Exhibit 10.14
$60,000,000 SENIOR UNSECURED REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
CUNO INCORPORATED, as Borrower
and
THE BANKS PARTY HERETO
and
MELLON BANK, N.A., as Agent
Dated as of October 31, 1996
TABLE OF CONTENTS
Article Page
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1. CERTAIN DEFINITIONS...................................................... 1
1.1 Certain Definitions................................................ 1
1.2 Construction....................................................... 17
1.2.1 Number; Inclusion........................................... 17
1.2.2 Determination............................................... 17
1.2.3 Agent's Discretion and Consent.............................. 17
1.2.4 Documents Taken as a Whole.................................. 17
1.2.5 Headings.................................................... 17
1.2.6 Implied References to this Agreement........................ 17
1.2.7 Persons..................................................... 18
1.2.8 Modifications to Documents.................................. 18
1.2.9 From, To and Through........................................ 18
1.2.10 Shall; Will................................................ 18
1.3 Accounting Principles.............................................. 18
2. REVOLVING CREDIT FACILITY................................................ 18
2.1 Commitments........................................................ 18
2.1.1 Revolving Credit Commitments................................ 18
2.1.2 Swing Loans Commitment...................................... 19
2.2 Nature of Banks' Obligations with Respect to Revolving
Credit Loans....................................................... 19
2.3 Commitment Fees.................................................... 19
2.4 Voluntary Reduction of Revolving Credit Commitments................ 20
2.4.1 General Requirements........................................ 20
2.4.2 Collateral for Letter of Credit Outstandings................ 20
2.5 Loan Requests...................................................... 21
2.5.1 Revolving Credit Loan Requests.............................. 21
2.5.2 Swing Loan Request.......................................... 21
2.6 Making Loans....................................................... 22
2.6.1 Making Revolving Credit Loans............................... 22
2.6.2 Making Swing Loans.......................................... 22
2.7 Borrowings to Repay Swing Loans.................................... 22
2.8 Notes.............................................................. 23
2.8.1 Revolving Credit Notes...................................... 23
2.8.2 Swing Loan Note............................................. 23
2.9 Use of Revolving Credit Proceeds................................... 23
2.10 Letters of Credit Subfacility..................................... 23
2.10.1 Issuance of Letters of Credit.............................. 23
2.10.2 Participations............................................. 24
2.10.3 Letter of Credit Fees...................................... 24
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2.10.4 Disbursements, Reimbursement................................ 25
2.10.5 Documentation............................................... 25
2.10.6 Determinations to Honor Drawing Requests.................... 25
2.10.7 Nature of Participation and Reimbursement Obligations....... 26
2.10.8 Indemnity................................................... 27
2.10.9 Liability for Acts and Omissions............................ 27
3. INTEREST RATES............................................................ 28
3.1 Interest............................................................ 28
3.1.1 Interest Rate Options........................................ 29
3.2 Interest Periods.................................................... 29
3.2.1 Ending Date and Business Day................................. 29
3.2.2 Amount of Borrowing Tranche.................................. 30
3.2.3 Termination Before Expiration Date........................... 30
3.2.4 Renewals..................................................... 30
3.3 Interest After Default.............................................. 30
3.3.1 Letters of Credit Fees, Interest Rate........................ 30
3.3.2 Other Obligations............................................ 30
3.3.3 Acknowledgment............................................... 30
3.4 Euro-Rate Unascertainable........................................... 31
3.4.1 Unascertainable.............................................. 31
3.4.2 Illegality; Increased Costs; Deposits Not Available.......... 31
3.4.3 Agent's and Bank's Rights.................................... 31
3.5 Selection of Interest Rate Options.................................. 32
4. PAYMENTS.................................................................. 32
4.1 Payments............................................................ 32
4.2 Pro Rata Treatment of Banks......................................... 33
4.3 Interest Payment Dates.............................................. 33
4.4 Voluntary Prepayments............................................... 34
4.4.1 Right to Prepay.............................................. 34
4.5 Mandatory Reduction of Commitments; Mandatory Payments and
Prepayments....................................................... 35
4.5.1 Qualified Note Placement..................................... 35
4.6 Additional Compensation in Certain Circumstances.................... 35
4.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc....... 35
4.6.2 Indemnity.................................................... 36
4.7 Settlement Date Procedures.......................................... 37
4.8 Interbank Market Presumption........................................ 38
4.9 Taxes............................................................... 38
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4.9.1 No Deductions............................................... 38
4.9.2 Stamp Taxes................................................. 38
4.9.3 Indemnification for Taxes Paid by a Bank.................... 39
4.9.4 Certificate................................................. 39
4.9.5 Survival.................................................... 39
5. REPRESENTATIONS AND WARRANTIES........................................... 39
5.1 Representations and Warranties..................................... 39
5.1.1 Organization and Qualification.............................. 39
5.1.2 Subsidiary and Joint Venture Matters........................ 40
5.1.3 Power and Authority......................................... 40
5.1.4 Validity and Binding Effect................................. 40
5.1.5 No Conflict................................................. 41
5.1.6 Litigation.................................................. 41
5.1.7 Title to Properties......................................... 41
5.1.8 Financial Statements........................................ 41
5.1.9 Margin Stock................................................ 43
5.1.10 Full Disclosure............................................ 43
5.1.11 Taxes...................................................... 43
5.1.12 Consents and Approvals..................................... 43
5.1.13 No Event of Default; Compliance with Instruments........... 44
5.1.14 Patents, Trademarks, Copyrights, Licenses, Etc............. 44
5.1.15 Insurance.................................................. 44
5.1.16 Compliance with Laws....................................... 44
5.1.17 Material Contracts......................................... 45
5.1.18 Investment Companies....................................... 45
5.1.19 Plans and Benefit Arrangements............................. 45
5.1.20 Employment Matters......................................... 47
5.1.21 Environmental Matters...................................... 47
5.1.22 Senior Debt Status......................................... 49
5.1.23 Solvency................................................... 49
5.1.24 Schedule of Indebtedness................................... 50
5.1.25 Material Adverse Change.................................... 50
5.2 Updates to Schedules............................................... 50
6. CONDITIONS OF LENDING.................................................... 50
6.1 First Revolving Credit Loans....................................... 50
6.1.1 Officer's Certificate....................................... 50
6.1.2 Secretary's Certificate..................................... 51
6.1.3 Delivery of Loan Documents.................................. 51
6.1.4 Opinions of Counsel......................................... 51
6.1.5 Legal Details............................................... 52
6.1.6 Payment of Fees and Reimbursement of Expenses............... 52
6.1.7 Consents.................................................... 52
6.1.8 Officer's Certificate Regarding MACs........................ 52
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6.1.9 No Violation of Laws........................................ 52
6.1.10 No Actions or Proceedings.................................. 52
6.1.11 Insurance Policies; Certificates of Insurance.............. 53
6.1.12 Termination of Existing Debt............................... 53
6.1.13 Solvency Certificate....................................... 53
6.2 Each Additional Loan or Letter of Credit Issuance.................. 53
6.3 Syndication........................................................ 54
6.3.1 Syndication Representation and Warranties................... 54
6.3.2 Syndication Documents....................................... 54
6.3.3 Syndication Cooperation..................................... 54
7. COVENANTS................................................................ 55
7.1 Affirmative Covenants.............................................. 55
7.1.1 Preservation of Existence, Etc.............................. 55
7.1.2 Payment of Liabilities, Including Taxes, Etc................ 55
7.1.3 Maintenance of Insurance.................................... 55
7.1.4 Maintenance of Properties and Leases........................ 56
7.1.5 Maintenance of Patents, Trademarks, Etc..................... 56
7.1.6 Visitation Rights........................................... 56
7.1.7 Keeping of Records and Books of Account..................... 56
7.1.8 Plans and Benefit Arrangements.............................. 57
7.1.9 Compliance with Laws........................................ 57
7.1.10 Use of Proceeds............................................ 57
7.1.11 Subordination of Intercompany Loans........................ 57
7.1.12 Post-Closing Matters....................................... 57
7.1.13 Payment of Intercompany Obligations Related to Intertech... 58
7.1.14 Interest Rate Protection................................... 58
7.2 Negative Covenants................................................. 58
7.2.1 Indebtedness................................................ 58
7.2.2 Liens; Further Negative Pledges............................. 59
7.2.3 Guaranties.................................................. 60
7.2.4 Loans and Investments....................................... 60
7.2.5 Dividends and Related Distributions......................... 61
7.2.6 Liquidations, Mergers, Consolidations, Acquisitions......... 62
7.2.7 Dispositions of Assets or Subsidiaries...................... 63
7.2.8 Affiliate Transactions...................................... 65
7.2.9 Subsidiaries, Partnerships and Joint Ventures............... 65
7.2.10 Continuation of or Change in Business...................... 66
7.2.11 Plans and Benefit Arrangements............................. 66
7.2.12 Fiscal Year................................................ 67
7.2.13 Issuance of Stock.......................................... 67
7.2.14 Changes in Organizational Documents........................ 67
7.2.15 Minimum Fixed Charge Coverage Ratio........................ 68
7.2.16 Maximum Leverage Ratio..................................... 68
7.2.17 Minimum Consolidated Net Worth............................. 68
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7.2.18 Amendments to Certain Documents............................ 68
7.2.19 No Prepayment of Existing Indebtedness..................... 68
7.3 Reporting Requirements............................................. 69
7.3.1 Quarterly Financial Statements.............................. 69
7.3.2 Annual Financial Statements................................. 69
7.3.3 Certificate of the Borrower................................. 70
7.3.4 Notice of Default........................................... 70
7.3.5 Notice of Litigation........................................ 70
7.3.6 Budgets, Forecasts, Other Reports and Information........... 70
7.3.7 Notices Regarding Plans and Benefit Arrangements............ 71
8. DEFAULT.................................................................. 73
8.1 Events of Default.................................................. 73
8.1.1 Payments Under Loan Documents............................... 73
8.1.2 Breach of Warranty.......................................... 73
8.1.3 Breach of Negative Covenants and Sections 7.1.12 or 7.1.14.. 73
8.1.4 Breach of Other Covenants................................... 74
8.1.5 Defaults in Other Agreements or Indebtedness................ 74
8.1.6 Final Judgments or Orders................................... 74
8.1.7 Loan Document Unenforceable................................. 75
8.1.8 Notice of Lien or Assessment................................ 75
8.1.9 Insolvency.................................................. 75
8.1.10 Events Relating to Plans and Benefit Arrangements.......... 75
8.1.11 Cessation of Business...................................... 76
8.1.12 Change of Control.......................................... 76
8.1.13 Involuntary Proceedings.................................... 76
8.1.14 Voluntary Proceedings...................................... 77
8.1.15 Material Adverse Change.................................... 77
8.2 Consequences of Event of Default................................... 77
8.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings................................ 77
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings........ 77
8.2.3 Set-off..................................................... 78
8.2.4 Suits, Actions, Proceedings................................. 78
8.2.5 Application of Proceeds..................................... 78
8.2.6 Other Rights and Remedies................................... 79
9. THE AGENT................................................................ 79
9.1 Appointment........................................................ 79
9.2 Delegation of Duties............................................... 80
9.3 Nature of Duties; Independent Credit Investigation................. 80
9.4 Actions in Discretion of Agent; Instructions from the Banks........ 80
9.5 Reimbursement and Indemnification of Agent by the Borrower......... 81
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9.6 Exculpatory Provisions............................................. 81
9.7 Reimbursement and Indemnification by Banks of the Agent............ 82
9.8 Reliance by Agent.................................................. 82
9.9 Notice of Default.................................................. 83
9.10 Notices........................................................... 83
9.11 Banks in Their Individual Capacities.............................. 83
9.12 Holders of Notes.................................................. 83
9.13 Equalization of Banks............................................. 84
9.14 Successor Agent................................................... 84
9.15 Other Fees........................................................ 85
9.16 Availability of Funds............................................. 85
9.17 Calculations...................................................... 85
9.18 Beneficiaries..................................................... 85
10. MISCELLANEOUS........................................................... 86
10.1 Modifications, Amendments or Waivers.............................. 86
10.1.1 Increase of Revolving Credit Commitments; Extension of
Expiration Date.......................................... 86
10.1.2 Extension of Payment; Reduction of Principal, Interest or
Fees; Modification of Terms of Payment................... 86
10.1.3 Release of Guarantor....................................... 86
10.1.4 Miscellaneous.............................................. 86
10.2 No Implied Waivers; Cumulative Remedies; Writing Required......... 87
10.3 Reimbursement and Indemnification of Banks by the Borrower;
Taxes........................................................... 87
10.4 Holidays.......................................................... 88
10.5 Funding by Branch, Subsidiary or Affiliate........................ 88
10.5.1 Notional Funding........................................... 88
10.5.2 Actual Funding............................................. 89
10.5.3 Changes to Other Branches, Subsidiaries or Affiliates...... 89
10.6 Notices........................................................... 89
10.7 Severability...................................................... 90
10.8 Governing Law..................................................... 90
10.9 Prior Understanding............................................... 90
10.10 Duration; Survival............................................... 90
10.11 Successors and Assigns........................................... 91
10.12 Confidentiality.................................................. 92
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10.13 Counterparts..................................................... 92
10.14 Agent's or Bank's Consent........................................ 92
10.15 Exceptions....................................................... 93
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL........................... 93
10.17 Tax Withholding Clause........................................... 93
10.18 Joinder of Subsidiaries.......................................... 94
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS
SCHEDULE 1.1(P)(1) - EXISTING DEPOSITORY INSTITUTIONS
SCHEDULE 1.1(P)(2) - PERMITTED LIENS
SCHEDULE 5.1.1 - SUBSIDIARIES
SCHEDULE 5.1.2 - SUBSIDIARY MATTERS
SCHEDULE 5.1.6 - LITIGATION
SCHEDULE 5.1.12 - CONSENTS AND APPROVALS
SCHEDULE 5.1.19 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.1.21 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 5.1.24 - INDEBTEDNESS
SCHEDULE 6.1.4 - COUNSEL TO LOAN PARTIES
SCHEDULE 7.1.12 - POST-CLOSING MATTERS
SCHEDULE 7.2.4 - LOANS AND INVESTMENTS
SCHEDULE 7.2.8 - AFFILIATE TRANSACTIONS
EXHIBITS
EXHIBIT 1.1(A)(1) - FORM OF CLOSING DATE CERTIFICATE
EXHIBIT 1.1(A)(2) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(I) - FORM OF INTERCOMPANY NOTE
EXHIBIT 1.1(M)(1) - FORM OF MASTER GUARANTY AGREEMENT
EXHIBIT 1.1(M)(2) - FORM OF MASTER INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(R) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)(1) - FORM OF SWING LOAN NOTE
EXHIBIT 1.1(S)(2) - FORM OF SYNDICATION ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 2.5.1 - FORM OF REVOLVING CREDIT LOAN REQUEST
EXHIBIT 2.5.2 - FORM OF SWING LOAN REQUEST
EXHIBIT 2.9.1 - FORM OF APPLICATION AND AGREEMENT FOR LETTERS OF CREDIT
EXHIBIT 6.1.4 - OPINION OF COUNSEL
EXHIBIT 7.2.6 - FORM OF TRANSACTION NOTICE CERTIFICATE
EXHIBIT 7.3.3 - FORM OF COMPLIANCE CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of October 31, 1996 and is made by
and among CUNO INCORPORATED, a Delaware corporation (the "Borrower"), the BANKS
(as hereinafter defined), and MELLON BANK, N.A., in its capacity as Agent.
WITNESSETH:
WHEREAS, the Borrower has requested a revolving credit facility in an
aggregate principal amount of $60,000,000, including a $20,000,000 sublimit for
letters of credit and a $5,000,000 sublimit for swingline loans; and
WHEREAS, the Banks are willing to provide such credit facilities upon
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Acquisition shall mean the acquisition of a 50% or greater direct
and/or indirect ownership interest by merger, purchase or otherwise of all or
substantially all of the stock or other equity interests or assets of any other
Person or of any division or Subsidiary of a Person which constitutes a
"reportable industry segment" or "class of similar products" of an industry
segment (as such term is defined in Item 101(c) of Regulation S-K promulgated
under the Securities Act of 1933 and the Securities Exchange Act of 1934).
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting or other equity interests of which is beneficially owned or
held, directly or indirectly, by such Person. Control, as used in this
definition, 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.
Agent shall mean Mellon Bank, N.A., in its capacity as agent and
its successors and assigns.
Agent's Fee shall have the meaning assigned to that term in
Section 9.15.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Applicable Margin, with respect to the Revolving Credit Loans,
the Commitment Fees payable under Section 2.3 and Letters of Credit Fees payable
under Section 2.10.3 shall mean the rate specified for such Obligation below,
subject to adjustment as hereinafter provided:
Applicable Margin
When the Status For Eurodollar Applicable Margin
Below Exists Applicable Margin Loans and Standby For Documentary Applicable Margin
For Base Rate Letters of Credit Letters of Credit For Commitment
Loan Is: Fees Is: Fees Is: Fee Is:
---------------- ----------------- ----------------- -----------------
Level I Status 0% .25% .375% .10%
Level II Status 0% .375% .375% .125%
Level III Status 0% .50% .375% .15%
Level IV Status 0% .625% .375% .20%
Level V Status 0% .75% .375% .25%
For purposes of determining the Applicable Margin:
(a) The Applicable Margin shall be determined on the Closing Date
based on the Leverage Ratio computed on such date pursuant to a certificate in
the form of Exhibit 1.1(A)(1) to be delivered on the Closing Date.
(b) The Applicable Margin shall be recomputed as of the end of
each fiscal quarter ending after the Closing Date and on the closing date of
each transaction under Sections 7.2.6 or 7.2.7 which is conditioned upon the
delivery of a Transaction Notice Certificate, based on the Leverage Ratio
computed as required by this Agreement under the relevant circumstances. Any
increase or decrease in the Applicable Margin computed as of a quarter end shall
be effective on the date on which the Compliance Certificate under Section 7.3.3
or the Transaction Notice Certificate under Section 7.2.6 or 7.2.7 evidencing
such computation is due to be delivered.
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Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among an "Assignor" and an "Assignee" (each as
defined therein) and the Agent on behalf of the other Banks, substantially in
the form of Exhibit 1.1(A)(2).
Authorized Officer shall mean those individuals, designated by
written notice to the Agent from the Borrower, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder.
The Borrower may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a "Bank".
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
1/2% per annum.
Base Rate Option shall mean the Revolving Credit Base Rate Option
or the Swing Loan Base Rate Option.
Base Net Worth shall mean, as of any date of determination, the
sum of (A) 80% of the Consolidated Net Worth as of October 31, 1996, plus (B)
50% of the cash proceeds received after October 31, 1996 by the Borrower from
any issuance by the Borrower of capital stock of the Borrower after deducting
expenses incurred in connection with such issuance plus (C) 50% of consolidated
net income of the Borrower and its Subsidiaries for each fiscal year after 1996
in which net income was earned (as opposed to a net loss). Interim
determinations made during the second, third and fourth quarters of each fiscal
year shall include 50% of year to date consolidated net income of the Borrower
and its Subsidiaries during such fiscal year through the last day of the
immediately preceding fiscal quarter. The foregoing shall be determined in
accordance with GAAP, but without currency translation adjustments required by
FAS 52.
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 CUNO Incorporated, a corporation organized
and existing under the laws of the State of Delaware.
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.
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Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) Loans to which a Revolving Credit Euro-Rate Option
applies by reason of the selection of, conversion to or renewal of such Interest
Rate Option on the same day and having the same Interest Period shall constitute
one Borrowing Tranche, (ii) Loans with respect to which the Revolving Credit
Base Rate Option applies by reason of the selection of or conversion to such
Interest Rate Option shall constitute one Borrowing Tranche, (iii) Loans with
respect to which the Swing Loan Base Rate Option applies by reason of the
selection of or conversion to such Interest Rate Option shall constitute one
Borrowing Tranche and (iv) Loans with respect to which the Swing Loan Quoted
Rate Option applies by reason of the selection of or conversion to such Interest
Rate Option shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania or New York, New York, and, if
the applicable Business Day relates to any Loan to which the Revolving Credit
Euro-Rate Option applies, such day must also be a day on which dealings in
Dollar deposits are carried on in the London interbank market.
Capitalized Lease shall mean any lease of Property by a Person as
lessee which is a capital lease in accordance with GAAP.
Closing Date shall mean the Business Day on which the first Loan
shall be made, which shall be October 31, 1996, or, if all of the conditions
specified in Section 6.1 have not been satisfied or waived by such date, not
later than November 29, 1996, as designated by the Borrower at least three
Business Days' advance notice to the Agent at its Principal Office, or such
other date as the parties agree. The closing shall take place at 10:00 a.m.,
Pittsburgh time, on the Closing Date at the offices of Xxxxxxxx Xxxxxxxxx
Professional Corporation, Pittsburgh, Pennsylvania, or at such other time and
place as the parties agree.
Commitment Fee shall have the meaning assigned to that term in
Section 2.3.
Consideration shall mean (A) with respect to any Acquisition, the
aggregate of (i) the cash paid by the Borrower or any of its Subsidiaries,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by the Borrower or any of its Subsidiaries
(including Indebtedness owed by any target which is a Subsidiary immediately
after the Acquisition), whether in favor of the seller or otherwise and whether
fixed or contingent, (iii) any Guaranty (other than of Indebtedness described in
clause (ii) above) given or incurred by the Borrower or any of its Subsidiaries
in connection therewith and (iv) the present value of any other consideration
(including stock or other securities issued by the Borrower or any of its
Subsidiaries) given or obligation incurred by the Borrower or any of its
Subsidiaries in connection therewith; and (B) with respect to any disposition of
assets, the aggregate of (i) the cash paid to the Borrower or any of its
Subsidiaries, (i) any Indebtedness of the Borrower or any of its Subsidiaries
assumed by the purchaser and (iii) the present value of any other consideration
received by the Borrower or any of its Subsidiaries in connection therewith.
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Consolidated Capital Expenditures means, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including that portion of Capitalized Leases which is capitalized on a
consolidated balance sheet of the Borrower and its Subsidiaries) by the Borrower
and its Subsidiaries during that period that, in conformity with GAAP, are
required to be included in or reflected in the property, plant or equipment or
similar fixed asset accounts reflected on a consolidated balance sheet of the
Borrower and its Subsidiaries. Any amount which is included in any period as an
accrual shall not be duplicated in any calculation at the time payment thereof
is actually made to the extent included in such prior accrual.
Consolidated EBITDA for any period of determination shall mean an
amount equal to the sum of (i) the net income (excluding income (or loss) of any
Person in which any of the Borrower or its Subsidiaries has an equity interest
of 50% or less, except to the extent of the amount of dividends or other
distributions actually paid in cash by such Person to any of the Borrower or its
Subsidiaries during such period) for such period plus (ii) interest expense in
respect of Indebtedness to the extent deducted in determining net income for
such period ("Interest Expense"), plus (iii) the provision for domestic and
foreign taxes for such period based on income or profits to the extent such
income or profits were included in computing net income for such period, plus
(iv) depreciation deducted in determining net income for such period, plus (v)
amortization deducted in determining net income for such period, plus (vi) only
with respect to the Borrower's 1996 and 1997 fiscal years, expense to the extent
deducted in determining net income for such period in respect of fees and costs
which were incurred in connection with the Tender Offer and the Spin-Off
(provided, that no such expense described in this clause (vi) shall be added to
determine Consolidated EBITDA for any period of determination if the aggregate
expense for that period of determination together with all expense included in
determining net income in all periods prior to the period of determination for
all such fees and costs would exceed $6,000,000), in each case of the Borrower
and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP; provided, however, there shall be excluded from the
foregoing computation (A) all non-cash extraordinary income, gains and losses
for such period and (B) all gains or losses from the sale of assets not sold in
the ordinary course of business for such period, to the extent (A) or (B) were
included in net income under the foregoing clause (i) for such period.
Consolidated Funded Indebtedness as of any date of determination
shall mean the aggregate of any and all indebtedness, obligations or liabilities
of the Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP for or in respect of: (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations under (A) any letter of credit drawn
upon and not reimbursed within the time period required, or (B) under any
currency swap agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device (net of any payments made to the Borrower
under any of the foregoing interest rate management devices), (iv) any other
transaction (including forward sale or purchase agreements, capitalized leases
(but not operating leases) and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to
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finance its operations or capital requirements (but not including trade
payables, trade credits and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or other evidence of
indebtedness and which are not more than sixty (60) days past due), or (v) any
Guaranty (without duplication) of any liability described in the foregoing
clauses (i) through (iv).
Consolidated Income Tax Expense for any period of determination
shall be equal to the consolidated income tax expense (domestic and foreign) of
the Borrower and its Subsidiaries in respect of their consolidated net income
for such period.
Consolidated Interest Expense for any period of determination
shall be equal to the Interest Expense of the Borrower and its Subsidiaries as
determined in clause (ii) of the definition of the term "Consolidated EBITDA"
for such period on a consolidated basis determined in accordance with GAAP, less
any amortization of fees and costs which were incurred and paid in a period
prior to the period of determination in connection with the Tender Offer and the
Spin-Off to the extent included in Interest Expense for such period.
Consolidated Net Worth shall mean as of any date of determination
total stockholders' equity of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP, but without currency
translation adjustments required by FAS 52.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
Domestic Subsidiary shall mean any Subsidiary of Borrower other
than a Foreign Subsidiary and Domestic Subsidiaries shall mean more than one
Domestic Subsidiary.
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 or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, 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
-6-
consent decrees issued, or entered into, pursuant thereto, relating to pollution
or protection of human health or the environment or employee safety in the
workplace.
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,
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-Rate shall mean with respect to the Loans comprising any
Borrowing Tranche to which the Revolving Credit Euro-Rate Option applies for any
Interest Period, the interest rate per annum determined by the Agent by dividing
(the resulting quotient rounded upward to the nearest 1/16 OF 1% per annum) (I)
the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates set forth on the "LIBO" page
of the Reuters Monitor Money Rate Service (or appropriate successor) or, if
Reuters or its successor ceases to provide such quotes, a comparable replacement
determined by the Agent, at approximately 11:00 a.m. London time two (2)
Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a maturity comparable to such
Interest Period by (II) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates on LIBO
page of Reuters Monitor Money
Euro-Rate = Rate Service or appropriate successor
--------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Revolving Credit 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.
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: (i) 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;
-7-
and (ii) to be maintained by a Bank as required for reserve liquidity, special
deposit, or a similar purpose by any governmental or monetary authority of any
country or political subdivision thereof (including any central bank), against
(A) any category of liabilities that includes deposits by reference to which a
Euro-Rate is to be determined, or (B) any category of extension of credit or
other assets that includes Loans or Borrowing Tranches to which a Euro-Rate
applies.
Event of Default shall mean any of the events described in
Section 8.1.
Executive Officer shall mean as to any designated Person a
natural Person who constitutes an executive officer of such designated Person
for purposes of item 401(b) of Regulation S-K promulgated under the Securities
Act of 1933 and the Securities Exchange Act of 1934.
Expiration Date shall mean, with respect to the Revolving Credit
Commitments, the fifth anniversary of the date of this Agreement.
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 of which such rate was announced.
Fixed Charge Coverage Ratio shall mean on any date of
determination, the ratio of (i) Consolidated EBITDA minus Consolidated Capital
Expenditures to (ii) the sum of Consolidated Interest Expense plus Consolidated
Income Tax Expense, with such ratio determined as of the end of each fiscal
quarter commencing on October 31, 1996, for the four fiscal quarters ended on
the date of determination.
Foreign Subsidiary means any Subsidiary of Borrower that (i) is
formed under the laws of a jurisdiction other than the United States, any state
of the United States, the District of Columbia or any territory or possession of
the United States and (ii) maintains the major portion of its assets outside of
the United States and Foreign Subsidiaries means more than one Foreign
Subsidiary.
Form 10 shall mean the Borrower's Form 10 filed with the
Securities and Exchange Commission on July 29, 1996, as amended.
-8-
GAAP shall mean generally accepted accounting principles as are
in effect in the United States from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.
Governmental Acts shall have the meaning assigned to that term in
Section 2.10.8.
Guarantor shall mean each Domestic Subsidiary of the Borrower.
Guarantor Joinder shall mean a joinder to the Master Guaranty
Agreement as provided in the Master Guaranty Agreement.
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 (whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent or joint or several), including any agreement to indemnify or hold
harmless any other Person, 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
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any (A) standby letter of creditor or (B) currency swap
agreement, interest rate swap, cap, collar or floor agreement or other interest
rate management device (net of any payments made to the Borrower under any of
the foregoing interest rate management devices), (iv) any other transaction
(including forward sale or purchase agreements, capitalized leases (but not
operating 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, trade credits and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than sixty (60) days past due), or (v) any Guaranty of the Indebtedness
described in the foregoing clauses (i) through (iv). For purposes of any
calculation of an aggregate amount of Indebtedness, any Guaranty of Indebtedness
shall be excluded to the extent the underlying Indebtedness to which such
Guaranty relates is included in such calculation, and vice versa.
Insolvency Proceeding shall mean, with respect to any Person, (a)
any case, action or proceeding with respect to such Person (i) before any court
or any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Borrower or any of its Subsidiaries or otherwise
relating to liquidation, dissolution, winding-up or relief of such Person, or
(b) any
-9-
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors, undertaken
under any Law.
Intercompany Loans shall mean loans made by one Loan Party to one
or more other Loan Parties or their Subsidiaries and, in the case of loans
between the Borrower and the Material Subsidiaries, evidenced by Intercompany
Notes.
Intercompany Notes shall mean the notes, in the form attached
hereto as Exhibit 1.1(I), executed by each of the Material Subsidiaries in favor
of the Borrower pursuant to which such Material Subsidiary evidences such
Material Subsidiary's obligations to the Borrower.
Interest Payment Date shall mean each date specified for the
payment of interest in Section 4.3.
Interest Period shall have the meaning assigned to such term in
Section 3.2.
Interest Rate Option shall mean any Revolving Credit Euro-Rate
Option, Swing Loan Quoted Rate Option or 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.
Intertech shall mean Commercial Intertech Corp., an Ohio
corporation which until the Spin-Off owned all of the capital stock of the
Borrower.
Joint Venture shall mean any corporation, partnership, limited
liability company, joint venture, or any other entity in which the Borrower
owns, directly or indirectly, 50% of the Control (as such term is defined in the
definition of "Affiliate").
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.
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.
Letter of Credit shall have the meaning assigned to that term in
Section 2.10.1.
-10-
Letter of Credit Outstandings shall mean collectively at any time the
sum of: (i) the aggregate undrawn face amount of all Letters of Credit and,
without duplication, (ii) all unpaid and outstanding Reimbursement Obligations.
Letters of Credit Fees shall have the meaning assigned to that
term in Section 2.10.3.
Level I Status shall mean that the Leverage Ratio is less than
1.5 to 1.0.
Level II Status shall mean that the Leverage Ratio is greater
than or equal to 1.5 to 1.0 and less than 2.0 to 1.0.
Level III Status shall mean that the Leverage Ratio is greater
than or equal to 2.0 to 1.0 and less than 2.5 to 1.0.
Level IV Status shall mean that the Leverage Ratio is greater
than or equal to 2.5 to 1.0 and less than 3.0 to 1.0.
Level V Status shall mean that the Leverage Ratio is greater than
or equal to 3.0 to 1.0.
Leverage Ratio shall mean at any time of determination the ratio of
Consolidated Funded Indebtedness on the relevant date to the Consolidated EBITDA
for the relevant four fiscal quarters. For purposes of the foregoing, the
Consolidated EBITDA for a given four fiscal quarter period shall be calculated
on an historic pro forma basis which includes (in the case of an acquisition) or
excludes (in the case of a disposition) the financial results of each
transaction with respect to which a Transaction Notice Certificate was required
pursuant to Section 7.2.6 or Section 7.2.7, in each case as if such
transaction described in this sentence had occurred on the first day of such
four quarter fiscal period. When the Leverage Ratio is being determined in
connection with the delivery of a Transaction Notice Certificate, the numerator
shall be Consolidated Funded Indebtedness as of the last day of the Month
preceding the relevant transaction date (adjusting to such date for any changes
in the amount of any Indebtedness for borrowed money under lines of credit
(excluding overdraft facilities), revolving credit facilities or term loans) and
the denominator shall be the Consolidated EBITDA for the four consecutive fiscal
quarters ending on the last day of the most recently ended fiscal quarter of the
Borrower prior to such transaction date for which financial statements have
become due pursuant to Section 7.3.1 or Section 7.3.2 (provided that for this
purpose, the due date of the annual financial statements required under Section
7.3.2 shall be deemed to be 60 days after the end of the fiscal year). When
the Leverage Ratio is being determined for purposes of each certificate required
pursuant Section 7.3.3, the numerator shall be Consolidated Funded Indebtedness
on the last day of the fiscal quarter or fiscal year end to which it relates and
the denominator shall be the Consolidated EBITDA for the four consecutive fiscal
quarters ending on the same date.
-11-
Leverage Ratio Status shall be on any date of determination any of
Level I Status, Level II Status, Level III Status, Level IV Status, or Level V
Status, based on the Leverage Ratio of the Loan Parties on such date.
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 any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having 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).
Loan Documents shall mean this Agreement, the Master Guaranty
Agreement, the Master Intercompany Subordination Agreement, the Notes, the
Intercompany Notes, and any other instruments, certificates or documents
delivered or contemplated to be delivered hereunder or thereunder or in
connection herewith or therewith, as 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 collectively the Borrower and the Guarantors
and Loan Party shall mean separately any one of them.
Loans shall mean collectively the Revolving Credit Loans and Swing
Loans and Loan shall mean separately any of the Loans.
Master Guaranty Agreement shall mean the Master Guaranty and
Suretyship Agreement in substantially the form of Exhibit 1.1(M)(1) or in such
other form as is acceptable to the Agent in its sole discretion, in all cases
executed and delivered by the Guarantors to the Agent for the benefit of the
Banks.
Master Intercompany Subordination Agreement shall mean a subordination
agreement among the Loan Parties in the form attached hereto as Exhibit
1.1(M)(2).
Material Adverse Change shall mean any circumstance or event or set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
this Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Loan Parties
taken as a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Loan Parties TAKEN AS A WHOLE TO DULY AND
PUNCTUALLY PAY OR PERFORM THEIR INDEBTEDNESS, OR (D) IMPAIRS MATERIALLY OR COULD
REASONABLY BE EXPECTED TO IMPAIR MATERIALLY THE ABILITY OF THE AGENT OR ANY OF
THE BANKS, TO THE EXTENT PERMITTED, TO ENFORCE THEIR LEGAL REMEDIES PURSUANT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
-12-
Material Subsidiary shall mean any Subsidiary of the Borrower having
at least 5% of the total consolidated assets of the Borrower and its
Subsidiaries or at least 5% of the total consolidated revenues of the Borrower
and its Subsidiaries for the 12-month period ending on the last day of the most
recent fiscal quarter of the Borrower.
Mellon shall mean Mellon Bank, N.A., its successors and assigns.
Month, with respect to an Interest Period under the Revolving Credit
Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period begins on a day of a calendar month
for which there is no numerically corresponding day in the month in which such
Interest Period is to end, the final month of such Interest Period shall be
deemed to end on the last Business Day of such final month.
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 the Revolving Credit Notes and Swing
Notes and Note shall mean separately any of the Notes.
Notices shall have the meaning assigned to that term in Section 10.6.
Obligation 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, the Master Guaranty Agreement, the Letters of Credit 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.
-13-
Participation Advance shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Section 2.10.4.
PBGC shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
Permitted Cash Equivalent Investments shall mean readily marketable:
(i) direct obligations of the United States of America or
any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in six (6) MONTHS OR LESS
FROM THE DATE OF ACQUISITION;
(ii) commercial paper maturing in six (6) months or less
rated not lower than "A-1" by Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc. or "P-1" by Xxxxx'x Investors Service, Inc. on
the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within six (6) months which (x) are held by any domestic or
foreign commercial bank which has capital and surplus in excess of $500,000,000
or the relevant foreign currency equivalent, or by a domestic commercial bank,
the holding company of which has obligations rated not lower than "A-1" by
Standard & Poor's Ratings Services, a division of the McGraw Hill Companies,
Inc. or "P-1" by Xxxxx'x Investors Service, Inc. on the date of acquisition, (y)
are deposited, held or issued, as applicable, by a financial institution
reasonably and prudently chosen by the Borrower, provided the aggregate amount
of any such deposits at any such institution shall not exceed $500,000 (or the
relevant foreign currency equivalent) at any one time or (z) are listed on
Schedule 1.1(p)(1);
(iv) repurchase obligations of any commercial bank described
in clause (iii) above with a term of not more than seven days for underlying
securities of the type described in clause (i) above; and
(v) investments in mutual funds which invest exclusively in
obligations of the type described in clauses (i) through (iv) above.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) 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
-14-
workmen's compensation, unemployment insurance, old-age pensions or other social
security programs;
(iii) 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 and payable or
in default;
(iv) Good-faith 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
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens and security interests in favor of the Agent for
the benefit of the Banks in the application for a Letter of Credit;
(vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party or other interest or title of the lessor under
operating leases securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;
(viii) Any Lien or rights or restrictions with respect
thereto existing on the date of this Agreement and described on Schedule
1.1(P)(2), provided that the principal amount secured thereby is not hereafter
increased (although it may be refinanced), and no additional assets become
subject to such Lien, other than additions or accessions to the assets which are
subject to such Lien or any replacements of any such assets acquired in the
ordinary course of business;
(ix) Purchase Money Security Interests to the extent that
(X) such Purchase Money Security Interests attach to inventory purchased in the
ordinary course of business pursuant to customary payment terms and are not
perfected by the filing of financing statements or other public filings or (Y)
the aggregate amount of loans and deferred payments secured by Purchase Money
Security Interests not described in the foregoing clause (X) do not exceed at
any one time outstanding $5,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P)(2));
(x) Liens relating to the licensing by Borrower, the other
Loan Parties or their Subsidiaries of intellectual property;
-15-
(xi) The following (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (B) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry or (C) if payments thereof are covered in full
(subject to customary deductibles) by an insurance company of reputable standing
which insurance company has acknowledged that the applicable policy applies to
the following and is not reserving any right to contest applicability, and in
any case they do not in the aggregate, materially impair the ability of any Loan
Party to perform its Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges by the
United States, or any department, agency or instrumentality thereof,
or by any state, county, municipal or other governmental agency,
including the PBGC, due and payable and subject to interest or
penalty, provided that the applicable Loan Party maintains such
reserves or other appropriate provisions as shall be required by GAAP
and pays all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to,
real or personal property, including any attachment of personal or
real property or other legal process prior to adjudication of a
dispute on the merits;
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens;
(xii) Liens granted by the Japanese Foreign Subsidiary in
its accounts receivable to Japanese commercial banks to secure Indebtedness
incurred in the ordinary course of business by such Japanese Subsidiary for
working capital in Japan;
(xiii) additional Liens securing Indebtedness not to exceed
at any time an amount equal to 5% of Consolidated Net Worth;
(xiv) Liens in the nature of a lease entered into as part of
a sale/leaseback transaction;
(xv) Liens on assets of a Person which exist on the date
such Person becomes the subject of an Acquisition by the Borrower or any of its
Subsidiaries, provided that the same (A) do not attach to assets of such Person
having a value in excess of 10% of the aggregate value of all assets of such
Person acquired as part of the Acquisition, as such value is reflected on the
books of such Person as of the date of consummation of such Acquisition, (B)
secure only Indebtedness owed by such Person immediately prior to the
Acquisition and (C) were not originated in anticipation of such Acquisition; and
-16-
(xvi) Liens created in connection with the refinancing of
any Indebtedness which relates to any of the Liens described in this definition
of Permitted Liens, subject, however to the proviso set forth in clause (viii)
of this definition of Permitted Liens.
Person shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, joint
venture, limited liability company, 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 (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) 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.
Potential Default shall mean any event or condition which with notice,
passage of time or a determination by the Agent or the Required Banks, or any
combination of the foregoing, would constitute an Event of Default.
Principal Office shall mean the main banking office of the Agent in
Pittsburgh, Pennsylvania at the address shown on the signature page hereto.
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 all real property and fixtures, both owned and
leased, of the Borrower or any Subsidiary.
Purchase Money Security Interest shall mean any Liens upon real or
personal property to the extent the same secures no obligation other than (i)
loans to the Borrower or Subsidiary of the Borrower the proceeds of which were
used to acquire such property or (ii) payments owed by the Borrower or
Subsidiary constituting the balance of the purchase price for such property.
Qualified Investments shall have the meaning assigned to that
term in Section 7.2.6
Qualified Note Placement shall mean a private or public placement of
senior unsecured notes issued by the Borrower after the Closing Date, having
terms acceptable to the Agent and which in the judgment of the Agent (i) has an
average life longer than the then remaining unexpired term of the Revolving
Credit Commitments; and (ii) has covenants that are
-17-
no more restrictive than those under this Agreement; provided that the proceeds
thereof are applied to reduce the Revolving Credit Commitments by the amount of
the financing raised.
Qualified Survivor shall mean a Person which is the surviving entity
following any acquisition of capital stock or merger, provided such surviving
Person (i) after giving effect to such acquisition of capital stock or merger
has a net worth equal to or greater than the net worth of the entities which
were the subject of such acquisition of capital stock or merger and (ii) assumes
or continues to perform, as applicable, all Obligations under the Loan Documents
to which each was a party prior to such acquisition of capital stock or merger,
and (iii) after the transaction (other than one in which the Borrower survives)
is a Subsidiary of the Borrower.
Ratable Share shall mean at any time of determination:
(i) prior to the earlier of the Expiration Date or the termination of
all of the Revolving Credit Commitments hereunder pursuant to Section 8.2.1 or
8.2.2, the proportion that a Bank's Revolving Credit Commitment bears to the
Revolving Credit Commitments of all of the Banks; and
(ii) thereafter, the proportion that the sum of a Bank's Loans and
Letter of Credit Outstandings outstanding at such time bears to the total
principal amount of all of the Loans and Letter of Credit Outstandings then
outstanding.
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 and coproducts,
impurities, dust, scrap, and heavy metals defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic substance,"
"extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous
waste," "industrial waste," "residual waste," "solid waste," "municipal waste,"
"mixed waste," "infectious waste," "chemotherapeutic 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.
Regulation U shall mean Regulation U, T, G or X as promulgated by the
Board of Governors of the Federal Reserve System, as amended from time to time.
Reimbursement Obligation shall have the meaning assigned to such term
in Section 2.10.4.
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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 Banks shall mean at any time of determination:
(i) prior to the earlier of the Expiration Date or a termination of
all of the Revolving Credit Commitments hereunder pursuant to Section 8.2.1 or
8.2.3, Banks, whose Revolving Credit Commitments aggregate at least 66% of
the total amount of all Revolving Credit Commitments at such time; and
(ii) thereafter, Banks whose Loans and Letter of Credit Outstandings
outstanding at such time aggregate at least 66 2/3% of the total principal
amount of all of the Loans and Letter of Credit Outstandings then outstanding.
Letter of Credit Outstandings shall be deemed, for purposes of this definition,
to be in favor of the Agent and not a participating Bank if such Bank has not
made its Participation Advance in respect thereof and shall be deemed to be in
favor of such Bank to the extent of its Participation Advance if it has made its
Participation Advance in respect thereof.
Revolving Credit Base Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 3.1.1(i).
Revolving Credit Commitment shall mean, as to any Bank at any time the
amount initially set forth opposite its name on Schedule 1.1(B) (as amended from
time to time pursuant to Section 11.11 of this Agreement) in the column labeled
"Revolving Credit Commitment" as the same may have been reduced in accordance
with Section 2.4 AND REVOLVING CREDIT COMMITMENTS SHALL MEAN THE AGGREGATE
REVOLVING CREDIT COMMITMENTS OF ALL OF THE BANKS.
Revolving Credit Euro-Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 3.1.1(ii).
Revolving Credit Loan Request shall have the meaning ascribed
thereto assigned to that term in Section 2.5.1
Revolving Credit Loans shall mean collectively and Revolving Credit
Loan shall mean separately all loans or any loan made by the Banks or one of the
Banks to the Borrower pursuant to Section 2.1 or 2.10.4.
Revolving Credit Notes shall mean collectively and Revolving Credit
Note shall mean separately all the Revolving Credit Notes of the Borrower in the
form attached
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hereto as Exhibit 1.1(R) evidencing the Revolving Credit Loans together with all
amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the then
outstanding Revolving Credit Loans and Letter of Credit Outstandings.
Settlement Date shall mean each Thursday of each week and each date on
which the Agent elects to effectuate settlement pursuant to Section 4.7.
Solvent shall mean, with respect to any Person on a particular date,
that on such date (i) 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, (ii) the present fair saleable value of the assets
(including general intangibles) of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (iii) 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, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) 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 will 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.
Spin-Off shall mean the dividend distribution by Intertech to its
shareholders of all of the outstanding shares of capital stock of the Borrower
to the shareholders of Intertech which occurred on September 10, 1996.
Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which more than 50% (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, any partnership of which such Person is a general partner or any
partnership or limited liability company of which such Person is a limited
partner or member, respectively, and as to which more than 50% of the
partnership interests or membership interests are at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries, or
(ii) any corporation, trust, partnership, limited liability company or other
entity which is controlled or capable of being controlled by such Person and/or
one or more of such Person's Subsidiaries.
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Swing Loan Base Rate Option shall mean the option of the Borrower to
have Swing Loans bear interest at the rate and under the terms and conditions
set forth in Section 3.1.1
Swing Loan Commitment shall mean Mellon's commitment to make Swing
Loans to the Borrower pursuant to Section 2.1.2 hereof in an aggregate
principal amount up to but not in excess of $5,000,000.
Swing Loan Quoted Rate Option shall mean the option of the Borrower to
have Swing Loans bear interest at the rate and under the terms and conditions
set forth in Section 3.1.1
Swing Loan Request shall mean a request for Swing Loans made in
accordance with Section 2.5.2 hereof.
Swing Note shall mean the Swing Loan Note of the Borrower in the form
of Exhibit 1.1(S)(1) evidencing the Swing Loans, together with all extensions,
renewals, refinancings or refundings thereof in whole or in part.
Swing Loans shall mean collectively and Swing Loan shall mean
separately all Swing Loans or any Swing Loan made by Mellon to the Borrower
pursuant to Section 2.1.2 hereof.
Syndication Assignment and Assumption Agreement shall mean a
Syndication Assignment and Assumption Agreement by and among the "Assignees" and
Mellon Bank, N.A. as the "Assignor" (each as defined therein) and the Agent,
substantially in the form of Exhibit 1.1(S)(2).
Syndication Date shall mean a date after the Closing Date selected by
the Agent and notice of which is given by the Agent to the Borrower at least
five (5) Business Days prior thereto.
Tender Offer shall mean the July, 1996 offer by United Dominion, Inc.
to Intertech's shareholders to purchase any and all shares of the common stock
of Intertech.
Transaction Notice Certificate shall mean any Transaction Notice
Certificate referred to in Section 7.2.6 or 7.2.7.
1.2 Construction.
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:
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1.2.1 Number; Inclusion.
References to the plural include the singular, the plural, the part
and 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";
1.2.2 Determination.
References to "determination" of or by the Agent or the Banks shall be
deemed to include good-faith estimates by the Agent or the Banks (in the case of
quantitative determinations) and good-faith beliefs by the Agent or the Banks
(in the case of qualitative determinations) and such determination shall be
conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
Whenever the Agent or the Banks 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;
1.2.4 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;
1.2.5 Headings.
The section and other headings contained in this Agreement or such
other Loan Document and the Table of Contents (if any) 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;
1.2.6 Implied References to this Agreement.
Article, section, subsection, clause, schedule and exhibit references
are to this Agreement or such other Loan Document, as the case may be, unless
otherwise specified;
1.2.7 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;
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1.2.8 Modifications to Documents.
Reference to any agreement (including this Agreement and any other
Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.9 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"; and
1.2.10 Shall; Will.
References to "shall" and "will" are intended to have the same
meaning.
1.3 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. In the event that on or after the date hereof,
a material change occurs in GAAP, the Banks and the Borrower will consult in
good faith regarding whether such change in GAAP affects any financial covenants
contained herein that should be adjusted due to such change in GAAP.
2. REVOLVING CREDIT FACILITY
2.1 Commitments.
2.1.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date in an aggregate principal amount
not to exceed at any one time such Bank's Revolving Credit Commitment minus the
sum of (i) such Bank's Revolving Credit Loans then outstanding, plus (ii) such
Bank's Ratable Share of the Letter of Credit Outstandings to the Borrower then
outstanding plus (iii) such Bank's Ratable Share of Swing Loans outstanding
that would be allocable to such Bank if Swing Loans were Revolving Credit Loans.
Within such
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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 2.1.
2.1.2 Swing Loans Commitment.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and in order to facilitate
loans and repayments between Settlement Dates in amounts of $5,000,000 or less,
Mellon may, at its option, cancelable at any time for any reason whatsoever,
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 outstanding at any one time not to exceed $5,000,000.
the aggregate principal amount of Mellon's Swing Loans and the Revolving Credit
Loans of all the Banks at any one time outstanding shall not exceed the
Revolving Credit Commitments of all the Banks. 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 2.1.2
2.2 Nature of Banks' Obligations with Respect to Revolving Credit
Loans.
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.5 in accordance with its Ratable
Share. The obligations of each Bank hereunder are several. The failure of any
Bank to perform its obligations hereunder shall not affect the Obligations of
the Borrower to any other party nor shall any other party be liable for the
failure of such Bank to perform its obligations hereunder. The Banks shall have
no obligation to make Revolving Credit Loans hereunder on or after the
Expiration Date.
2.3 Commitment Fees.
Accruing from the Closing Date until the Expiration Date, the Borrower
agrees to pay to the Agent for the account of each Bank, as consideration for
such Bank's Revolving Credit Commitment hereunder, a nonrefundable commitment
fee (the "Commitment Fee") equal to the Applicable Margin per annum (computed on
the basis of a year of 360 days and actual days elapsed) times the average daily
difference between (i) the amount of such Bank's Revolving Credit Commitment as
the same may be constituted from time to time, and (ii) the sum of such Bank's
Revolving Credit Loans outstanding plus its Ratable Share of then outstanding
Letter of Credit Outstandings excluding documentary letters of credit.
The Commitment Fee shall change on the effective date of any change in
the Applicable Margin. All Commitment Fees shall be payable in arrears on the
first Business Day of each January, April, July, and October after the Closing
Date and on the Expiration Date or upon acceleration of the Notes. For purposes
of the computation of the Commitment Fee pursuant to this Section 2.3, the
Swing Loans shall be deemed to be borrowed amounts under Mellon's Revolving
Credit Commitment.
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2.4 Voluntary Reduction of Revolving Credit Commitments.
2.4.1 General Requirements.
The Borrower shall have the right at any time and from time to
time upon not less than three (3) Business Days' prior written notice to the
Banks to permanently reduce, in a minimum amount of $3,000,000 and in integral
multiples of $1,000,000, or terminate the Revolving Credit Commitments, both
without penalty or premium, except as hereinafter set forth, provided that any
such reduction or termination shall be accompanied by (a) the payment in full by
the Borrower of any Commitment Fee then accrued on the amount of such reduction
or termination and (b) prepayment of the Revolving Credit Notes in an amount
equal to the amount by which the then outstanding balance of the Notes and
Letter of Credit Outstandings exceeds the Revolving Credit Commitments after
such reduction or termination, as applicable, together with the full amount of
interest accrued on the principal sum to be prepaid (and all amounts referred to
in Section 4.5). From the effective date of any such reduction or termination,
the obligations of Borrower to pay the Commitment Fee pursuant to Section 2.3
shall correspondingly be reduced or cease.
2.4.2 Collateral for Letter of Credit Outstandings.
In the case of a voluntary reduction by the Borrower or the
termination for any reason of the Revolving Credit Commitments, the Borrower
shall deposit in a non-interest bearing blocked cash collateral account with the
Agent (provided that (i) with the consent of the Agent, such account shall bear
interest and (ii) the Agent shall utilize good faith efforts to grant such
consent), as cash collateral for its Obligations in respect of the Letters of
Credit and related applications and agreements, the amount, if any, by which the
resulting Revolving Facility Usage exceeds the Revolving Credit Commitments as
so reduced or terminated and the Borrower hereby pledges to the Agent and the
Banks, and grants to the Agent and the Banks a security interest in, all such
cash as security for such Obligations. From time to time the Agent shall return
to the Borrower any excess of the amount held in such account over the amount by
which the Revolving Facility Usage then exceeds the Revolving Credit
Commitments.
2.5 Loan Requests.
2.5.1 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from time
to time prior to the Expiration Date request the Banks to make Revolving Credit
Loans, or renew or convert the Interest Rate Option applicable to existing
Revolving Credit Loans pursuant to Section 3.1.1, by delivering to the Agent,
(i) not later than 12:00 p.m., Pittsburgh, Pennsylvania time, three (3) Business
Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Revolving Credit Euro-Rate Option applies or
the conversion to or the renewal of the Revolving Credit Euro-Rate Option for
any Revolving Credit Loans; and (ii) not later than 12:00 p.m., Pittsburgh,
Pennsylvania time on the proposed
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Borrowing Date with respect to the making of a Revolving Credit Loan to which
the Revolving Credit Base Rate Option applies or the last day of the preceding
Interest Period with respect to the conversion to the Revolving Credit Base Rate
Option for any Revolving Credit Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.5.1 or a request by telephone
immediately confirmed in writing by letter, facsimile or telex in such form
(each, a " Revolving Credit Loan Request"), it being understood that the Agent
may rely on the authority of any individual making such a telephonic request
without the necessity of receipt of such written confirmation. Each Loan Request
shall be irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the
aggregate amount of the proposed Revolving Credit Loans comprising each
Borrowing Tranche, which shall be in integral multiples of $1,000,000 and not
less than $3,000,000 for each Borrowing Tranche to which the Revolving Credit
Euro-Rate Option applies and not less than the lesser of $1,000,000 or the
maximum amount available for Borrowing Tranches to which the Revolving Credit
Base Rate Option applies; (iii) whether the Revolving Credit Euro-Rate Option or
Revolving Credit Base Rate Option shall apply to the proposed Revolving Credit
Loans comprising the applicable Borrowing Tranche; and (iv) in the case of a
Borrowing Tranche to which the Revolving Credit Euro-Rate Option applies, an
appropriate Interest Period for the proposed Revolving Credit Loans comprising
such Borrowing Tranche.
2.5.2 Swing Loan Request.
Except as otherwise provided herein, the Borrower may from time to
time prior to the Expiration Date request Swing Loans in integral multiples of
$1,000,000 by telephonic or written request to Mellon not later than 2:30 p.m.
Pittsburgh time on the proposed Borrowing Date (each, a "Swing Loan Request"),
it being understood that Mellon may rely on the authority of any person making a
telephonic request without the necessity of receipt of written confirmation. If
requested by Mellon, the Borrower shall deliver a duly completed request for
Swing Loans in the form of Exhibit 2.5.2 hereto. In the case of a Borrowing
Tranche to which the Swing Loan Quoted Rate Option is to apply, the request
shall also specify an appropriate Interest Period.
2.6 Making Loans.
2.6.1 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan Request
pursuant to Section 2.5, notify the Banks of its receipt of the related Loan
Request specifying: (i) the proposed Borrowing Date of such Revolving Credit
Loans; (ii) the amount and type of each such Revolving Credit Loan and the
applicable Interest Period (if any); and (iii) the apportionment among the Banks
of such Revolving Credit Loans as determined by the Agent in accordance with
Section 2.2. Each Bank shall remit the principal amount of each Revolving
Credit Loan to the Agent such that the Agent is able to, and the Agent shall, to
the extent the Banks have made funds available to it for such purpose, fund such
Revolving Credit Loans to the Borrower in Dollars and immediately available
funds at the Principal Office prior to 2:00 p.m., Pittsburgh,
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Pennsylvania time, on the applicable Borrowing Date, provided that if the Agent
assumes pursuant to Section 9.16 that a Bank will make available to the Agent
such Bank's portion of a Revolving Credit Loan and such Bank fails to remit such
funds to the Agent in a timely manner, the Agent may elect in its sole
discretion to fund with its own funds the Revolving Credit Loans of such Bank on
such Borrowing Date, and such Bank shall be subject to the repayment obligation
in Section 9.16.
2.6.2 Making Swing Loans.
Subject to Section 6.2, Mellon at its election after receipt by
it of a Swing Loan Request pursuant to Section 2.5.2, shall fund such Swing Loan
to the Borrower in U.S. Dollars and immediately available funds at the Principal
Office prior to 3:00 p.m. Pittsburgh time on the Borrowing Date.
2.7 Borrowings to Repay Swing Loans.
Mellon may at its option, exercisable at any time after a Swing Loan
has been outstanding for more than five (5) Business Days for any reason
whatsoever, demand repayment of the Swing Loans, and each Bank shall make a
Revolving Credit Loan in an amount equal to such Bank's Ratable Share of the
aggregate principal amount of the outstanding Swing Loans, plus, if Mellon so
requests, accrued interest thereon, provided that no Bank shall be obligated in
any event to make Revolving Credit Loans in excess of its Revolving Credit
Commitment. In that event, such Revolving Credit Loans shall bear interest at
the Revolving Credit Base Rate Option and shall be deemed to have been properly
requested in accordance with Section 2.5.1 without regard to any of the
requirements of that provision. Any such prepayment of a Swing Loan subject to
the Swing Loan Quoted Rate Option shall be subject to the provisions of Section
4.6.2. Mellon shall provide notice to the Banks (which may be a telephonic or
written notice by letter, facsimile or telex) that such Revolving Credit Loans
are to be made under this Section 2.7 and of the apportionment among the Banks,
and the Banks shall be unconditionally obligated to fund such Revolving Credit
Loans (whether or not the conditions specified in Section 6.2 are then
satisfied) by the time Mellon so requests, which shall not be earlier than 12:00
p.m. Pittsburgh time on the Business Day next succeeding the date the Banks
receive such notice from Mellon.
2.8 Notes.
2.8.1 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank, together
with interest thereon, shall be evidenced by a Revolving Credit Note payable to
the order of such Bank in a face amount equal to the Revolving Credit Commitment
of such Bank.
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2.8.2 Swing Loan Note.
The obligation of the Borrower to repay the unpaid principal
amount of the Swing Loans made to it by Mellon, together with interest thereon,
shall be evidenced by the Swing Note payable to the order of Mellon in a face
amount of $5,000,000.
2.9 Use of Revolving Credit Proceeds.
The proceeds of the Revolving Credit Loans shall be used to repay
certain existing Indebtedness, including the term debt that resulted from the
payment of a one time dividend to Intertech, for working capital and other
general corporate purposes.
2.10 Letters of Credit Subfacility.
2.10.1 Issuance of Letters of Credit.
The Borrower may request the issuance of (or modification of any
issued) letters of credit (each a "Letter of Credit" and in the aggregate the
"Letters of Credit") on behalf of itself by delivering no later than 12:00 p.m.,
Pittsburgh, Pennsylvania time three (3) Business Days prior to the requested
date of issuance of such Letter of Credit to the Agent a written notice
specifying the proposed beneficiary, date of issuance and expiry date for such
Letter of Credit or modification to an existing Letter of Credit and the nature
of the transactions to be supported thereby. Subject to the terms and
conditions hereof and to the execution of a completed application and
continuing agreement for letters of credit in the form attached hereto as
Exhibit 2.10.1 or such other form as the Agent may specify from time to time
and in reliance on the agreements of the Banks set forth in this Section 2.10,
the Agent will issue a Letter of Credit provided that each Letter of Credit
shall (A) have a maximum maturity of 365 days from and including the date of
issuance, (B) in no event expire later than five Business Days prior to the
Expiration Date and provided further that in no event shall (i) the Letter of
Credit Outstandings exceed, at any one time, $20,000,000 or (ii) the Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments. In
the event of any conflict between the terms of this Agreement and the terms of
the forms of application and continuing agreement for letters of credit, the
terms of this Agreement shall control (provided that terms of the Agent's form
of application and agreement for letters of credit which are in addition to
those contained herein and which do not expressly conflict with the terms
contained herein shall not be deemed to be in conflict with this Agreement),
provided, however, that notwithstanding the foregoing, the provisions of the
application and agreement for letters of credit, to the extent the same pertain
to remedies, shall govern and control. Notwithstanding the minimum draw
requirements for Revolving Credit Loans, any standby Letter of Credit may be
requested for an amount greater than or equal to $250,000 and any documentary
Letter of Credit may be requested for an amount greater than or equal to
$50,000.
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2.10.2 Participations.
Immediately upon issuance of each Letter of Credit, and without
further action, each Bank shall be deemed to, and hereby agrees that it shall,
have irrevocably purchased for such Bank's own account and risk from the Agent
an individual participation interest in such Letter of Credit and drawings
thereunder in an amount equal to such Bank's Ratable Share of the maximum amount
which is or at any time may become available to be drawn thereunder, and each
Bank shall be responsible to reimburse the Agent immediately for its Ratable
Share of any disbursement under any Letter of Credit which has not been
reimbursed by the Borrower in accordance with Section 2.10.4 by making its
Ratable Share of the Revolving Credit Loans referred to in Section 2.9.4
available to the Agent. Upon the request of any Bank and no less frequently than
once in each calendar month, the Agent shall notify each Bank of the amount of
such Bank's participation in Letters of Credit.
2.10.3 Letter of Credit Fees.
The Borrower agrees to pay to the Agent for the ratable
accounts of the Banks as provided in Section 4.2 fees ("Letters of Credit
Fees") with respect to Letter of Credit Outstandings in respect of standby and
documentary Letters of Credit in an amount equal to such Letter of Credit
Outstandings multiplied by a rate per annum, (computed on the basis of a year of
360 days, and actual days lapsed) as specified in the definition of Applicable
Margin separately for standby Letters of Credit and for documentary Letters of
Credit, for the applicable period specified below, payable quarterly in arrears
on the first Business Day of each January, April, July and October following the
Closing Date and on the earlier of the Expiration Date or the acceleration of
the Notes. Such rates (per annum) of the foregoing Letters of Credit Fees shall
change on the effective date of any change in the Applicable Margin.
The Borrower shall also pay to the Agent for its sole account
(i) a fronting fee equal to one-eighth of one percent (0.125%) per annum of the
aggregate undrawn face amount of each Letter of Credit payable quarterly in
arrears and (ii) its then in effect customary issuance fees and administrative
expense payable with respect to its Letters of Credit as the Agent may generally
charge or incur from time to time in connection with the issuance, maintenance,
modification (if any), assignment or transfer (if any), negotiation, and
administration of letters of credit, payable at such times as the Agent may
specify.
2.10.4 Disbursements, Reimbursement.
Borrower shall be obligated immediately to reimburse the Agent
(each a "Reimbursement Obligation") for all amounts which the Agent is required
to pay pursuant to the Letters of Credit issued by the Agent on or before the
date on which the Agent is required to make payment with respect to a draft
presented thereunder. The Agent will promptly notify the Borrower of each demand
or presentment for payment or draft accepted for payment or other drawing under
each Letter of Credit issued by the Agent. The Agent shall promptly notify each
Bank of the amount required to be paid by such Bank as a result of a drawing
upon such Letter
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of Credit if the Borrower has not timely reimbursed the Agent for such draw. If
such notice is received by a Bank before 1:00 p.m., Pittsburgh, Pennsylvania
time, such Bank shall deliver such Bank's Ratable Share of such payment in
immediately available funds to the Agent on that Business Day. If such notice is
received by a Bank after 1:00 p.m., Pittsburgh, Pennsylvania time, such Bank
shall before 10:00 a.m., Pittsburgh, Pennsylvania time, on the next succeeding
Business Day deliver to the Agent such Bank's Ratable Share of such payment as a
Revolving Credit Loan from such Bank in immediately available funds.
2.10.5 Documentation.
The Borrower agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from the Borrower's own. In the event of a
conflict between such application or agreement and this Agreement, this
Agreement shall govern (provided that terms of the Agent's application and
agreement for letters of credit which are in addition to those contained herein
and which do not expressly conflict with the terms contained herein shall be
deemed not to be in conflict with this Agreement). It is understood and agreed
that, except in the case of gross negligence or willful misconduct, the Agent
shall not be liable for any error, negligence and/or mistakes, whether of
omission or commission, in following the Borrower's instructions or those
contained in the Letters of Credit issued by the Agent or any modifications,
amendments or supplements thereto.
2.10.6 Determinations to Honor Drawing Requests.
In determining whether to honor any request for drawing under
any Letter of Credit by the beneficiary thereof, the Agent shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit.
2.10.7 Nature of Participation and Reimbursement Obligations.
The obligation of the Banks to participate in Letters of Credit
pursuant to Section 2.10.2 and the obligation of the banks pursuant to section
2.10.4 to fund Revolving Credit Loans upon a draw under a Letter of Credit or to
acquire participations in Letters of Credit and the Obligations of the Borrower
to reimburse the Agent upon a draw under any Letter of Credit pursuant to
section 2.10 shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of such sections under all
circumstances, including the following circumstances:
(i) the failure of any Loan Party or any other Person to
comply with the conditions set forth in Sections 2.1
or 6.2 or as otherwise set forth in this Agreement
for the making of a Revolving Credit Loan, it being
acknowledged that such
30
conditions are not required for the making of a
Revolving Credit Loan under SECTION 2.10.4;
(ii) any lack of validity or enforceability of any Letter
of Credit;
(iii) the existence of any claim, set-off, defense or other
right which any Loan Party, the Agent or any Bank may
have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the
Agent or any Bank or any other Person or whether in
connection with this Agreement, the transactions
contemplated herein or any unrelated transaction
(including any underlying transaction between any
Loan Party or Subsidiaries of a Loan Party and the
beneficiary for which any Letter of Credit was
procured);
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or
inaccurate in any respect even if the Agent has been
notified thereof;
(v) payment by the Agent under any Letter of Credit
against presentation of a demand, draft or
certificate or other document which does not comply
with the terms of such Letter of Credit;
(vi) any adverse change in the business, operations,
properties, assets, condition (financial or
otherwise) or prospects of the Borrower, any other
Loan Party or Subsidiaries of a Loan Party;
(vii) any breach of this Agreement or any other Loan
Document by any party thereto;
(viii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing;
(ix) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing; and
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(x) the fact that the Expiration Date shall have passed or
this Agreement or the Revolving Credit Commitments
hereunder shall have been terminated.
2.10.8 Indemnity.
In addition to amounts payable as provided in Section 9.5, the
Borrower hereby agrees to pay and to protect, indemnify and save harmless the
Agent and the Banks from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and/or allocated costs of internal
counsel) which any of them may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit, other than as a result
of (A) the gross negligence or willful misconduct of the Agent with respect to
the Letters of Credit as determined by a final judgment of a court of competent
jurisdiction or (B) subject to the following clause (ii), the wrongful dishonor
by the Agent of a proper demand for payment made under any Letter of Credit or
(ii) the failure of the Agent to honor a drawing under any such Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or governmental authority (all such
acts or omissions herein called "Governmental Acts").
2.10.9 Liability for Acts and Omissions.
As between any Loan Party and the Agent, such Loan Party assumes
all risks of the acts and omissions of, or misuse of the Letters of Credit by,
the respective beneficiaries of the Letters of Credit. In furtherance and not in
limitation of the foregoing, neither the Agent nor any Bank shall be responsible
for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for an
issuance of any Letter of Credit issued by the Agent, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged (even if the Agent shall have been notified thereof); (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such 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) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Agent, including any Governmental Acts, and none of the above
shall affect or impair, or prevent the vesting of, any of the Agent's rights or
powers hereunder.
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In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
put the Agent under any resulting liability to the Borrower or any Banks.
The Banks and any Loan Party may not commence a proceeding against the
Agent for wrongful disbursement under a Letter of Credit issued by the Agent as
a result of acts or omissions constituting gross negligence or willful
misconduct of the Agent, until the Banks have made and the Borrower has repaid
the Revolving Credit Loans described in Section 2.10.4; provided, however, that
nothing in this Section 2.10 shall adversely affect the right of any Loan
Party, after such payment, to commence any proceeding against the Agent for any
breach of its obligations hereunder.
3. INTEREST RATES
3.1 Interest
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Revolving Credit Euro-Rate Option set forth below applicable to the Loans, it
being understood that, subject to the provisions of this Agreement, the Borrower
by delivering to the Agent a duly completed Loan Request may select different
Interest Rate Options and different Interest Periods to apply simultaneously to
the Loans comprising different Borrowing Tranches and may convert to or renew
one or more Interest Rate Options with respect to all or any portion of the
Revolving Credit Loans comprising any Borrowing Tranche by delivering to the
Agent a duly completed Loan Request by the time described in Section 2.5 for
conversion or renewal of such Interest Rate Option for a Revolving Credit Loan,
provided that there shall not be at any one time outstanding more than ten (10)
Borrowing Tranches in the aggregate among all the Loans. If at any time the
designated rate applicable to any Loan made by any Bank exceeds such Bank's
highest lawful rate, the rate of interest on such Bank's Loan shall be limited
to such Bank's highest lawful rate.
3.1.1 Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Loans (provided that the Euro-Rate
Option is not available with respect to Swing Loans and the Swing Loan Quoted
Rate Option is not available with respect to Revolving Credit Loans):
(i) Base Rate Option: A fluctuating rate per annum
(computed on the basis of a year of 365 days and
actual days elapsed) equal to the Base Rate plus the
Applicable Margin, such interest rate to change
automatically from time to time
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effective as of the effective date of (A) each change
in the Base Rate and (B) each change in the Applicable
Margin.
(ii) Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and
actual days elapsed) equal to the Euro-Rate plus the
Applicable Margin, such interest rate shall change on
the effective date of any change in the Applicable
Margin.
(iii) Swing Loan Quoted Rate Option: A fixed rate per annum
based upon Mellon's cost of funds plus a margin as
such rate is set and quoted to the Borrower on any
given day by Mellon in its sole discretion.
3.2 Interest Periods.
The interest period specified in a Loan Request (the "Interest
Period") (i) during which a Euro Rate Option shall apply shall be one, two,
three or six Months, provided, that prior to the Business Day following the
Syndication Date, such Interest Period shall be one month and (ii) during which
a Swing Loan Quoted Rate Option shall apply shall be one, two, three, four or
five Business Days or two or three weeks or thirty (30) days; and provided,
further, that:
3.2.1 Ending Date and Business Day.
Any Interest Period which would otherwise end on a date which is
not a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
3.2.2 Amount of Borrowing Tranche.
Each Borrowing Tranche of a Loan to which the Revolving Credit
Euro-Rate Option applies shall be in integral multiples of $1,000,000 and not
less than $3,000,000;
3.2.3 Termination Before Expiration Date.
The Borrower shall not select, convert to or renew an Interest
Period for any portion of the Loans that would end after the Expiration Date;
and
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3.2.4 Renewals.
In the case of the renewal of a Revolving Credit Euro-Rate Option
at the end of an Interest Period, the first day of the new Interest Period shall
be the last day of the preceding Interest Period, without duplication in payment
of interest for such day.
3.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
3.3.1 Letters of Credit Fees, Interest Rate.
The Letters of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Section 2.10 or Section 3.1, respectively,
shall be increased by 2.0% per annum;
3.3.2 Other Obligations.
Each other Obligation hereunder if not paid when due shall bear
interest at a rate per annum equal to the sum of the rate of interest applicable
under the Base Rate Option plus an additional 2.0% per annum from the time such
Obligation becomes due and payable and until it is paid in full; and
3.3.3 Acknowledgment.
The Borrower acknowledges that the increased rates referred to in
this Section 3.3 reflect, among other things, the fact that the Loans or other
amounts have become a substantially greater risk given their default status and
that the Banks are entitled to additional compensation for such risk. All such
interest shall be payable by Borrower upon demand by the Agent.
3.4 Euro-Rate Unascertainable.
3.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
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(ii) a contingency has occurred which materially and
adversely affects the London interbank market relating
to the Euro-Rate, then the Agent shall have the rights
specified in Section 3.4.3.
3.4.2 Illegality; Increased Costs; Deposits Not Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to
which a Revolving Credit Euro-Rate Option applies has
been made impracticable or unlawful by compliance by
such Bank in good faith with any Law or any
interpretation or application thereof by any Official
Body or with any request or directive of any Official
Body (whether or not having the force of Law), or
(ii) such Revolving Credit Euro-Rate Option will not
adequately and fairly reflect the cost to such Bank of
the establishment or maintenance of any such Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars for the relevant Interest
Period for a Loan to which a Revolving Credit Euro-
Rate Option applies, are not available to such Bank
with respect to such Loan in the London interbank
market,
then such Bank shall have the rights specified in Section 3.4.3.
3.4.3 Agent's and Bank's Rights.
In the case of any event specified in Section 3.4.1, the Agent
shall promptly so notify the Banks and the Borrower thereof, and in the case of
a determination specified in Section 3.4.2, such Bank shall promptly so notify
the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given) the obligation of (A) the Banks, in the case of such notice
given by the Agent in respect of Section 3.4.1, or (B) such Bank, in the case
of such notice given by such Bank in respect of Section 3.4.2, to allow the
Borrower to select, convert to or renew a Revolving Credit Euro-Rate Option
shall be suspended until the Agent shall have later notified the Borrower, or
such Bank shall have later notified the Agent, of the Agent's or such Bank's, as
the case may be, determination that the circumstances giving rise to such
previous determination no longer exist.
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If at any time the Agent makes a determination under Section 3.4.1 and the
Borrower has previously notified the Agent of its selection of, conversion to or
renewal of a Revolving Credit Euro-Rate Option and such Interest Rate Option has
not yet gone into effect, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to the affected Loans. If any Bank notifies the Agent of
a determination under Section 3.4.2, the Borrower shall, subject to the
Borrower's indemnification Obligations under Section 4.6.2, as to any Loan of
such Bank to which a Revolving Credit Euro-Rate Option applies, on the date
specified in such notice convert such Loan to the Base Rate Option otherwise
available with respect to such Loan. Absent due notice from the Borrower of
conversion, such Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Loan upon such specified date. Upon any
such conversion, the Borrower shall have the right to prepay Loans in the amount
of such Loan on the date of such conversion without providing the notice
otherwise required by Section 4.4.1. If an event occurs that makes the
applicable Euro-Rate Option no longer available to the Borrower, the Borrower,
the Agent and the Banks shall negotiate in good faith to provide a replacement
Interest Rate Option for the affected Euro-Rate Option that is mutually
satisfactory.
3.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche to which a Revolving Credit Euro-Rate Option applies at the
expiration of an existing Interest Period applicable to such Borrowing Tranche
in accordance with the provisions of Section 3.2, the Borrower shall be deemed
to have converted such Borrowing Tranche to the Revolving Credit Base Rate
Option commencing upon the last day of such Interest Period.
4. PAYMENTS
4.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letters of Credit Fees, the Agent's Fee, or other
amounts due from the Borrower hereunder (other than the fees and expenses
referenced in Section 2.10.3 which are to be paid to the Agent as provided in
such sections and the fees and expenses referenced in Section 9.15, each of
which shall be paid in accordance with such sections) shall be payable prior to
12:00 p.m., Pittsburgh, Pennsylvania 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 set-off, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue to the
extent of any non-payment thereof. Payments of principal and interest on Loans
and of Commitment Fees and Letters of Credit Fees shall be made to the Agent at
the Principal Office for the ratable accounts of the Banks in Dollars and in
immediately available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds; provided that in the event
payments are received by noon (Pittsburgh, Pennsylvania time) by the Agent with
respect to the Loans and such payments are not distributed
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to the Banks on the same day received by the Agent, the Agent shall pay the
Banks the Federal Funds Effective Rate with respect to the amount of such
payments for each day held by the Agent and not distributed to the Banks. The
Agent's and each Bank'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 and other amounts owing under
this Agreement and shall be deemed an "account stated."
4.2 Pro Rata Treatment of Banks.
Each borrowing of a Revolving Credit Loan shall be allocated to each
Bank according to its Ratable Share, and each selection of, conversion to or
renewal of any Interest Rate Option and each payment or prepayment by the
Borrower with respect to principal, interest, Commitment Fees related to the
Revolving Credit Loans, Letters of Credit Fees, or other fees (except for the
Agent's Fee, and any fees to the Agent with respect to the issuance,
administration or payments under Letters of Credit) or amounts due from the
Borrower hereunder to the Banks with respect to the Revolving Credit Loans to
it, shall (except as provided in Section 3.4.2 [Illegality, Increased Costs;
Deposits not Available], 4.4 [Voluntary Prepayments] or 4.5 [Additional
Compensation in Certain Circumstances]) be made in proportion to the applicable
Revolving Credit Loans outstanding from each Bank and, if no such Revolving
Credit Loans are then outstanding, in proportion to the Ratable Share of each
Bank.
4.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each January, April, July
and October after the date hereof and on the Expiration Date and upon
acceleration of the Notes. Interest on Loans to which the Revolving Credit
Euro-Rate Option applies shall be due and payable on the last day of each
Interest Period for those Loans and, if any such Interest Period is longer than
three Months, also on the last day of every third Month during such Interest
Period. Interest on Swing Loans subject to the Swing Loan Quoted Rate Option
shall be due and payable in arrears on the first Business Day of each January,
April, July and October and upon acceleration of the Notes. Without limitation
on Section 4.4.1, interest on mandatory prepayments of principal under Section
4.5 shall be due on the date such mandatory prepayment is due. Interest on the
principal amount of each Loan or other monetary Obligation shall be due and
payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise).
4.4 Voluntary Prepayments.
4.4.1 Right to Prepay.
The Borrower shall have the right at its option from time to time
to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 4.5):
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(i) at any time with respect to any Loan to which the Base
Rate Option applies,
(ii) on the last day of the applicable Interest Period with
respect to Loans to which a Revolving Credit Euro-Rate
Option or a Swing Loan Quoted Rate Option applies, and
(iii) on the date specified in a notice by any Bank pursuant
to Section 3.4 [Euro-Rate Unascertainable], with
respect to any Loan to which a Revolving Credit Euro-
Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it
shall provide a prepayment notice to the Agent not later than 10:00 a.m.,
Pittsburgh, Pennsylvania time on the Business Day prior to the date of
prepayment of Loans setting forth the following information (provided no notice
from Borrower is required pursuant to subsection (iii) above):
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(y) a statement indicating the application of the prepayment to
the Revolving Credit Loans; and
(z) the total principal amount of such prepayment, which shall
not be less than $3,000,000 or integral multiples of $1,000,000.
All prepayment notices shall be irrevocable. The principal amount
of the Loans for which a prepayment notice is given, together with interest on
such principal amount, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made. If
the Borrower prepays a Loan pursuant to this Section but fails to specify the
applicable Borrowing Tranche which the Borrower is prepaying, the prepayment
shall be applied first to Swing Loans to which the Swing Loan Base Rate Option
applies, then to Revolving Credit Loans to which the Base Rate Option applies,
then to Swing Loans to which the Swing Loan Quoted Rate Option applies, then to
Revolving Credit Loans to which the Revolving Credit Euro-Rate Option applies.
Any prepayment hereunder shall be subject to the Borrower's Obligation to
indemnify the Banks under Section 4.6.2.
4.5 Mandatory Reduction of Commitments; Mandatory Payments and
Prepayments.
4.5.1 Qualified Note Placement.
If the Borrower issues notes pursuant to a Qualified Note
Placement, simultaneously with the closing thereof, the proceeds of such
issuance shall be first applied to
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Swing Loans to which the Swing Loan Base Rate Option applies, then to Revolving
Credit Loans to which the Base Rate Option applies, then to Swing Loans to which
the Swing Loan Quoted Rate Option applies, then to Revolving Credit Loans to
which the Revolving Credit Euro-Rate Option applies. Upon each mandatory
prepayment of Loans pursuant to this Section 4.5.1, the Revolving Credit
Commitments automatically shall be permanently and irrevocably reduced by an
amount equal to such prepayment.
4.6 Additional Compensation in Certain Circumstances.
4.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any Law,
guideline or interpretation or application thereof by any Official Body charged
with the interpretation or administration thereof or compliance with any request
or directive (whether or not having the force of Law) of any central bank or
other Official Body:
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes,
the Loans or payments by the Borrower of principal,
interest, Commitment Fees, or other amounts due from
the Borrower hereunder or under the Notes (except for
taxes on the overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits
or commitments to extend credit extended by, or assets
(funded or contingent) of, deposits with or for the
account of, or other acquisitions of funds by, any
Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets
(funded or contingent) of, or letters of credit, other
credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the
obligations of any Bank under this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrower and
the Agent of the amount determined in good
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faith (using any averaging and attribution methods employed in good faith which
shall be binding upon the parties absent manifest error) by such Bank to be
necessary to compensate such Bank for such increase in cost, reduction of income
or additional expense or reduced rates of return. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due and
payable by the Borrower to such Bank five (5) Business Days after such notice is
given, subject, however, to the provisions of Section 10.5.3.
4.6.2 Indemnity.
In addition to the compensation required by Section 4.6.1, the
Borrower shall indemnify each Bank against all liabilities, losses or expenses
(including loss of margin, any loss or expense incurred in liquidating or
employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Bank to fund or maintain Loans subject to a
Revolving Credit Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any
(i) payment, prepayment, conversion or renewal of any Loan
to which a Revolving Credit Euro-Rate Option applies
on a day other than the last day of the corresponding
Interest Period (whether or not such payment or
prepayment is mandatory, voluntary or automatic and
whether or not such payment or prepayment is then
due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part
any Loan Requests under Section 2.5 or any notice
relating to prepayments under Section 4.4, or
(iii) default by the Borrower in the performance or
observance of any covenant or condition contained in
this Agreement or any other Loan Document, including
any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest,
Commitment Fee or any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it shall
from time to time notify the Borrower of the amount determined in good faith by
such Bank (which determination may include such assumptions, allocations of
costs and expenses and averaging or attribution methods as such Bank shall deem
reasonable which shall be binding on the parties absent manifest error) to be
necessary to indemnify such Bank for such loss or expense. Such notice shall set
forth in reasonable detail the basis for such determination. Such amount shall
be due and payable by the Borrower to such Bank ten (10) Business Days after
such notice is given.
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4.7 Settlement Date Procedures.
In order to minimize the transfer of funds between the Banks and the
Agent, the Borrower may borrow, repay and reborrow Swing Loans, and Mellon may
make Swing Loans, as provided in Section 2.1.2 hereof during the period
between Settlement Dates. On each Settlement Date, the Banks agree among
themselves to effect a settlement so that each Bank shall have its Ratable Share
of all Revolving Credit Loans (including those Revolving Credit Loans designated
by Mellon as Swing Loans) outstanding as of the close of business on the
business day immediately preceding such Settlement Date. not later than 10:00
a.m. on each Settlement Date when Swing Loans are outstanding, the Agent shall
notify each Bank of its Ratable Share of the Revolving Credit Loans outstanding
as of the close of business on the business day immediately preceding such
Settlement Date. Prior to 3:00 p.m. Pittsburgh time on such Settlement Date,
each Bank shall pay to the Agent the amount, if any, necessary to effectuate the
settlement contemplated by this Section, and the Agent shall promptly pay to
each Bank its Ratable Share of all payments, if any, made by the Borrower to the
Agent with respect to the Revolving Credit Loans not theretofor paid and any
payments due such Bank in settlement under this Section. The Agent shall also
effect settlement in accordance with this Section 4.7 on the proposed Borrowing
Dates for all Revolving Credit Loans and may at its option effect settlement on
any other Business Day. if an Event of Default shall occur and on the date of
such occurrence the sum of Mellon's Revolving Credit Loans shall be less than
Mellon's Ratable Share of all Revolving Credit Loans, Mellon shall pay to the
Agent the amount, if any, necessary to effectuate the settlement between the
Banks as contemplated by this Section 4.7. These settlement procedures are
established solely as a matter of administrative convenience, and nothing
contained in this Section 4.7 shall relieve the Banks of their obligations to
fund Revolving Credit Loans on dates other than a Settlement Date pursuant to
Section 2.7. Mellon may at any time, at its option, for any reason whatsoever
require each Bank to pay immediately to Mellon such Bank's Ratable Share of the
outstanding Swing Loans, and each Bank may at any time require the Agent to pay
immediately to such Bank its Ratable Share of all payments made by the Borrower
to the Agent with respect to the Revolving Credit Loans.
4.8 Interbank Market Presumption.
For all purposes of this Agreement and each Note with respect to any
aspects of the Euro-Rate, any Loan under the Revolving Credit Euro-Rate Option,
each Bank and 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 Bank's and Agent's determination of amounts
payable under, and actions required or authorized by, Sections 3.4 and 4.6
shall be calculated, at each Bank's and Agent's option, as though each Bank and
Agent funded its share of each Borrowing Tranche of Loans under the Revolving
Credit 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, whether
in fact that is the case.
-42-
4.9 Taxes.
4.9.1 No Deductions.
All payments made by the Borrower hereunder 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 Bank and all income and franchise taxes applicable to any Bank 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 necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) each Bank
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.
4.9.2 Stamp Taxes.
In addition, 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").
4.9.3 Indemnification for Taxes Paid by a Bank.
The Borrower shall indemnify each Bank 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 4.9) paid by
any Bank 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 30 days
from the date a Bank makes written demand therefor.
4.9.4 Certificate.
Within 30 days after the date of any payment of any Taxes by the
Borrower, the Borrower shall furnish to each Bank, at its address referred to
herein, 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 Bank, provide a certificate of an officer
of the Borrower to that effect.
-43-
4.9.5 Survival.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 4.9.1 through 4.9.4 shall survive the payment in full of principal
and interest hereunder and under any instrument delivered hereunder.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties.
The Borrower represents and warrants to the Agent and each of the
Banks as follows:
5.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of any Loan Party is a
corporation or partnership, duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Each Loan Party and
each Subsidiary of any Loan Party has the lawful power to own or lease its
properties and to engage in the business it presently conducts or proposes to
conduct. Each Loan Party and each Subsidiary of any Loan Party is listed on
Schedule 5.1.1 and is duly licensed or qualified and in good standing in each
jurisdiction where the property owned or leased by it or the nature of the
business transacted by it or both makes such licensing or qualification
necessary (except where the failure to be so licensed or qualified would not
constitute a Material Adverse Change), and upon request of the Agent, the
Borrower will promptly furnish a written list of every jurisdiction where each
Subsidiary and Loan Party is so qualified.
5.1.2 Subsidiary and Joint Venture Matters.
Schedule 5.1.2 sets forth the authorized, issued and outstanding
capital stock of or ownership interest in each Subsidiary and each Joint Venture
and the record owner of such capital stock or other ownership interest, as the
case may be. Other than as set forth on Schedule 5.1.2, each of the Borrower's
Subsidiaries is directly or indirectly wholly owned by the Borrower and all of
the issued and outstanding shares of capital stock of each such Subsidiary
(referred to herein as the "Subsidiary Shares") are owned free and clear in each
case of any Lien and each Joint Venture interest is owned by the Borrower or any
of its Subsidiaries free and clear of any Lien. All Subsidiary Shares have been
validly issued, and all Subsidiary Shares are fully paid and, except as
otherwise set forth on such Schedule 5.1.2, nonassessable. There are no
-44-
options, warrants or other rights outstanding to purchase any Subsidiary Shares
except as indicated on Schedule 5.1.2.
5.1.3 Power and Authority.
Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement and the other 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 proceedings on its part.
5.1.4 Validity and Binding Effect.
This Agreement has been duly and validly executed and delivered
by each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have been duly
executed and delivered by such Loan Party on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes, or
will constitute, legal, valid and binding obligations of each Loan Party which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any such Loan Document 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.
5.1.5 No Conflict.
Neither the execution and delivery of this Agreement or the other
Loan Documents by any Loan Party nor the consummation of the transactions herein
or therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them (i) will conflict with, constitute a default under or
result in any breach of (A) the terms and conditions of the certificate of
incorporation, bylaws or other organizational documents of any Loan Party or any
of its Subsidiaries which is a party thereto or (B) any Law or any agreement or
instrument or order, writ, judgment, injunction or decree to which any such Loan
Party or any of its Subsidiaries is a party, is bound by or is subject, which
conflict, default or breach reasonably would be expected to result in a Material
Adverse Change, or (ii) will result in the creation or enforcement of any Lien
whatsoever upon any property (now or hereafter acquired) of any Loan Party or
any of its Subsidiaries (other than Liens granted under the Loan Documents).
5.1.6 Litigation.
Except as set forth on Schedule 5.1.6, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened against such Loan Party or any Subsidiary of any Loan Party at
law or equity before any Official Body which individually or in the aggregate
may result in any Material Adverse Change. None of the
-45-
Loan Parties or any Subsidiaries of any Loan Party is in violation of any order,
writ, injunction or any decree of any Official Body which reasonably would be
expected to result in any Material Adverse Change.
5.1.7 Title to Properties.
Each Loan Party and each Subsidiary of any Loan Party has good
and marketable title to or a valid leasehold interest in all material
properties, assets and other rights which it purports to own or lease or which
are reflected as owned or leased on its books and records, free and clear of all
Liens except Permitted Liens, and subject to the terms and conditions of the
applicable leases. All material leases of property are in full force and effect
without the necessity for any consent which has not previously been obtained
upon consummation of the transactions contemplated hereby.
5.1.8 Financial Statements.
(i) Historical Statements. The Borrower has delivered to
the Agent copies of its (A) audited consolidated year-
end financial statements for and as of the end of the
three fiscal years ended October 31, 1995 (the "Annual
Statements" ) and (B) unaudited consolidated interim
financial statements for the fiscal year to date and
as of the end of the fiscal quarter ended July 31,
1996 (the "Interim Statements", and together with the
Annual Statements, the "Historical Statements"). The
Historical Statements were compiled from the books and
records maintained by the Borrower's management, are
correct and complete and fairly represent the
consolidated financial condition of the Borrower and
its Subsidiaries as of their dates and the results of
operations for the fiscal periods then ended and have
been prepared in accordance with GAAP consistently
applied;
(ii) Financial Projections. The Borrower has delivered to
the Agent financial projections of the Borrower and
its Subsidiaries for fiscal years 1996, 1997, 1998,
1999, 2000, and 2001 derived from various assumptions
of the Borrower's management (the "Financial
Projections"). The Financial Projections reflect the
reasonable expectations of the Borrower's management
as of the Closing Date in light of the history of the
business, present and foreseeable conditions and
intentions of the Borrower's management, all based on
the assumptions thereto, which assumptions were made
and based upon information available at the
-46-
time of preparation of such projections. The Financial
Projections accurately reflect the liabilities of the
Borrower and its Subsidiaries incurred pursuant to the
Loan Documents upon consummation of the transactions
contemplated hereby as of the Closing Date; and
(iii) Accuracy of Financial Statements. Neither the Borrower
nor any Subsidiary of the Borrower has as of the date
of the Historical Statements any material liabilities,
contingent or otherwise, or forward or long-term
commitments that are not disclosed in the Historical
Statements or in the notes thereto, and except as
disclosed therein there are no unrealized or
anticipated losses from any commitments of the
Borrower or any Subsidiary of the Borrower which
reasonably would be expected to cause a Material
Adverse Change. Since October 31, 1995, no Material
Adverse Change has occurred provided however, that
neither the Tender Offer nor the Spin-Off shall be
deemed to constitute a Material Adverse Change for the
purposes of this clause (iii).
5.1.9 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan Party
engages or intends to engage principally, or as one of its important activities,
in the business of extending credit for the purpose, immediately, incidentally
or ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan or issued Letter of Credit
has been or will be used, immediately, incidentally or ultimately, to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any purpose which entails a violation of or
which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System.
5.1.10 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Agent or
any Bank in connection herewith or therewith, contains any untrue statement 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 any Executive
Officer of any Loan Party which materially adversely affects the business,
property, assets, financial condition, results of operations or prospects of any
Loan Party or Subsidiary of any Loan Party which has not been set forth in this
Agreement or in the certificates, statements,
-47-
agreements or other documents furnished in writing to the Agent and the Banks
prior to or at the date hereof in connection with the transactions contemplated
hereby.
5.1.11 Taxes.
All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of any Loan Party
have been filed, other than those for which the failure to file the same would
not reasonably be expected to result in a Material Adverse Change, and payment
or adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges shown to be owing pursuant to said
returns or to assessments received, except to the extent that such taxes, fees,
assessments and other charges are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made. Except with respect to the consolidated Federal income tax return for
Intertech and its Subsidiaries for the fiscal year ended October 31, 1993, there
are no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of any Loan Party or Subsidiary of
any Loan Party for any period.
5.1.12 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 other Loan Documents by any Loan Party,
except as listed on Schedule 5.1.12, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on Schedule
5.1.12.
5.1.13 No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition exists
now or will exist after giving effect to and as a result of the extensions of
credit to be made on the Closing Date under the Loan Documents which constitutes
an Event of Default or Potential Default. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of (i) any term of its
certificate of incorporation, bylaws, 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
constitute a Material Adverse Change.
5.1.14 Patents, Trademarks, Copyrights, Licenses, Etc.
A Loan Party or a Subsidiary of a Loan Party 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
-48-
business as presently conducted and planned to be conducted by the Borrower and
its Subsidiaries taken as a whole, without known conflict by, or with the rights
of, others.
5.1.15 Insurance.
The Borrower has delivered to the Agent a true and correct
listing of the property and general liability insurance of the Borrower. No
notice has been given or claim made and to the best knowledge of the Executive
Officers and the individuals responsible for insurance matters of the Loan
Parties no grounds exist to cancel or avoid any of such policies or bonds or to
reduce the coverage provided thereby. Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of each Loan Party and each Subsidiary of any Loan
Party in accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
5.1.16 Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in all
material respects with all applicable Laws (other than Environmental Laws which
are specifically addressed in Section 5.1.21) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently or currently anticipates
it will be doing business except where the failure to do so would not constitute
a Material Adverse Change.
5.1.17 Material Contracts.
Each material contract relating to the business operations of
each Loan Party and each Subsidiary of any Loan Party, is valid, binding and
enforceable upon such Loan Party or Subsidiary to the extent such Person is a
party thereto in accordance with its respective terms, and the Loan Party which
is a party thereto has not received actual notice of a default thereunder with
respect to parties other than such Loan Party or Subsidiary. For purposes of
this Section 5.1.17 the term "material contracts" shall mean those contracts or
other agreements which the Borrower would be required to file with the
Securities and Exchange Commission pursuant to item 601(a)(10) of Regulation S-K
promulgated under the Securities Act of 1933 and the Securities Exchange Act of
1934.
5.1.18 Investment Companies.
None of the Loan Parties or any Subsidiary of any Loan Party 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 and shall not
become such an "investment company" or under such "control".
-49-
5.1.19 Plans and Benefit Arrangements.
Except as set forth on Schedule 5.1.19:
(i) The Borrower and each other 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 or, to the best
knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which
reasonably would be expected to result in any material
liability of the Borrower or any other member of the
ERISA Group. The Borrower and all other 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
Multiemployer Plan, the Borrower and each other 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, and (iii) have not had asserted
against them any penalty for failure to fulfill the
minimum funding requirements of ERISA;
(ii) To the best of each Loan Parties' knowledge, each
Multiemployer Plan and Multiple Employer Plan is able
to pay benefits thereunder when due;
(iii) Neither the Borrower nor any other member of the ERISA
Group has instituted or intends to institute
proceedings to terminate any Plan;
(iv) 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;
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under the Plans,
determined on an ongoing basis, as disclosed in, and
as of
-50-
the date of, the most recent actuarial report for
each such Plan, does not exceed the aggregate fair
market value of the assets of such Plans;
(vi) 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 best 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;
(vii) To the extent that any Benefit Arrangement is
insured, the Borrower and all other members of the
ERISA Group have paid when due all premiums required
to be paid for all periods through the Closing Date.
To the extent that any Benefit Arrangement is funded
other than with insurance, the Borrower and all other
members of the ERISA Group have made when due all
contributions required to be paid for all periods
through the Closing Date; and
(viii) All Plans, Benefit Arrangements and Multiemployer
Plans have been administered in all material respects
in accordance with their terms and applicable Law.
5.1.20 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply reasonably would be expected to constitute a Material
Adverse Change. There are no outstanding grievances, arbitration awards or
appeals therefrom arising out of the Labor Contracts or current or threatened
strikes, picketing, handbilling or other work stoppages or slowdowns at
facilities of any of the Loan Parties or any of their Subsidiaries which in any
case would constitute a Material Adverse Change.
-51-
5.1.21 Environmental Matters.
----------------------
Except as disclosed on Schedule 5.1.21:
(i) Except for notices which would not reasonably be
expected to result in a Material Adverse Change, none
of the Loan Parties or any Subsidiary of any Loan
Party has received any Environmental Complaint from
any Official Body or private Person alleging that such
Loan Party or Subsidiary or any prior owner of any
Property or acquirer of any Property from any Loan
Party or Subsidiary is a potentially responsible party
under the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. (S) 9601, et
seq., and none of the Loan Parties has any reason to
believe that such an Environmental Complaint might be
received. There are no pending or, to any Loan Party's
knowledge, threatened Environmental Complaints
relating to any Loan Party or any Subsidiary of any
Loan Party or, to any Loan Party's knowledge, any
prior or subsequent owner of any Property pertaining
to, or arising out of, any Environmental Conditions
which reasonably would be expected to result in a
Material Adverse Change,
(ii) Except for Environmental Conditions, violations or
failures which individually and in the aggregate would
not reasonably be expected to result in a Material
Adverse Change, there are no circumstances at, on or
under any 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 Property or, to any Loan Party's
knowledge, at, on or under adjacent property, that
prevent compliance with the Environmental Laws at any
Property,
(iii) Neither any Property nor any structures, improvements,
equipment, fixtures, activities or facilities thereon
or thereunder contain or use Regulated Substances,
except in compliance with Environmental Laws, which
would reasonably be expected to result in a Material
Adverse Change. There are no processes, facilities,
operations, equipment or other activities at, on or
under any Property, or, to any Loan Party's knowledge,
at, on or under adjacent property, that currently
result in the release or threatened
-52-
release of Regulated Substances onto any 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 or would not
reasonably be expected to result in a Material Adverse
Change,
(iv) 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 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, except in any case where such
would not reasonably be expected to result in a
Material Adverse Change. 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
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 Property that is not in compliance with
Environmental Laws, except in any case where such
would not reasonably be expected to result in a
Material Adverse Change,
(v) The applicable Loan Party or a Subsidiary of a Loan
Party has all permits, licenses, authorizations, plans
and approvals necessary under the Environmental Laws
for the conduct of the business of the Borrower and
its Subsidiaries taken as a whole, except in any case
where the failure to so have would not reasonably be
expected to result in a Material Adverse Change. Each
Loan Party and each Subsidiary of a Loan Party has
submitted all 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 Property, except in any case where
the failure to so submit would not reasonably be
expected to result in a Material Adverse Change, and
(vi) Except for violations which individually and in the
aggregate would not result in a Material Adverse
Change,
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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 Property and all off-
site transportation, storage, processing, treatment,
recycling, reclamation, disposal or other use or
management of Regulated Substances have been done in
accordance with the Environmental Laws.
5.1.22 Senior Debt Status.
-------------------
The Obligations of each Loan Party under this Agreement, the
Notes, the Master Guaranty Agreement and each of the other Loan Documents to
which it is a party do rank and will rank no less than 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. There is no Lien upon
or with respect to any of the properties or income of any Loan Party or
Subsidiary of any Loan Party which secures indebtedness or other obligations of
any Person except for Permitted Liens.
5.1.23 Solvency.
---------
The Borrower and each Domestic Subsidiary is Solvent.
5.1.24 Schedule of Indebtedness.
-------------------------
The Borrower has no Indebtedness not listed on Schedule 5.1.24
except items not exceeding $500,000 individually or $1,000,000 in the aggregate.
5.1.25 Material Adverse Change.
------------------------
Since October 31, 1995, no Material Adverse Change has occurred,
provided however, that neither the Tender Offer nor the Spin-Off shall be deemed
to constitute a Material Adverse Change for the purposes of this Section 5.1.25.
5.2 Updates to Schedules.
---------------------
Except as set forth in the next sentence, no Schedule to this
Agreement may be updated, amended or modified without the consent of the
Required Banks given or withheld in their sole and absolute discretion. The
Borrower shall provide to the Agent updates to Schedule 5.1.1, 5.1.2 and 5.1.24
on a quarterly basis provided, however, that the Agent's receipt of any such
update shall not imply that the Agent or any Bank has consented to any event,
transaction or change of circumstance reflected in such update, all of which
shall continue to be governed by the other provisions of this Agreement.
-54-
6. CONDITIONS OF LENDING
---------------------
The obligation of each Bank to make Loans and of the Agent to
issue Letters of Credit is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
6.1 First Revolving Credit Loans.
-----------------------------
On the Closing Date:
6.1.1 Officer's Certificate.
----------------------
The representations and warranties of the Borrower contained in
Article 5 and in each of the other Loan Documents shall be true and accurate 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 on and as of the specific dates or
times referred to therein), and the Borrower shall have performed and complied
with all covenants and conditions hereof and thereof, no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and
there shall be delivered to the Agent for the benefit of each Bank a certificate
of the Borrower dated the Closing Date and signed by its Chief Executive
Officer, President or Chief Financial Officer, to each such effect.
6.1.2 Secretary's Certificate.
------------------------
There shall be delivered to the Agent for the benefit of each
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 action taken by the Borrower in connection with
this Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to
sign this Agreement and the other Loan Documents
and the true signatures of such officer or officers
and specifying the Authorized Officers permitted to
act on behalf of the Borrower for purposes of this
Agreement and the true signatures of such officers,
on which the Agent and each Bank may conclusively
rely; and
(iii) copies of its organizational documents, including
its certificate of incorporation and bylaws (or
their equivalents) as in effect on the Closing Date
certified by
-55-
the appropriate governmental official where such
documents are filed in a governmental office together
with certificates from the appropriate governmental
officials as to the continued existence and good
standing of the Borrower in each jurisdiction where
organized or qualified to do business.
6.1.3 Delivery of Loan Documents.
---------------------------
The Loan Documents shall have been executed and delivered to the Agent
for the benefit of the Banks.
6.1.4 Opinions of Counsel.
--------------------
There shall be delivered to the Agent for the benefit of each Bank
written opinions of counsel for the Loan Parties listed on Schedule 6.1.4 (who
may rely on the opinions of such other counsel as may be acceptable to the
Agent), dated the Closing Date and in form and substance satisfactory to the
Agent and its counsel.
6.1.5 Legal Details.
--------------
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 reasonably 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.
6.1.6 Payment of Fees and Reimbursement of Expenses.
----------------------------------------------
The Borrower shall have paid or caused to be paid to the Agent for
itself (and, as applicable, for the account of the Banks) to the extent not
previously paid (i) all fees accrued through the Closing Date set forth in the
commitment letter and related fee letter each dated October 15, 1996 and (ii)
all costs and expenses for which the Agent and the Banks are entitled to be
reimbursed thereunder and under this Agreement, to the extent they have been
incurred as of the Closing Date.
6.1.7 Consents.
---------
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 5.1.12 shall have been obtained.
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6.1.8 Officer's Certificate Regarding MACs.
Since October 31, 1995 (i) no Material Adverse Change shall have
occurred and (ii) there shall have been no material change in the management of
the Borrower (except as disclosed to the Banks in a writing referencing this
provision); and there shall have been delivered to the Agent for the benefit of
each Bank a certificate dated the Closing Date and signed by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower to each such
effect; provided, however neither the Tender Offer nor the Spin-Off shall be
deemed to constitute a Material Adverse Change.
6.1.9 No Violation of Laws.
The making of the Loans and issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party or any of the Banks.
6.1.10 No Actions or Proceedings.
No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed against the Borrower, any
Subsidiary, the Agent or any Bank or any of their respective officers or
directors in their capacity as such before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Agreement or the other Loan Documents, which, in the Agent's
sole discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
6.1.11 Insurance Policies; Certificates of Insurance.
The Borrower shall have delivered to the Agent upon its request
evidence acceptable to the Agent that adequate insurance in compliance with
Section 7.1.3 is in full force and effect and that all premiums then due
thereon have been paid, together with if requested by the Agent a certified
copy of each Loan Party's casualty insurance policy or policies.
6.1.12 Termination of Existing Debt.
The Borrower simultaneously shall have terminated the
Indebtedness incurred under and paid all amounts owed under the Credit Agreement
dated as of August 9, 1996 among the Borrower, the banks parties thereto and
Mellon Bank, N.A., as Agent.
6.1.13 Solvency Certificate.
The Chief Financial Officer or any other Person specifically
authorized by resolution of the Borrower shall certify as to the solvency and
capital adequacy of the Borrower after giving effect to the transactions
contemplated.
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6.2 Each Additional Loan or Letter of Credit Issuance.
At the time of making any Loans or issuance of any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Borrower contained in Article 5 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Banks; and the Borrower
shall have delivered to the Agent, a duly executed and completed Loan Request or
application for a Letter of Credit, as the case may be.
6.3 Syndication.
6.3.1 Syndication Representation and Warranties.
On the Syndication Date, the representations and warranties of
the Borrower contained in Article 5 and in the other Loan Documents shall be
true on and as of such 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 expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein) and the Loan Parties shall have
performed and complied with all covenants and conditions hereof; and no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist.
6.3.2 Syndication Documents.
On the Syndication Date, the Borrower shall deliver to the Agent
for the benefit of the Banks (a) an Officer's Certificate dated as of the
Syndication Date with respect to the matters set forth in Section 6.3.1 and
Section 6.1.8(i), (b) a Secretary's Certificate dated as of the Syndication
Date with respect to the matters set forth in Section 6.1.2(i) and 6.1.2(ii)
and that there have been no changes in the charter documents or bylaws of the
Borrower or any other Loan Party since the Closing Date, (c) Notes dated as of
the Syndication Date which give effect to the syndication on the Syndication
Date of the Revolving Credit Commitments of the Banks which originally executed
the Credit Agreement in exchange for the original Notes issued to such Banks,
(d) written opinions of the counsel to the Borrower identified in Section 6.1.4
with respect to such matters as the Agent may request and (e) acknowledgments
dated as of the Syndication Date to the Loan Documents in form and substance
satisfactory to the Agent.
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6.3.3 Syndication Cooperation
The Agent, with the Borrower's assistance, will prepare and
distribute a Confidential Information Memorandum (the "Memorandum") for the
purpose of syndicating the credit facilities provided under this Agreement to
financial institutions. The Agent will not distribute the Memorandum to any
party that is not subject to a customary confidentiality agreement. The Borrower
will use all reasonable efforts to assist the Agent in syndicating the credit
facilities, including participating in meetings with potential syndicate
members. Until the closing on the initial syndication, , except as otherwise
required by Law, the Borrower will not, and will not permit any of its
affiliates to, syndicate or issue, attempt to syndicate or issue, announce or
otherwise authorize the announcement of the syndication or issuance of, or enter
into discussions concerning the syndication of the credit facilities or any
other debt facility to be syndicated, in each case without the prior written
consent of the Agent, which will not be unreasonably withheld.
7. COVENANTS
---------
7.1 Affirmative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations under the Loan Documents and termination of the Revolving
Credit Commitments, the Borrower and its Subsidiaries shall comply at all times
with each of the following affirmative covenants:
7.1.1 Preservation of Existence, Etc.
The Borrower and, except as permitted by Section 7.2.6, each
Material Subsidiary shall maintain its corporate existence and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to be so licensed or qualified
would not result in a Material Adverse Change.
7.1.2 Payment of Liabilities, Including Taxes, Etc.
Each Loan Party shall, and shall cause each of its Subsidiaries
to, duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently
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conducted and for which such reserve or other appropriate provisions, if any, as
shall be required by GAAP shall have been made, but only to the extent that
failure to discharge any such liabilities would not result in any additional
liability which would adversely affect to a material extent the financial
condition of the Loan Parties and their Subsidiaries taken as a whole, provided
that the Loan Parties and their Subsidiaries will pay all such liabilities
forthwith upon the commencement of proceedings to foreclose any Lien which may
have attached as security therefor unless and as long as such proceedings are
stayed.
7.1.3 Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
insure its properties and assets against loss or damage by fire and such other
insurable hazards as such assets are commonly insured (including fire, extended
coverage, property damage, workers' compensation, public liability and business
interruption insurance) and against other risks (including errors and omissions
with respect to directors and officers) 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, for each such Loan Party or Subsidiary
of a Loan Party within its respective industry. At the request of the Agent, the
Loan Parties shall deliver to the Agent on the Closing Date and annually
thereafter an original certificate of insurance signed by the Loan Parties'
independent insurance broker describing and certifying as to the existence of
the insurance required to be maintained by this Agreement and the other Loan
Documents
7.1.4 Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
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 material properties necessary to its business,
and from time to time, such Loan Party or such Subsidiary will make or cause to
be made all appropriate repairs, renewals or replacements thereof.
7.1.5 Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect all patents, trademarks, service marks, trade
names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
7.1.6 Visitation Rights.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
permit any of the officers or authorized employees or representatives of the
Agent (at the Borrower's expense) or any of the Banks to visit and inspect any
of its properties and to examine and make
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excerpts from its books and records and discuss its business affairs, finances
and accounts with its Authorized Officers, all in such detail as any of the
Banks may reasonably request, provided that each Bank shall provide the Borrower
and the Agent with reasonable notice prior to any visit or inspection, the Banks
shall attempt to reasonably coordinate such requests and all information
obtained by any Bank shall be subject to Section 10.12.
7.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary to, maintain and
keep proper books and records which will enable the Borrower and its
Subsidiaries to issue consolidated and consolidating financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made in all
material respects of all dealings and business and financial affairs on a
consolidated and consolidating basis.
7.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each other 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 other member of the ERISA
Group to be funded in accordance with the minimum funding requirements of ERISA
and shall make, and cause each other member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
7.1.9 Compliance with Laws.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this Section
7.1.9 if any failure to comply with any Law would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would reasonably be expected to constitute a Material
Adverse Change.
7.1.10 Use of Proceeds.
The Borrower will use the Letters of Credit and the proceeds of the
Loans only for lawful purposes in accordance with Sections 2.9 and the other
provisions of this Agreement and such uses shall not contravene any applicable
Law or any other provision hereof.
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7.1.11 Subordination of Intercompany Loans.
Each Loan Party shall cause any Intercompany Loans owed by any Loan
Party to the Borrower or any of its Subsidiaries to be subordinated pursuant to
the terms of the Master Intercompany Subordination Agreement and evidenced by an
Intercompany Note.
7.1.12 Post-Closing Matters.
The Borrower shall deliver to the Agent for the benefit of the Banks
the documents set forth on Schedule 7.1.12 at the times indicated therein.
7.1.13 Payment of Intercompany Obligations Related to Intertech
The Borrower and its Subsidiaries shall settle all obligations owed by
them in respect of all Indebtedness owed as of the date of the Spin-Off to
Intertech and its Subsidiaries (after the Spin-Off) in a manner (including by
set-off to the extent feasible) and within the time period that will enable
Intertech and its Subsidiaries to meet its similar obligations in the manner and
within the time set forth in the Form 10.
7.1.14 Interest Rate Protection.
On or before the earlier of eighteen (18) months after the Closing
Date or the Trigger Date, the Borrower shall have entered into an interest rate
protection agreement or agreements in each case for a period of at least three
years which in the aggregate are in an amount equal to at least 33 1/3% of
Consolidated Funded Indebtedness at such time, and with such other terms and
conditions as shall be acceptable to the Agent (the "Interest Rate Protection
Agreements"). Documentation for the Interest Rate Protection Agreements shall be
in a standard International Swap Dealer Association Agreement, and shall not
require that any collateral be provided as security for such agreement. As used
in this Section 7.1.14, "Trigger Date" means 15 days after the last day of the
first thirty (30) consecutive day period in which the Euro-Rate with respect to
Loans in Dollars was greater than or equal to at least eight percent (8%) for at
least ten (10) days. Notwithstanding the foregoing provisions, if, within the
time period set forth herein, the Borrower shall have completed a Qualified Note
Placement, the Borrower will be deemed to have satisfied, or partially
satisfied, the requirements of this Section 7.1.14 to the extent of the
aggregate principal amount of the Notes issued in the Qualified Note Placement.
7.2 Negative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and termination of the Revolving Credit Commitments,
the Borrower and its Subsidiaries shall comply with each of the following
negative covenants:
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7.2.1 Indebtedness.
-------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, at any time create, incur, assume or suffer to exist any Indebtedness,
except the following:
(i) Indebtedness under the Loan Documents;
(ii) existing Indebtedness as set forth on Schedule 5.1.24
(including any extensions, amendments or refinancings or
renewals thereof, provided there is no increase in the
outstanding amount thereof or imposition of additional
material obligations therein unless otherwise specified on
Schedule 5.1.24);
(iii) Indebtedness for borrowed money other than under the Loan
Documents which does not have covenants that in the
judgment of the Agent individually or in the aggregate are
more restrictive in any material respect than under the
Loan Documents;
(iv) Indebtedness (to the extent not of a type included in
Consolidated Funded Indebtedness) of Domestic Subsidiaries
which shall not exceed $5,000,000 in the aggregate, minus
the amount of the then outstanding Guaranties referred to
in clause (iii) of Section 7.2.3;
(v) Indebtedness of a Foreign Subsidiary to a Foreign
Subsidiary, Indebtedness of a Loan Party to a Foreign
Subsidiary or Indebtedness of a Loan Party to a Loan
Party;
(vi) Indebtedness of a Foreign Subsidiary to a Loan Party or
Indebtedness of a Foreign Subsidiary to any other Person,
provided, that the aggregate of all such Indebtedness,
including any Indebtedness of this type set forth on
Schedule 5.1.24, does not exceed at any one time
outstanding $25,000,000 through fiscal year end 1998, and
$30,000,000 thereafter, in each case, minus the amount of
the then outstanding Guarantees referred to in clause (iv)
of Section 7.2.3;
(vii) any Indebtedness incurred as part of a Qualified Note
Placement; and
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(viii) any Guarantees permitted by Section 7.2.3.
7.2.2 Liens; Further Negative Pledges.
--------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (i) at any time create, incur, assume or suffer to exist any Lien on any of
its assets, whether real or personal property or fixtures, tangible or
intangible, or now owned or hereafter acquired (the "Assets"), or agree or
become liable to do so, except permitted liens, (ii) suffer to exist any
indebtedness which if unpaid might by Law or upon bankruptcy or insolvency, or
otherwise, be given priority over its general creditors or (iii) at any time,
directly or indirectly, enter into any agreement, understanding or other
arrangement which purports to restrict in any manner the ability of the Borrower
or any of its Subsidiaries to grant security interests or Liens to the Agent for
the benefit of the Agent and the Banks with respect to any Asset or Assets of
the Borrower or any of its Subsidiaries that have not theretofore been
encumbered or made subject to the grant of a security interest in favor of or
for the benefit of the Agent and the Banks; provided however that a written
agreement of a type described in the preceding clause (iii) containing terms
satisfactory to the Agent may be entered into by one or more of the Borrower or
any of its Subsidiaries in favor of the note purchasers in a Qualified Note
Placement that is privately placed.
7.2.3 Guaranties.
-----------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, at any time, directly or indirectly, become liable in respect of any
Guaranty, except for: (i) Guaranties of Indebtedness of the Loan Parties under
the Loan Documents; (ii) Guaranties of Indebtedness of Foreign Subsidiaries
which Indebtedness constitutes Consolidated Funded Indebtedness; (iii)
Guaranties by the Borrower or any of its Domestic Subsidiaries not included in
clause (i) or (ii) above so long as the liability of the Borrower and its
Domestic Subsidiaries thereunder does not exceed in the aggregate at any time
outstanding $3,000,000; and (iv) Guaranties by Foreign Subsidiaries not included
in clauses (i) or (ii) above so long as the liability of the Foreign
Subsidiaries thereunder does not exceed in the aggregate at any time outstanding
$5,000,000.
7.2.4 Loans and Investments.
----------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, at any time make or suffer to remain outstanding any loan or advance to, or
purchase, acquire or own any stock, bonds, notes or securities of, or any equity
interest in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain liable to do any
of the foregoing, except as set forth on Schedule 7.2.4 and:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
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(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Cash Equivalent Investments;
(iv) investments in Foreign Subsidiaries by Loan Parties so
long as the aggregate outstanding amount of such
investments permitted by this Section 7.2.4(iv) (excluding
Indebtedness of Foreign Subsidiaries to Loan Parties
permitted by Section 7.2.1(vi), Indebtedness of Foreign
Subsidiaries to Loan Parties set forth on Schedule 7.2.1,
and investments which arise and exist as part of a Loan
Party's permitted acquisition pursuant to Section 7.2.6)
does not exceed at any one time $7,500,000;
(v) investments in other Loan Parties;
(vi) investments in Foreign Subsidiaries by Foreign
Subsidiaries;
(vii) liquidations, mergers, consolidations and acquisitions
permitted by Section 7.2.6, provided, that in the case of
a Foreign Subsidiary making an acquisition, after giving
effect thereto, the aggregate investments in Foreign
Subsidiaries by Loan Parties does not exceed the amount
permitted by clause (iv) above;
(viii) capital expenditures made in the ordinary course of
business;
(ix) investments permitted by clause (y) of Section 7.2.9; and
(x) debt securities having maturities no longer than 6 months
in an aggregate amount not exceeding $2,500,000 at any one
time;
provided, however, in no event shall the aggregate investments made by the Loan
Parties after the date hereof of the types described in clauses (vii) and (ix)
above exceed $20,000,000.
7.2.5 Dividends and Related Distributions.
------------------------------------
During the first two years after the Closing Date, the Borrower shall
not, and shall not permit any of its Subsidiaries to, declare, make or pay, or
agree to become or remain liable to make or pay, any dividend or other
distribution of any nature (whether in cash,
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property, securities or otherwise) on account of or in respect of its shares of
capital stock or partnership or other equity interests on account of the
purchase, redemption, retirement or acquisition of its shares of capital stock
(or warrants, options or rights therefor) or partnership or other equity
interests, except:
(i) dividends or other distributions payable to another Loan
Party or Subsidiary;
(ii) dividends made by the Borrower described in Section 7.1.13;
(iii) stock repurchases made by the Borrower for the purpose of
utilization in employee benefit plans in the amount of
$3,000,000 in each of the first two fiscal years after the
Closing Date, provided that the aggregate stock repurchases
in such years does not exceed $5,000,000.
7.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
----------------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, dissolve, liquidate or wind-up its affairs, or become a party to any merger
or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets, capital stock, or equity interests of any other
Person except, subject in each case to Section 7.2.7, as follows:
(i) the Borrower may acquire by merger (provided the Borrower
is thereafter a Qualified Survivor), or may acquire the
capital stock or other equity interests of or in, or may
acquire all or a portion of the assets of (including as a
result of a liquidation or dissolution of), any existing
Subsidiary of the Borrower;
(ii) any Domestic Subsidiary may acquire by merger (provided the
survivor is a Qualified Survivor), or may acquire the
capital stock or other equity interests of or in, or may
acquire all or a portion of the assets of (including as a
result of a liquidation or dissolution of), any other
existing Domestic Subsidiary or any existing Foreign
Subsidiary;
(iii) any Foreign Subsidiary may acquire by merger (provided the
survivor is a Qualified Survivor), or may acquire the
capital stock or other equity interests of or in, or may
acquire all or a portion of the assets of (including as a
result
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of a liquidation or dissolution of), any other existing
Foreign Subsidiary;
(iv) each of the Borrower and its Subsidiaries may make
Acquisitions of Persons (other than the Borrower or an
existing Subsidiary of the Borrower) that are in the same
or a similar line of business then being conducted by the
Borrower or any of its Subsidiaries provided the survivor
is a Qualified Survivor and provide further that
immediately after giving effect to any such Acquisition the
aggregate Consideration paid or given by the Borrower or
any of its Subsidiaries with respect to all Acquisitions
then made by the Borrower and its Subsidiaries pursuant to
this clause (iv) does not exceed on a cumulative basis
$20,000,000 minus the cumulative Consideration paid or
given by the Borrower and its Subsidiaries since the
Closing Date to acquire interests in Joint Ventures as
permitted by Section 7.2.9; and
provided, however, that any Acquisition permitted in clause (iv) above shall be
permitted only if
(A) both immediately before and after the consummation of
the transaction there exists no Event of Default or
Potential Default,
(B) the Borrower is in compliance with its representations,
warranties and covenants hereunder after giving effect to
the transaction,
(C) if the transaction involves Consideration greater than
$1,000,000, the Borrower shall have computed the Leverage
Ratio (in the manner required in the definition thereof) as
of the date (the "Transaction Date") of such transaction
and there shall be an adjustment of the fees and interest
rates effective on the Transaction Date if the Leverage
Ratio Status changes on such date, and
(D) there was delivered to the Agent no later than five (5)
Business Days after the Transaction Date a certificate in
the form of Exhibit 7.2.6 (the "Transaction Notice
Certificate") executed by an Executive Officer of the
Borrower certifying as to compliance with the foregoing
clauses (A), (B) and (C) above;
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7.2.7 Dispositions of Assets or Subsidiaries
--------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, sell, convey, assign, lease, spin-off as an in-kind dividend distribution,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general intangibles with or without recourse or of capital stock,
partnership interests or other equity interests issued by a Subsidiary of the
Borrower, except as permitted by Section 7.2.6 and except as follows:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease or abandonment of assets in the
ordinary course of business which are no longer necessary
or required in the conduct of the Borrower's or such
Subsidiary's business;
(iii) any sale, transfer or lease of assets (x) by any Domestic
Subsidiary to another Loan Party, (y) by any Foreign
Subsidiary directly owned by one or more Loan Parties to
another Foreign Subsidiary or another Loan Party or (z) by
any Foreign Subsidiary that is not directly owned by one or
more Loan Parties to a Foreign Subsidiary or another Loan
Party;
(iv) the discounting, assigning or sale of accounts receivable
of the Japanese Foreign Subsidiary in connection with
Indebtedness incurred in the ordinary course of business by
such Foreign Subsidiary for working capital in Japan;
(v) any licensing of intellectual property in the ordinary
course of business; and
(vi) any sale of assets, other than those specifically excepted
pursuant to clauses (i) through (v) above, provided that
upon the closing thereof the present value of the
Consideration to be received by the seller in respect of
the sale together with all such Consideration in respect of
all other sale transactions pursuant to this clause (vi)
consummated on and after the Closing Date does not exceed
$10,000,000 in the aggregate;
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provided, however, that no transactions identified in clause (vi) above shall be
permitted unless:
(A) both immediately before and after the consummation of
the transaction there exists no Event of Default or
Potential Default,
(B) the Borrower is in compliance with its representations,
warranties and covenants hereunder after giving effect to
the transaction,
(C) in the event the proposed transaction is for
Consideration in excess of $1,000,000, the Borrower shall
have computed the Leverage Ratio (in the manner required in
the definition thereof) as of the date (the "Transaction
Date") of such transaction and there shall be an adjustment
of the fees and interest rates effective on the Transaction
Date if the Leverage Ratio Status changes on such date, and
(D) there was delivered to the Agent no later than five (5)
Business Days after the Transaction Date a Transaction
Notice Certificate executed by an Executive Officer of the
Borrower certifying as to compliance with the foregoing
clauses (A), (B) and (C) above.
7.2.8 Affiliate Transactions.
-----------------------
Except as set forth on Schedule 7.2.8 the Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into or carry out any
transaction with any of its Affiliates (including purchasing property or
services from or selling property or services to any Affiliate of any Loan Party
or other Person other than the Borrower or any of its Subsidiaries) unless such
transaction is not otherwise prohibited by this Agreement and, is entered into
in the ordinary course of business upon fair and reasonable arm's-length terms
and conditions or is approved by independent Directors of the Borrower's Board
of Directors or an appropriate committee thereof as being upon fair and
reasonable arm's length terms and conditions (including without limitation
employment arrangements with any Executive Officer of the Borrower or any
Subsidiary), all of which are fully disclosed to the Agent and are in accordance
with all applicable Law.
7.2.9 Subsidiaries, Partnerships and Joint Ventures.
----------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, own or create directly or indirectly any Subsidiaries other than (i) any
Domestic Subsidiary which has joined the Master Guaranty Agreement, as
Guarantor, on the date required pursuant to Section 10.18, as applicable and
joined the Master Intercompany Subordination Agreement, (ii)
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any Foreign Subsidiary which is directly owned by the Borrower and/or one or
more Domestic Subsidiaries; and (iii) any Foreign Subsidiary which is directly
owned by one or more Foreign Subsidiaries. Each of the Borrower and its
Subsidiaries shall not become or agree to become or permit any of its
Subsidiaries to become a general or limited partner in any general or limited
partnership or a joint venturer in any Joint Venture or a member in any limited
liability company other than solely with Persons who are or pursuant to such
transaction will become either a Subsidiary of the Borrower or a Joint Venture,
provided that the cumulative aggregate Consideration paid on and after the
Closing Date to acquire interests in Joint Ventures shall not exceed $5,000,000
and when aggregated with Acquisitions permitted pursuant to clause (iv) of
Section 7.2.6 shall not exceed $20,000,000, and provided further that the
Borrower and its Subsidiaries may be general or limited partners in other Loan
Parties.
7.2.10 Continuation of or Change in Business.
--------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than substantially those businesses as
conducted and operated by the Borrower and its Subsidiaries on the Closing Date
and those businesses reasonably related thereto.
7.2.11 Plans and Benefit Arrangements.
-------------------------------
The Borrower shall not, and shall not permit any of its
Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of ERISA
and the Internal Revenue Code with respect to any Plan
where such would result in a Material Adverse Change;
(ii) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(iii) 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
constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all benefit
liabilities (whether or not vested) under the Plans,
determined on an ongoing basis, as disclosed in the most
recent actuarial report completed with respect to each such
Plan, to exceed, as of any actuarial valuation date, 120%
of the fair market value of the assets of such Plans;
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(v) 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
where such would result in a Material Adverse
Change;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed
under Section 4062(e) of ERISA to withdraw) from
any Multiple Employer Plan, where any such
withdrawal would result in a material liability
of the Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings to terminate,
any Plan, where such termination would result in
a material liability to the Borrower or any
member of the ERISA Group;
(viii) make any amendment to any Plan with respect to
which security is required under Section 307 of
ERISA; or
(ix) 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 would result in a Material Adverse
Change.
7.2.12 Fiscal Year.
------------
The Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, change its fiscal year from the fiscal year ending on October
31 each year.
7.2.13 Issuance of Stock.
------------------
The Borrower shall not, and shall not permit any of its
Subsidiaries to, issue any additional shares of its capital stock or any
options, warrants or other rights in respect thereof other than to another Loan
Party or Subsidiary of a Loan Party or to a Person which becomes a Loan Party or
Subsidiary of a Loan Party, including as a result thereof. Notwithstanding the
foregoing, nothing contained herein shall prohibit the Borrower from issuing
shares of its capital stock or other equity interests of the Borrower.
7.2.14 Changes in Organizational Documents.
------------------------------------
Except as permitted by Section 7.2.6, the Borrower shall not,
and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including
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any provisions or resolutions relating to capital stock), by-laws or other
organizational documents without providing at least five (5) calendar days'
prior written notice to the Agent and the Banks and, in the event such change
would be adverse to the Banks as determined by the Required Banks in their sole
discretion, obtaining the prior written consent of the Required Banks.
7.2.15 Minimum Fixed Charge Coverage Ratio.
------------------------------------
The Borrower shall not permit the Fixed Charge Coverage Ratio to
be less than the following:
(i) 1.25 to 1.00 with respect to the relevant period
ending on October 31, 1996, and January 31, April
30, and July 31, 1997; or
(ii) 1.50 to 1.00 with respect to each period of
determination ending on or after October 31, 1997.
7.2.16 Maximum Leverage Ratio.
----------------------
The Borrower shall not permit at any time during the respective
periods set forth below the Leverage Ratio to be greater than as follows:
DATES RATIO
----- -----
Closing Date through October 30,1997: 3.25 to 1.00
October 31, 1997 through October 30, 1999: 3.00 to 1.00
October 31, 1999 and thereafter: 2.50 to 1.00
7.2.17 Minimum Consolidated Net Worth.
------------------------------
The Borrower shall not permit at any time Consolidated Net
Worth to be less than the Base Net Worth.
7.2.18 Amendments to Certain Documents.
-------------------------------
The Borrower shall not permit, without the prior written consent
of the Required Banks, any material amendment, waiver or modification to any
document, indenture, agreement or instrument evidencing any Indebtedness set
forth on Schedule 5.1.24 except for amendments, waivers or modifications to
provisions which do not change or otherwise affect the terms of such agreements
or instruments in a material manner.
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7.2.19 No Prepayment of Existing Indebtedness.
The Borrower shall not permit the prepayment, directly or
indirectly (including without limitation on the foregoing any purchase of one or
more of the notes issued thereunder or any interest or participation in any such
notes), prior to the stated maturity thereof of any principal of any
Indebtedness set forth on section 1 of Schedule 5.1.24 or any notes issued in a
Qualified Note Placement.
7.3 Reporting Requirements.
The Borrower covenants and agrees that until payment in full of
the Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and under the other Loan Documents and termination
of the Revolving Credit Commitments, the Borrower will furnish or cause to be
furnished to the Agent for itself and on behalf of each of the Banks (wherever
referenced in Section 7.3, the term "consolidating" is limited to consolidating
information on a basis consistent with current accounting practices of the
Borrower):
7.3.1 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45)
calendar days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrower, consisting of a consolidated
and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with GAAP and as
to fairness of presentation, consistently applied, and setting forth in
comparative form the respective financial statements for the corresponding date
and period in the previous fiscal year.
7.3.2 Annual Financial Statements.
As soon as available and in any event within ninety (90)
calendar days after the end of each fiscal year of the Borrower, consolidated
and consolidating financial statements of the Borrower consisting of a
consolidated and consolidating balance sheet as of the end of such fiscal year,
and related consolidated and consolidating statements of income, stockholders'
equity and cash flows for the fiscal year then ended, all in reasonable detail
and setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and with respect to the consolidated
statements, certified by independent certified public accountants of nationally
recognized standing reasonably satisfactory to the Agent. The certificate or
report of accountants shall be free of qualifications (other than any
consistency qualification that may result from a change in the method used to
prepare the financial statements as to which such accountants concur) and shall
be accompanied by a letter or report of such
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accountants addressed to the Agent for the benefit of the Banks confirming the
Borrower's calculations with respect to the certificate to be delivered pursuant
to Section 7.3.3 with respect to such financial statements.
7.3.3 Certificate of the Borrower.
----------------------------
Concurrently with the financial statements of the Borrower
furnished to the Agent and to the Banks pursuant to Sections 7.3.1 and 7.3.2,
a certificate of the Borrower signed by the Chief Executive Officer, President
or Chief Financial Officer of the Borrower, in the form of Exhibit 7.3.3, to
the effect that, except as described pursuant to Section 7.3.4, (i) the
representations and warranties contained in Article 5 and in the other Loan
Documents are true on and as of the date of such certificate with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate solely
to an earlier date or time) and the Borrower has performed and complied in all
material respects with all covenants and conditions hereof, (ii) no Event of
Default or Potential Default exists and is continuing on the date of such
certificate and (iii) containing calculations in sufficient detail to
demonstrate compliance as of the date of such financial statements with all
financial covenants contained in Section 7.2.
7.3.4 Notice of Default.
------------------
Promptly after any Executive Officer of any Loan Party has
learned of the occurrence of an Event of Default or Potential Default, a
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of such Loan Party setting forth the details of such Event of Default or
Potential Default and the action which the such Loan Party proposes to take with
respect thereto.
7.3.5 Notice of Litigation.
---------------------
Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party which involve a
claim or series of uninsured claims (provided that a claim shall be deemed to be
uninsured unless the insurance company is a reputable insurance company and has
acknowledged that the claim is covered by the applicable insurance policy
without any reservation to challenge the applicability thereof) in excess of
$5,000,000 or which if adversely determined would reasonably be expected to
constitute a Material Adverse Change.
7.3.6 Budgets, Forecasts, Other Reports and Information.
--------------------------------------------------
Promptly upon their becoming available to any Loan Party:
(i) a summary (in detail reasonably satisfactory to the
Agent) of the consolidated annual operating budget
of the
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Borrower, which shall be (x) certified by the
Chief Financial Officer of the Borrower as
having been prepared in accordance with
reasonable assumptions and (y) supplied not
later than the end of the first quarter of the
fiscal year to which such budget pertains;
(ii) any reports, notices or proxy statements
generally distributed by the Borrower to its
stockholders on a date no later than the date
supplied to such stockholders;
(iii) regular or periodic reports, including Forms 10-
K, 10-Q and 8-K, registration statements and
prospectuses, as may be filed by the Borrower
with the Securities and Exchange Commission;
(iv) a copy of any order in any proceeding to which
the Borrower or any of its Subsidiaries is a
party issued by any Official Body, which order,
if carried out, reasonably would be expected to
result in a Material Adverse Change; and
(v) such other reports and information as any of the
Banks may from time to time reasonably request.
The Loan Parties shall also notify the Banks
promptly of the enactment or adoption of any Law
which reasonably would be expected to result in
a Material Adverse Change.
7.3.7 Notices Regarding Plans and Benefit Arrangements.
-------------------------------------------------
7.3.7.1 Certain Events.
---------------
Promptly upon becoming aware of the occurrence thereof,
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) of:
(i) any Reportable Event with respect to the Borrower
or any other member of the ERISA Group (regardless
of whether the obligation to report said Reportable
Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the
Borrower or any other 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
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Code in connection with any Plan, any Benefit
Arrangement or any trust created thereunder,
(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 other
member of the ERISA Group under Title IV of ERISA (or
assertion thereof), where such withdrawal is likely
to result in material withdrawal liability,
(v) any cessation of operations (by the Borrower or any
other member of the ERISA Group) at a facility in the
circumstances described in Section 4063(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the
ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other 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, other than those required
by GAAP, where the effect of such change is to
materially increase or materially reduce the unfunded
benefit liability or obligation to make periodic
contributions.
7.3.7.2 Notices of Involuntary Termination and Annual
Reports.
Promptly after receipt thereof, copies of (a) all notices
received by the Borrower or any other 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 (b) at the request of the Agent or any Bank 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 other member of
the ERISA Group, and schedules showing the amounts contributed to each such Plan
by or on behalf of the
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Borrower or any other member of the ERISA Group in which any of their 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
other member of the ERISA Group with the Internal Revenue Service with respect
to each such Plan.
7.3.7.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310,
or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
8. DEFAULT
8.1 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):
8.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay when due any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity) or any Reimbursement Obligations or shall fail to pay within two (2)
Business Days when due any interest on any Loan or on any Reimbursement
Obligations or any other amount owing hereunder or under the other Loan
Documents after such principal, interest or other amount becomes due in
accordance with the terms hereof or thereof;
8.1.2 Breach of Warranty.
Any representation or warranty made or deemed made at any time by
any of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, 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 deemed made or
furnished;
8.1.3 Breach of Negative Covenants and Sections 7.1.12 or
7.1.14.
The Borrower shall default in the observance or performance of
any covenant contained in Section 7.2 or the covenants contained in Sections
7.1.12 or 7.1.14;
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8.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of thirty
(30) Business Days after any Executive Officer of the Borrower becomes aware of
the occurrence thereof (such grace period to be applicable only in the event
such default can be remedied by corrective action of the Loan Parties as
determined by the Agent in its sole discretion);
8.1.5 Defaults in Other Agreements or Indebtedness.
If a breach, default or event of default shall occur at any time
under the terms of any other agreement involving borrowed money or the extension
of credit or any other Indebtedness under which any Loan Party or Subsidiary of
any Loan Party may be obligated as a borrower or guarantor in excess of
$5,000,000 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,) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or such breach or default permits or causes the
acceleration of any Indebtedness or the termination of any commitment to lend;
provided, however, that no default shall exist under this Section 8.1.5 if any
such breach, default or event of default described herein is waived in a manner
that fully cures or eliminates such breach, default or event of default, except
that if (i) such waiver is with respect to a breach, default or event of default
arising under the agreement in question which is the result of (A) the failure
by the Borrower or any Loan Party to (1) make any payments of principal or
interest under such agreement when due thereunder or (2) comply with any
financial covenants set forth in such agreement or (B) any representation or
warranty made by the Borrower or any Loan Party in such agreement proving to be
false or misleading in any material respect at the time such representation or
warranty was made or deemed made, or (ii) the Indebtedness under such agreement
actually is accelerated as a result of such breach, default or event of default,
then a default shall exist under this Section 8.1.5, notwithstanding any waiver
described herein or rescission of acceleration.
8.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in excess
of $5,000,000 in the aggregate shall be entered against any Loan Party by a
court having jurisdiction in the premises, which judgment either (i) is not
discharged, vacated, bonded or stayed pending appeal within a period of sixty
(60) days from the date of entry, or (ii) is not fully insured (provided that a
judgment shall be deemed to be uninsured unless the insurance company is a
reputable insurance company and has acknowledged that the judgment is covered by
the applicable insurance policy without any reservation to challenge the
applicability thereof) or the Borrower or any of its Subsidiaries' assets having
a value on its respective books in excess of $5,000,000 in the aggregate are
attached, seized, levied upon or subjected to a writ or distress
-78-
warrant; or such come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors and the same is not cured within sixty
(60) days thereafter;
8.1.7 Loan Document Unenforceable.
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 or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested;
8.1.8 Notice of Lien or Assessment.
A notice or notices of Lien or assessment in excess of $5,000,000
in the aggregate which are not Permitted Liens are filed of record with respect
to all or any part of any of the Borrower's or any of its Subsidiaries' assets
by the United States, or any department, agency or instrumentality thereof, or
by any state, county, municipal or other governmental agency, including the
PBGC, or if any taxes or debts owing at any time or times hereafter to any one
of these becomes payable and the same is not paid within sixty (60) days after
the same becomes payable (unless the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed);
8.1.9 Insolvency.
The Borrower, any Material Subsidiary, or one or more other
Subsidiaries of the Borrower which individually or in the aggregate represent
more than five percent (5%) of the book value of the consolidated assets of the
Borrower and its Subsidiaries, ceases to be able to pay its debts as they become
due, admits in writing its inability to pay its debts as they mature or is no
longer Solvent;
8.1.10 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which the
Agent and the Required Banks determine in good faith 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 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) above, the Agent
determines in good faith that the amount of the Borrower's liability is likely
to exceed 10% of its 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
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any other 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 other member of the ERISA Group shall withdraw completely or
partially from a Multiemployer Plan; (viii) the Borrower or any other member of
the ERISA Group shall withdraw (or shall be deemed under Section 4062(e) of
ERISA to withdraw) 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, Multiemployer Plans or Benefit
Arrangements and, with respect to any of the events specified in (v), (vi),
(vii), (viii) or (ix), the Agent and the Required Banks determine in good faith
that 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;
8.1.11 Cessation of Business.
Except as permitted by Section 7.2.6 or Section 7.2.7, the
Borrower, any Material Subsidiary or one or more other Subsidiaries of the
Borrower which individually or in the aggregate represent more than five percent
(5%) of the book value of the consolidated assets of the Borrower and its
Subsidiaries, ceases to conduct its or their business as contemplated or such
Person or Persons are enjoined, restrained or in any way prevented by court
order from conducting all or any material part of their respective business and
such injunction, restraint or other preventive order is not dismissed within
thirty (30) days after the entry thereof;
8.1.12 Change of Control.
(i) Any person or group of persons (within the meaning of Section
13(a) or 14(a) of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act)of 20% or more of the
voting capital stock of the Borrower; or (ii) within a period of twelve (12)
consecutive calendar months, individuals who were directors on the board of
directors of the Borrower on the first day of such period together with any
directors whose election by such board of directors or whose nomination for
election by the shareholders was approved by a vote of the majority of the
directors then in office shall cease to constitute a majority of the board of
directors of the Borrower;
8.1.13 Involuntary Proceedings.
An Insolvency Proceeding shall have been instituted by a Person
other than the Borrower or any of its Subsidiary in a court having jurisdiction
in the premises seeking a decree or order for relief in respect of the Borrower
or any of its Subsidiary, 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; unless in the case of any Subsidiary that is not a Borrower or a
Material Subsidiary, the same would not be a Material Adverse Change;
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8.1.14 Voluntary Proceedings.
A Borrower or any Material Subsidiary shall, or if it would be a
Material Adverse Change any other Subsidiary shall, commence a voluntary
Insolvency Proceeding, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.
8.1.15 Material Adverse Change.
There shall have occurred a Material Adverse Change.
8.2 Consequences of Event of Default.
8.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 8.1.1 through
8.1.12 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks, shall (i) by
written notice to the Borrower, terminate the Revolving Credit Commitments,
declare the unpaid principal amount of the Notes and all Reimbursement
Obligations then outstanding and all interest accrued thereon, any unpaid fees
and all other indebtedness of the Borrower to the Banks hereunder and thereunder
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 Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Banks, and grants to the agent and the banks a security interest in, all
such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Banks, the Agent shall
return such cash collateral to the Borrower;
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 8.1.13 or 8.1.14
shall occur, the Revolving Credit Commitments shall automatically terminate, the
Banks shall make no Loans hereunder and the unpaid principal amount of the
Notes, and all Reimbursement Obligations then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to
the Banks hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived;
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8.2.3 Set-off.
If an Event of Default shall occur and be continuing, any Bank
to whom any Obligation is owed by any Loan Party hereunder or under any other
Loan Document or any participant of such Bank which has agreed in writing to be
bound by the provisions of Section 9.13 and any branch, Subsidiary or Affiliate
of such Bank or participant anywhere in the world shall have the right, subject
to the approval of the Required Banks, in addition to all other rights and
remedies available to it, to set off against and apply to the then unpaid
balance of all the Loans and all other Obligations of the Borrower and the other
Loan Parties 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 or such
other Loan Party by such Bank or participant or by such branch, Subsidiary or
Affiliate, including 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 or such other Loan Party for its own
account (but not including funds held in custodian or trust accounts) with such
Bank or participant or such branch, Subsidiary or Affiliate; provided, however,
that the Agent shall use reasonable, good faith efforts to notify the applicable
Loan Party of the exercise of such right of set-off as soon as possible after
such exercise. Such right shall exist whether or not any Bank or the Agent 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 or such
other Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any collateral, any Guaranty or any other security, right or
remedy available to any Bank or the Agent;
8.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and
whether or not the Agent shall have accelerated the maturity of Loans pursuant
to any of the foregoing provisions of this Section 8.1.15, the Agent or any
Bank, with the approval of the Required Banks, if owed any amount with respect
to the Notes, may proceed to protect and enforce its rights by suit in equity,
action at law and/or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement or the
Notes, including as permitted by applicable Law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of the Agent or such Bank;
8.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any action
pursuant to this Section 8.1.15 and until all Obligations of the Loan Parties
have been paid in full, any and all proceeds received by the Agent from any sale
or other disposition of any collateral, or any part thereof, the exercise of any
other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
reasonable out-of-pocket costs, expenses and
disbursements, including
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reasonable attorneys' and paralegals' fees and legal
expenses, incurred by the Agent or the Banks in
connection with realizing on any collateral or
collection of any Obligations of any of the Loan
Parties under any of the Loan Documents, including
advances made by the Banks or any one of them or the
Agent for the reasonable maintenance, preservation,
protection or enforcement of, or realization upon, any
collateral, including advances for taxes, insurance,
repairs and the like and reasonable expenses incurred
to sell or otherwise realize on, or prepare for sale
or other realization on, any of any collateral;
(ii) second, to the repayment of all Indebtedness then due
and unpaid of the Loan Parties to the Banks incurred
under this Agreement or any of the other Loan
Documents, whether of principal, interest, fees,
expenses or otherwise, in such manner as the Agent may
determine in its discretion; and
(iii) the balance, if any, to the Borrower or as required by
Law.
8.2.6 Other Rights and Remedies.
The Agent may, and upon the request of the Required Banks shall,
exercise all post-default rights granted to the Agent and the Banks under the
Loan Documents or applicable Law.
9. THE AGENT
9.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes
Mellon Bank, N.A. to act as Agent for such Bank under this Agreement and to
execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. Mellon Bank, N.A. agrees
to act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
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9.2 Delegation of Duties.
The Agent may perform any of its respective duties hereunder by or
through agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 9.5 and 9.6,
shall be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
9.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature. Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the Agent
has not made any representations or warranties to it and that no act by the
Agent hereafter taken, including any review of the affairs of any of the Loan
Parties, shall be deemed to constitute any representation or warranty by the
Agent to any Bank; (ii) that it has made and will continue to make, without
reliance upon the Agent, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of each of
the Loan Parties in connection with this Agreement and the making and
continuance of the Loans hereunder; and (iii) except as expressly provided
herein, that the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other information
with respect thereto, whether coming into its possession before the making of
any Loan or at any time or times thereafter.
9.4 Actions in Discretion of Agent; Instructions from the Banks.
The Agent agrees, upon the written request of the Required Banks, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, 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 Banks, 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 Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
9.6. Subject to the provisions of Section 9.6, no Bank 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 Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
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9.5 Reimbursement and Indemnification of Agent by the Borrower.
The Borrower agrees unconditionally upon demand to pay or reimburse
the Agent and to save the Agent harmless against (i) liability for the payment
of all reasonable out-of-pocket costs, expenses and disbursements, including
fees and expenses of counsel, appraisers and environmental consultants, except
with respect to clauses (A), (B) and (C) below, incurred by the Agent (a) in
connection with the development, negotiation, preparation, printing, execution,
syndication, administration, performance and interpretation of this Agreement
and the other Loan Documents, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to provisions hereof, (c) in connection with the enforcement of this
Agreement or any other Loan Document, or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings; (ii) all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted by or asserted against the Agent, in its
capacity as such, as a result of the use of the proceeds of the Loans; and (iii)
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent, in its capacity as
such, in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Agent hereunder or thereunder,
provided that the Borrower shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (A) if the same results from the Agent's gross
negligence or willful misconduct, or (B) if the Borrower was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or (C) if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. In addition,
the Borrower agrees to reimburse and pay all reasonable out-of-pocket expenses
of the Agent's regular employees and agents engaged to perform audits of the
books, records and properties of the Loan Parties and their Subsidiaries.
9.6 Exculpatory Provisions.
None of the Agent or any of its respective directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any Loan Document, unless caused by
its or its respective directors, officers, employees, agents, attorneys or
Affiliates own gross negligence or willful misconduct, (b) be responsible in any
manner to any of the Banks for the effectiveness, enforceability, genuineness,
validity or due execution of this
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Agreement or any other Loan Documents or for any recital, representation,
warranty, document, certificate, report or statement herein or made or furnished
under or in connection with this Agreement or any other Loan Documents, or (c)
be under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of the Loan Parties, or the financial condition of the Loan
Parties, or the existence or possible existence of any Event of Default or
Potential Default. None of the Agent or any Bank or any of their respective
directors, officers, employees, agents, attorneys or Affiliates shall be liable
to any of the Loan Parties for any consequential, special or indirect damages,
losses or expenses (including without limitation, counsel fees) resulting from
any breach of contract, tort or other wrong in connection with the negotiation,
documentation, administration or collection of the Loans or any of the Loan
Documents.
9.7 Reimbursement and Indemnification by Banks of the Agent.
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrower and without limiting the Obligation of the
Borrower to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in its capacity as such or
in its capacity of issuing Letters of Credit, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) if the same
results from the Agent's gross negligence or willful misconduct, or (b) if such
Bank was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Bank shall
remain liable to the extent such failure to give notice does not result in a
loss to the Bank), or (c) if the same results from a compromise and settlement
agreement entered into without the consent of such Bank, which shall not be
unreasonably withheld. In addition, each Bank agrees promptly upon demand to
reimburse the Agent (to the extent not reimbursed by the Borrower and without
limiting the Obligation of the Borrower to do so) in proportion to its Ratable
Share for all amounts due and payable by the Borrower to the Agent in connection
with the Agent's periodic audit of the Loan Parties' books, records and business
properties.
9.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense (other than a
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liability or expense relating to gross negligence or willful misconduct) which
may be incurred by it by reason of taking or continuing to take any such action.
9.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
9.10 Notices.
The Agent shall promptly send to each Bank a copy of all notices and
other documents received from the Borrower pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof. The Agent
shall promptly notify the Borrower and the other Banks of each change in the
Base Rate and the effective date thereof.
9.11 Banks in Their Individual Capacities.
With respect to the Revolving Credit Commitments and the Loans made by
it, the Agent shall have the same rights and powers hereunder as any other Bank
and may exercise the same as though it were not the Agent, and the term "Banks"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates and each of the Banks and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, accept deposits from, discount drafts for, act
as trustee under indentures of, and generally engage in any kind of banking or
trust business with, the Loan Parties and their Affiliates, in the case of the
Agent, as though it were not acting as Agent hereunder and in the case of each
Bank, as though such Bank were not a Bank hereunder.
9.12 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.
9.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank 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
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of set-off or banker's lien, by counterclaim or by any other non-pro rata
source, equitable adjustment will be made in the manner stated in the following
sentence so that, in effect, all such excess amounts will be shared ratably
among the Banks and such holders in proportion to their interests in payments
under the Notes, except as otherwise provided in Sections 3.4.2 or 4.6.1. The
Banks or any such holder receiving any such amount shall purchase for cash from
each of the other Banks an interest in such Bank's Loans in such amount as shall
result in a ratable participation by the Banks 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 Bank 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 Bank or the holder
making such purchase.
9.14 Successor Agent.
----------------
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank, the
Agent's Loans and its Revolving Credit Commitment shall be considered in
determining whether the Required Banks have requested such resignation), in
either case of (i) or (ii) by giving not less than thirty (30) days' prior
written notice to the Borrower. If the Agent shall resign under this Agreement,
then subject to the consent of the Borrower (which consent shall not be
unreasonably withheld and which consent shall not be required during any period
in which an Event of Default exists) either (a) the Required Banks shall appoint
from among the Banks a successor agent for the Banks, or (b) if a successor
agent shall not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then the Agent
shall appoint a successor agent who shall serve as Agent until such time as the
Required Banks appoint a successor agent. Upon its appointment, such successor
agent shall succeed to the rights, powers and duties of the Agent and the term
"Agent" shall mean such successor effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated without any other
or further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions of
this Article 9 shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
9.15 Other Fees.
-----------
The Borrower shall pay to the Agent the fees due pursuant to
that certain commitment letter and related fee letter, each dated October 15,
1996, at the times and in the amounts set forth in such letters.
9.16 Availability of Funds.
----------------------
Unless the Agent shall have been notified by a Bank prior to the
date upon which a Loan is to be made that such Bank does not intend to make
available to the Agent such Bank's
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portion of such Loan, the Agent may assume that such Bank has made or will make
such proceeds available to the Agent on such date and the Agent may, in reliance
upon such assumption (but shall not be required to), make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Bank, the Agent shall be entitled to recover
such amount on demand from such Bank (or, if such Bank fails to pay such amount
forthwith upon such demand, from the Borrower) together with interest thereon,
in respect of each day during the period commencing on the date such amount was
made available to the Borrower and ending on the date the Agent recovers such
amount, at a rate per annum equal to the Federal Funds Effective Rate.
9.17 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
Bank whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrower and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
9.18 Beneficiaries.
---------------
Except as expressly provided herein, the provisions of this
Article 9 are solely for the benefit of the Agent and the Banks, and the Loan
Parties 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 Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any of the Loan Parties.
10. MISCELLANEOUS
-------------
10.1 Modifications, Amendments or Waivers.
-------------------------------------
With the written consent of the Required Banks, the Agent,
acting on behalf of all the Banks, and the Borrower, on behalf of the Loan
Parties, may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or the
rights of the Banks or the Loan Parties hereunder or thereunder, or may grant
written waivers or consents to a departure from the due performance of the
Obligations of the Loan Parties hereunder or thereunder; provided, however, that
the written consent of the Required Banks shall not be required with respect to
the joinder of additional Loan Parties pursuant to Section 10.18. Any such
agreement, waiver or consent made with such written
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consent shall be effective to bind all the Banks and the Loan Parties; provided,
that, without the written consent of all the Banks, no such agreement, waiver or
consent may be made which will:
10.1.1 Increase of Revolving Credit Commitments; Extension of
------------------------------------------------------
Expiration Date.
---------------
Increase the amount of the Revolving Credit Commitment of any
Bank hereunder or extend the Expiration Date;
10.1.2 Extension of Payment; Reduction of Principal, Interest
------------------------------------------------------
or Fees; Modification of Terms of Payment.
-----------------------------------------
Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan, the Commitment Fee or any other
fee payable to any Bank, or reduce the principal amount of or the rate of
interest borne by any Loan or reduce the Commitment Fee or any other fee payable
to any Bank, or otherwise affect the terms of payment of the principal of or
interest of any Loan, the Commitment Fee or any other fee payable to any Bank;
10.1.3 Release of Guarantor.
--------------------
Release any Domestic Subsidiary from its Obligations under the
Master Guaranty Agreement; or
10.1.4 Miscellaneous.
--------------
Amend Sections 4.2 [Pro Rata Treatment of Banks], 9.6
[Exculpatory Provisions] or 9.13 [Equalization of Banks] or this Section 10.1,
alter any provision regarding the pro rata treatment of the Banks, change the
definition of Required Banks, or change any requirement providing for the Banks
or the Required Banks to authorize the taking of any action hereunder.
No agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent, or its
capacity as the issuer of Letters of Credit shall be effective without the
written consent of the Agent.
10.2 No Implied Waivers; Cumulative Remedies; Writing Required.
---------------------------------------------------------------
No course of dealing and no delay or failure of the Agent or any
Bank 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. The rights and remedies of the Agent and the Banks
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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 Bank 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.
10.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.
-----------------------------------------------------------------
The Borrower agrees unconditionally upon demand to pay or reimburse to each
Bank and to save each Bank harmless against (i) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements (including fees and
expenses of counsel for each Bank except with respect to (A), (B) and (C)
below), incurred by such Bank (a) in connection with the administration and
interpretation of this Agreement, the other Loan Documents, and the other
instruments and documents to be delivered hereunder, provided such reimbursement
with respect to administration only shall be available to such Bank at a time
when an Event of Default shall have occurred and be continuing, (b) relating to
any amendments, waivers or consents pursuant to provisions hereof, (c) in
connection with the enforcement of this Agreement or any other Loan Document, or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any workout,
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings; (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted by or
asserted against such Bank as a result of the use of the proceeds of the Loans;
and (iii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Bank,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by such Bank
hereunder or thereunder, provided that the Borrower shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (A) if the same results from
such Bank's gross negligence or willful misconduct, or (B) if the Borrower was
not given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that the Borrower shall remain liable to
the extent such failure to give notice does not result in a loss to the
Borrower), or (C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not be
unreasonably withheld. The Banks will attempt to minimize the fees and expenses
of legal counsel for the Banks which are subject to reimbursement by the
Borrower hereunder by considering the usage of one law firm to represent the
Banks and the Agent if appropriate under the circumstances. The Borrower agrees
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan Document,
and the Borrower
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agrees unconditionally to save the Agent and the Banks harmless from and against
any and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions, except as provided otherwise above.
10.4 Holidays.
--------
Whenever any payment or action to be made or taken hereunder shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day (except as provided in
Section 3.2.1 with respect to Interest Periods under the Revolving Credit Euro-
Rate Option), and such extension of time shall be included in computing interest
or fees, if any, in connection with such payment or action.
10.5 Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
10.5.1 Notional Funding.
----------------
Each Bank 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 10.5 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 association which directly or indirectly controls such Bank) of
such Bank to have made, maintained or funded any Loan to which the Revolving
Credit 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 pursuant to Section 4.5 than it would have been in
the absence of such change. Notional funding offices may be selected by each
Bank without regard to such Bank's actual methods of making, maintaining or
funding the Loans or any sources of funding actually used by or available to
such Bank; and
10.5.2 Actual Funding.
--------------
Each Bank shall have the right from time to time to make or maintain any
Loan by arranging for a branch, Subsidiary or Affiliate of such Bank to make or
maintain such Loan subject to the last sentence of this Section 10.5.2. If any
Bank 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 Bank,
but in no event shall any Bank's use of such a branch, Subsidiary or Affiliate
to make or maintain any part of the Loans hereunder cause such Bank 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
Bank (including any expenses incurred or payable pursuant to Section 4.5) which
would otherwise not be incurred.
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10.5.3 Changes to Other Branches, Subsidiaries or Affiliates.
-----------------------------------------------------
If a Bank claims any additional amounts payable pursuant to Section 4.5 or
that it is unable to make Loans to which a Revolving Credit Euro-Rate Option
applies, it shall use its reasonable efforts (consistent with legal and
regulatory restrictions) to avoid the need for paying such additional amounts or
such inability, including changing the jurisdiction of its applicable lending
office or moving the Loan to a Subsidiary or Affiliate; provided, however, that
the taking of any such action would not, in the reasonable judgment of such
Bank, be disadvantageous to such Bank.
10.6 Notices.
-------
All notices, requests, demands, directions and other communications (as
used in this Section 10.6, collectively referred to as "notices") given to or
made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on the signature pages to this Agreement or any
Guaranty or in accordance with any subsequent unrevoked written direction from
any party to the others. All notices shall, except as otherwise expressly herein
provided, be effective (a) in the case of telex or facsimile, when received, (b)
in the case of hand-delivered notice, when hand-delivered, (c) in the case of
telephone, when telephoned, provided, however, that in order to be effective,
telephonic notices must be confirmed in writing no later than the next day by
letter, facsimile or telex, (d) if given by mail, four (4) days after such
communication is deposited in the mail with first-class postage prepaid, return
receipt requested, and (e) if given by any other means (including by air
courier), when delivered; provided, that notices to the Agent shall not be
effective until received. Any Bank giving any notice to any Loan Party shall
simultaneously send a copy thereof to the Agent, and the Agent shall promptly
notify the other Banks of the receipt by it of any such notice.
10.7 Severability.
------------
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
10.8 Governing Law.
-------------
Each Letter of Credit and Section 2.10 shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be revised or amended
from time to time, and to the extent not inconsistent therewith, the internal
laws of the Commonwealth of Pennsylvania without
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regard to its conflict of laws principles and the balance of this Agreement
shall be deemed to be a contract under the Laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to its conflict of laws principles.
10.9 Prior Understanding.
-------------------
This Agreement and the other documents and instruments executed in
connection herewith supersede all prior understandings and agreements, whether
written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments except that the Borrower's fee
payment obligations contained in the fee letter referred to in Section 9.15
shall continue in full force and effect.
10.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties contained herein or
made in connection herewith shall survive the making of Loans and issuance of
Letters of Credit and shall not be waived by the execution and delivery of this
Agreement, any investigation by the Agent or the Banks, the making of Loans,
issuance of Letters of Credit, or payment in full of the Loans. All covenants
and agreements of the Loan Parties contained in Sections 7.1, 7.2 and 7.3
shall continue in full force and effect from and after the date hereof so long
as the Borrower may borrow or request Letters of Credit hereunder and until
termination of the Revolving Credit Commitments, repayment of all Loans and
expiration or termination of all Letters of Credit. All covenants and agreements
of the Borrower contained herein relating to the payment of principal, interest,
premiums, additional compensation or expenses and indemnification, including
those set forth in the Notes, Article 4 and Sections 9.5, 9.7 and 10.3,
shall survive payment in full of the Loans, expiration or termination of the
Letters of Credit and termination of the Revolving Credit Commitments.
10.11 Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the benefit of the
Banks, the Agent, the Loan Parties and their respective successors and assigns,
except that, other than as contemplated by Sections 7.2.6 and 7.2.7, none of
the Loan Parties may assign or transfer any of its rights and Obligations
hereunder or any interest herein without consent of all Banks. Each Bank may, at
its own cost, make assignments of or sell participations in all or any part of
its Revolving Credit Commitment and Loans and its Ratable Share of Letter of
Credit Outstandings to one or more banks or other entities, subject to the
consent of the Borrower (which consent shall not be required during any period
in which an Event of Default exists), and the Agent with respect to any
assignee, such consents not to be unreasonably withheld, and provided that (i)
assignments may not be made in amounts less than $5,000,000 and (ii) after
giving effect to such assignment, no Bank which remains a Bank thereafter shall
have Commitments of less than $5,000,000. In the case of an assignment, upon
receipt by the Agent of the Syndication
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Assignment and Assumption Agreement with respect to all assignments made as part
of the initial syndication of the credit facilities under the Agreement after
the Closing Date, or the Assignment and Assumption Agreement with respect to
each subsequent assignment, the assignee or assignees shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights,
benefits and obligations as it would have if it had been a signatory Bank
hereunder, the Revolving Credit Commitments in Section 2.1 shall be adjusted
accordingly and Schedule 1.1(B) to this Agreement shall be modified by Schedule
I to the Syndication Assignment and Assumption Agreement with respect to all
assignments made as part of the initial syndication of the credit facilities
under this Agreement after the Closing Date or by Schedule I to each Assignment
and Assumption Agreement with respect to subsequent assignments, and upon
surrender of any Notes subject to such assignment, the Borrower shall execute
and deliver new Notes to the assignee in an amount equal to the amount of the
Revolving Credit Commitments assumed by it and new Notes to the assigning Bank
in an amount equal to the Revolving Credit Commitments retained by it hereunder.
Any assigning Bank shall pay to the Agent a service fee in the amount of $3,500
for each assignment, which amount shall not be subject to reimbursement or
indemnification by the Borrower. In the case of a participation, the participant
shall only have the rights specified in Section 8.2.3 (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto and
not to include any voting rights), all of such Bank's obligations under this
Agreement or any other Loan Document shall remain unchanged, and all amounts
payable by any Loan Party hereunder or thereunder shall be determined as if such
Bank had not sold such participation. Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrower and the Agent the form of certificate described in
Section 10.17 relating to federal income tax withholding. Each Bank may furnish
any publicly available information concerning any Loan Party or its Subsidiaries
and any other information concerning any Loan Party or its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants), provided that such assignees
and participants agree to be bound by the provisions of Section 10.12.
Notwithstanding any other language in this Agreement, any Bank may at any time
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank as collateral in accordance with Regulation A and the
applicable Operating Circular of such Federal Reserve Bank.
10.12 Confidentiality.
---------------
The Agent and the Banks each agree to keep confidential all information
obtained from any Loan Party or its Subsidiaries which is nonpublic and
confidential or proprietary in nature (including any information the Borrower
specifically designates as confidential), except as provided below, and to use
such information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement and who are
notified that the information is to be treated as
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confidential, (ii) to assignees and participants as contemplated by Section
10.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower if not prohibited, as otherwise required by applicable
Law or by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to be
subject to confidentiality restrictions, (v) if the Borrower shall have
consented to such disclosure, or (vi) after notice to the Borrower unless the
Borrower is an adverse party in such litigation, in connection with any
litigation to which any Bank is a party the subject matter of which involves
this Agreement or is deemed necessary upon the advice of legal counsel of such
Bank by such Bank in any defense of such litigation.
10.13 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, including facsimiles, each of which, when so
executed and delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
10.14 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be obtained
under this Agreement or any of the other Loan Documents as a condition to any
action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole discretion and to
condition its consent upon the giving of additional collateral, the payment of
money or any other matter.
10.15 Exceptions.
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 10.6 AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON ACTUAL
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RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE
OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR INCONVENIENT FORUM. EACH
LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULL EXTENT
PERMITTED BY LAW.
10.17 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrower hereunder for the account of such
Bank; (B) each assignee or participant shall deliver such form or certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Agent in its sole discretion shall permit such
assignee or participant to deliver such form or certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower and the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, either certifying
that such Bank, assignee or participant is entitled to receive payments under
this Agreement and the other Loan Documents without deduction or withholding of
any United States federal income taxes or is subject to such tax at a reduced
rate under an applicable tax treaty or stating that no such exemption or reduced
rate is allowable. The Agent shall be entitled to withhold United States
federal income taxes at the full withholding rate unless the Bank, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
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10.18 Joinder of Subsidiaries.
Any Subsidiary of the Borrower which is required to join the Master
Guaranty Agreement pursuant to Section 7.2.9 shall execute and deliver to the
Agent a signature page to the Master Guaranty Agreement and to the Master
Intercompany Subordination Agreement. The Loan Parties shall deliver such
Guarantor Joinder and the other documents required by this Section 10.18 to the
Agent within five (5) Business Days after the date of the filing of such
Subsidiary's articles of incorporation if the Subsidiary is a corporation, the
date of the filing of its certificate of limited partnership if it is a limited
partnership or the date of its organization if it is an entity other than a
limited partnership or corporation or, if acquired, the date of acquisition. The
Agent shall have received, for its benefit and the benefit of the Banks,
opinions of the Loan Parties legal counsel in form and substance satisfactory to
the Agent together with such other documents, certificates and agreements as the
Agent may request to effectuate the provisions of this Section 10.18.
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[SIGNATURE PAGE 1 OF 2 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
BORROWER:
ATTEST: CUNO INCORPORATED.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Title: Chief Financial Officer
------------------------
[Seal]
Address for Notices:
000 Xxxxxxxx Xxxxxxx
Xxxxxxx XX 00000
Telecopier No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Telephone No. (000) 000-0000
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[SIGNATURE PAGE 2 OF 2 TO CREDIT AGREEMENT]
MELLON BANK, N.A., Individually as
a Bank and as Agent
By: /s/ Xxxx Xxxx Xxxxxxx
--------------------------------
Title: Assistant Vice President
-----------------------------
Address for Notices:
Legal Documents:
Mellon Financial Services
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Telecopier No. (000) 000-0000
Attention: Xxxx Xxxx Xxxxxxx
Telephone No. (000) 000-0000
Administrative Notices:
Mellon Bank, N.A.
Loan Administration
Three Mellon Bank Center
Xxxxxxxxxx, XX 00000
Telecopier No. (000) 000-0000
Mellon's Wiring Instructions:
MELLON BANK
PITTSBURGH, PA
ABA #000000000
ATTN: LOAN ADMINISTRATION
CREDIT ACCOUNT #___________
REF: CUNO Incorporated
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