the Other Currency after any premium and costs of
exchange on the Business Day preceding that on which final judgment is given.
(b) Indemnity in Certain Events. The obligation of the Borrower
---------------------------
in respect of any sum due from the Borrower to any Lender under this Agreement
shall, notwithstanding any judgment in an Other Currency, whether pursuant to a
judgment or otherwise, be discharged only to the extent that, on the Business
Day following receipt by any Lender of any sum adjudged to be so due in such
Other Currency, such Lender may in accordance with normal banking procedures
purchase the Original Currency with such Other Currency. If the amount of the
Original Currency so purchased is less than the sum originally
-49-
due to such Lender in the Original Currency, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment or payment, to indemnify such
Lender against such loss.
2.22 Borrowings to Repay Swing Loans. PNC Bank may, at its option,
--------------------------------
exercisable at any time for any reason whatsoever, demand repayment of the Swing
Loans, and each Lender shall make available to the Agent, on behalf of PNC Bank,
an amount equal to such Lender's Revolving Credit Ratable Share of the aggregate
principal amount of the outstanding Swing Loans, plus, if PNC Bank so requests,
accrued interest thereon, provided that no Lender shall be obligated in any
--------
event to make Revolving Credit Loans in excess of its Revolving Credit
Commitment. Revolving Credit Loans made pursuant to the preceding sentence shall
bear interest at the Base Rate Option and shall be deemed to have been properly
requested in accordance with Section 2.05 without regard to any of the
requirements of that provision. PNC Bank shall provide notice to all of the
Lenders (which may be telephonic or written notice by letter, facsimile or
telex) of the amount of such Lender's Revolving Credit Ratable Share of the
aggregate principal amount of the outstanding Swing Loans, plus accrued interest
thereon, to be made available to the Agent on behalf of PNC Bank under this
Section 2.22. The Agent shall promptly provide to each Bank notice of the
apportionment thereof among the Banks, and the Banks shall be unconditionally
obligated to fund such amount (whether or not the conditions specified in
Section 2.05 are then satisfied) by the time PNC Bank so requests, which shall
not be earlier than 3:00 p.m., Pittsburgh time, on the Business Day next after
the date the Banks receive such notice of apportionment from the Agent.
2.23 Extension of Expiration Date. If the Borrower completes the
----------------------------
Staffing Divestiture on or before ten Business Days before October 1, 2001, and
realizes net consideration of at least $80,000,000 in cash and cash equivalents
for the divestitures, the Lenders hereby agree to extend the Expiration Date to
January 1, 2002. To request the extension, the Borrower will promptly, and in no
event later than ten Business Days before October 1, 2001 provide the Agent with
all information the Agent requests to demonstrate that the requirements for the
extension have been met. Once the Agent issues a written confirmation that the
extension has occurred, the definition of "Expiration Date" in the Loan
Documents shall mean January 1, 2002 instead of October 1, 2001.
ARTICLE III
LOAN DISBURSEMENT ACCOUNT, GUARANTEES, ETC.
-------------------------------------------
3.01 Loan Disbursement Account. The Borrower shall maintain at all
-------------------------
times during this Agreement with the Agent, at the Agent's office in Pittsburgh,
Pennsylvania, a demand deposit account (the "Loan Disbursement Account"), into
which proceeds of Loans and other monies transferred to the Borrower hereunder
shall be deposited from time to time. The Loan Disbursement Account shall be in
the name of the Borrower and, subject to the other provisions of this Agreement
and the other Loan Documents, monies therein shall be disbursed as directed by
the Borrower, from time to time. To secure the payment and performance of
Obligations, the Borrower hereby pledges and assigns, and grants to the Agent
for the benefit of
-50-
the Agent, the Issuing Bank and the Lenders, a lien on and security interest in
the Loan Disbursement Account, all funds from time to time deposited or held
therein, all interest and other income derived therefrom, and all proceeds of
all the foregoing.
3.02 Designation of Subsidiary Guarantors. Each Domestic Subsidiary
-------------------------------------
of the Borrower, whether now in existence or hereafter acquired shall be
automatically designated as a Subsidiary Guarantor by the Lenders. Each Domestic
Subsidiary designated as a Subsidiary Guarantor shall continue as a Subsidiary
Guarantor until released in writing by all of the Lenders. Notwithstanding the
foregoing, those Domestic Subsidiaries identified on Schedule 3.02 shall not be
designated as Subsidiary Guarantors.
3.03 Pledge of Subsidiary Interests. As security for the Obligations,
-------------------------------
the Borrower shall pledge, and, as applicable, shall cause each of its domestic
Subsidiaries to pledge, to the Agent for the benefit of the Lenders (a) one
hundred percent (100%) of its ownership interest in each Domestic Subsidiary and
(b) sixty-five percent (65%) of its ownership interest in each of the Borrower's
non-Domestic Subsidiaries.
3.04 Further Cooperation. The Borrower shall perform, or cause each
-------------------
other Loan Party to perform, on the reasonable request of the Agent and at the
Borrower's expense, such reasonable acts as may be necessary or reasonably
advisable to carry out the intent of this Agreement and the other Loan
Documents. Without limiting the generality of the preceding sentence, the
Borrower shall cause each newly-created or acquired Subsidiary Guarantor to
execute and deliver a Subsidiary Guaranty to the Agent within a reasonable
period of time following the creation or acquisition of such Subsidiary
Guarantor and shall execute and deliver a Pledge Agreement relating to the
equity interest in any hereafter acquired or created Subsidiary in accordance
with Section 3.03. Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable form time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Representations and Warranties. The Borrower represents and warrants
------------------------------
to the Agent, each of the Lenders and the Issuing Bank as follows:
4.01 Organization and Qualification.
------------------------------
(a) The Borrower is a corporation duly organized and validly
subsisting, under the laws of the Commonwealth of Pennsylvania, has the lawful
power to own or lease its properties and to engage in the business it presently
conducts or proposes to conduct, and is duly licensed or qualified and in good
standing in each jurisdiction and in all other
-51-
jurisdictions where the property owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary,
except for those jurisdictions where the Borrower's non-qualification would not
result in a Material Adverse Change.
(b) Each Subsidiary of the Borrower is a corporation, business
trust, limited liability company or limited partnership, as the case may be,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, as the case may be; each
Subsidiary of the Borrower has the lawful power to own or lease its properties
and to engage in the business it presently conducts or proposes to conduct; and
each Subsidiary of the Borrower is duly licensed or qualified and in good
standing in each jurisdiction and except as set forth on Schedule 4.01(b) in all
other jurisdictions where the property owned or leased by it or the nature of
the business transacted by it makes such licensing or qualification necessary,
except for those jurisdictions where such Subsidiary's non-qualification would
not result in a Material Adverse Change. Schedule 4.01(b) shows, on the Closing
Date, each of the jurisdictions in which each Subsidiary is organized and, if
applicable, those additional jurisdictions in which it is duly licensed or
qualifies to conduct its business.
4.02 Capitalization and Ownership. As of December 31, 1999, the
----------------------------
authorized capital stock of the Borrower consists of 100,000,000 shares of
common stock of which (a) 48,769,008 shares were issued and outstanding and (b)
813,500 shares were issued and held in treasury by the Borrower, and 20,000,000
shares of preferred stock, of which one (1) share was issued and outstanding.
All of the capital stock of the Borrower has been validly issued and is fully
paid and non-assessable. Except as set forth in Schedule 4.02, there are no
options, warrants, conversion rights or other rights outstanding to purchase any
such capital stock.
4.03 Subsidiaries. As of the date hereof, except for the Subsidiaries
------------
and investments in other Persons set forth in Schedule 4.03, the Borrower does
not own directly or indirectly any capital stock of any other Person, is not a
partner (general or limited) of any partnership, is not a party to any joint
venture and does not own (beneficially or of record) any equity interest or
similar interest in any other Person.
4.04 Power and Authority. Each of the Loan Parties has full power to
-------------------
enter into, execute, deliver, carry out and perform this Agreement and the Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its obligations under the Loan Documents to which
it is a party and all such actions have been duly authorized by all necessary
corporate proceedings on its part.
4.05 Validity and Binding Effect. This Agreement has been, and each
---------------------------
Loan Document, when executed and delivered by the Borrower and each other Loan
Party, shall have been, duly and validly executed and delivered by the Borrower
or such Loan Party. This Agreement and each of the other Loan Documents executed
and delivered by the Borrower and each Loan Party shall constitute legal, valid
and binding obligations of the Borrower or such Loan Party, enforceable against
the Borrower or such Loan Party in accordance with their respective terms,
except to the extent that enforceability of any of the Loan Documents may be
-52-
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
4.06 No Conflict. Neither the execution and delivery of this Agreement
-----------
or the Loan Documents by any Loan Party, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the terms and
provisions hereof or thereof by any Loan Party shall (a) conflict with,
constitute a default under or result in any breach of (i) the terms and
conditions of the articles of incorporation, by-laws or other organizational
documents of any Loan Party or (ii) any Law or any agreement or instrument or
order, writ, judgment, injunction or decree to which any Loan Party is a party
or by which it is bound or to which it is subject, which conflict, default or
breach would result in a Material Adverse Change, or (ii) result in the creation
or enforcement of any Lien upon any property (now or hereafter acquired) of any
Loan Party (other than the Permitted Liens).
4.07 Litigation. Except for the litigation set forth on Schedule 4.07,
----------
there are no actions, suits, proceedings or investigations pending or, to the
knowledge of the Borrower, threatened against the Borrower or any Subsidiary of
the Borrower, at law or in equity, before any Official Body which individually
or in the aggregate, if adversely determined, would be likely to result in any
Material Adverse Change. Neither the Borrower nor any Subsidiary of the Borrower
is in violation of any order, writ, injunction or decree of any Official Body
which could be expected to result in any Material Adverse Change.
4.08 Financial Statements.
--------------------
(a) Financial Statements. The Borrower has delivered to the
--------------------
Agent the consolidated annual financial statements of the Borrower and its
Subsidiaries for the Fiscal Year ended December 31, 1999 and the quarter ended
March 31, 2000. All such financial statements are complete and correct in all
material respects and fairly present the consolidated financial condition of the
Borrower and its Subsidiaries in all material respects and the results of their
operations as of the dates and for the periods referred to, and have been
prepared in accordance with GAAP throughout the period included.
(b) Accuracy of Financial Statements. The Borrower and its
--------------------------------
Subsidiaries have no material liabilities, contingent or otherwise, that are not
disclosed in the financial statements referred to in clause (a) above and that
would be required to be disclosed in accordance with GAAP, except for those
incurred since the date of such financial statements in the ordinary course of
business and, in the case of quarterly financial statements, subject to year end
audit adjustments.
4.09 Margin Stock; Section 20 Subsidiaries. None of the Loan Parties
-------------------------------------
engages or intends to engage principally, or as one of its important activities,
in the business of incurring Indebtedness or extending credit to others
(including, without limitation, any of the Subsidiaries of the Borrower) for the
purpose, immediately, incidentally or ultimately, of purchasing or carrying
margin stock (within the meaning of any Margin Regulation). No part of the
proceeds of any Loan has been or shall be used, immediately, incidentally or
ultimately, to purchase or
-53-
carry any margin stock or to extend credit to others (including, without
limitation, any of its Subsidiaries) for the purpose of purchasing or carrying
any margin stock or to refund or retire Indebtedness originally incurred for
such purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the Margin Regulations. The Borrower does
not intend to hold, and shall not permit its Subsidiaries to hold, margin stock.
None of the Loan Parties intends to use any portion of the proceeds of the
Loans, directly or indirectly, to purchase during the underwriting period, or
for thirty (30) days thereafter, Ineligible Securities being underwritten by a
Section 20 Subsidiary.
4.10 Full Disclosure. Neither this Agreement nor any Loan Document,
---------------
nor any certificate, statement, agreement or other document furnished to the
Agent, the Issuing Bank or any Lender in connection herewith or therewith,
contains any misstatement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which they were made, not misleading. There is no
fact known to the Borrower which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of the
Borrower and its Subsidiaries, taken as a whole, which has not been set forth in
this Agreement or the Loan Documents or in the certificates, statements,
agreements or other documents furnished in writing to the Agent, the Lenders or
the Issuing Bank prior to or at the date hereof in connection with the
transactions contemplated hereby and thereby.
4.11 Tax Returns and Payments. The Borrower is a member of an
------------------------
affiliated group of companies which files consolidated federal tax returns. All
such federal tax returns that are required by law to be filed have been filed or
properly extended. All taxes, assessments and other governmental charges levied
upon members of such affiliated group or any of their respective properties,
assets, income or franchises which are due and payable have been paid in full
other than (a) those presently payable without penalty or interest, (b) those
which are being contested in good faith by appropriate proceedings and (c) those
which, if not paid, would not, in the aggregate, result in a Material Adverse
Change; and as to each of items (a), (b) and (c) the affiliated group has
established reserves for such claim as have been determined to be adequate by
application of GAAP consistently applied. As of the date hereof, there are no
agreements or waivers extending the statutory period of limitations applicable
to any consolidated federal income tax return of the Borrower and its
consolidated Subsidiaries for any period, except as set forth on Schedule 4.11.
4.12 Consents and Approvals. No consent, approval, exemption, order or
----------------------
authorization of, or a registration or filing with any Official Body or any
other Person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement and the Loan Documents to
which any Loan Party is a party, except as listed on Schedule 4.12, all of which
items set forth on Schedule 4.12 shall have been obtained or made on or prior to
the Closing Date.
4.13 No Event of Default; Compliance with Instruments. No event has
------------------------------------------------
occurred and is continuing and no condition exists or shall exist after giving
effect to the borrowings to be made on the Closing Date under the Loan Documents
which constitutes an
-54-
Event of Default or a Default. None of the Loan Parties is in violation of (i)
any term of its articles of incorporation, by-laws or other organizational
documents or (ii) any material agreement or instrument to which it is a party or
by which it or any of its properties may be subject or bound where such
violation would result in a Material Adverse Change.
4.14 Compliance with Laws. The Borrower and its Subsidiaries are in
--------------------
compliance in all material respects with all applicable Laws (other than
Environmental Laws, which are addressed in Section 4.20) in all jurisdictions in
which the Borrower, and its Subsidiaries, are presently or shall be doing
business except where the failure to do so would not, individually or in the
aggregate, result in a Material Adverse Change.
4.15 Investment Company; Public Utility Holding Company. None of the
--------------------------------------------------
Loan Parties is an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended from time to time, and shall not become such an "investment
company" or under such "control." None of the Loan Parties is a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" within the meaning the Public Utility Holding Company Act of
1935, as amended from time to time. The Borrower is not subject to any Law of
any Official Body (in each case whether United States federal, state or local,
or other) having jurisdiction over the Borrower, which purports to restrict or
regulate its ability to borrow money, or to extend or obtain credit, or to
pledge its interests in the Loan Disbursement Account. No other Loan Party is
subject to any Law of any Official Body (in each case whether United States
federal, state or local, or other) having jurisdiction over such Loan Party
which purports to restrict or regulate its ability to borrow money or to extend
or obtain credit.
4.16 Plans and Benefit Arrangements. Except as set forth on Schedule
------------------------------
4.16:
(a) The Borrower and each member of the ERISA Group are in
compliance in all material respects with any applicable provisions of ERISA with
respect to all Benefit Arrangements, Plans and Multiemployer Plans. There has
been no Prohibited Transaction with respect to any Benefit Arrangement or any
Plan (other than a Multiemployer Plan) or, to the knowledge of the Borrower,
with respect to any Multiemployer Plan or Multiple Employer Plan, which could
result in any material liability of the Borrower or any other member of the
ERISA Group. The Borrower and all members of the ERISA Group have made when due
any and all payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining thereto.
With respect to each Plan and, to the knowledge of Borrower, each Multiemployer
Plan, the Borrower and each member of the ERISA Group (i) have fulfilled in all
material respects their obligations under the minimum funding standards of
ERISA, (ii) have not incurred any liability to the PBGC (other than for premiums
not yet due) and (iii) have not had asserted against them any penalty for
failure to fulfill the minimum funding requirements of ERISA.
(b) To the knowledge of the Borrower, each Multiemployer Plan
and Multiple Employer Plan is able to pay benefits thereunder when due.
-55-
(c) Neither the Borrower nor any other member of the ERISA Group
has instituted or intends to institute proceedings to terminate any Plan.
(d) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.
(e) Neither the Borrower nor any other member of the ERISA Group
has incurred or reasonably expects to incur any material withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Borrower nor any other member of the ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or
Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the knowledge of the Borrower, no Multiemployer Plan or Multiple
Employer Plan is reasonably expected to be reorganized or terminated, within the
meaning of Title IV of ERISA.
(f) To the extent that any Benefit Arrangement is insured, the
Borrower and all members of the ERISA Group have paid when due all premiums
required to be paid for all periods ending through and including the Closing
Date. To the extent that any Benefit Arrangement is funded other than with
insurance, the Borrower and all members of the ERISA Group have made when due
all contributions, to the extent required by applicable Law or the terms of such
Benefit Arrangement to be paid for all periods ending through and including the
Closing Date.
4.17 Title to Properties. With respect to the Collateral, the Borrower
-------------------
and its Subsidiaries have such title as is represented and warranted in the
Security Documents. With respect to all other real and personal property, the
Borrower and each of its Subsidiaries has good title to, or a valid leasehold
interest in, all their respective real and personal property, except to the
extent the failure to have such title or leasehold interests is not reasonably
likely, individually or in the aggregate, to result in a Material Adverse
Change, and none of such property is subject to any Lien except Permitted Liens.
4.18 Insurance. There are in full force and effect for the benefit of
---------
the Borrower and its Subsidiaries insurance policies and bonds providing
adequate coverage from reputable and financially sound insurers in amounts
sufficient to insure the assets and risks of the Borrower and its Subsidiaries
in accordance with prudent business practice in the industry of the Borrower and
its Subsidiaries. No notice has been given or claim made and to the knowledge of
the Borrower, no grounds exist, to cancel or void any of such policies or bonds
or to reduce the coverage provided thereby.
4.19 Employment Matters. The Borrower and each of its Subsidiaries are
------------------
in compliance with all employment agreements, collective bargaining agreements
and labor contracts (the "Labor Contracts"), except where the failure to comply
would not result in a
-56-
Material Adverse Change. There are no outstanding grievances, arbitration awards
or appeals therefrom arising out of the Labor Contracts or current or, to the
knowledge of the Borrower, threatened strikes, picketing, handbilling or other
work stoppages or slowdowns at facilities of the Borrower or any Subsidiary of
the Borrower which in any case would result in a Material Adverse Change.
4.20 Environmental Matters. Except as disclosed on Schedule 4.20:
---------------------
(a) To the knowledge of the Borrower, none of the Borrower or any
Subsidiaries of the Borrower has received any Environmental Complaint from any
Official Body or private Person alleging that the Borrower or any Subsidiary or
any prior or subsequent owner of any of the Property is a potentially
responsible party under the Comprehensive Environmental Response, Cleanup and
Liability Act, 42 U.S.C. (S) 9601, et seq., and the Borrower has no reason to
-- ----
believe that such an Environmental complaint might be received. There are no
pending or, to the Borrower's knowledge, threatened Environmental Complaints
relating to the Borrower or any Subsidiary of the Borrower or, to the Borrower's
knowledge, any prior or subsequent owner of any of the Property pertaining to,
or arising out of, any Environmental Conditions.
(b) To the knowledge of the Borrower, there are no circumstances
at, on or under any of the Property that constitute a breach of or non-
compliance with any of the Environmental Laws, and there are no past or present
Environmental Conditions at, on or under any of the Property or, at, on or under
adjacent property, that prevent compliance with the Environmental Laws at any of
the Property.
(c) To the knowledge of the Borrower, neither any of the Property
nor any structures, improvements, equipment, fixtures, activities or facilities
thereon or thereunder contain or use Regulated Substances except in compliance
with Environmental Laws. To the knowledge of the Borrower, there are no
processes, facilities, operations, equipment or other activities at, on or under
any of the Property, or at, on or under adjacent property, that currently result
in the release or threatened release of Regulated Substances onto any of the
Property, except to the extent that such releases or threatened releases are not
a breach of or otherwise not a violation of the Environmental Laws.
(d) To the knowledge of the Borrower, there are no aboveground
storage tanks, underground storage tanks or underground piping associated with
such tanks, used for the management of Regulated Substances at, on or under any
of the Property that (a) do not have, to the extent required by Environmental
Laws, a full operational secondary containment system in place, and (b) are not
otherwise in compliance with all Environmental Laws. To the knowledge of the
Borrower, there are no abandoned underground storage tanks or underground piping
associated with such tanks, previously used for the management of Regulated
Substances at, on or under any of the Property that have not either been closed
in place in accordance with Environmental Laws or removed in compliance with all
applicable Environmental Laws and no contamination associated with the use of
such tanks exists on any of the Property that is not in compliance with
Environmental Laws.
-57-
(e) The Borrower and each Subsidiary of the Borrower has all
material permits, licenses, authorizations, plans and approvals necessary under
the Environmental Laws for the conduct of the business of the Borrower and each
such Subsidiary as presently conducted. The Borrower and each Subsidiary of the
Borrower have submitted all material notices, reports and other filings required
by the Environmental Laws to be submitted to an Official Body which pertain to
past and current operations on any of the Property.
(f) All past and present on-site generation, storage, processing,
treatment, recycling, reclamation, disposal or other use or management of
Regulated Substances at, on or under any of the Property and all off-site
transportation, storage, processing, treatment,, recycling, reclamation,
disposal or other use or management of Regulated Substances by or on behalf of
the Borrower or any Subsidiary of the Borrower have been done in accordance with
the Environmental Laws, including the management and disposal of infectious
wastes both on and off site) and management, licensing and disposal of
radioactive wastes.
4.21 Senior Debt Status. The obligations of the Borrower under this
------------------
Agreement and the Notes rank at least pari passu in priority of payment with all
---- -----
other Indebtedness of the Borrower, except Indebtedness of the Borrower to the
extent secured by Permitted Liens. The obligations of a Subsidiary Guarantor
under a Subsidiary Guaranty executed by such Subsidiary Guarantor rank at least
pari passu in priority of payment with all other Indebtedness of such Subsidiary
---- -----
Guarantor except Indebtedness of such Subsidiary Guarantor to the extent secured
by Permitted Liens. There is no Lien upon or with respect to any of the
properties or income of the Borrower or any of its Subsidiaries which secures
Indebtedness or other obligations of any Person except for Permitted Liens.
4.22 Solvency. On the date hereof, and as of the date of each advance
--------
of the Loan and issuance or renewal of any Letter of Credit, as the case may be,
and after giving effect to such advance or the issuance or renewal of a Letter
of Credit, each Loan Party is, and shall be, Solvent.
4.23 Material Contracts; Burdensome Restrictions. All material
-------------------------------------------
contracts relating to the business operations of each Loan Party, including all
employee benefit plans and Labor Contracts, are valid, binding and enforceable
upon such Loan Party and each of the other parties thereto in accordance with
their respective terms, and there is no material default thereunder with respect
to such Loan Party, and there is no material default thereunder, to the Loan
Parties' knowledge, with respect to parties other than such Loan Party. No
contract, lease, agreement or other instrument to which any Loan Party is a
party or is bound and no provision of any applicable Law or governmental
regulation would reasonably be expected to result in a Material Adverse Change.
4.24 Patents, Trademarks, Copyrights, Licenses, Etc. Each of the Loan
----------------------------------------------
Parties owns or possesses all the material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises, permits and rights
necessary to own and operate its properties and to carry on its business as
presently conducted and planned to be conducted by such Loan
-58-
Party, and, to the Borrower's knowledge, without possible, alleged or actual
conflict with the rights of others.
4.25 Year 2000 Problem. Each of the Loan Parties has reviewed areas
-----------------
within their business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely basis, the
risk that certain computer applications used by the Loan Parties (or any of
their respective material suppliers, customers or vendors) may be unable to
recognize and perform properly date-sensitive functions involving dates prior to
and after December 31, 1999 (the "Year 2000 Problem"). The rollover to calendar
year 2000 has not resulted in, and the Year 2000 Problem will not result in, any
Material Adverse Change.
4.26 Brokers. No broker or finder acting on behalf of Borrower brought
-------
about the obtaining, making or closing of the loans made pursuant to this
Agreement, and Borrower has no obligation to any other Person in respect of any
finder's or brokerage fees in connection with the loans contemplated by this
Agreement.
4.27 No Material Adverse Change. No event has occurred since March 31,
--------------------------
2000 and is continuing which has had or would reasonably be expected to result
in a Material Adverse Change.
4.28 Security Interests. The Liens and security interests granted to
------------------
the Agent for the benefit of the Lenders pursuant to the Patent, Trademark and
Copyright Assignment, the Pledge Agreements and the Security Agreements
constitute and will continue to constitute Prior Security Interests under the
Uniform Commercial Code as in effect in each applicable jurisdiction (the
"Uniform Commercial Code") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or such Law.
Upon the filing of financing statements relating to said security interests in
each office and in each jurisdiction where required in order to perfect the
security interests described above, taking possession of any stock certificates
or other certificates and recordation of the Patent, Trademark and Copyright
Assignment in the United States Patent and Trademark Office and United States
Copyright Office, as applicable, all such action as is necessary or advisable to
establish such rights of the Agent will have been taken, and there will be upon
execution and delivery of the Patent, Trademark and Copyright Assignment, the
Pledge Agreements and the Security Agreements, such filings and such taking of
possession, no necessity for any further action in order to preserve, protect
and continue such rights, except the filing of continuation statements with
respect to such financing statements within six months prior to each five-year
anniversary of the filing of such financing statements or within not less than
six months prior to such other longer anniversary date in any jurisdiction. All
filing fees and other expenses in connection with each such action have been or
will be paid by the Borrower.
4.29 Status of Pledged Collateral. All the shares of capital stock,
----------------------------
partnership interests or LLC interests pledged pursuant to the Pledge Agreements
are or will be upon issuance validly issued and nonassessable and owned
beneficially and of record by the pledgor free and clear of any Lien or
restriction on transfer, except as otherwise provided by the Pledge Agreements
and except as the right of the Lenders to dispose of the shares of capital
stock,
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partnership interests or LLC interests may be limited by the Securities Act of
1933, as amended, and the regulations promulgated by the SEC thereunder and by
applicable state securities laws. There are no shareholder, partnership, limited
liability company or other agreements or understandings with respect to the
shares of capital stock, partnership interests or LLC interests held by a Loan
Party except for the partnership agreements and limited liability company
agreements described on Schedule 4.29. The Loan Parties have delivered true and
correct copies of such partnership agreements and limited liability company
agreements to the Agent.
ARTICLE V
CONDITIONS OF LENDING OR ISSUANCE OF LETTER OF CREDIT
-----------------------------------------------------
The obligation of each Lender to make the Loans hereunder, or of the
Issuing Bank to issue Letters of Credit hereunder is subject to the performance
by the Borrower of its obligations to be performed hereunder at or prior to the
making of any such Loans or the issuance of any such Letter of Credit, as the
case may be, and to the satisfaction of the following further conditions:
5.01 Conditions to Initial Borrowings. On or prior to the Closing Date
--------------------------------
the following actions shall be completed or satisfied to the sole satisfaction
of the Agent:
(a) The representations and warranties of the Borrower or the
other Loan Parties contained in Article IV and in the other Loan Documents
executed and delivered by the Borrower or any of the other Loan Parties in
connection with the Closing shall be true and accurate in all material respects
on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct in all material
respects on and as of the specific date or times referred to therein), and the
Borrower, and each other Loan Party, shall have performed, observed and complied
with all covenants and conditions hereof and contained in the other Loan
Documents; no Event of Default or Default under this Agreement shall have
occurred and be continuing or shall exist; and there shall be delivered to the
Agent, for the benefit of each Lender, the Issuing Bank and the Agent, a
certificate of the Borrower, dated the Closing Date and signed by the Chief
Executive Officer, President, Chief Financial Officer or Vice President Finance
of the Borrower, to each such effect.
(b) The Borrower shall deliver to the Agent for the benefit of
each Lender and the Issuing Bank a certificate dated the Closing Date and signed
by the secretary or an assistant secretary of the Borrower, certifying as
appropriate as to:
(i) all corporate action taken by the Borrower in
connection with this Agreement and the other Loan Documents;
(ii) the names, offices and titles of the Borrower's officer
or officers authorized to sign this Agreement and the other Loan Documents and
the true signatures
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of such officer or officers and the identities of the Authorized Officers
permitted to act on behalf of the Borrower for purposes of this Agreement and
the other Loan Documents and the true signatures of such officers, on which the
Agent, each Lender and the Issuing Bank may conclusively rely;
(iii) (A) copies of the Borrower's organizational documents,
including its articles of incorporation as in effect on the Closing Date
certified by the Secretary of the Commonwealth of Pennsylvania, (B) a copy of
the Borrower's by-laws and (C) a certificate as to the continued existence and
good standing of the Borrower issued by the Secretary of the Commonwealth of
Pennsylvania;
(iv) all corporate or partnership action taken by each
Subsidiary Guarantor in connection with each Loan Document executed by such
Subsidiary Guarantor;
(v) the names, offices and titles of each Subsidiary's
officer or officers authorized to sign each Subsidiary Guaranty, Pledge
Agreement and Security Agreement and the true signatures of such officer or
officers and the identities of the Authorized Officers permitted to act on
behalf of each Subsidiary for purposes of each Subsidiary Guaranty and the true
signatures of such officers, on which the Agent, each Lender and the Issuing
Bank may conclusively rely; and
(vi) copies of each Subsidiary's organizational documents,
as in effect on the Closin g Date, certified, by the Secretary of State of the
state of its organization;
(c) The Borrower shall duly execute and deliver or cause to be
duly executed and delivered to the Agent for the benefit of the Lenders, the
Issuing Bank and the Agent this Agreement, the Notes, the Subsidiary Guaranty
Agreement, the Pledge Agreements (together with stock certificates, accompanied
by stock powers, and/or control agreements in respect of all pledged equity
securities), the Security Agreements, the Patent Trademark and Copyright
Assignments and copies of all intercompany demand notes, and all required UCC-1
financing statements.
(d) The Borrower shall deliver to the Agent an initial Borrowing
Base Certificate showing availability for the initial borrowing.
(e) The Borrower shall duly execute and deliver to the Agent for
the benefit of the Lenders, the Issuing Bank and the Agent all other Loan
Documents reasonably required by the Agent to be executed and delivered by the
Borrower or another Loan Party at the Closing.
(f) The Borrower shall deliver to the Agent for the benefit of
each Lender a written opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP for the Borrower
and the other Loan Parties, dated the Closing Date and in form and substance
reasonably satisfactory to the Agent and its counsel as to the matters set forth
on Exhibit I.
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(g) All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and its counsel, and the
Agent shall have received all such other counterpart originals or certified or
other copies of such documents and proceedings in connection with such
transactions, in form and substance reasonably satisfactory to the Agent and
said counsel, as the Agent or said counsel may reasonably request.
(h) No Material Adverse Change shall have occurred since May 31,
2000 and no material litigation shall have been instituted by or against the
Borrower or any Subsidiary or any of their respective material properties or
assets; and there shall be delivered to the Agent for the benefit of each
Lender, the Issuing Bank and the Agent a certificate of the Borrower dated the
Closing Date and signed by the Chief Executive Officer, President, Chief
Financial Officer or Vice President Finance of the Borrower to each such effect.
(i) The Borrower shall deliver evidence acceptable to the Agent
that adequate insurance in compliance with Section 6.05 is in full force and
effect.
(j) The Borrower shall obtain all material consents required to
effectuate the transactions contemplated hereby as set forth on Schedule 4.12
including all waivers and consents under the Note Purchase Agreement dated as of
July 22, 1999 by and between the Borrower and GE Capital Equity Investments,
Inc. deemed necessary by the Agent, in form and substance satisfactory to the
Agent.
(k) The making and/or assumption of any Loan or the issuance of a
Letter of Credit or assumption of any reimbursement liability with regard
thereto, shall not contravene any Law applicable to the Borrower, any other Loan
Party, the Agent, the Lenders or the Issuing Bank.
(l) Except as set forth on Schedule 4.07, no action, suit,
proceeding, investigation, regulation or legislation shall have been instituted,
threatened or proposed before any court or other Official Body (i) with respect
to the Borrower or its Subsidiaries or this Agreement, the other Loan Documents
or the consummation of the transactions contemplated hereby or thereby to
enjoin, restrain or prohibit, or to obtain damages in respect of, their
performance under this Agreement or any other Loan Documents or the consummation
of the transactions contemplated hereby or thereby or (ii) which in the
reasonable opinion of Agent would result in a Material Adverse Change.
(m) The Borrower shall pay to the Agent on its own behalf and on
behalf of the Lenders and the Issuing Bank all Fees (and any other fees payable
pursuant to the terms of the Agent's Letter) due and payable on or prior to the
Closing Date and all reimbursable expenses incurred on or prior to the Closing
Date.
(n) The Credit Agreement dated December 3, 1998, as amended, by
and among Mastech Systems Corporation, the lenders party thereto and PNC Bank,
National
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Association as agent, shall be terminated and all amounts due thereunder shall
have been paid in full.
(o) All matters and circumstances set forth as qualifications,
limitations, exceptions, additional matters or other materials set forth in the
Schedules to this Agreement provided by or on behalf of the Borrower or its
Subsidiaries shall be acceptable to the Agent, the Issuing Bank and the Lenders
in their reasonable discretion.
5.02 Each Additional Loan or Issuance of a Letter of Credit. At the
------------------------------------------------------
time of making any Loans or the issuance of, or renewal of, a Letter of Credit
and after giving effect to the proposed borrowings or issuance:
(a) the representations and warranties of the Borrower contained
in Article IV hereof and in the other Loan Documents shall be true and correct
in all material respects on and as of the date of such additional Loan or
issuance of a Letter of Credit, with the same effect as though such
representations and warranties have been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific date or times referred to therein);
(b) the Borrower shall have performed and complied in all
material respects with all covenants and conditions hereof;
(c) no Default or Event of Default shall have occurred and be
continuing or shall exist;
(d) the making of any Loan or the issuance of any Letter of
Credit shall not contravene any Law applicable to the Borrower, any of the
Lenders or the Issuing Bank;
(e) the Borrower shall have delivered to the Agent, as regards a
Loan, a duly executed and completed Loan Request and with respect to the
issuance of a Letter of Credit, the Borrower shall have delivered a duly
executed Application for Letter of Credit therefor and otherwise complied with
the reasonable requirements of the Issuing Bank not inconsistent with the terms
hereof; and
(f) Total Utilization shall not exceed the aggregate Revolving
Credit Commitments or the Borrowing Base; provided, however, that prior to the
-------- -------
advance of any Loan on a Borrowing Date the proceeds of which shall repay any
Unreimbursed Letter of Credit Draw, for the purpose of calculating Total
Utilization and compliance with this Subsection 5.02(g) on such date, the
existing Total Utilization immediately prior to such advance shall be reduced
pro tanto by the dollar amount of the Loans to be advanced on such Borrowing
---
Date which shall be used to repay any outstanding Unreimbursed Letter of Credit
Draws.
5.03 Location of Closing. The Closing shall take place at 10:00 a.m.,
-------------------
Pittsburgh, Pennsylvania time, on the Closing Date at the offices of Xxxxxxxxxxx
& Xxxxxxxx LLP,
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Xxxxx X. Xxxxxx Building, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
or at such other time and place as the parties agree.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
Until payment in full of the Loans and interest thereon, payment in
full of all Letter of Credit reimbursement obligations and interest thereon,
satisfaction of all of the Borrower's other obligations hereunder and
termination of the Revolving Credit Commitments, the Swing Loan Commitment, and
the expiration and cancellation of all Letters of Credit issued hereunder, the
Borrower shall comply, or cause compliance, at all times with the following
affirmative covenants:
6.01 Preservation of Existence, Etc.
-------------------------------
(a) The Borrower shall maintain its corporate existence and its
license or qualification and its good standing in the state of its incorporation
and in each other jurisdiction in which its ownership or lease of property or
the nature of its businesses makes such license or qualification necessary
(except for such other jurisdictions in which such failure to be so licensed or
qualified individually and in the aggregate would not result in a Material
Adverse Change).
(b) Each Subsidiary of the Borrower shall maintain its corporate
existence and its license or qualification and its good standing in the
jurisdiction of its incorporation and in each other jurisdiction in which its
ownership or lease of property or the nature of its businesses makes such
license or qualification necessary (except as otherwise permitted under Section
7.04 or Section 7.05 and except for such other jurisdictions in which such
failure to be so licensed or qualified individually and in the aggregate would
not result in a Material Adverse Change).
6.02 Accounting System; Reporting Requirements. The Borrower shall
-----------------------------------------
maintain, and shall cause its Subsidiaries to maintain, a system of accounting
established and administered in accordance with GAAP, and shall and shall cause
its Subsidiaries to set aside on its books all such proper reserves as shall be
required by GAAP. Further, the Borrower shall:
(a) deliver an updated Borrowing Base Certificate to the Agent
when required by Section 2.02(b);
(b) deliver to the Agent, for redelivery to the Lenders, within
forty-five (45) days after the end of each of the first three (3) Fiscal
Quarters in each Fiscal Year of the Borrower, (i) consolidated and consolidating
balance sheet as at the end of such period for the Borrower and its
Subsidiaries, (ii) consolidated and consolidating statements of income for such
period for the Borrower and its Subsidiaries and, in the case of the second and
third quarterly periods, for the period from the beginning of the current Fiscal
Year to the end of such quarterly
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period, and (iii) consolidated and consolidating statements of cash flow for
such period for the Borrower and its Subsidiaries and, in the case of the second
and third quarterly periods, for the period from the beginning of the current
Fiscal Year to the end of such quarterly period; and each such statement shall
set forth, in comparative form, corresponding figures for the corresponding
period in the immediately preceding Fiscal Year; and all such statements shall
be prepared in reasonable detail and certified, subject to changes resulting
from year-end adjustments, by the chief financial officer, treasurer or
controller of the Borrower;
(c) deliver to the Agent, for redelivery to the Lenders, within
ninety (90) days after the end of each Fiscal Year of the Borrower, (i)
consolidated and consolidating balance sheets as at the end of such year for the
Borrower and its Subsidiaries, (ii) consolidated and consolidating statements of
income for such year for the Borrower and its Subsidiaries, (iii) consolidated
and consolidating statements of cash flow for such year for the Borrower and its
Subsidiaries, and (iv) consolidated and consolidating statements of shareholders
equity for such year for the Borrower and its Subsidiaries; and each such
statement shall set forth, in comparative form, corresponding figures for the
immediately preceding Fiscal Year; and all such financial statements shall
present fairly in all material respects the financial position of the Borrower
and its consolidated Subsidiaries, as at the dates indicated and the results of
its operations and its cash flow for the periods indicated, in conformity with
GAAP; and the Borrower shall cause each of the consolidated financial statements
described in clauses (i) through (iv) of this Section 6.02(b) to be certified
without limitation as to scope or material qualification by Xxxxxx Xxxxxxxx
L.L.P. or other independent certified public accountants acceptable to the
Required Lenders;
(d) deliver to the Agent, together with each delivery of
financial statements pursuant to items (b) and (c) above for redelivery to the
Lenders, a Compliance Certificate of the Borrower substantially in the form of
Exhibit C, properly completed and signed by the chief financial officer,
treasurer or controller of the Borrower, (i) stating (A) that such officer has
reviewed the terms of the Loan Documents and has made, or caused to be made
under his supervision, a review of the transactions and condition of the
Borrower and its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence of a
Default or Event of Default during such accounting period, and (B) that the
Borrower does not have knowledge of the existence, as at the date of such
Compliance Certificate, of the occurrence of any Default or Event of Default, or
if a Default or Event of Default has occurred, specifying the nature and period
of existence thereof and what action the Borrower has taken or is taking or
proposes to take with respect thereto, (ii) setting forth a summary of all
intercompany obligations of each Subsidiary to the Borrower, and (iii)
demonstrating in reasonable detail compliance as at the end of such accounting
period with the restrictions contained in Section 7.13;
(e) promptly give written notice to the Agent, for redelivery to
the Lenders, of the happening of any event (which is known to the Borrower)
which constitutes an Event of Default or a Default hereunder, but in no event
shall any such notice be given later than five (5) Business Days after the
Borrower knows, exercising reasonable diligence, of such event;
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(f) promptly give written notice to the Agent, for redelivery to
the Lenders, of any pending or, to the knowledge of the Borrower, overtly
threatened claim in writing, litigation or threat of litigation which arises
between the Borrower, or any of its Subsidiaries, and any other party or parties
(including, without limitation, any Official Body) which claim, litigation or
threat of litigation, individually or in the aggregate, is reasonably likely to
result in a Material Adverse Change, any such notice to be given not later than
five (5) Business Days after any of the Borrower becomes aware of the occurrence
of any such claim, litigation or threat of litigation;
(g) promptly deliver to the Agent, but in no event later than
twenty (20) days after the mailing or filing thereof, for redelivery to the
Lenders, copies of (i) all reports, notices and proxy statements sent by the
Borrower to its shareholders, and (ii) all regular and periodic reports and
definitive proxy materials (including but not limited to Forms 10-K, 10-Q and 8-
K) filed by the Borrower with any securities exchange or the Federal Securities
and Exchange Commission;
(h) promptly deliver to the Agent, but in no event later than
twenty (20) days after Borrower receives the same, for redelivery to the
Lenders, copies of any management letters addressed to the Borrower by its
independent certified public accountant; and
(i) such other reports and information as the Agent or the
Required Lenders may from time to time reasonably request.
6.03 Notices Regarding Plans and Benefit Arrangements.
------------------------------------------------
(a) Promptly upon becoming aware of the occurrence thereof, the
Borrower shall give notice (including the nature of the event and, when known,
any action taken or threatened by the Internal Revenue Service or the PBGC with
respect thereto) to the Agent, for redelivery to the Lenders, of:
(i) any Reportable Event with respect to the Borrower or
any member of the ERISA Group,
(ii) any Prohibited Transaction which could subject the
Borrower or any member of the ERISA Group to a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code in connection with any Plan, Benefit Arrangement or any trust
created thereunder, if such tax and/or penalty is reasonably likely to result in
a Material Adverse Change,
(iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any member of the ERISA Group under Title
IV of ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
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(v) any cessation of operations (by the Borrower of any
member or the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any member of the ERISA
Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a lien under
Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
(b) Promptly after receipt thereof, the Borrower shall give to
the Agent, for redelivery to the Lenders, copies of (i) all notices received by
the Borrower or any member of the ERISA Group of the PBGC's intent to terminate
any Plan administered or maintained by the Borrower or any member of the ERISA
Group, or to have a trustee appointed to administer any such Plan; and (ii) at
the request of the Agent or any Lender each annual report (IRS Form 5500 series)
and all accompanying schedules, the most recent actuarial reports, the most
recent financial information concerning the financial status of each Plan
administered or maintained by the Borrower or any member of the ERISA Group, and
schedules showing the amounts contributed to each such Plan by or on behalf of
the Borrower or any member of the ERISA Group in which any of their respective
personnel participate or from which such personnel may derive a benefit, and
each Schedule B (Actuarial Information) to the annual report filed by the
Borrower or any member of the ERISA Group with the Internal Revenue Service with
respect to each such Plan.
(c) Promptly upon the filing thereof, the Borrower shall give to
the Agent, for redelivery to the Lenders, copies of any PBGC Form 200, 500, 600
or 601, or any successor form, filed with the PBGC in connection with the
termination of any Plan.
6.04 Payment of Liabilities, Including Taxes, etc. The Borrower shall
--------------------------------------------
duly pay and discharge, and shall cause its Subsidiaries to pay and discharge
(subject, where applicable, to specified grace periods and, in the case of trade
payables, to normal payment practices) promptly as and when the same shall
become due and payable, all liabilities which singularly are in excess of
$100,000 or which in the aggregate exceed $500,000 to which they are subject or
which are asserted against them, including all taxes, assessments and
governmental charges upon them or any of their properties, assets, income or
profits, prior to the date on which penalties attach thereto; provided, however,
-------- -------
the Borrower may choose not to pay any such liabilities, including
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taxes, assessments or charges, if the same are being contested in good faith and
for which such reserves (including reserves for any additional amounts which
would be payable as a result of the failure to discharge timely any such
liabilities) or other appropriate provisions, if any, as shall be required by
GAAP shall have been made.
6.05 Maintenance of Insurance. The Borrower shall insure, and shall
------------------------
cause its Subsidiaries to insure, their respective properties and assets against
loss or damage in such amounts as similar properties and assets are insured by
prudent companies in similar circumstances carrying on similar businesses, and
with reputable and financially sound insurers, including self-insurance to the
extent customary. The Borrower shall furnish to the Agent for redelivery to the
Lenders on the Closing Date and thereafter simultaneously with the delivery of
the annual financial information delivered pursuant to Section 6.02(b) a
certificate of the Borrower executed by an Authorized Officer of the Borrower
certifying that such insurance is in force, is adequate in nature and amount and
complies with the Borrower's obligations under this Section 6.05. Such policies
of insurance shall be in form and substance acceptable to the Agent, including,
without limitation, specifying the Agent as an additional insured, mortgagee and
lender loss payee as its interests may appear, with the understanding that any
obligation imposed upon the insured (including the liability to pay premiums)
shall be the sole obligation of the applicable Loan Parties and not that of the
insured. The applicable Loan Parties shall notify Agent promptly of any
occurrence causing a material loss or decline in value of the Collateral and the
estimated (or actual, if available) amount of such loss or decline. If no Event
of Default exists, any monies received by the Loan Parties constituting
insurance proceeds or condemnation proceeds may, at the option of the Borrower
(i) be applied by the Borrower to the payment of the Loans in such manner as the
Borrower may reasonably determine, or (ii) be disbursed for the repair or
restoration of such property and/or replacement with other operating assets. If
an Event of Default exists, any monies received by the Loan Parties or the Agent
constituting insurance proceeds or condemnation proceeds may, at the option of
the Agent, (i) be applied by the Agent to the payment of the Loans in such
manner as the Agent may reasonably determine, or (ii) be disbursed to the
applicable Loan Parties on such terms as are deemed appropriate by the Agent for
the repair, restoration and/or replacement of property in respect of which such
proceeds were received.
6.06 Maintenance of Properties and Leases. The Borrower and its
------------------------------------
Subsidiaries shall maintain in good repair, working order and condition
(ordinary wear and tear excepted) in accordance with the general practice of
other businesses of similar character and size, all of those properties useful
or necessary to their respective businesses, and from time to time, the Borrower
shall make or cause to be made all appropriate repairs, renewals or replacements
thereof.
6.07 Maintenance of Permits and Franchises. The Borrower and its
-------------------------------------
Subsidiaries shall maintain in full force and effect all franchises, permits and
other authorizations necessary for the ownership and operation of their
respective properties and business if the failure so to maintain the same,
individually or in the aggregate, would result in a Material Adverse Change.
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6.08 Visitation Rights. The Borrower shall permit, and shall cause
-----------------
its Subsidiaries to permit, any of the officers or authorized employees or
representatives of the Agent or any of the Lenders to visit and inspect any of
the properties of the Borrower, or a Subsidiary of the Borrower, and to examine
and make excerpts from its books and records and discuss its respective business
affairs, finances and accounts with its officers, all in such detail and at such
times and as often as any of the Lenders may reasonably request, provided that
each Lender shall provide the Borrower, or the Subsidiary of the Borrower, as
the case may be, and the Agent with reasonable notice prior to any visit or
inspection and that only the Agent and its authorized employees or
representatives are permitted to conduct audits. After the occurrence of an
Event of Default and during the continuance thereof the Agent and the Lenders
shall have the right of visitation and inspection without prior notice.
6.09 Keeping of Records and Books of Account. The Borrower and its
---------------------------------------
Subsidiaries shall maintain and keep proper books of record and account which
enable the Borrower to issue financial statements in accordance with GAAP and as
otherwise required by applicable Laws of any Official Body having jurisdiction
over the Borrower and its Subsidiaries, and in which full, true and correct
entries shall be made in all material respects of all their respective dealings
and business and financial affairs.
6.10 Plans and Benefit Arrangements. The Borrower shall, and shall
------------------------------
cause each member of the ERISA Group to, comply with ERISA, the Internal Revenue
Code and other applicable Laws applicable to Plans and Benefit Arrangements
except where such failure, alone or in conjunction with any other failure, would
not result in a Material Adverse Change. Without limiting the generality of the
foregoing, the Borrower shall cause all of its Plans and all Plans maintained by
any member of the ERISA Group to be funded in accordance with the minimum
funding requirements of ERISA and shall make, and cause each member of the ERISA
Group to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
6.11 Compliance with Laws. The Borrower and its Subsidiaries shall
--------------------
comply with all applicable Laws (other than Environmental Laws) in all respects,
provided that they shall not be deemed to be a violation of this Section 6.11 if
any failure to comply with any Law would not result in fines, penalties, other
similar liabilities or injunctive relief which in the aggregate would result in
a Material Adverse Change.
6.12 Use of Proceeds. The Borrower shall use the proceeds of the
---------------
Loans only for lawful purposes in accordance with Section 2.17 hereof as
applicable and such uses shall not contravene any applicable Law or any other
provision hereof. The Borrower shall permit the use of the Letters of Credit
only for lawful purposes in accordance with Section 2.18 hereof as applicable,
and such uses shall not contravene any applicable Law or any other provision
hereof. The Borrower and its Subsidiaries shall not use any portion of the
proceeds of the Loans, directly or indirectly, to purchase during the
underwriting period, or for thirty (30) days thereafter, Ineligible Securities
being underwritten by a Section 20 Subsidiary.
6.13 Environmental Laws.
------------------
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(i) The Borrower and its Subsidiaries shall comply in all
material respects, subject to the disclosure set forth in Schedule 4.20, with
all Environmental Laws and shall obtain and comply in all material respects with
and maintain any and all licenses, approvals, registrations or permits required
by Environmental Laws;
(ii) The Borrower and its Subsidiaries shall conduct and
complete in all material respects all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Official Bodies respecting Environmental Laws,
except to the extent that the same are being contested in good faith by
appropriate and lawful proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, required by GAAP shall have
been made; and
(iii) The Borrower shall defend, indemnify and hold harmless the
Agent and the Lenders, and their respective employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of or noncompliance with any Environmental Laws applicable to the real
property owned or operated by the Borrower or any of its Subsidiaries, or any
orders, requirements or demands of any Official Bodies related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
6.14 Senior Debt Status. The obligations of the Borrower under this
------------------
Agreement and the Notes shall rank at least pari passu in priority of payment
---- -----
with all other Indebtedness of the Borrower except Indebtedness of the Borrower
to the extent secured by Permitted Liens. The obligations of each other Loan
Party under a Subsidiary Guaranty executed by it shall rank at least pari passu
---- -----
in priority of payment with all other Indebtedness of such Loan Party except
Indebtedness of such Loan Party to the extent secured by Permitted Liens.
6.15 Further Assurances. Each Loan Party shall, from time to time, at
------------------
its expense, faithfully preserve and protect the Agent's Lien on and Prior
Security Interest in the Collateral as a continuing first priority perfected
Lien, subject only to Permitted Liens, and shall do such other acts and things
as the Agent may reasonably deem necessary or advisable from time to time in
order to preserve, perfect and protect the Liens granted under the Loan
Documents and to exercise and enforce its rights and remedies thereunder with
respect to the Collateral.
6.16 Post Closing Items.
------------------
(a) By September 19, 2000, the Borrower will deliver to the Agent:
(i) landlord waivers in number, form and substance satisfactory
to the Agent from locations where the Borrower or any Domestic Subsidiary leases
real property;
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(ii) a certificate as to the continued existence and good
standing of each Subsidiary issued by the Secretary of State of the state of its
organization and in states where the failure to so qualify would result in a
Material Adverse Change; and
(iii) stock certificates and stock powers executed in blank
evidencing 65% of the Loan Parties' interest in the non-Domestic Subsidiaries.
(b) By November 7, 2000, the Borrower will establish, and it will
thereafter maintain, accounts with one or more of the Lenders in which the
Borrower will maintain, subject to the Lenders' right of setoff, the cash and
Cash Equivalents required by Section 7.13(b).
ARTICLE VII
NEGATIVE COVENANTS
------------------
Until payment in full of the Loans and interest thereon, payment in
full of all Letter of Credit reimbursement obligations and interest thereon,
satisfaction of all of the Borrower's other obligations hereunder and
termination of the Revolving Credit Commitments, and the expiration and
cancellation of all Letters of Credit issued hereunder, the Borrower shall
comply, or cause the compliance, with the following negative covenants:
7.01 Indebtedness. The Borrower and its Subsidiaries shall not on a
------------
consolidated basis at any time, create, incur, assume or suffer to exist any
Indebtedness (including Indebtedness secured by Permitted Liens), except:
(a) Indebtedness under the Loan Documents;
(b) Existing Indebtedness as set forth on Schedule 7.01
(including any extensions or renewals thereof provided there is no increase in
the amount thereof or other significant adverse change in the terms thereof);
(c) Indebtedness of a Subsidiary of the Borrower to the
Borrower or to another Subsidiary of the Borrower or the Indebtedness of the
Borrower to a Subsidiary of the Borrower; provided, that such Indebtedness is
--------
reported in reasonable detail to the Agent pursuant to the requirements of
Section 6.02 (c);
(d) Indebtedness with respect to foreign exchange hedging
transactions entered into in the ordinary course of business to manage foreign
currency risk for the Borrower and/or one or more of its Subsidiaries;
(e) Indebtedness incurred pursuant to Interest Rate Hedge
Agreements (in an aggregate notional amount not greater than fifty percent (50%)
of the maximum amount of the Loans available under this Agreement);
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(f) Indebtedness due sellers of Persons or assets acquired
pursuant to Sections 7.03 or 7.04, including without limitation notes the
principal amount of which may vary as a function of the performance of the
Person or assets acquired;
(g) Indebtedness secured by Permitted Liens;
(h) Obligations and liabilities as a general partner in general
partnerships or limited partnerships provided that the aggregate amount of such
Indebtedness permitted by this Section (h) shall not exceed $10,000,000 at any
one time outstanding; and
(i) Other Indebtedness not covered by items (a) through (h)
above, provided that the aggregate amount of such Indebtedness permitted by this
item (i) shall not exceed $10,000,000 at any one time outstanding.
7.02 Liens. The Borrower and its Subsidiaries shall not at any time
-----
create, incur, assume or suffer to exist any Lien on any of their respective
property or assets, tangible or intangible, now owned or hereafter acquired, or
agree or become liable to do so, except Liens in favor of the Agent for the
benefit of the Lenders and Permitted Liens. Further, neither the Borrower nor
any of its Subsidiaries shall enter into any agreement with any Person (other
than the Lenders pursuant hereto) which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien in favor of the Agent for the benefit of the Lenders upon any of its
property, assets or revenues, whether now owned or hereafter acquired.
7.03 Loans, Acquisitions and Investments. The Borrower and its
-----------------------------------
Subsidiaries shall not at any time make any loan or advance to, or purchase or
otherwise acquire any stock, bonds, notes or securities of, or any partnership
interest (whether general or limited) or other equity interest in, or assets of,
or any other investment or interest in, or make any capital contribution to, any
other Person, or agree to or become liable to do any of the foregoing, except
for:
(a) trade credit extended on usual and customary terms in the
ordinary course of business;
(b) fixed assets, equipment or Inventory acquired in the
ordinary course of business;
(c) loans and advances to employees to meet expenses incurred by
such employees in the ordinary course of business, including without limitation
relocation expenses;
(d) Cash Equivalents;
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(e) investments, capital contributions and advances by the
Borrower to Subsidiaries in existence as of the date hereof, which investments,
capital contributions and advances are set forth on Schedule 7.03;
(f) investments and capital contributions by the Borrower or a
Subsidiary in, and loans and advances by Borrower or a Subsidiary to, a third
Person so long as after giving effect to each such investment or capital
contribution the Borrower shall not have caused a violation of the Loan
Documents;
(g) loans, advances and capital contributions by a Subsidiary of
the Borrower to the Borrower or any of the Borrower's other Subsidiaries or
loans, advances and capital contributions by the Borrower to any of its
Subsidiaries; and
(h) the Borrower or any Subsidiary may acquire the assets or
securities of any other Person provided that (i) at the time of such acquisition
no Default or Event of Default shall have occurred and be continuing or be
caused by such acquisition, (ii) the acquired Person, if a Domestic Subsidiary,
shall become a Subsidiary Guarantor simultaneously with such acquisition and
shall execute all Loan Documents required of a Subsidiary Guarantor, including
without limitation a subsidiary Guarantor Joinder in the form attached as
Exhibit __, (iii) the Borrower's equity ownership interest in the acquired
Person shall, if a Subsidiary, be pledged to the Agent for the benefit of the
Lenders; provided, however, that if the acquired Person is a non-Domestic
-------- -------
Subsidiary, the maximum amount of such acquired Person's equity pledged to the
Agent shall not exceed sixty-five percent (65%) of the acquired Person's equity
capitalization, (iv) the board of directors or other equivalent governing body
of such acquired Person shall have approved such acquisition, (v) the acquired
Person is engaged in the information technology business or a business related
thereto, and (vi) the Borrower shall have provided the Agent, for redelivery to
the Lenders, at least three (3) Business Days prior to such acquisition, with a
certificate stating that (A) such acquisition shall not violate any covenants of
this Agreement and (B) establishing that, on a pro forma basis after taking into
account the acquisition, the Borrower is in compliance with the financial
covenants set forth in Section 7.13.
7.04 Liquidations, Mergers and Consolidations. The Borrower shall
----------------------------------------
not, and shall not permit any Subsidiary of Borrower to, dissolve, liquidate or
wind-up its affairs, or become a party to any merger, consolidation or other
business combination, whether accounted for under GAAP as a purchase or a
pooling of interests and regardless of whether the value of the consideration
paid or received is comprised of cash, common or preferred stock or other equity
interests, or other assets, or sell, lease, transfer, or otherwise dispose of
all or substantially all of its assets, provided that:
--------
(a) any Subsidiary of Borrower may consolidate or merge into the
Borrower or another Subsidiary of the Borrower;
(b) any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or another Subsidiary of the Borrower;
and
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(c) the Borrower or any Subsidiary may consolidate or merge with
any Person, provided that (i) such Person must be engaged in the information
technology business or a business related thereto, (ii) if the Borrower is a
party to such merger or consolidation, the Borrower is the surviving Person,
(iii) at the time of the consolidation or merger no Default or Event of Default
shall have occurred and be continuing or be caused by such consolidation or
merger, (iv) the surviving Person, if a Domestic Subsidiary, shall become a
Subsidiary Guarantor, (v) the consolidation or merger shall not be contested by
such Person and shall be approved by such Person's board of directors or other
governing body, and (vi) the Borrower shall have provided to Agent, for
redelivery to the Lenders, at least three (3) Business Days before such merger
or consolidation, a certificate which (A) states such merger or consolidation
shall not violate any covenant of this Agreement, (B) establishes that, on a pro
forma basis after taking into account such merger or consolidation, the Borrower
is in compliance with the financial covenants set forth in Section 7.13, and (C)
includes a new Borrowing Base Certificate prepared after giving effect to such
merger or consolidation.
7.05 Dispositions of Assets or Subsidiaries.
Neither the Borrower nor any of its Subsidiaries shall sell,
convey, assign, lease, or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including but not limited to sale, assignment, discount or other disposition of
receivables, contract rights, chattel paper, equipment or general intangibles
with or without recourse or of capital stock, shares or beneficial interests or
partnership interests in Subsidiaries), except:
(i) any sale, transfer or disposition of surplus, obsolete
or worn out assets of the Borrower or a Subsidiary;
(ii) any sale, transfer or lease of inventory by the
Borrower or any Subsidiary of the Borrower in the ordinary course of business;
(iii) any sale, transfer or lease of assets by any
Subsidiary of the Borrower to the Borrower or any other Subsidiary of the
Borrower or by the Borrower to any Subsidiary of the Borrower;
(iv) the Staffing Divestiture; or
(v) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (iv) above, which
(A) individually does not dispose of assets of more that $5,000,000, (B)
together with other sales, transfers or leases does not dispose of assets of
more than $10,000,000 or (C) is preceded by delivery to the Agent, for
redelivery to the Lenders, at least three (3) Business Days before such sale,
transfer or lease, of a certificate which (1) states such sale, transfer or
lease will not violate any covenant of this Agreement, (2) establishes that, on
a pro forma basis after taking into account such sale, transfer or lease, the
Borrower is in compliance with the financial covenants set forth in Section
7.13, and
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(3) includes a new Borrowing Base Certificate prepared after giving effect to
such sale, transfer or lease.
7.06 Affiliate Transactions. Except as set forth on Schedule 7.06,
----------------------
neither the Borrower nor any Subsidiary of the Borrower shall enter into or
carry out any material transaction (including, without limitation, purchasing
property or services or selling property or services) with an Affiliate which is
not a Subsidiary unless such transaction is not otherwise prohibited by this
Agreement or the other Loan Documents, is entered into in the ordinary course of
business upon fair and reasonable arm's-length terms and conditions and is in
accordance with all applicable Law.
7.07 Subsidiaries, Partnerships and Joint Ventures. Except as
---------------------------------------------
permitted by Sections 7.03 and 7.04, neither the Borrower nor any Subsidiary of
the Borrower shall own or create any Subsidiaries other than those listed in
Schedule 4.03.
7.08 Continuation of or Change in Business. Neither the Borrower nor
-------------------------------------
any Subsidiary of the Borrower shall engage in any business other than the
information technology business or a business related thereto, and the Borrower
shall not permit any material change in such business.
7.09 Plans and Benefit Arrangements. The Borrower shall not, and
------------------------------
shall not permit any member of the ERISA Group to:
(a) fail to satisfy the minimum funding requirements of ERISA and
the Internal Revenue Code with respect to any Plan;
(b) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(c) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA, would
result in a Material Adverse Change;
(d) fail to make when due any contribution to any Multiemployer
Plan that the Borrower or any member of the ERISA Group may be required to make
under any agreement relating to such Multiemployer Plan, or any Law pertaining
thereto;
(e) withdraw (completely or partially) from any Multiemployer
Plan or be deemed under Section 4062(e) of ERISA to withdraw from any Multiple
---------------
Employer Plan, where any such withdrawal is likely to result in a material
liability of the Borrower or any member of the ERISA Group;
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(f) terminate, or institute proceedings to terminate, any Plan,
where such termination is likely to result in a material liability to the
Borrower or any member of the ERISA Group;
(g) make any amendment to any Plan with respect to which security
is required under Section 307 of ERISA; or
(h) fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code, where
such failure is likely to result in a Material Adverse Change.
7.10 Distributions to Shareholders. The Borrower shall not make any
------------------------------
distributions to any of its shareholders. No Subsidiary of the Borrower shall
enter into any agreement with any Person (other than the Lenders pursuant
hereto) which prohibits or limits the ability of such Subsidiary to make any
distribution to a Loan Party that is a shareholder of such Subsidiary.
7.11 Fiscal Year. Neither the Borrower nor any Subsidiary of the
-----------
Borrower shall change its Fiscal Year from a period beginning January 1 and
ending on the immediately succeeding December 31.
7.12 Changes in Organizational Documents. The Borrower shall not, and
-----------------------------------
shall not permit any other Loan Party to, amend in any respect its certificate
or articles of incorporation without providing at least ten (10) days' prior
written notice to the Agent and the Lenders and, in the event such change would
be materially adverse to the Lenders as determined by the Agent in its sole but
reasonable discretion, obtaining the prior written consent of the Required
Lenders.
7.13 Financial Covenants.
-------------------
(a) Minimum Consolidated Tangible Net Worth. The Borrower shall
---------------------------------------
not at any time permit its Consolidated Tangible Net Worth of the Borrower and
its Subsidiaries, measured as of the last day of each Fiscal Quarter, to be less
than an amount equal to the sum of $100,000,000.
(b) Minimum Cash and Cash Equivalents. The Borrower shall not
---------------------------------
permit the sum of the cash and Cash Equivalents of the Borrower and its
Subsidiaries to be less than $30,000,000 at any time.
(c) Maximum Leverage. The Borrower shall not at any time permit
-----------------
the Leverage Ratio, measured as of the last day of each Fiscal Quarter, to
exceed 0.5:1.0.
7.14 Change of Control. The Borrower shall not experience a Change of
------------------
Control; provided, that the expansion of the size of the Borrower's board of
--------
directors from five
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(5) to seven (7) members and the designation of new independent directors shall
not be deemed to be a Change of Control for purposes of this Section 7.14.
ARTICLE VIII
DEFAULT
-------
8.01 Events of Default. An "Event of Default" shall mean the
-----------------
occurrence or existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary or effected by
operation of Law):
(a) (i) The Borrower shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity, whether by acceleration or otherwise) when due, or (ii) the Borrower
shall fail to pay any Unreimbursed Letter of Credit Draw when due, or (iii) the
Borrower shall fail to pay any interest on any Loan, any Unreimbursed Letter of
Credit Draw, any Fee, or any other amount owing hereunder or under any other
Loan Documents after such interest, Fee or other amount becomes due in
accordance with the terms hereof or thereof;
(b) Any representation or warranty made at any time by the
Borrower herein or in any other Loan Document or by any other Loan Party in any
Loan Document executed by such Loan Party, or in any certificate, other
instrument or statement furnished pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading in any material respect as of the
time it was made or furnished;
(c) The Borrower shall default in the observance or performance
of any covenant contained in Section 6.08, Section 6.14 or Article VII hereof;
(d) The Borrower shall default in the observance or performance
of any other covenant, condition or provision hereof, or of any other Loan
Document or any other Loan Party shall default in the observance or performance
of any other covenant, condition or provision contained in any other Loan
Document executed by such Loan Party;
(e) A default or event of default shall occur at any time under
the terms of any agreements involving Indebtedness under which the Borrower or
any Subsidiary of the Borrower may be obligated as borrower, guarantor or
otherwise in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default causes the acceleration
of any such Indebtedness or such breach or default permits the acceleration of
any Indebtedness;
(f) Any judgments or orders for the payment of money in excess of
Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate shall be
entered
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against the Borrower or any of its Subsidiaries, by a court having jurisdiction
in the premises which judgments are not satisfied, discharged, vacated, bonded
or stayed pending appeal within a period of thirty (30) days from the respective
date of entry;
(g) Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof (except to the extent that
enforceability of any of the Loan Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors' rights generally or limiting the right of specific
performance) or shall in any way be terminated (except in accordance with terms)
or become or be declared ineffective or inoperative or shall in any way be
challenged or contested or cease to give or provide the respective rights,
titles, interests, remedies, powers or privileges intended to be created thereby
in all material respects;
(h) A notice of lien, levy or assessment in excess of Two Million
Five Hundred Thousand Dollars ($2,500,000) in the aggregate is filed of record
with respect to all or any part of the assets of the Borrower or a Subsidiary
Guarantor by the United States, or any department, agency or instrumentality
thereof, or by any state, county, municipal or other governmental agency,
including, without limitation, the PBGC, or if any taxes or debts in excess of
Two Million Five Hundred Thousand Dollars ($2,500,000) owing at any time or
times hereafter to any one of these becomes payable and the same is not paid
within thirty (30) days after the same becomes payable, or if such notice is
filed or such payment is not so made, unless the Borrower or such Subsidiary
Guarantor (i) contests such lien, assessment, tax or debt in good faith by
appropriate and lawful proceedings diligently conducted but only so long as such
proceedings could not subject the Agent, the Lenders or the Issuing Bank to any
criminal penalties, (ii) establishes such reserves or other appropriate
provisions, if any, as shall be required by GAAP and (iii) pays such Lien,
assessment, tax or debt in accordance with the terms of any final judgments or
orders relating thereto within thirty (30) days after the entry of such
judgments or orders;
(i) The Borrower or any other Loan Party ceases to be Solvent or
admits in writing its inability to pay debts as they mature; provided, however,
-------- -------
that the insolvency of any individual Subsidiary shall not constitute an Event
of Default under this Section 8.01(i) unless (A) the contribution of such
Subsidiary to Consolidated EBITDA on the Borrowers most recent consolidated
financial statements prior to the Closing Date for the most recent Fiscal
Quarter exceeded ten percent (10%) of Consolidated EBITDA for such Fiscal
Quarter, or (B) the contribution of such Subsidiary to Consolidated EBITDA, when
combined with the contributions to Consolidated EBITDA of any and all other
insolvent Subsidiaries for the same period, exceeds fifteen percent (15%) of
Consolidated EBITDA for such period;
(j) Any of the following occurs: (i) any Reportable Event, which
constitutes grounds for the termination of any Plan by the PBGC or the
appointment of a trustee to administer or liquidate any Plan, shall have
occurred and be continuing; (ii) proceedings shall have been instituted or other
action taken to terminate any Plan, or a termination notice shall
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have been filed with respect to any Plan; (iii) a trustee shall be appointed to
administer or liquidate any Plan; (iv) the PBGC shall give notice of its intent
to institute proceedings to terminate any Plan or Plans or to appoint a trustee
to administer or liquidate any Plan and, in the case of the occurrence of (i),
(ii), (iii) or (iv) of this Section 8.01(j), the amount of Borrower's liability
or the liability of the other members of the ERISA Group is likely to exceed
five percent (5%) of the Consolidated Net Worth; (v) the Borrower or any member
of the ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Borrower or any member of the ERISA Group shall
make any amendment to a Plan with respect to which security is required under
Section 307 of ERISA; (vii) the Borrower or any member of the ERISA Group shall
withdraw completely or partially from a Multiemployer Plan; (viii) the Borrower
or any member of the ERISA Group shall withdraw (or shall be treated under
Section 4062(e) of ERISA as having withdrawn) from a Multiple Employer Plan; or
(ix) any applicable Law is adopted, changed or interpreted by any Official Body
with respect to or otherwise affecting one or more Plans or Multiemployer Plans
and, with respect to any of the events specified in (v), (vi), (vii), (viii) or
(ix), any such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the other members of
the ERISA Group;
(k) The Borrower or any other Loan Party is enjoined, restrained
or in any way prevented by court order from conducting all or any material part
of its business and such injunction, restraint or other preventive order is not
stayed or dismissed within thirty (30) days after the entry thereof;
(l) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
the Borrower, or another Loan Party, in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or a receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator (or similar official) of the Borrower, or another Loan Party, for
any substantial part of such Person's property, or for the winding-up or
liquidation of such Person's affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding;
(m) The Borrower, or another Loan Party, shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay debts as
they become due, or shall take any action in furtherance of any of the
foregoing;
(n) any of the Loan Documents shall cease to be in full force and
effect or shall be declared to be null and void by a court of competent
jurisdiction; or
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(o) any garnishment proceeding concerning a sum in excess of Two
Million Five Hundred Thousand Dollars ($2,500,000) shall be instituted by
attachment, levy or otherwise, against any deposit account maintained by the
Borrower or another Loan Party with any Lender; or
(p) a Material Adverse Change shall occur.
8.02 Consequences of Event of Default.
--------------------------------
(a) If an Event of Default specified in any of items (a) through
(k) or item (n) or (o) of Section 8.01 shall occur and be continuing, the
Lenders shall be under no further obligation to make Loans hereunder, the
Issuing Bank shall be under no further obligation to issue or amend Letters of
Credit hereunder and the Agent may, and upon the request of the Required Lenders
shall, by written notice to the Borrower, terminate the Revolving Credit
Commitment and declare the unpaid principal amount of the Notes then outstanding
and all interest accrued thereon, any unpaid fees and all other Indebtedness of
the Borrower to the Lenders, the Agent and the Issuing Bank to be forthwith due
and payable, and the same shall thereupon become and be immediately due and
payable to the Agent for the benefit of each Lender, the Agent and the Issuing
Bank without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived; and
(b) If any Event of Default specified in item (l) or (m) of
Section 8.01 shall occur, the Lenders shall be under no further obligations to
make Loans hereunder, the Issuing Bank shall be under no further obligation to
issue or amend Letters of Credit hereunder, the Revolving Credit Commitment
shall be terminated and the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Lenders, the Agent and the Issuing Bank and
under the other Loan Documents shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; further, during the sixty (60) day period referred to in item
(l) the Lenders shall be under no further obligation to make Loans and the
Issuing Bank shall be under no further obligation to issue or amend Letters of
Credit; and
(c) If an Event of Default shall occur and be continuing, any
Lender, the Agent or the Issuing Bank to whom any obligation is owed by the
Borrower hereunder or under any other Loan Document, and any branch, subsidiary
or affiliate of such Lender, Agent or Issuing Bank anywhere in the world shall
each have the right, in addition to all other rights and remedies available to
it, without notice to the Borrower, to set-off against and apply to the then
unpaid balance of all the Loans and all other obligations of the Borrower
hereunder or under any other Loan Document, any debt owing to, and any other
funds held in any manner for the account of, the Borrower by such Lender, the
Agent or the Issuing Bank or by such branch, subsidiary or affiliate, including,
without limitation, all funds in all deposit accounts (whether time or demand,
general or special, provisionally credited or finally credited, or otherwise)
now or hereafter maintained by the Borrower for its own account (but not
including funds held in custodian or trust accounts) with such Lender, the Agent
or the Issuing Bank or such branch, subsidiary or affiliate. Such right shall
exist in each case whether or not any Lender, the Agent
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or the Issuing Bank shall have made any demand under this Agreement or any other
Loan Document, whether or not such debt owing to or funds held for the account
of the Borrower is or are matured or unmatured and regardless of the existence
or adequacy of any other security, right or remedy available to any Lender, the
Agent or the Issuing Bank; and
(d) In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents, the Agent, the Issuing
Bank and the Lenders shall have all of the rights and remedies of a creditor
under applicable Law, all of which rights and remedies shall be cumulative and
non-exclusive, to the extent permitted by Law. The Agent may, and upon the
request of the Required Lenders shall, exercise all post-default rights granted
to the Agent, the Issuing Bank and the Lenders under the Loan Documents or
applicable Law; and
(e) Upon the occurrence of any Event of Default described in the
foregoing Sections 8.01(l) or (m) or upon the declaration by the Required
Lenders of any other Event of Default and the termination of the Revolving
Credit Commitments, the obligation of the Issuing Bank to issue or amend Letters
of Credit shall terminate, the Issuing Bank or the Agent may provide written
demand to any beneficiary of a Letter of Credit to present a draft against such
Letter of Credit, and an amount equal to the maximum amount which may at any
time be drawn under the Letters of Credit then outstanding (whether or not any
beneficiary of such Letters of Credit shall have presented, or shall be entitled
at such time to present, the drafts or other documents required to draw under
the Letters of Credit) shall automatically become immediately due and payable,
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by the Borrower; provided that the foregoing
--------
shall not affect in any way the obligations of the Lenders to purchase from the
Issuing Bank participations in the unreimbursed amount of any drawings under the
Letters of Credit as provided in Section 2.18(c). So long as the Letters of
Credit shall remain outstanding, any amounts declared due pursuant to this
Section 8.02(e) with respect to the outstanding Letters of Credit when received
by the Agent shall be deposited and held by the Agent in an interest bearing
account denominated in the name of the Agent for the benefit of the Agent, the
Lenders and the Issuing Bank over which the Agent shall have sole dominion and
control of withdrawals (the "Letter of Credit Cash Collateral Account") as cash
collateral for the obligation of the Borrower to reimburse the Issuing Bank in
the event of any drawing under the Letters of Credit and upon any drawing under
such Letters of Credit in respect of which the Agent has deposited in the Letter
of Credit Cash Collateral Account any amounts declared due pursuant to this
Section 8.02(e), the Agent shall apply such amounts held by the Agent to
reimburse the Issuing Bank for the amount of such drawing. In the event that
any Letter of Credit in respect of which the Agent has deposited in the Letter
of Credit Cash Collateral Account any amounts described above is canceled or
expires or in the event of any reduction in the maximum amount available at any
time for drawing under the Letters of Credit outstanding, the Agent shall apply
the amount then in the Letter of Credit Cash Collateral Account designated to
reimburse the Issuing Bank for any drawings under the Letters of Credit less the
maximum amount available at any time for drawing under the Letters of Credit
outstanding immediately after such cancellation, expiration or reduction, if
any, to the payment in full of the outstanding Obligations, and second, to the
payment of any excess, to the Borrower.
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ARTICLE IX
THE AGENT
---------
9.01 Appointment and Grant of Authority. Each of the Lenders and the
----------------------------------
Issuing Bank hereby appoints PNC Bank, National Association, and PNC Bank,
National Association, hereby agrees to act, as the Agent under this Agreement
and the other Loan Documents. The Agent shall have and may exercise such powers
under this Agreement and the other Loan Documents as are specifically delegated
to it by the terms hereof or thereof, together with such other powers as are
incidental thereto. Without limiting the foregoing, the Agent, on behalf of the
Lenders and the Issuing Bank, is authorized to execute all of the Loan Documents
(other than this Agreement) and to accept all of the Loan Documents and all
other agreements, documents or instruments reasonably required to carry out the
intent of the parties to this Agreement.
9.02 Delegation of Duties. The Agent may perform any of its duties
--------------------
hereunder by or through agents or employees (provided such delegation does not
constitute a relinquishment of duties as the Agent hereunder) and, subject to
Sections 9.07 and 10.02, shall be entitled to engage and pay for the advice or
services of any attorneys, accountants, or other experts concerning all matters
pertaining to duties hereunder and to rely upon any advice so obtained.
9.03 Reliance by Agent on Lenders for Funding. Unless the Agent shall
----------------------------------------
have received notice from a Lender prior to any Borrowing Date that such Lender
shall not make available to the Agent such Lender's portion of net disbursements
of Loans, the Agent may assume that such Lender has made such portion available
to the Agent and the Agent may, in reliance upon such assumption, make Loans to
the Borrower. If and to the extent that such Lender has not made such portion
available to the Agent on or prior to any Borrowing Date, such Lender and the
Borrower severally agree to repay to the Agent immediately upon demand, in
immediately available funds, such unpaid amount, together with interest thereon
for each day from the applicable Borrowing Date until such amount is repaid to
the Agent, at (a) in the case of the Borrower, at the rate of interest then in
effect for such Loan and (b) in the case of such Lender, at the Federal Funds
Effective Rate. If such Lender shall repay to the Agent such corresponding
amount, such amount shall constitute a Loan made by such Lender for purposes of
this Agreement. The failure by any Lender to pay its portion of a Loan made by
the Agent shall not relieve any other Lender of the obligation to pay its
portion of net disbursements of Loans on any Borrowing Date, but no Lender shall
be responsible for the failure of any other Lender to make its net share of
Loans to be made by such other Lender on such Borrowing Date.
9.04 Non-Reliance on Agent. Each Lender and the Issuing Bank agree
---------------------
that (a) it has, independently and without reliance on the Agent, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and its Subsidiaries and decision to enter into this
Agreement and (b) that it shall, independently and without reliance upon the
Agent, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement. Except as otherwise provided herein or under
any other Loan Document, the Agent shall not have any duty to keep the Lenders
or the Issuing Bank informed
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as to the performance or observance by the Borrower of this Agreement or any
other document referred to or provided for herein or to inspect the properties
or books of the Borrower or any of its Subsidiaries. The Agent, in the absence
of gross negligence or willful misconduct, shall not be liable to any Lender or
the Issuing Bank for their failure to relay or furnish to the Lender any
information.
9.05 Responsibility of Agent and Other Matters.
-----------------------------------------
(a) Ministerial Nature of Duties. As between the Lenders, the
----------------------------
Issuing Bank and itself, the Agent shall not have any duties or responsibilities
except those expressly set forth in this Agreement or in the other Loan
Documents, and those duties and responsibilities shall be subject to the
limitations and qualifications set forth in this Article IX. The duties of the
Agent shall be ministerial and administrative in nature.
(b) Limitation of Liability. As between the Lenders, the Issuing
-----------------------
Bank and the Agent, neither the Agent nor any of its directors, officers,
employees or agents shall be liable, in the absence of gross negligence or
willful misconduct, for any action taken or omitted (whether or not such action
taken or omitted is within or without the Agent's responsibilities and duties
expressly set forth in this Agreement) under or in connection with this
Agreement or any other instrument or document in connection herewith. Without
limiting the foregoing, neither the Agent nor any of its directors, officers,
employees or its agents, shall be responsible for, or have any duty to examine
(i) the genuineness, execution, validity, effectiveness, enforceability, value
or sufficiency of (A) this Agreement or any of the other Loan Documents or (B)
any other document or instrument furnished pursuant to or in connection with
this Agreement, (ii) the collectability of any amounts owed by the Borrower to
the Agent, the Lenders or the Issuing Bank, (iii) the truthfulness of any
recitals or statements or representations or warranties made to the Agent or the
Lenders in connection with this Agreement, (iv) any failure of any party to this
Agreement to receive any communication sent, including any telegram, telex,
teletype, telecopy, bank wire, cable, or telephone message or any writing,
application, notice, report, statement, certificate, resolution, request, order,
consent letter or other instrument or paper or communication entrusted to the
mails or to a delivery service, or (v) the assets or liabilities or financial
condition or results of operations or business or creditworthiness of the
Borrower or any of its Subsidiaries.
(c) Reliance. The Agent shall be entitled to act, and shall be
--------
fully protected in acting upon, any telegram, telex, teletype, telecopy, bank
wire or cable or any writing, application, notice, report, statement,
certificate, resolution, request, order, consent, letter or other instrument or
paper or communication believed by the Agent in good faith to be genuine and
correct and to have been signed or sent or made by a proper Person. The Agent
may consult counsel and shall be entitled to act, and shall be fully protected
in any action taken in good faith, in accordance with advice given by counsel.
The Agent may employee agents and attorneys-in-fact and shall not be liable for
the default or misconduct of any such agents or attorneys-in-fact selected by
the Agent with reasonable care. The Agent shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the other Loan Documents on the part of
the Borrower.
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9.06 Actions in Discretion of Agent; Instructions from the Lenders.
-------------------------------------------------------------
The Agent agrees, upon the written request of the Required Lenders, to take or
refrain from taking any action of the type specified as being within the Agent's
rights, powers or discretion herein or under any Loan Documents, provided that
the Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or any other Loan
Document or applicable Law. In the absence of a request by the Required Lenders,
the Agent shall have authority, in its sole discretion, to take or not to take
any such action, unless this Agreement specifically requires the consent of the
Required Lenders or all of the Lenders. Any action taken or failure to act
pursuant to such instructions or discretion shall be binding on the Lenders and
the Issuing Bank, subject to Section 9.05(b) hereof. Subject to the provisions
of Section 9.05(b), no Lender shall have any right of action whatsoever against
the Agent as a result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders.
9.07 Indemnification. To the extent the Borrower does not reimburse
---------------
and save harmless the Agent according to the terms hereof for and from all
costs, expenses and disbursements in connection herewith, such costs, expenses
and disbursements, shall be borne by the Lenders ratably in accordance with
respective Lender's Ratable Share. Each Lender hereby agrees on such basis (a)
to reimburse the Agent for such Lender's Ratable Share of all such reasonable
costs, expenses and disbursements on request and (b) to the extent of each such
Lender's Ratable Share, to indemnify and save harmless the Agent against and
from any and all losses, obligations, penalties, actions, judgments and suits
and other costs, expenses and disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against the Agent, other than
as a consequence of gross negligence or willful misconduct on the part of the
Agent, arising out of or in connection with this Agreement, the other Loan
Documents or any other agreement, instrument or document in connection herewith
or therewith, or any request of the Required Lenders, including without
limitation the reasonable costs, expenses and disbursements in connection with
defending itself against any claim or liability related to the exercise or
performance of any of its powers or duties under this Agreement, the other Loan
Documents, or any of the other agreements, instruments or documents delivered in
connection herewith or the taking of any action under or in connection with any
of the foregoing.
9.08 Agent's Rights as Lender. With respect to the Revolving Credit
------------------------
Commitment of the Agent as Lender hereunder, any Loans of the Agent under this
Agreement, the Agent's Ratable Share of any Unreimbursed Letter of Credit Draws,
the participation as a Lender, and as to PNC Bank, as the Issuing Bank under
this Agreement the other Loan Documents and any other agreements, instruments
and documents delivered pursuant hereto, and the issuance of any Letter of
Credit under the terms hereof, the Agent shall have the same rights and powers,
duties and obligations under this Agreement, the other Loan Documents or any
other agreement, instrument or document as any Lender and may exercise such
rights and powers and shall perform such duties and fulfill such obligations as
though it were not the Agent. The Agent may accept deposits from, lend money to,
and generally engage, and continue to engage, in any kind of business with the
Borrower or any of its Subsidiaries.
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9.09 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of an Event of Default unless the Agent
has received written notice from a Lender or the Borrower referring to this
Agreement, describing such Event of Default and stating that such notice is a
"notice of default".
9.10 Payment to Lenders. Except as otherwise set forth in Section
------------------
9.03, promptly after receipt from the Borrower of any principal repayment of the
Loans or any Unreimbursed Letter of Credit Draw, interest due on the Loans or
any Unreimbursed Letter of Credit Draws, and any Fees (other than the
underwriting fee and the administration fee paid to the Agent and the Fronting
Fee paid to the Issuing Bank) or other amounts due under any of the Loan
Documents, the Agent shall distribute to each Lender that Lender's Ratable Share
of the funds so received except that funds received from the Borrower or another
Loan Party to reimburse the Issuing Bank for drawings on Letters of Credit
(other than a Lender's Ratable Share of such reimbursement payment to the extent
such Lender has complied fully with any funding obligations under Section
2.18(g)) or to fund any risk participant in the Letters of Credit or to pay the
Fronting Fee shall be paid solely for the account of Issuing Bank. If the Agent
fails to distribute collected funds received by 2:00 p.m. on any Business Day by
3:00 p.m. of such Business Day or collected funds received after 2:00 p.m. on
any Business Day by 3:00 p.m. the next Business Day the funds shall bear
interest until distributed at the Federal Funds Effective Rate. The Agent agrees
to make its best efforts to provide telephonic notice to each Lender that it is
in receipt of funds from the Borrower and the day on which it shall commence a
wire transfer of such Lender's share of such funds.
9.11 Holders of Notes. The Agent may deem and treat any payee of any
----------------
Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or consent is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note or Notes issued in exchange therefor.
9.12 Equalization of Lenders. Each borrowing and each payment or
-----------------------
prepayment by, or for the account of, the Borrower with respect to principal,
interest, Fees, or other amounts due from the Borrower hereunder to the Lenders
with respect to the Loans, shall (except as provided in Section 2.10, 2.12,
2.18(b) or 9.03) be made in proportion to the Loans outstanding from each Lender
or, if no such Loans are then outstanding, in proportion to the Ratable Share of
each Lender. Each payment of Unreimbursed Letter of Credit Draws shall be made
for the account of the Issuing Bank. The Lenders agree among themselves that,
with respect to all amounts received by any Lender (in its capacity solely as a
Lender) or any such holder for application on any obligation hereunder or under
any Note or under any such participation, whether received by voluntary payment,
by realization upon security, by the exercise of the right of set-off or
banker's lien, by counterclaim or by any other non-pro rata source, equitable
adjustment shall be made in the manner stated in the following sentence so that,
in effect, all such excess amounts shall be shared ratably among the Lenders and
such holders in proportion to their interest in payments under the Notes, except
as otherwise expressly provided herein. The Lenders or any such holder receiving
any such amount shall purchase for cash, from
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each of the other Lenders, an interest in such Lender's Loans in such amount as
shall result in a ratable participation by the Lenders and each such holder in
the aggregate unpaid amount under the Notes, provided that if all or any portion
of such excess amount is thereafter recovered from the Lender or the holder
making such purchase, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, together with interest or other
amounts, if any, required by Law (including court order) to be paid by the
Lender or the holder making such purchase.
9.13 Successor Agent. The Agent may resign as the Agent upon sixty
---------------
(60) days' written notice to the Lenders and the Borrower. If such notice shall
be given, the Lenders shall appoint from among the Lenders a successor agent for
the Lenders, during such 60-day period, which successor agent shall be
reasonably satisfactory to the Borrower, to serve as agent hereunder and under
the several documents, the forms of which are attached hereto as exhibits, or
which are referred to herein. If at the end of such 60-day period the Lenders
have not appointed such a successor, the Agent shall procure a successor
reasonably satisfactory to the Lenders and the Borrower, to serve as agent for
the Lenders hereunder and under the several documents, the forms of which are
attached hereto as exhibits, or which are referred to herein. Any such successor
agent shall succeed to the rights, powers and duties of the Agent. Upon the
appointment of such successor agent or upon the expiration of such 60-day period
(or any longer period to which the Agent has agreed), the former Agent's rights,
powers and duties as Agent shall be terminated, without any other or further act
or deed on the part of such former Agent or any of the parties to this
Agreement. After any retiring Agent's resignation hereunder as the Agent, the
provisions of this Article IX shall inure to the benefit of such retiring Agent
as to any actions taken or omitted to be taken by it while it was the Agent
under this Agreement.
9.14 Calculations. In the absence of gross negligence or willful
------------
misconduct, the Agent shall not be liable for any error in computing the amount
payable to any Lender whether in respect of the Loans, fees or any other amounts
due to the Lenders or the Issuing Bank under this Agreement. In the event an
error in computing any amount payable to any Lender or the Issuing Bank is made,
the Agent, the Borrower and each affected Person shall, forthwith upon discovery
of such error, make such adjustments as shall be required to correct such error,
and any compensation therefor shall be calculated at the Federal Funds Effective
Rate.
9.15 Beneficiaries. Except as expressly provided herein, the
-------------
provisions of this Article IX are solely for the benefit of the Agent, the
Lenders and the Issuing Bank, and the Borrower shall not have any rights to rely
on or enforce any of the provisions hereof. In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for the Borrower.
9.16 Additional Lenders. Any lender becoming a party to this
------------------
Agreement pursuant to Section 2.01 (c) hereof (each an "Additional Lender")
shall execute and deliver to the Administrative Agent a Lender Joinder, in
substantially the form attached hereto as Exhibit K. Upon execution and delivery
of the Lender Joinder, such Additional Lender will be a party
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hereto, such Additional Lender's signature page shall be attached hereto and
such Additional Lender shall have the rights and obligations of a Lender
hereunder for all purposes except that such Additional Lender's rights shall be
limited as more fully set forth in the Lender Joinder.
The Administrative Agent and the Borrower shall acknowledge each
Lender Joinder delivered pursuant to this Section 9.16 and provide copies to the
other Lenders. All Lender Joinders will be effective and binding on all the
Lenders.
ARTICLE X
GENERAL PROVISIONS
------------------
10.01 Amendments and Waivers. The Required Lenders, or the Agent with
----------------------
the consent in writing of the Required Lenders, and the Borrower may, subject to
the provisions of this Section 10.01, from time to time enter into written
supplemental agreements to this Agreement and the other Loan Documents for the
purpose of adding or deleting any provisions or otherwise changing, varying or
waiving in any manner the rights of the Lenders, the Agent or the obligor
thereunder or the conditions, provisions or terms thereof or waiving any Event
of Default thereunder or consenting to an action of any of the Borrower or any
of its Subsidiaries, but only to the extent specified in such written
agreements; provided, however, that no such supplemental agreement shall,
without the consent of all the Lenders:
(a) waive an Event of Default by the Borrower in any payment of
principal, interest, Fees or other amounts due hereunder and under any of the
other Loan Documents, or otherwise postpone any scheduled payment date of any of
the foregoing;
(b) reduce the interest rate relating to the Loans or change the
definition of the terms Base Rate, Applicable Euro-Rate Margin, Euro-Rate, Euro-
Rate Interest Period, Euro-Rate Reserve Percentage or Federal Funds Effective
Rate so as to decrease the interest rate relating to the Loans;
(c) change the definition of Borrowing Base;
(d) change the Expiration Date;
(e) reduce any Fee due the Lenders;
(f) increase the maximum principal amount of the Revolving
Credit Commitment of any Lender, or increase the Ratable Share of any Lender;
(g) change the definition of Required Lenders;
(h) release any Subsidiary Guarantor or any Collateral (other
than a through merger, sale or disposition permitted by Section 7.04 or 7.05);
or
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(i) amend or waive the provisions of this Section 10.01.
Any such supplemental agreement shall apply equally to each of the Lenders and
the Issuing Bank and shall be binding upon the Borrower, the Lenders, the Agent,
all future holders of the Notes and all Participants. In the case of any
waiver, the Borrower, the Lenders, the Issuing Bank, the Agent shall be restored
to its former position and rights, and any Event of Default waived shall be
deemed to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Event of Default, or impair any right consequent thereon.
10.02 Costs and Expenses, etc.
------------------------
(a) The Borrower shall:
(i) pay or reimburse the Agent for all reasonable out-of-
pocket costs and expenses incurred by the Agent in connection with (A) the
preparation, negotiation and execution of this Agreement, any other Loan
Documents or any instrument or document prepared in connection herewith or
therewith; (B) the completion of the Agent's "due diligence" permitted as a
condition of the closing; (C) the syndication efforts of the Agent with respect
to this Agreement and the commitments hereunder; and (D) the consummation of the
transactions contemplated hereby and thereby (including, without limitation, in
each case the reasonable fees and out-of-pocket expenses of the counsel to the
Agent as agreed in the Agent's Letter); and
(ii) reimburse the Agent, the Issuing Bank and each Lender
on demand for all reasonable out-of-pocket costs and expenses incurred by the
Agent, the Issuing Bank or such Lender in connection with the enforcement of or
preservation of any of its Liens, rights, powers, interests or remedies under
this Agreement or any other Loan Document (including, without limitation, in
each case the reasonable fees and out-of-pocket expenses of the respective
counsel to the Agent, the Issuing Bank and each Lender).
(b) All of such costs, expenses and indemnities shall be payable
by the Borrower to the Agent, the Lenders or the Issuing Bank as appropriate
upon demand or as otherwise agreed upon by the Agent, the Lenders or the Issuing
Bank as appropriate and the Borrower, and shall constitute Obligations under
this Agreement.
10.03 Notices.
-------
Any notice, request, demand, direction or other communication
(for purposes of this Section 10.03 only, a "Notice") to be given to or made
upon any party hereto under any provision of this Agreement shall be given or
made by telephone or in writing (which includes by means of electronic
transmission (i.e. "e-mail") or facsimile transmission or by setting forth such
Notice on a site on the World Wide Web (a "Website Posting") if Notice of such
Website Posting (including the information necessary to access such site) has
previously been delivered to the applicable parties hereto by another means set
forth in this Section 10.03) in accordance with this Section 10.03. Any such
Notice must be delivered to the applicable parties hereto at the addresses and
numbers set forth under their respective names on Schedule
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10.03 hereof or in accordance with any subsequent unrevoked Notice from any such
party that is given in accordance with this Section 10.03. Any Notice shall be
effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited
with the United States Postal Service, with first-class postage prepaid, return
receipt requested;
(c) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by hand delivery, a facsimile or electronic
transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
(e) In the case of electronic transmission, when actually
received;
(f) In the case of a Website Posting, upon delivery of the
Notice of such posting (including the information necessary to access such site)
by another means set forth in this Section 10.03; and
(g) If given by any other means (including overnight courier),
when actually received.
Any Lender giving a Notice to a Loan Party shall concurrently send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lender of
its receipt of such Notice.
10.04 Participation and Assignment.
----------------------------
(a) Sale of Participation.
---------------------
(i) Any Lender may, in the ordinary course of its commercial
lending business and in accordance with applicable law, and without the consent
of the Borrower, at any time sell to one or more Participants (which
Participants may be Affiliates of such Lender) Participations in the Revolving
Credit Commitment of such Lender or any Loan, the Note, or other interest of
such Lender hereunder. In the event of any such sale of a Participation, such
Lender's obligations under this Agreement to the Borrower shall remain
unchanged, such Lender shall remain solely responsible for its performance under
this Agreement, such Lender shall remain the holder of the Note made payable to
it for all purposes under this Agreement (including all voting rights hereunder)
and the Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents.
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(ii) As between a Participant and that Participant's
selling Lender only, the sole issues on which the Participant shall have a
contractual right to vote are: (A) an increase in such Lender's Revolving Credit
Commitment, (B) any change of the term Base Rate, Euro-Rate, Euro-Rate Reserve
Percentage, or Applicable Euro-Rate Margin so as to decrease the interest rate
relating to the Loans, (C) postponement of the scheduled payment of principal,
interest or Fees due under any of the Loan Documents, or (D) release of any
collateral.
(iii) In the case of any participation, no additional
amounts payable under Section 2.19 shall be in excess of that which would have
been payable in the absence of such participation.
(b) Assignments. Subject to the remaining provisions of this
-----------
Section 10.04(b), any Lender may at any time, in the ordinary course of its
commercial lending business, in accordance with applicable law, sell to one or
more Purchasing Lenders (which Purchasing Lender may be affiliates of the
Transferor Lender), all or a portion of its rights and obligations under this
Agreement and the Note then held by it, pursuant to an Assignment and Assumption
Agreement substantially in the form of Exhibit A and satisfactory to the Agent,
executed by the Transferor Lender, such Purchasing Lender, the Agent and the
Borrower; subject, however to the following requirements:
(i) The Agent, and, so long as no Event of Default has
occurred and is continuing, the Borrower, must each give its prior consent to
any such assignment which consent shall not be unreasonably withheld; it being
agreed that it shall not be deemed unreasonable for the Borrower to decline to
consent to such assignment if (A) such assignment would result in incurrence of
additional costs to the Borrower under Section 2.10, 2.11 or 2.12, or (B) the
proposed assignee has not provided to the Borrower any tax forms required under
Section 2.19(e); provided, however, no consent is required for the transfer by a
-------- -------
Lender to its Affiliate so long as the conditions in clauses (A) and (B)
immediately above are satisfied;
(ii) Each such assignment must be in a minimum amount of
$5,000,000, or, if in excess of $5,000,000, in integral multiples of $1,000,000;
(iii) each such assignment shall be of a constant, and not a
varying, percentage of the Transferor Lender's Revolving Credit Commitment,
outstanding Loans and all other rights and obligations under this Agreement and
the other Loan Documents; and
(iv) The Transferor Lender shall pay to the Agent, for its
own Account, a fee of $3,500 for each such assignment (the "Assignment Fee").
Upon the execution, delivery, acceptance and recording of any such Assignment
and Assumption Agreement, from and after the Transfer Effective Date determined
pursuant to such Assignment and Assumption Agreement, (x) the Purchasing Lender
thereunder shall be a party hereto as a
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Lender and, to the extent provided in such Assignment and Assumption Agreement,
shall have the rights and obligations of a Lender hereunder with a Revolving
Credit Commitment as set forth therein, and (y) the Transferor Lender thereunder
shall, to the extent provided in such Assignment and Assumption Agreement, be
released from its obligations under this Agreement as a Lender. Such Assignment
and Assumption Agreement shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender as a Lender and the resulting adjustment of Ratable Share arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such Transferor Lender under this Agreement and the Notes. On or
prior to the Transfer Effective Date, the Borrower shall execute and deliver to
the Agent, in exchange for the surrendered Note held by the Transferor Lender, a
new Note to the order of such Purchasing Lender in an amount equal to the
Revolving Credit Commitment assumed by it and purchased by it pursuant to such
Assignment and Assumption Agreement, and a Note to the order of the Transferor
Lender in an amount equal to the Revolving Credit Commitment retained by it
hereunder.
(c) Assignment Register. The Agent shall maintain at its address
-------------------
referred to in Schedule 10.03 a copy of each Assignment and Assumption Agreement
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the amount of the Loans owing to each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent, the Lender and the
Issuing Bank may treat each Person whose name is recorded in the Register as the
owner of the Loans recorded therein for all purposes of this Agreement. The
Register shall be available at the office of the Agent for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Assignments to Federal Reserve Bank. In addition to the
-----------------------------------
assignments permitted above, any Lender may assign and pledge all or any portion
of its Loans and Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations and duties
hereunder or under the other Loan Documents.
10.05 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Borrower and the Agent, the Lenders, the Issuing Bank and their respective
successors and assigns, and shall inure to the benefit of the Borrower, the
Agent, the Lenders, the Issuing Bank and respective successors and assigns;
provided, however, that the Borrower shall not assign its rights or duties
-------- -------
hereunder or under any of the other Loan Documents without the prior written
consent of the Lenders.
10.06 No Implied Waivers; Cumulative Remedies; Writing Required. No
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course of dealing and no delay or failure of the Agent or any Lender in
exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege.
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The rights and remedies of the Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Lender of any breach or
default under this Agreement or any such waiver of any provision or condition of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.
10.07 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or enforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
10.08 Indemnity. The Borrower hereby agrees to indemnify the Agent,
---------
the Lenders, the Issuing Bank, and the directors, officers, employees,
attorneys, agents and Affiliates of all of the foregoing (each of the foregoing
an "Indemnified Person") against, and hold each of them harmless from, any loss,
liabilities, damages, claims, costs and expenses (including reasonable
attorneys' fees and disbursements) suffered or incurred by any Indemnified
Person (except those caused by such Indemnified Person's gross negligence or
willful misconduct, ) arising out of, resulting from or in any manner connected
with, the execution, delivery and performance of each of the Loan Documents, the
Obligations and any and all transactions related to or consummated in connection
with the Obligations, including, without limitation, losses, liabilities,
damages, claims, costs and expenses suffered or incurred by any Indemnified
Person arising out of or related to investigating, preparing for, defending
against, or providing evidence, producing documents or taking any other action
in respect of any commenced or threatened litigation, administrative proceeding
or investigation under any Federal securities law or by any Official Body of any
jurisdiction, or at common law or otherwise, that is alleged to arise out of or
is based on (a) any untrue statement or alleged untrue statement of any material
fact of the Borrower or any Affiliate of the Borrower in any document or
schedule filed with the Securities and Exchange Commission or any other Official
Body, (b) any omission or alleged omission to state any material fact required
to be stated in such document or schedule, or necessary to make the statements
made therein, in light of the circumstances under which made, not misleading;
(c) any actual or alleged acts, practices or omissions of the Borrower, any
other Loan Party, or any of their respective directors, officers, partners,
employees, attorneys, agents or Affiliates, related to the making of any
acquisition, purchase of shares or assets pursuant thereto, financing of such
purchases or the consummation of any other transactions contemplated by any such
acquisitions that are alleged to be in violation of any Federal securities law
or of any other statute, regulation or other law of any jurisdiction applicable
to the making of any such acquisition, the purchase of shares or assets pursuant
thereto, the financing of such purchases or the consummation of the other
transactions contemplated by any such acquisition; or (d) any withdrawals,
termination or cancellation of any such proposed acquisition for any reason
whatsoever. The indemnity set forth in this Section 10.08 shall be in addition
to any other obligations or liabilities of the Borrower to the Agent, the
Lenders or the Issuing Bank, or at common law or otherwise. The provisions of
this Section 10.08 shall survive the payment of the Obligations and the
termination of this Agreement and the other Loan Documents.
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10.09 Confidentiality. The Agent, the Lenders and the Issuing Bank
---------------
shall keep confidential and not disclose to any Person, other than to their
respective directors, officers, employees, Affiliates and agents, and to actual
and potential Purchasing Lenders and Participants, all non-public information
concerning the Borrower and the Borrower's Affiliates which comes into the
possession of the Agent, the Lenders or the Issuing Bank during the term hereof.
Notwithstanding the foregoing, the Agent, the Lenders and the Issuing Bank may
disclose information concerning the Borrower (a) in accordance-with normal
banking practices and the Agent's, such Lender's or the Issuing Bank's policies
concerning disclosure of such information in connection with syndication or
sales of Participations, subject to informing the recipient of such information
of the duties of confidentiality hereunder, (b) pursuant to what the Agent, such
Lender or the Issuing Bank believes to be the lawful requirements or request of
any Official Body regulating banks or banking, (c) as required by governmental
regulation or rule, judicial process or subpoena; provided however, if permitted
by law, the Agent, or such Lender shall notify the Borrower and permit the
Borrower, at the Borrower's cost, to contest such subpoena; and (d) to their
respective attorneys, accountants and auditors who have been informed of the
confidentiality hereunder.
10.10 Survival. All representations, warranties, covenants and
--------
agreements of the Borrower contained herein or in the other Loan Documents or
made in writing in connection herewith shall survive the issuance of the Notes
and the Letters of Credit and shall continue in full force and effect so long as
the Borrower may borrow hereunder and so long thereafter until payment in full
of all the Notes and the Obligations is made. The obligations of the Borrower
under Sections 2.13, 2.19, 2.21, 6.13, 10.02, 10.03 and 10.08 shall survive the
termination of this Agreement and the discharge of the other obligations of the
Borrower hereunder, and any other Loan Documents, and shall also survive the
payment in full of all Obligations, the termination of the Revolving Credit
Commitment in accordance with the provisions of this Agreement and the
termination or expiration of all Letters of Credit in accordance with their
respective terms.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
-------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, EXCEPTING APPLICABLE FEDERAL LAW AND EXCEPT ONLY TO THE EXTENT
PRECLUDED BY THE MANDATORY APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
10.12 FORUM. THE PARTIES HERETO AGREE THAT ANY ACTION OR PROCEEDING
-----
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS TO
WHICH THE BORROWER IS A PARTY MAY BE COMMENCED IN THE COURT OF COMMON PLEAS OF
ALLEGHENY COUNTY, PENNSYLVANIA OR IN XXX XXXXXXXX XXXXX XX XXX XXXXXX XXXXXX FOR
THE WESTERN DISTRICT OF PENNSYLVANIA, AND THE PARTIES HERETO AGREE THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN EITHER OF SUCH
COURTS SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED
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PERSONALLY OR BY CERTIFIED MAIL TO THE PARTIES AT THEIR ADDRESSES SET FORTH IN
SECTION 10.03, OR AS OTHERWISE PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA. FURTHER, THE BORROWER HEREBY SPECIFICALLY CONSENTS TO THE PERSONAL
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, PENNSYLVANIA AND
THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF PENNSYLVANIA
AND WAIVES AND HEREBY ACKNOWLEDGES THAT IT IS ESTOPPED FROM RAISING ANY
OBJECTION BASED ON FORUM NON CONVENIENS, ANY CLAIM THAT EITHER SUCH COURT LACKS
PROPER VENUE OR ANY OBJECTION THAT EITHER SUCH COURT LACKS PERSONAL JURISDICTION
OVER THE BORROWER SO AS TO PROHIBIT EITHER SUCH COURT FROM ADJUDICATING ANY
ISSUES RAISED IN A COMPLAINT FILED WITH EITHER SUCH COURT AGAINST THE BORROWER
BY THE AGENT, THE LENDERS OR THE ISSUING BANK CONCERNING THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR PAYMENT TO THE LENDERS. THE BORROWER HEREBY ACKNOWLEDGES
AND AGREES THAT THE CHOICE OF FORUM CONTAINED IN THIS SECTION 10.12 SHALL NOT BE
DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN ANY FORUM OR THE
TAKING OF ANY ACTION UNDER THE LOAN DOCUMENTS TO ENFORCE THE SAME IN ANY
APPROPRIATE JURISDICTION.
10.13 Non-Business Days. Whenever any payment hereunder or under the
-----------------
Notes is 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
each such case be included in computing interest in connection with such
payment.
10.14 Integration. This Agreement and the other Loan Documents
-----------
constitute the entire agreement between the parties relating to this financing
transaction and they supersede all prior understandings and agreements, whether
written or oral, between the parties hereto relating to the transactions
provided for herein.
10.15 Counterparts. This Agreement and any amendment hereto may be
------------
executed in several counterparts and by each party on a separate counterpart,
each of which, when so executed and delivered, shall be an original, but all of
which together shall constitute but one and the same instrument. In proving this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by the other party against whom enforcement is sought.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be as effective as delivery of a manually executed counterpart
of this Agreement.
10.16 Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
(a) Notional Funding. Each Lender shall have the right from
----------------
time to time, without notice to the Borrower, to deem any branch, subsidiary or
affiliate (which for the purposes of this Section 10.16 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or
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association which directly or indirectly controls such Lender) of such Lender to
have made, maintained or funded any Loan in Dollars or in any Optional Currency
to which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrower to
such other office) and as a result of such change the Borrower would not be
under any greater financial obligation to such Lender hereunder, pursuant to
Section 2.08, 2.10, 2.11 or 2.12 than it would have been in the absence of such
change. Notional funding offices may be selected by each Lender without regard
to a Lender's actual methods of making, maintaining or funding the Loans or any
sources of funding actually used by or available to such Lender.
(b) Actual Funding. Each Lender shall have the right from time
--------------
to time to make or maintain any Loan by arranging for a branch, subsidiary or
affiliate of such Lender to make or maintain such Loan subject to the last
sentence of this Section 10.16(b). If any Lender causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loans were made or maintained by such Lender but in no event shall any Lender's
use of such a branch, subsidiary or affiliate to make or maintain any part of
the Loans hereunder cause such Lender or such branch, subsidiary or affiliate to
incur any cost or expenses payable by the Borrower hereunder or require the
Borrower to pay any other compensation to any such Lender (including, without
limitation, any expenses incurred or payable pursuant to Section 2.08, 2.10,
2.11 or 2.12) which would otherwise not be incurred.
10.17 WAIVER OF JURY TRIAL. THE BORROWER, EACH LENDER, THE AGENT, THE
--------------------
SWING LOAN LENDER AND THE ISSUING BANK EACH HEREBY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE
BORROWER, THE LENDERS, THE AGENT, THE SWING LOAN LENDER, THE ISSUING BANK OR ANY
OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND
THINGS ARISING OUT OF THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Credit Agreement to be executed by their respective
duly authorized officers as of the date first written above.
WITNESS: iGATE CAPITAL CORPORATION, a
Pennsylvania corporation
___________________________ By:___________________________________ (SEAL)
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
PNC BANK, NATIONAL ASSOCIATION,
in its capacities as Agent, Swing Loan
Lender and Issuing Bank and as a Lender
By:___________________________________ (SEAL)
Name:
Title:
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