EXHIBIT 10.25
CREDIT AGREEMENT
BY AND AMONG
IMAGEMAX, INC.
AND SUBSIDIARIES
AND
CORESTATES BANK, N.A.,
FOR ITSELF AND AS AGENT
AND ANY OTHER BANKS BECOMING PARTY
As of
MARCH 30, 1998
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS................................................................ 1
Section 1.01. Definitions................................................. 1
Section 1.02. Other Definitional Provisions............................... 15
ARTICLE II - THE REVOLVING CREDIT FACILITY............................................. 16
Section 2.01. Amount and Nature of Revolving Credit
Facility.................................................... 16
Section 2.02. Notes....................................................... 17
Section 2.03. Making of Revolving Credit Advances......................... 17
Section 2.04. Mandatory Prepayment........................................ 18
ARTICLE III - LETTERS OF CREDIT........................................................ 19
Section 3.01. Letter of Credit Facility................................... 19
Section 3.02. Letter of Credit Fees....................................... 20
ARTICLE IV - INTEREST RATE ELECTIONS AND INTEREST PERIODS
AS TO REVOLVING CREDIT FACILITY........................................... 21
Section 4.01. Interest On Loan Balance.................................... 21
Section 4.02. Interest Rate Elections..................................... 22
Section 4.03. Interest Periods............................................ 23
Section 4.04. Procedures Applicable to Interest Rates..................... 24
Section 4.05. Applicable Margin and Certain
Adjustments................................................. 24
Section 4.06. Special Provisions for LIBOR Loans.......................... 25
ARTICLE V - GENERAL MATTERS WITH RESPECT TO THE CREDIT
FACILITY................................................................... 26
Section 5.01. Priority of Payments........................................ 26
Section 5.02. Computation of Interest..................................... 26
Section 5.03. General Provisions as to Payments and
Prepayments................................................. 26
Section 5.04. Payment on Non-Business Day................................. 27
Section 5.05. Accounting Terms............................................ 27
Section 5.06. Reference to Time........................................... 28
Section 5.07. Default Rate................................................ 28
Section 5.08. Commitment Fee.............................................. 28
Section 5.09. Other Fees.................................................. 28
Section 5.10. The Banks' Reimbursements................................... 29
Section 5.11. Capital Adequacy............................................ 30
Section 5.12. Interest Laws............................................... 31
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PAGE
Section 5.13. No Deductions............................................... 31
Section 5.14. Yield Protection............................................ 32
Section 5.15. Illegality.................................................. 33
ARTICLE VI - CONDITIONS OF LENDING..................................................... 34
Section 6.01. Execution of Principal Loan Documents....................... 34
Section 6.02. Additional Collateral Documentation......................... 34
Section 6.03. Additional Loan Documentation............................... 35
Section 6.04. Financial Information....................................... 36
Section 6.05. Additional Conditions for Each Revolving
Credit Advance.............................................. 36
ARTICLE VII - REPRESENTATIONS AND WARRANTIES........................................... 37
Section 7.01. Organization and Authority.................................. 37
Section 7.02. Authorization and Binding Nature of Loan
Documents................................................... 37
Section 7.03. No Conflicts................................................ 38
Section 7.04. Consents.................................................... 39
Section 7.05. Financial Information....................................... 40
Section 7.06. Absence of Certain Developments............................. 41
Section 7.07. Material Leases and Contracts............................... 42
Section 7.08. ERISA Matters............................................... 42
Section 7.09. Litigation.................................................. 44
Section 7.10. Tax and Other Returns and Reports........................... 45
Section 7.11. Absence of Undisclosed Liabilities.......................... 45
Section 7.12. Affiliate Agreements........................................ 46
Section 7.13. Personal Property........................................... 46
Section 7.14. Real Property............................................... 46
Section 7.15. Intellectual Property....................................... 47
Section 7.16. Laws and Permits; Environmental
Protection.................................................. 48
Section 7.17. Insurance................................................... 48
Section 7.18. Employee Relations.......................................... 49
Section 7.19. Adequacy of Assets.......................................... 49
Section 7.20. Regulation U................................................ 49
Section 7.21. Year 2000 Compliance........................................ 49
Section 7.22. Full Disclosure............................................. 50
ARTICLE VIII - AFFIRMATIVE COVENANTS................................................... 50
Section 8.01. Corporate Existence, Properties, Etc........................ 50
Section 8.02. Payment of Indebtedness, Taxes, Etc......................... 51
Section 8.03. Statements, Reports and Certificates to
be Delivered by Borrower.................................... 51
Section 8.04. Other Reports and Notices................................... 54
Section 8.05. ERISA Reports............................................... 55
Section 8.06. Additional Uniform Commercial Code
Searches.................................................... 56
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PAGE
Section 8.07. Formation of Company Affiliates............................. 56
Section 8.08. Bank Accounts............................................... 56
ARTICLE IX - NEGATIVE COVENANTS........................................................ 57
Section 9.01. Minimum Cash Flow........................................... 57
Section 9.02. Ratio of Funded Debt to Cash Flow........................... 57
Section 9.03. Cash Flow Coverage.......................................... 58
Section 9.04. Capitalization.............................................. 58
Section 9.05. Employee Plans.............................................. 58
Section 9.06. Indebtedness................................................ 59
Section 9.07. Guaranties.................................................. 59
Section 9.08. Negative Pledge............................................. 59
Section 9.09. Corporate Reorganizations................................... 61
Section 9.10. Restriction on Acquisitions................................. 61
Section 9.11. Disposition of Assets....................................... 65
Section 9.12. Loans, Investments, Etc..................................... 65
Section 9.13. Sales and Leasebacks........................................ 65
Section 9.14. Payments and Distributions to
Affiliates.................................................. 66
Section 9.15. Lines of Business........................................... 67
ARTICLE X - DEFAULT AND REMEDIES....................................................... 67
Section 10.01. Default..................................................... 67
Section 10.02. Remedies.................................................... 70
Section 10.03. Remedies Cumulative......................................... 72
Section 10.04. Remedies Not Waived......................................... 72
ARTICLE XI - THE AGENT................................................................. 72
Section 11.01. Appointment and Authority of Agent.......................... 72
Section 11.02. Responsibilities of Agent................................... 75
Section 11.03. Indemnification of Agent.................................... 77
Section 11.04. Sharing of Set-Offs......................................... 78
Section 11.05. Option to Purchase.......................................... 79
ARTICLE XII - MISCELLANEOUS............................................................ 80
Section 12.01. Right of Set-Off............................................ 80
Section 12.02. No Discharge................................................ 81
Section 12.03. Amendment; Waiver........................................... 81
Section 12.04. Severability................................................ 82
Section 12.05. Borrower Assignees.......................................... 82
Section 12.06. Bank Assignees; Participations.............................. 82
Section 12.07. Governing Law............................................... 83
Section 12.08. Headings.................................................... 83
Section 12.09. Notices..................................................... 84
Section 12.10. Survival of Agreement....................................... 84
Section 12.11. Counterparts................................................ 84
Section 12.12. Canceled Notes.............................................. 84
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PAGE
Section 12.13. Conflicts Among Loan Documents; Merger...................... 84
Section 12.14. Appointment and Authorization of
Borrowing Agent............................................. 84
Section 12.15. Joinder of Additional Company
Affiliates.................................................. 85
Section 12.16. Jurisdiction and Venue...................................... 85
Section 12.17. Waiver of Jury Trial........................................ 85
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EXHIBITS
Responsible Party
2.01 - Banks and Ratable Shares MMWR
2.02 - Form of Revolving Credit Note MMWR
2.03 - Credit Request MMWR
3.01 - Master Letter of Credit Agreement CoreStates
4.02 - Interest Rate Election Notice MMWR
7.01 - Organization and Authority BOR
7.03 - No Conflicts BOR
7.07 - Material Leases and Contracts BOR
7.08 - ERISA Matters BOR
7.09 - Litigation; Compliance With Law BOR
7.10 - Tax and Other Returns and Reports BOR
7.11 - Absence of Undisclosed Liabilities BOR
7.12 - Affiliate Agreements BOR
7.14 - Real Property BOR
7.15 - Intellectual Property BOR
7.17 - Insurance BOR
7.21 - Year 2000 Compliance BOR
8.03 - Compliance Certificate MMWR
9.08 - Permitted Liens BOR
9.10A - Pending Acquisitions BOR
9.10B - Subordination Provisions MMWR
9.10C - Due Diligence Checklist BOR
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CREDIT AGREEMENT
CREDIT AGREEMENT (the "Agreement") dated as of the 30th day of March, 1998
by and among IMAGEMAX, INC., a Pennsylvania corporation (referred to herein as
the "Borrower"), each Subsidiary of Borrower now or hereafter becoming a
signatory to this Agreement (referred to herein, with the Borrower, as the
"Company Affiliates"), CORESTATES BANK, N.A., a national banking association for
itself ("CoreStates"), and as agent hereunder (the "Agent") and any other bank
becoming party to this Agreement, and their successors and assigns (Corestates
in its individual capacity and such other banks, each referred to herein as a
"Bank," or collectively, the "Banks").
W I T N E S S E T H:
WHEREAS, the Borrower and its operating Subsidiaries provide document
management and related services throughout the United States; and
WHEREAS, the Borrower wishes to obtain and the Banks have agreed, subject
to and in reliance on all of the provisions of this Agreement and the other Loan
Documents, to provide up to $30,000,000 in a revolving credit facility (the
"Credit Facility") to Borrower and, through the Borrower, to all of its
operating Subsidiaries, for the financing of future acquisitions and for working
capital, as further described in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the Company Affiliates, jointly and severally, and
the Banks and the Agent, severally but not jointly, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined), and certain other
terms shall have the meanings set forth elsewhere in this Agreement.
"Account" shall have the meaning set forth in the Uniform Commercial Code.
"Accountants" means Xxxxxx Xxxxxxxx LLP or such other independent certified
public accountants of recognized standing
selected by Borrower and approved by the Agent, such approval not to be
unreasonably withheld, delayed or conditioned.
"Acquisition" has the meaning set forth in Section 9.10.
"Acquisition Facility" has the meaning set forth in Section 2.01.
"Adjusted Cash Flow" means the sum of (a) Cash Flow, and (b) any portion of
historical salaries, bonuses, withdrawals, rent adjustments and other
non-recurring expenses of an acquired company which will not be paid or payable
after such company becomes a Company Affiliate.
"Adjusted LIBOR Rate" means (a) the LIBOR Rate divided by the difference
between 1.00 and the Eurocurrency Reserve Requirement, if any, plus (b) the
Applicable Margin.
"Affiliate" means, as to any specified Person, any Person that directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified.
"Agent" means CoreStates Bank, N.A. in its capacity as agent for the Banks
hereunder, its successors and assigns, and any other Person acting as agent
hereunder.
"Agreement" or "Credit Agreement" means this Credit Agreement as the same
may be amended, modified or supplemented from time to time.
"Applicable Margin" has the meaning given to such term in Section 4.05
hereof.
"Bank" means CoreStates Bank, N.A. in its individual capacity and any other
financial institution becoming party to this Agreement, and the successors and
assigns of the foregoing.
"Base Rate" means an annual interest rate equal to the greater of: (a) the
Prime Rate or (b) one-half of one percent (1/2 of 1%) in excess of the Federal
Funds Rate; such rate to change immediately upon and in accordance with any
change in the Prime Rate or the Federal Funds Rate, as the case may be.
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"Base Rate Interest Period" means any period of time during which the
Interest Rate on a Loan is calculated with reference to the Base Rate.
"Base Rate Loan" is that portion of the Revolving Credit Balance for which
the Base Rate is elected or applicable.
"Borrower Plan" means any Plan maintained or contributed to by the Borrower
and/or a Related Party now or prior to the termination of the Loan, or any Plan
under which Borrower or any Related Party has an obligation now or prior to the
termination of the Loan to any Person (including current and former employees),
including without limitation, those Plans listed on Exhibit 7.08.
"Business Day" means any day except a Saturday, Sunday or any other day on
which commercial banks in Philadelphia, Pennsylvania, or in any other city in
which a Bank's headquarters are located, are authorized or required by law to
close and, if the applicable day relates to a LIBOR Loan, LIBOR Interest Period,
or notice with respect to a LIBOR Loan, a day on which dealings in Dollar
deposits are also carried on in the London Interbank Market and banks are open
for business in London.
"Capital Expenditures" means, for any period, expenditures for any fixed
assets or improvements, replacements, substitutions or additions thereto, which
have a useful life of more than one (1) year, including without limitation
assets acquired pursuant to a Capital Lease.
"Capital Lease" means any lease for property, real, personal or mixed,
under which such Person is the lessee and which, in accordance with GAAP, is or
should be capitalized on the books of such Person.
"Capitalization" means, at any date of determination, book net worth, minus
existing Loans and advances to Affiliates and guaranties of Liabilities of
Affiliates other than Company Affiliates, plus debt subordinated to the
Obligations on terms satisfactory to the Banks (including Permitted Seller
Notes).
"Cash Flow" for any period means net income before taxes and extraordinary
gains or losses, plus interest expense, plus depreciation, plus amortization.
"Closing" means the consummation of the initial transactions contemplated
hereby on the date hereof.
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"Closing Date" means the date on which the Closing is held.
"Code" means the Internal Revenue Code of 1986, as amended, and all rules
and regulations thereunder in effect from time to time.
"Collateral" has the meaning given to such term in Section 6.01 hereof.
"Company Affiliate" means the Borrower and any other present or future
Subsidiary of Borrower.
"Compliance Certificate" means a certificate in the form attached hereto as
Exhibit 8.03, to be given to the Agent by the Borrower signed by its Chief
Financial Officer or Chief Executive Officer to certify compliance with the
terms hereof.
"Consideration" means "cost basis" as defined in ss.1012 of the Code.
"Consolidated" with reference to financial information shall mean such
financial information of all Company Affiliates, on a consolidated basis in
accordance with GAAP.
"Credit Request" has the meaning given in Section 2.03 hereof and shall be
substantially in the form of Exhibit 2.03 hereto with respect to Revolving
Credit Advances.
"Confirmations" has the meaning given to such term in Section 9.10 hereof.
"Current Liabilities" means, at any date, all Liabilities (including
deferred charges and provision for income taxes but not including life insurance
policies or the Revolving Credit Balance) which would, in accordance with GAAP,
after eliminating all intercompany transactions, be classified as current
liabilities, but in any event such term shall include but not be limited to,
Current Maturities.
"Current Maturities" means, at any date, such portion of Funded Debt which
is outstanding on such date and under the provisions applicable thereto matures
on demand or within one year from such date and may not, directly or indirectly,
be renewed, extended, or refunded, so as to be outstanding more than one year
after such date (but not including the Revolving Credit Balance).
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"Default" has the meaning given to such term in Section 10.01 hereof.
"Default Rate" means the interest rate set forth in Section 5.07 hereof.
"Distributable Share" of any Bank means the percentage obtained by dividing
the dollar amount of the Obligations owing to such Bank (as a Bank or as Agent)
in connection with this Agreement by the dollar amount of all such Obligations
owing to all of the Banks (as a Bank or as Agent).
"DOL" means the United States Department of Labor.
"Effective Date" means the date of disbursement of a Loan, or, if the Loan
has already been disbursed, the date the Borrower designates as the date on
which a Base Rate Interest Period or a LIBOR Interest Period is to commence, all
as provided in Article IV hereof.
"Eligible Accounts" means the aggregate without duplication of all invoiced
Accounts of a Company Affiliate arising from the sale of goods or services by
the Company Affiliate, which are not more than ninety (90) days past due date or
one hundred twenty (120) days past invoice date, each of which meets all of the
following specifications:
(a) it is lawfully owned by the Company Affiliate and subject to no
lien, security interest or prior assignment other than the liens created
hereunder, and the Company Affiliate has the right of assignment thereof and the
power to grant a security interest therein;
(b) it is a valid and enforceable Account, representing the undisputed
indebtedness of an Account debtor;
(c) it is not subject to any defense, set-off, counter-claim, contra
account, credit, deposit, allowance or adjustment;
(d) it has not arisen with respect to goods or services of which any
substantial part has been returned, rejected, lost or damaged;
(e) it arose from an absolute sale and not on consignment or on
approval or on a sale-or-return basis nor subject to any other repurchase or
return agreement, and such
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goods or services have been shipped or provided to the Account debtor;
(f) if it is due from an Account debtor located outside of the United
States or Canada, it is supported by an irrevocable letter of credit payable in
United States currency and issued by a bank acceptable to the Agent; provided
that, Eligible Accounts due from Account debtors located in Canada may not
exceed ten percent (10%) of all Eligible Accounts, except to the extent
supported by letters of credit as provided in this subsection;
(g) it arose in the ordinary course of the business of the Company
Affiliate and it is an operating Subsidiary of Borrower;
(h) it is not the obligation of an Account debtor which the Company
Affiliate or the Banks reasonably and in good faith believe is in bankruptcy,
receivership, reorganization, is insolvent, or is unable generally to pay its
debts as they mature;
(i) the Account debtor with respect thereto is not an affiliate of the
Company Affiliate and does not control, and is not under the control of, or
under common control with, the Company Affiliate;
(j) it is otherwise of a credit quality acceptable to the Banks, in
their reasonable and good faith determination, taking into consideration the
credit quality of the Account debtor and the Account debtor's history of
payment;
(k) it is not due from an Account debtor which owes, or which is
affiliated with an Account debtor which owes, Accounts to any Company Affiliate,
fifty percent (50%) of which in the aggregate are not Eligible Accounts;
(l) if the Account debtor is the United States of America, any state
or any municipality, or any department, agency or instrumentality thereof, the
Company Affiliate has, with respect to such Accounts, complied with the Federal
Assignment of claims Act (31 U.S.C. Section 3727) or any applicable statute or
municipal ordinance of similar purpose and effect;
(m) if evidenced by an "instrument" or "chattel paper" (as defined in
the UCC), the same is in the possession of Agent, on behalf of Agent and the
Banks;
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(n) Agent, on behalf of Agent and the Banks, has a valid, first
priority and fully perfected security interest thereon and it is subject to no
other Lien except Permitted Liens;
(o) it is due from a customer whose total Accounts owed to all Company
Affiliates do not exceed in the aggregate an amount equal at any time to ten
percent (10%) of the aggregate of all Company Affiliates' Accounts at such time;
and
(p) it is not an Account with respect to which the customer is a
creditor of any Company Affiliate, provided that any such Account shall only be
ineligible as to that portion of such Account which is less than or equal to the
amount owed by a Borrower to such Person.
"Environmental Laws" means all laws relating to pollution or protection of
the environment, including laws relating to emissions, discharges, releases or
threatened releases of hazardous substances, materials or wastes (including,
without limitation, petroleum products, petroleum wastes and petroleum
derivatives) (collectively, "Hazardous Wastes"), into the environment
(including, without limitation, ambient air, surface water, ground water, or
land), or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Hazardous Wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules and regulations thereunder in effect
from time to time.
"Eurocurrency Reserve Requirement" means, for any LIBOR Loan for any LIBOR
Interest Period relating thereto, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves) are required to be maintained during such
LIBOR Interest Period under Regulation D by member banks of the Federal Reserve
System for new non-personal time deposits in the amount of $100,000 or more and
with a maturity comparable to the LIBOR Interest Period of such LIBOR Loan.
Without limiting the effect of the foregoing, the Eurocurrency Reserve
Requirement shall reflect any other reserves required to be maintained by such
member bank against any category of liabilities which includes deposits by
reference to which the LIBOR Interest Rate for LIBOR Loans is to be determined;
or any category of extension of credit or other assets that include LIBOR Loans.
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"Event of Default" means any event which would, with the giving of notice
or expiration of time periods, become a Default if uncured.
"Failed Bank" has the meaning given to such term in Section 11.05(a)
hereof.
"Federal Funds Rate" means, for any date such rate is being calculated, the
rate for over-night Federal funds, in amounts of $1,000,000 or more, quoted in
Publication H-15 for such day or, if such is unavailable, then the rate quoted
for overnight federal funds for such day in The Wall Street Journal.
"Financial Statements" means the financial statements, including the notes
thereto, referred to in Section 7.05.
"Fixed Charges" for any period means the sum of Total Debt Service, plus
all taxes paid in cash, plus all non-financed Capital Expenditures.
"Funded Debt" means all Indebtedness that has a final maturity more than
one (1) year after the date of creation thereof (or which is renewable or
extendable at the option of the debtors to a date more than one (1) year from
said date of creation), including without limitation all sale and leaseback
payments and all final and serial maturities, prepayments and sinking fund
payments required to be made one (1) year or less after the date of
determination thereof (notwithstanding the fact that any amount thereof is at
the time also included in Current Liabilities under GAAP), but excluding
Permitted Seller Notes.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Governmental Authority" means any federal, state, or local agency, board,
commission, department, court or other authority.
"Head Office" means the office of the Agent at Broad and Chestnut Streets,
Philadelphia, Pennsylvania 19107-7618, or such other address as may be
designated by the Agent in writing to Borrower from time to time.
"Indebtedness" means, without duplication:
(a) (i) long-term indebtedness, (ii) deferred taxes and reserves,
(iii) indebtedness, obligations and
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liabilities for borrowed money or for the deferred purchase price of property,
(iv) lease obligations that, in conformity with GAAP, have been or should be
capitalized on such balance sheet, (v) all indebtedness, obligations and
liabilities secured by any lien, mortgage, charge, encumbrance or security
interest on any property even though the owner has not assumed or otherwise
become liable for the payment thereof, and (vi) all obligations to purchase
goods, property or services where payment therefor is required regardless of
whether delivery of such goods or property or the performance of such services
is ever made or tendered;
(b) all guarantees (whether by discount or otherwise), endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations in respect of, or to purchase or otherwise acquire
or become liable upon, indebtedness, obligations or liabilities of others,
including without limitation surety bonds; and
(c) all obligations or liabilities under or pursuant to any letter of
credit, surety bonds or similar obligations.
"Intangibles" means, as of the date of any determination thereof, the total
amount of goodwill, patents, non-compete agreements, restrictive covenants,
trade names, trademarks, copyrights, franchise, experimental expense,
organization expense, unamortized debt discount and expense, the excess of cost
of shares acquired over book value of related assets and such other assets as
are properly classified as "intangible assets" in accordance with GAAP.
"Intellectual Property" means all intellectual property and related rights
(whether or not currently being used in its business), including without
limitation, patents and applications therefor, confidential or proprietary
information, know-how, trade secrets, secret formulas, technical information,
computer software, programs, source code, object code, tapes, disks and related
materials, business and marketing plans, customer lists, registrations and
applications therefor, copyrights registrations and applications therefor,
trademarks, service marks, trade names and all names and slogans used or usable
by a Person in connection with its business or any of its activities, products
or services, and all goodwill related to the foregoing.
"Interest Period" means a Base Rate Interest Period or a LIBOR Rate
Interest Period.
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"Interest Rate" means the Base Rate or Adjusted LIBOR Rate.
"Interest Rate Election Notice" means a notice substantially in the form of
Exhibit 4.02 hereto duly executed by an officer of Borrower.
"Investment" means any loan or advance to, or purchase or acquisition of
the securities or obligations of, any Person or the assumption of any liability
of another Person which, in each case, did not arise from sales to such Person
in the ordinary course of business.
"IRS" means the Internal Revenue Service.
"Knowledge" shall mean (whether or not capitalized), with respect to any
representation, warranty or statement of any party in this Agreement that is
qualified by such party's knowledge or best knowledge, the actual knowledge of
such party or, in the case of an entity, the actual knowledge of any officer,
director or manager of such entity, in any case, after reasonable inquiry and
investigation.
"Laws" means and with all federal, state and local laws, regulations,
ordinances, rules, orders, judgments, legislation and other promulgations by a
Governmental Authority.
"Letter of Credit" and related terms shall have the meanings set forth in
Article III.
"Liabilities" means, at any date, all liabilities in accordance with GAAP,
after eliminating all intercompany transactions, which should in conformity with
GAAP be classified as liabilities and as such should be included on a balance
sheet, including without limitation: (a) Current Liabilities, (b) long-term
indebtedness, (c) deferred taxes and reserves, (d) indebtedness, obligations and
liabilities for borrowed money or for the deferred purchase price of property,
and (e) Capital Leases.
"LIBOR Interest Period" means any period for which a LIBOR Rate is in
effect, as set forth in Section 4.02 hereof.
"LIBOR Loan" means that portion of the Revolving Credit Balance for which
an Adjusted LIBOR Rate is elected.
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"LIBOR Rate" means for any Interest Period, the rate of interest per annum
(rounded upwards, if necessary, to the next 1/16th of one percent) at which the
Agent is offered deposits of United States Dollars in the London Interbank
Market on or about 11:00 a.m. London time, two (2) Business Days prior to the
commencement of an Interest Period for amounts and maturities substantially
similar to the outstanding principal amount as to which an Adjusted LIBOR Rate
is applicable (and fixed for such Interest Period) and with a maturity of
comparable duration to the Interest Period selected.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the recording of any mortgage or deed of trust or the filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction to evidence any of the foregoing).
"Loan" means any loan made pursuant to the Credit Facility.
"Loan Balance" means the Revolving Credit Balance.
"Loan Documents" means this Agreement and the Notes, Surety Agreement,
Subrogation and Contribution Agreement, Security and Pledge Agreement,
Subordination Agreement, Mortgages, the financing statements filed with respect
to the Collateral, and all certificates, agreements, instruments, exhibits and
other documents now or hereafter delivered or to be delivered by any Company
Affiliate to the Agent or the Banks in connection with this Agreement, all as
amended, restated, supplemented or otherwise modified from time to time.
"Material Adverse Effect" means a material adverse effect on the financial
or other condition, business or operations of the Company Affiliates taken as a
whole.
"Mortgages" means any mortgage or deed of trust executed by any Company
Affiliate on, before or after the date hereof, as joined, amended or modified
from time to time.
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"Multiemployer Plan" means any Plan which is a "multiemployer plan" within
the meaning of Section 3(37) of ERISA.
"Notes" means the Revolving Credit Notes evidencing the Borrower's
obligation to repay the Revolving Credit Balance in the form of Exhibit 2.02
hereto.
"Obligations" means the aggregate, without duplication, of all of the
following, whether absolute or contingent, matured or unmatured, direct or
indirect, xxxxxx or inchoate, sole, joint, several or joint and several, similar
or dissimilar, related or unrelated, due or to become due, heretofore or
hereafter contracted or acquired, whether for principal, interest (including,
without limitation, interest accruing after the filing of a petition initiating
any insolvency proceeding whether or not such interest accrues after the filing
of such petition for purposes of the Bankruptcy Code or is an allowed claim in
such proceeding), fees, expenses, premium, penalty or otherwise: (i) Borrower's
obligations under the Notes and any renewals, extensions or modifications
thereof, (ii) all obligations and liabilities of any Company Affiliate hereunder
or under any other Loan Document, including without limitation those referenced
in Article VI hereof, and (iii) all existing and future obligations or
liabilities of any Company Affiliate to the Agent or the Banks under this
Agreement or the other Loan Documents, or any amendment, extension,
modification, increase, renewal, refinancing or refunding thereof, whether
absolute or contingent, related or unrelated, regardless of their source or
nature and out of whatever transaction arising.
"Other Banks" has the meaning given to such term in Section 11.04 hereof.
"Participants" has the meaning given to such term in Section 12.06(a)
hereof.
"Participation" has the meaning given to such term in Section 12.06(a)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Benefit Plan" means any Plan which is an "employee pension benefit
plan", within the meaning of Section 3(2) of ERISA, other than a Multiemployer
Plan.
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"Permit" means any permit, license, registration, notice, filing or other
authorization required to be obtained from or given by or to any Governmental
Authority.
"Permitted Acquisition" has the meaning given to that term in Section 9.10
hereof.
"Permitted Liens" has the meaning given to that term in Section 9.08
hereof.
"Permitted Seller Notes" has the meaning given in Section 9.10.
"Person" means an individual, corporation, limited liability company,
partnership, trust, estate, incorporated or unincorporated association, joint
venture, joint stock company, government (or an agency, political subdivision or
instrumentality thereof) or other entity of any kind.
"Plan" means any "employee benefit plan," within the meaning of Section
3(3) of ERISA, as well as any other employee benefit, compensation or welfare
plan, program, practice, policy, agreement or arrangement, whether formal or
informal.
"Prime Rate" means the interest rate which is announced by the Agent from
time to time as its prime rate; the use of such term shall not imply that such
rate is the lowest or best rate offered by the Agent.
"Ratable Share" of any Bank means such Bank's share of the Credit Facility
as set forth in Exhibit 2.01 hereto.
"Registration Statement" has the meaning set forth in Section 7.05.
"Regulatory Change" means, with respect to any Person, any adoption or
change occurring after the date of this Agreement in or of any domestic or
foreign law applicable to such Person; or regulation, interpretation, directive
or request (whether or not having the force of law) applicable to such Person of
any court or Governmental Authority charged with the interpretation or
administration of any law referred to in this clause or of any fiscal, monetary,
central bank or other authority having jurisdiction over such Person.
"Related Party" means any trade or business, whether or not incorporated,
which, together with Borrower, is under common
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control or is otherwise described in Section 414(b), (c), (m), or
(o) of the Code.
"Repayment" has the meaning given to such term in Section 11.06 hereof.
"Reportable Event" has the meaning assigned to such term in Section 4043(b)
of ERISA or regulations issued thereunder, other than a reportable event for
which the thirty (30) day notice requirement to the Pension Benefit Guaranty
Corporation has been waived pursuant to Section 4043(a) of ERISA.
"Required Banks" means: (a) if the Agent, as a Bank, holds aggregate
Ratable Shares of sixty-six and two-thirds percent (66 2/3%) or more, then all
of the Banks, or (b) otherwise, then Banks holding aggregate Ratable Shares of
at least sixty-six and two thirds percent (66 2/3%); provided that, any Bank in
default of its obligations under this Agreement will not be counted for purposes
of determining the Required Banks.
"Revolving Credit Advance" means any advance made to Borrower under the
Credit Facility pursuant to Article II hereof.
"Revolving Credit Balance" has the meaning given to such term in Section
2.01(c) hereof.
"Revolving Credit Facility" or "Credit Facility" means the maximum
aggregate revolving credit facility of $30,000,000 made available under Article
II until the Termination Date.
"Revolving Credit Limits" has the meaning set forth in Section 2.01(a).
"Senior Liens" means Permitted Liens described in subsections 9.08(b), (f)
and (i).
"Security and Pledge Agreement" means the Security and Pledge Agreement
executed by the Company Affiliates, on the date hereof, as joined, amended, or
modified from time to time.
"Senior Management" shall mean the Chairman, President, Chief Executive
Officer, Chief Financial Officer and Senior Vice President of Corporate
Development of Borrower.
"Sharing Bank" has the meaning given to such term in Section 11.04 hereof.
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"Subrogation and Contribution Agreement" means the subrogation and
contribution agreement executed by the Company Affiliates on the date hereof, as
joined, amended or modified from time to time.
"Subsidiary" means any Person of which the Borrower now or hereafter,
directly or indirectly, owns or controls more than fifty percent (50%) of the
voting power.
"Surety Agreement" means the Surety Agreement executed by each Company
Affiliate on the date hereof, as joined, amended or modified from time to time.
"Termination Date" means the earlier of the fifth (5th) anniversary of the
Closing Date or December 31, 2002.
"Total Debt Service" means interest expense for the period of calculation,
plus Current Maturities of long term debt due in the subsequent period of
calculation for borrowings under notes, Capital Leases and other contractual
Indebtedness.
"Uniform Commercial Code" means the Uniform Commercial Code as enacted from
time to time in the Commonwealth of Pennsylvania or such jurisdiction the law of
which governs to the extent set forth in 13 Pa.C.S.A. ss.9103.
"Voting Shares" means, with respect to any corporation, association or
business entity, any and all shares of capital stock, partnership interests or
other ownership interests of such corporation, association or other business
entity of any class or classes (however designated), the holders of which are at
the time entitled to vote for the election of the directors (or persons
performing similar functions) of such corporation, association or other business
entity, whether or not the right so to vote exists by reason of the happening of
a contingency.
"Welfare Benefit Plan" means any "employee welfare benefit plan" within the
meaning of Section 3(l) of ERISA, including any "multiple employer welfare
arrangement" within the meaning of Section 3(40) of ERISA.
"Working Capital Facility" has the meaning set forth in Section 2.01.
Section 1.02. Other Definitional Provisions. References to "Sections",
"subsections", "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and
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Schedules, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural depending on the reference. In
this Agreement, words importing any gender include the other genders; the words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments, and
other modifications thereto, but only to the extent such amendments, assignments
and other modifications are not prohibited by the terms of this Agreement or any
other Loan Document; references to Persons include their respective permitted
successors and assigns or, in the case of governmental Persons, Persons
succeeding to the relevant functions of such persons; and all references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.
ARTICLE II
THE REVOLVING CREDIT FACILITY
Section 2.01. Amount and Nature of Revolving Credit
Facility.
(a) Subject to the terms and conditions of this Agreement, and in
particular Section 2.04 and 9.10, and to the other Loan Documents, and in
reliance upon the representations, warranties and covenants herein and therein
contained, each Bank severally (but not jointly) agrees to make a Revolving
Credit Facility available to Borrower and through the Borrower, to each of its
operating Subsidiaries, in an aggregate principal amount not to exceed such
Bank's Ratable Share of $30,000,000, divided into:
(i) an acquisition facility not to exceed $25,000,000 (the
"Acquisition Facility"), and
(ii) a working capital facility not to exceed the lesser of (A)
$5,000,000 or (B) 80% of the amount of the Eligible Accounts of the Company
Affiliates (the "Working Capital Facility").
(the various limitations required in this subsection (a) being herein referred
to as the "Revolving Credit Limits").
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(b) Borrower and its Subsidiaries shall use the proceeds of the
Acquisition Facility only to finance Permitted Acquisitions and shall use the
Working Capital Facility only for working capital, Capital Expenditures
permitted hereunder, and general corporate purposes; provided that, the Working
Capital Facility may also be used for Permitted Acquisitions.
(c) Borrower may borrow, repay, reborrow under the Revolving Credit
Facility at any time and from time to time subject at all times to the Revolving
Credit Limits, but only until the Termination Date, at which time the Revolving
Credit Facility shall terminate, and the entire unpaid principal balance
outstanding under the Revolving Credit Facility (the "Revolving Credit Balance")
shall be repaid to the Agent for the account of the Banks, together with accrued
interest. Borrower shall pay to the Agent for the account of the Banks interest
on the Revolving Credit Balance from the date hereof until paid in full, payable
in arrears in accordance with Article IV hereof.
Section 2.02. Notes.
(a) The obligation of the Borrower to repay the Revolving Credit
Balance shall be evidenced by separate Notes of the Borrower, payable to the
order of the Agent for the benefit of the Banks, in accordance with their
respective Ratable Shares, such Notes to be in the aggregate principal amount of
$30,000,000 and otherwise in the form of Exhibit 2.02 attached hereto.
(b) The Agent shall either record on the Notes or on schedules thereto
the date and amount of each Revolving Credit Advance and the date and amount of
each payment of principal made with respect thereto, or shall maintain computer
or other records reflecting such information. The records of the Agent with
respect to the foregoing information shall be presumed to be correct absent
manifest error.
Section 2.03. Making of Revolving Credit Advances.
(a) Borrower may, by telephone or telefax, request a Revolving Credit
Advance from the Banks on behalf of one or more operating Company Affiliates, in
an aggregate principal amount of $250,000 or a multiple of $50,000 in excess
thereof, if under the Working Capital Facility, and in an aggregate principal
amount of $250,000 or a multiple of $50,000 in excess thereof, if under the
Acquisition Facility. This
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request shall be promptly confirmed in writing by the submission of a Credit
Request, in the form attached hereto as Exhibit 2.03(a "Credit Request").
Borrower shall notify the Agent no later than 11:00 a.m., Philadelphia time:
(i) On the day, which must be a Business Day, of each proposed
Revolving Credit Advance to be made as a Base Rate Loan, specifying the date and
amount of the proposed Base Rate Loan, and the Agent shall promptly notify each
other Bank of the proposed Base Rate Loan; and
(ii) At least three Business Days before the borrowing date for
each proposed Revolving Credit Advance to be made as a LIBOR Loan, specifying
the date and the amount of the proposed LIBOR Loan and the length of the
proposed LIBOR Interest Period, and the Agent shall in turn promptly notify each
other Bank of the proposed LIBOR Loan.
(b) By 2:00 p.m., Philadelphia time, on the borrowing date for each
proposed Revolving Credit Advance each Bank shall make available to the Agent,
at Broad and Chestnut Streets, Philadelphia, Pennsylvania, in funds immediately
available to the Agent, such Bank's Ratable Share of such Revolving Credit
Advance. Upon receipt of such funds by the Agent and upon the Borrower's
fulfillment of the applicable conditions set forth in Article VI hereof, the
Agent will immediately make such funds available to the Borrower. The Agent
shall have no obligation to make funds available to the Borrower in excess of
amounts received by it from the Banks; provided, however, that if one or more
Banks fail to make available to the Agent such Bank's Ratable Share of such
Revolving Credit Advance and the Agent in its discretion elects to advance the
full amount of the Revolving Credit Advance requested by the Borrower, the
Borrower shall be obligated to repay to the Agent for the Agent's account the
amount, with interest, so advanced by the Agent and not advanced by the Bank(s)
in amounts and at the times the Borrower otherwise would be obligated to repay
such Revolving Credit Advance.
Section 2.04. Mandatory Prepayment.
(a) Notwithstanding Section 2.01, Borrower shall prepay the Revolving
Loan Balance, in accordance with the Distributable Shares of the Banks, payable
within three (3) Business Days after receipt by any Company Affiliate, in an
amount equal to all net proceeds after fees and expenses received in cash, cash
equivalents, cash payments on promissory notes or cash payments on other
instruments providing for deferred payments (such notes and instruments being
required to be pledged
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to the Agent immediately upon issuance) from: (i) the sale, conveyance, transfer
or other disposition for $50,000 or more of assets, properties or rights other
than in the ordinary course of business to a party other than a Company
Affiliate; or (ii) the sale or other issuance or exercise of any note,
debenture, capital stock, option, warrant or other security of any Company
Affiliate, in excess of $100,000 per fiscal year, other than as permitted by
Section 9.06; or (iii) the sale of the property in Chesterton, Indiana, but only
to the extent that such net proceeds exceed $1,000,000.
(b) Nothing in this Section shall imply that any Company Affiliate is
permitted to do or omit any act which would constitute a breach of any covenant
in any Loan Document.
(c) Each repayment under this Section will be allocated first to the
Acquisition Facility and second to the Working Capital Facility.
ARTICLE III
LETTERS OF CREDIT
Section 3.01. Letter of Credit Facility.
(a) A Revolving Credit Advance under the Working Capital Facility may
be made in the form of a standby or documentary letter of credit having an
expiration date not more than 364 days after issuance and in any event prior to
the Termination Date (each a "Letter of Credit"); provided that, the aggregate
stated amounts of all outstanding Letters of Credit and all outstanding
reimbursement Obligations with respect to Letters of Credit shall at no time
exceed $2,000,000 and Borrower shall immediately pay to the Agent in cash the
amount of any such excess. Borrower may request the issuance of a Letter of
Credit by submission to the Agent of a Credit Request at least three (3)
Business Days prior to issuance and any application or other document required
by the Master Letter of Credit Agreement, which shall govern all matters
relative to the Letters of Credit and shall be in the form attached hereto as
Exhibit 3.01 (the "Master Letter of Credit Agreement"). Each Letter of Credit
shall be for the purpose of issuance, in the ordinary course of business of
Borrower.
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(b) In the event of a draw on a Letter of Credit, Borrower shall
automatically be deemed to have requested, as of the immediately preceding
Business Day, a Revolving Credit Advance in cash and in an amount equal to such
draw, but if such an advance is not otherwise available under the terms of this
Agreement, Borrower shall immediately pay to the Agent an amount equal to the
amount of the draw. Each Bank hereby automatically and irrevocably purchases a
participation, in accordance with its Ratable Share, in all Letters of Credit.
In the event of any draw under a Letter of Credit which is not immediately
reimbursed to the Agent by the Borrower, by the making of a cash Revolving
Credit Advance or otherwise, or if any reimbursement received by the Agent from
the Borrower is or must be returned or rescinded upon or during any bankruptcy
or reorganization of Borrower or otherwise, each Bank shall immediately pay to
the Agent, in immediately available funds, such Bank's Ratable Share of such
draw.
(c) For all purposes the Master Letter of Credit Agreement and all
documents relating thereto shall be deemed Loan Documents, all obligations
thereunder and under this Section shall be deemed part of the Obligations, the
issuance of a Letter of Credit shall be deemed a Revolving Credit Advance, and
the term "Revolving Credit Balance" shall include all outstanding Obligations
relating to the Letters of Credit and the aggregate stated amount of outstanding
Letters of Credit (except for purposes of calculating interest under Article
IV), and any repayment obligation under this Agreement shall include payment to
the Agent of cash Collateral for all outstanding Letters of Credit.
Section 3.02. Letter of Credit Fees. The Borrower shall pay fees in respect
of the Letters of Credit as set forth in the Master Letter of Credit Agreement
and any related application or other documents and such other standard fees and
amounts as the Agent shall customarily require in connection with the issuance,
negotiation, processing and/or administration of Letters of Credit in similar
situations. The Borrower also agrees to pay to the Agent for the account of the
Banks in accordance with their Ratable Shares a non-refundable fee, immediately
upon issuance of each Letter of Credit, equal to the face amount thereof
multiplied by 2% if the Applicable Margin is 2.5%, 1.75% if the Applicable
Margin is 2.0%, and 1.5% if the Applicable Margin is 1.5%, but in no event less
than $100 per calendar quarter.
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Section 3.03. Termination of Facility. On the occurrence of a Default and
the continuance thereof, and on the Termination Date, (a) all Obligations with
respect to the Letter of Credit shall be repaid to the Agent for the account of
the Banks, (b) in the case of outstanding Letters of Credit, an amount equal to
the aggregate stated amounts thereof shall be paid to the Agent in cash and held
by the Agent as part of the Collateral, and (c) the Agent may refuse to issue
any additional Letters of Credit.
ARTICLE IV
INTEREST RATE ELECTIONS AND INTEREST PERIODS
AS TO REVOLVING CREDIT FACILITY
Section 4.01. Interest On Loan Balance.
(a) Borrower may elect, in accordance with the terms and conditions
set forth herein, that Borrower shall pay interest on the Loan Balance or one or
more portions thereof hereunder calculated in accordance with the Base Rate or
the Adjusted LIBOR Rate.
(b) Borrower shall pay to the Agent for the account of the Banks
interest on the unpaid principal amount of the Loan Balance as follows:
(i) For Base Rate Loans, for the period that begins on the
applicable Effective Date and that ends on the last day of the Base Rate
Interest Period, at an annual rate equal to the Base Rate, payable (A) in
arrears on the last day of each fiscal quarter of Borrower, beginning on the
first of such dates after the applicable Effective Date and (B) on the last day
of the Base Rate Interest Period; and
(ii) For LIBOR Loans, for the period that begins on the Effective
Date and that ends on the last day of the LIBOR Interest Period, at an annual
rate equal to the Adjusted LIBOR Rate applicable to the LIBOR Interest Period.
Interest on LIBOR Revolving Loans shall be payable in arrears: (A) if the
applicable LIBOR Interest Period is 1, 2 or 3 months long, on the last day of
the LIBOR Interest Period, or (B) if the applicable LIBOR Interest Period is six
(6) months long, (X) on the day that is three (3) months after the Effective
Date and (Y) on the last day of the LIBOR Interest Period.
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(c) Notwithstanding the above, the Loan Balance shall bear interest at
the Base Rate except to the extent that Borrower elects, in accordance with
Section 4.02 below, to pay interest on all or a portion of the Loan Balance at
the Adjusted LIBOR Rate. Each LIBOR LOAN as to which Borrower has elected a
LIBOR Rate shall continue to bear interest at such rate until the expiration of
the Interest Period selected as being applicable thereto pursuant to Section
4.03.
Section 4.02. Interest Rate Elections.
(a) Subject to the terms and conditions set forth herein, Borrower
may, by telephone or telefax (promptly confirmed in writing by an Interest Rate
Election Notice delivered to the Agent, in the form attached as Exhibit 4.02
hereto), elect that the Loan Balance or one or more portions thereof bear a
particular Interest Rate or be converted from one Interest Rate to another, or
continue at the same Interest Rate. Such notice shall also specify the Interest
Period elected by the Borrower for such balance or portion thereof. Each
Interest Rate Election Notice shall be irrevocable and shall be delivered to the
Agent not later than 11:00 A.M., Philadelphia time:
(i) For a Base Rate Loan, on the same Business Day as the
proposed Effective Date for such Base Rate Loan; and
(ii) For a LIBOR Loan, at least three Business Days prior to the
proposed Effective Date for such Loan.
(b) To the extent possible consistent with Section 2.03(a):
(i) Each Base Rate Loan shall be in an aggregate principal amount
of $250,000 or a multiple of $50,000 in excess thereof, and any Base Rate Loan
which is converted from a LIBOR Loan shall be in an aggregate principal amount
of $250,000 or multiples of $50,000 in excess thereof; and
(ii) Each LIBOR Loan shall be in an aggregate principal amount of
$250,000 or a multiple of $50,000 in excess thereof.
(c) Notwithstanding the foregoing:
(i) In the case of conversion of a LIBOR Loan to a Loan bearing
interest at a different Interest Rate, the
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Effective Date for the new Interest Period may not be any day other than the day
after the expiration of the Interest Period relating to the Loan being
converted;
(ii) At the end of any applicable LIBOR Interest Period, the
relevant LIBOR Loan will convert to a Base Rate Loan, respectively, unless the
Borrower notifies the Bank pursuant to an Interest Rate Election Notice that
Borrower is selecting a new Interest Rate option and a new Interest Period;
(iii) At no time shall there be outstanding more than five (5)
different LIBOR Loans under the Credit Facility, or six (6) if there are no Base
Rate Loans outstanding; and
(iv) During the continuance of an Event of Default, at the
Agent's option exercisable by written notice to the Borrower, Borrower may not
thereafter elect that the Loan Balance or one or more portions thereof shall
bear interest at the Adjusted LIBOR Rate, until Borrower receives written notice
to the contrary from the Agent.
Section 4.03. Interest Periods.
(a) In the case of Base Rate Loans, the Base Rate Interest Period
shall be any period of time during which the Interest Rate on a Loan is not
calculated with reference to the LIBOR Rate.
(b) In the case of LIBOR Loans, the LIBOR Interest Period shall mean
the period commencing on the date such Loan is made and ending, as the Borrower
may select, pursuant to Section 4.01 on the numerically corresponding day in the
first (1st), second (2nd), third (3rd) and sixth (6th) month thereafter.
(c) Notwithstanding the above:
(i) Any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day unless
such day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) Any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month
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at the end of such Interest Period) shall, subject to the provisions of (i)
above, end on the last day of the such calendar month;
(iii) Any Interest Period that begins before the Termination Date
and would otherwise end after the Termination Date shall end on the Termination
Date; and
(iv) Interest shall accrue from and including the first day of
each Interest Period (which must be a Business Day) to, but excluding, the day
on which such Interest Period expires.
Section 4.04. Procedures Applicable to Interest Rates.
(a) The Agent shall determine each Interest Rate hereunder in
accordance with this Article and its determination thereof shall be conclusive
in the absence of manifest error.
(b) If Borrower has failed to elect properly the Adjusted LIBOR Rate
with the applicable Interest Period for the Loan Balance or any portion thereof,
and the Agent so informs Borrower, then Borrower shall be deemed to have
requested that the Base Rate shall apply to such balance or portion thereof
until Borrower shall have given a proper Interest Rate Election Notice.
Section 4.05. Applicable Margin and Certain Adjustments.
(a) The Applicable Margin for LIBOR Loans shall be equal to the
percentage set forth below opposite the applicable ratio; Funded Debt to be
calculated at the end of each fiscal quarter and Adjusted Cash Flow to be
calculated for such fiscal quarter and the three (3) immediately preceding
fiscal quarters:
Funded Debt to Applicable
Adjusted Cash Flow Ratio Margin
Above or equal to 2.5 to 1.0 2.50%
Below 2.5 to 1.0 2.00%
Below 1.5 to 1.0 1.50%
(b) The Applicable Margin calculated under subsection (a) above shall
take effect retroactively and apply
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for the fiscal quarter following the fiscal quarter for which the Funded Debt to
Adjusted Cash Flow ratio was calculated.
(c) Notwithstanding anything to the contrary contained in this
Section, if any financial statements required by Section 8.03 hereof are not
timely delivered when due, the Applicable Margin shall automatically equal the
highest percentage set forth above as of the day such financial statements were
due and until such financial statements are delivered, at which time the
Applicable Margin shall be determined in accordance with this Section.
Section 4.06. Special Provisions for LIBOR Loans.
(a) If prior to the first day of any Interest Period for any LIBOR
Loans:
(i) The Agent determines reasonably and in good faith that
deposits (in the applicable amounts) are unavailable or are not being offered in
the relevant market for such Interest Period or that by reason of circumstances
affecting the relevant markets adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate; or
(ii) Any Bank advises the Agent that (A) the LIBOR Rate, as
determined by the Agent, will not adequately and fairly reflect that cost to
such Bank of maintaining or funding such Bank's Ratable Share of such Loans or
(B) that the making or funding of LIBOR Loans has become impracticable as a
result of an event occurring after the date of this Agreement which in the
reasonable good faith opinion of such Bank materially affects such Loans;
then, the Agent shall promptly notify the other Banks and the Borrower thereof
and, so long as such circumstances shall continue, no Bank shall be under any
obligation to make LIBOR Loans so affected.
(b) In the event any Bank shall incur any loss or expense incurred by
reason of the liquidation or redeployment of deposits or other funds acquired by
such Bank to make or maintain any portion of any LIBOR Loan hereunder as a
result of:
(i) Any payment or prepayment (whether voluntarily or
involuntarily, because of an acceleration of the maturity hereof or otherwise)
of the principal amount of any
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LIBOR Loan hereunder on a date other than the scheduled last day of the Interest
Period applicable thereto;
(ii) Any LIBOR Loan hereunder not being borrowed in accordance
with the Credit Request or Interest Rate Election Notice therefor;
then, within ten (10) Business Days after receipt by the Borrower of written
demand by such Bank, the Borrower shall pay directly to such Bank such amount as
will (in the reasonable determination of such Bank) reimburse such Bank for such
loss or expense. A statement as to any such loss or expense (including
calculations thereof in reasonable detail) shall be submitted by such Bank to
the Agent and the Borrower and shall, in the absence of manifest error, be
conclusive and binding on the Borrower. As to prepayments, Borrower's
reimbursement shall be equal to the amount, if any, by which (x) the
installments or principal being prepaid plus the installments of interest which
would have been payable thereon when discounted to a present value at a rate per
annum equal to the yield to maturity of the "Applicable Treasury Bond
Obligation(s)" exceeds (y) the principal amount being prepaid. The "Applicable
Treasury Bond Obligation(s) shall mean the debt obligation(s) of the United
States Treasury having a maturity date nearest in time to the maturity date(s)
of the principal being prepaid and the maturity date and yield to maturity of
such Applicable Treasury Bond Obligation(s) shall be determined by the Agent in
its sole discretion on the basis of quotations published in the Wall Street
Journal (or comparable source) on the date of prepayment.
ARTICLE V
GENERAL MATTERS
WITH RESPECT TO THE CREDIT FACILITY
Section 5.01. Priority of Payments. Any repayment or prepayment with
respect to the Obligations shall be applied as set forth in Section 10.02(e).
Section 5.02. Computation of Interest. Interest on the Credit Facility and
on any other amounts due to the Agent or the Banks pursuant to this Agreement
shall be computed on the basis of a year of 360 days for the actual number of
days elapsed as to LIBOR Loans and 365 days as to Base Rate Loans.
26
Section 5.03. General Provisions as to Payments and Prepayments. The
Company Affiliates shall make each payment with respect to any Loan or other
Obligation hereunder, whether principal or interest, whether due at the date of
maturity thereof or by declaration, acceleration or otherwise, and each
mandatory and optional prepayment or repayment hereunder, not later than 12:00
noon on the date when due, in Federal or other funds immediately available in
Philadelphia, Pennsylvania, to the Agent at its address following its signature
hereto, or at such other address as the Agent shall by notice in writing advise
Borrower. Each Company Affiliate hereby irrevocably authorizes the Agent and
each Bank to charge, without prior notice, the entire balance in any account of
any Company Affiliate with any Bank, to make payment on any Obligations then
due, during the continuance of an Event of Default. Any payment so made or
charged shall be promptly paid over to the Agent for application to the
Obligations in accordance with Section 10.02(e).
Section 5.04. Payment on Non-Business Day. Whenever any payment to be made
pursuant to this Agreement or the Notes or any other Loan Document shall be due
on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or other amounts due hereunder or under
such Note or Loan Document, as the case may be.
Section 5.05. Accounting Terms.
(a) All financial terms, whether or not specifically defined herein,
shall be construed, and all financial data submitted pursuant to this Agreement
shall be prepared, in accordance with GAAP applied in a manner consistent with
the application of GAAP in the preparation of the Financial Statements. To the
extent that under GAAP the financial statements of Borrower should be
consolidated with those of any Affiliate, all financial terms, whether or not
specifically defined herein, shall be construed accordingly, and all financial
data submitted pursuant to this Agreement shall be prepared on a consolidated
and consolidating basis.
(b) In the event any "Accounting Changes" (as defined below) shall
occur and such changes affect financial covenants, standards or terms in this
Agreement, then the Company Affiliates and the Banks agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result
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that the criteria for evaluating the financial condition of the Company
Affiliates shall be substantially the same after such Accounting Changes as if
such Accounting Changes had not been made, and until such time as such an
amendment shall have been executed and delivered by the Company Affiliates and
Required Banks, (i) all financial covenants, standards and terms in this
Agreement shall be calculated and/or construed as if such Accounting Changes had
not been made, and (ii) the Company Affiliates shall prepare footnotes to each
Compliance Certificate and the financial statements required to be delivered
hereunder that show the differences between the financial statements delivered
(which reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes). "Accounting
Changes" means: (x) changes in accounting principles required by GAAP and
implemented by the Company Affiliates; and (y) changes in accounting principles
recommended by the Company Affiliates' certified public accountants.
Section 5.06. Reference to Time. All references to a time of day herein
shall be deemed to be references to the time in Philadelphia, Pennsylvania,
unless otherwise specified.
Section 5.07. Default Rate. Notwithstanding any other provision hereof to
the contrary, any principal, and to the extent permitted under applicable law,
interest, of or on the Loan Balance and any other Obligation to the Banks or the
Agent which is not paid in full when due shall bear interest at a rate per annum
equal to two and one-half percent (2.5%) per annum in excess of the Interest
Rate applicable thereto otherwise in effect, as in effect from time to time;
provided that no interest shall accrue hereunder in excess of the maximum rate
permitted by law. Such Default Rate shall change immediately whenever there is a
change in the Base Rate, and such interest shall be payable by Borrower on
demand.
Section 5.08. Commitment Fee. Borrower shall pay to the Agent, to be
distributed by the Agent to each Bank according to its Ratable Share, a
nonrefundable commitment fee computed at an annual rate equal to the average
daily unused portion of the Revolving Credit Facility available to Borrower
hereunder from the date hereof to and including the Termination Date, multiplied
by 0.375% if the Applicable Margin is 2.50%, 0.25% if the Applicable Margin is
2.0%, and 0.20% if the Applicable Margin is 1.50%. Such commitment fee shall be
payable (a) quarterly in arrears on the last business day of each fiscal quarter
commencing March 31, 1998, and (b) on the Termination Date. Such
28
fee will be calculated on the basis of actual number of days elapsed in a year
of 360 days and shall accrue from the date hereof to but excluding the
Termination Date.
Section 5.09. Other Fees. Borrower shall pay agency and structuring fees to
the Agent as set forth in the Summary Terms and Conditions dated November 7,
1997.
Section 5.10. The Banks' Reimbursements. The Company Affiliates irrevocably
agree, jointly and severally, in consideration of the Credit Facility:
(a) To pay the reasonable fees and reasonable out-of-pocket expenses
of the Agent as reimbursement for the costs and expenses of field audits by the
Agent's employees and others, to be billed at Agent's rates then in effect,
payable promptly after receipt of an invoice therefor;
(b) To pay such funds as shall be required to reimburse all reasonable
out-of-pocket fees and expenses (including without limitation legal expenses)
incurred to third parties: (i) by the Agent in connection with the negotiation,
drafting, amendment and administration of this Agreement and the other Loan
Documents and (ii) by the Agent and the Banks in connection with the successful
enforcement and/or protection of the Agent's and the Banks' rights hereunder and
thereunder, and/or the Collateral, before or after any Event of Default, payable
promptly after receipt of the invoice therefor; and
(c) To indemnify, defend and hold harmless the Agent and each of the
Banks, and each of their directors, officers, employees and agents, on demand,
from and against any and all losses, claims, obligations, damages, liabilities,
expenses or disbursements of any kind and nature whatsoever (including but not
limited to reasonable fees and reasonable disbursements of counsel, interest,
penalties, and amounts paid in settlement) which may be imposed on, incurred by
or asserted against the Agent or any Bank, or any director, officer, employee or
agent thereof, in any way related to or arising out of this Agreement or the
Loan Documents or the transactions contemplated hereby or thereby or the good
faith enforcement of any of the terms hereof or thereof or of any such other
documents, including but not limited to those arising under any Environmental
Laws whether or not the Agent or the Banks shall have exercised any right to
take possession of any real property arising hereunder or under any other Loan
Document. The foregoing indemnity shall apply and be enforceable regardless of
whether any Bank or any
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director, officer, employee or agent thereof, or any action taken or omitted by
such party is or is alleged to be negligent, and such indemnity shall exclude
only such losses, claims, damages, liabilities or expenses which Borrower proves
were clearly and directly a result of such party's gross negligence, bad faith
or willful misconduct.
Section 5.11. Capital Adequacy.
(a) If any Bank shall have determined that the adoption after the date
hereof of any law, rule, regulation or guideline regarding capital adequacy, or
any change in any of the foregoing or in the interpretation or administration of
any of the foregoing by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Bank (or any lending office of such Bank) or such Bank's holding company
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's capital
or on the capital of the Bank's holding company to a level below that which such
Bank or its holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies and the policies of
such Bank's holding company with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time Borrower shall pay to
such Bank as set forth in (b) below such additional amount or amounts as will
compensate such Bank or its holding company for any such reduction suffered.
(b) A certificate of such Bank setting forth such amount or amounts
and such details as reasonably requested by the Borrower as shall be necessary
to compensate such Bank or its holding company as specified above shall be
delivered to the Borrower and shall be conclusive, absent manifest error. The
Borrower shall pay such Bank the amount shown as due on any such certificate
delivered by such Bank within ten (10) days after the Borrower's receipt of the
same.
(c) Failure on the part of any Bank to demand compensation for
increased costs (excluding overhead) or reduction in amounts received or
receivable or reduction in return on capital with respect to any period within
one hundred and eighty (180) days prior to demand shall not constitute a waiver
of such Bank's right to demand compensation with respect to such period or any
other period.
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(d) If any governmental action described in subsection (a) above is
successfully challenged by any Person, and as a consequence thereof any Bank
becomes entitled to recover any costs with respect to which it has been
compensated by Borrower, such Bank shall promptly repay the Borrower such amount
as it shall have received from the Borrower by way of such compensation.
Section 5.12. Interest Laws. Notwithstanding any provision to the contrary
contained in this Agreement or any Loan Document, no Borrower shall be required
to pay, and neither Agent nor any Bank shall be permitted to collect, any amount
of interest in excess of the maximum amount of interest permitted by applicable
law ("Excess Interest"). If any Excess Interest is provided for or determined by
a court of competent jurisdiction to have been provided for in this Agreement or
in any Loan Document, then in such event:
(a) the provisions of this section shall govern and control;
(b) neither Borrower nor any other Company Affiliate shall be
obligated to pay any Excess Interest;
(c) any Excess Interest that Agent or any Bank may have received
hereunder shall be, at such Bank's option, (i) applied as a credit against the
outstanding principal balance of the Obligations or accrued and unpaid interest
(not to exceed the maximum amount permitted by law), (ii) refunded to the payor
thereof, or (iii) any combination of the foregoing;
(d) the interest rate(s) provided for herein shall be automatically
reduced to the maximum lawful rate allowed from time to time under applicable
law (the "Maximum Rate"), and this Agreement and the other Loan Documents shall
be deemed to have been and shall be, reformed and modified to reflect such
reduction; and
(e) neither Borrower nor any Company Affiliate shall have any action
against Agent or any Bank for any damages arising out of the payment or
collection of any Excess Interest.
Section 5.13. No Deductions. Any and all payments or reimbursements made
under the Notes or any other Loan Document shall be made unconditionally and
without counterclaim or set-off, and free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
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withholdings, and all penalties, interest and other liabilities with respect
thereto; excluding, however, only the following: taxes imposed on the net income
of any Bank or Agent by the jurisdiction under the laws of which Agent or such
Bank is organized or doing business or any political subdivision thereof
and taxes imposed on its net income by the jurisdiction of Agent's or such
Bank's applicable lending office or any political subdivision thereof (all such
taxes, levies, imposts, deductions, charges or withholdings and all liabilities
with respect thereto excluding such taxes imposed on net income, herein "Tax
Liabilities"). If Borrower shall be required by law to deduct any such Tax
Labilities from or in respect to any sum payable hereunder to Agent or any Bank,
then the sum payable hereunder shall be increased as may be necessary so that,
after making all required deductions, Agent or such Bank receives an amount
equal to the sum it would have received had no such deductions been made.
Section 5.14. Yield Protection.
(a) If any Regulatory Change:
(i) Shall subject any Bank (or any lending office of such Bank)
to any tax, duty or other charge with respect to its Loans hereunder or its
obligation to make Loans hereunder, or shall change the basis of taxation of
payments to any Bank (or any lending office of such Bank) of the principal of or
interest on its Loans or any other amounts due under this Agreement in respect
of its Loans or its obligation to make Loans hereunder (except for changes in
the rate of tax on the overall net income of such Bank or its lending office
imposed by the jurisdiction in which such Bank's principal executive office or
lending office is located); or
(ii) Shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of Governors of
the Federal Reserve System, but excluding any reserve included in the
determination of the LIBOR Rate for any applicable Loan), special deposit,
special assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or any lending office of
such Bank) with respect to its Loans or obligations hereunder to make Loans; or
(iii) Shall impose on any Bank (or any lending office of such
Bank) any other condition affecting its Loans, or its obligations hereunder to
make Loans;
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and the result of any of the foregoing is to increase the cost to (or to impose
a cost on) such Bank (or any lending office of such Bank) of making or
maintaining any Loan hereunder, or to reduce the amount of any sum received or
receivable by such Bank (or any lending office of such Bank) under this
Agreement or under its Notes with respect thereto, within ten (10) Business Days
after receipt of written demand by such Bank, the Borrower shall pay directly to
such Bank such additional amount or amounts as will (in the reasonable good
faith determination of such Bank) compensate such Bank for such increased cost
or such reduction; provided that, to the extent any of the foregoing relates
only to LIBOR Loans, upon notice thereof by any Bank, Borrower may within such
ten (10) day period repay in full such LIBOR Loans or convert such LIBOR Loans
to Base Rate Loans without incurring reimbursement obligations for such
additional costs.
(b) Notwithstanding subsection (a), to the extent that such Bank can
without unreasonable expense or any other disadvantage (as determined by such
Bank), shift such Loan to another office which would not be subject to such
requirements, such Bank will make reasonable efforts to effectuate such change.
A certificate of any Bank setting forth the amount or amounts (including
calculations thereof in reasonable detail) necessary to compensate such Bank as
set forth in this section, together with appropriate written materials necessary
to document such costs, shall be submitted by such Bank to the Agent and the
Borrower and shall, in the absence of manifest error, be conclusive and binding
on the Borrower.
Section 5.15. Illegality. If any Regulatory Change shall make it (or in the
good faith reasonable judgment of any Bank shall raise a substantial question as
to whether it is) unlawful for any Bank to make, maintain or fund any Loans,
then (a) such Bank shall promptly notify the Agent and the Agent shall promptly
notify each of the other Banks and the Borrower, (b) the obligation of all Banks
to make or maintain Loans shall, upon the effectiveness of such event, be
suspended for the duration of such unlawfulness (or until such Bank is no longer
a party to this Agreement), and (c) if the illegality relates solely to LIBOR
Loans, on the last day (or, if earlier, on such date as may be required by the
Regulatory Change) of the Interest Period(s) for each borrowing of LIBOR Loans,
such LIBOR Loans shall be repaid in full, or if not so repaid, converted
automatically to Base Rate Loans (unless such Bank is no longer a party to this
Agreement on such date(s)). Any Bank that has given a notice of unlawfulness
pursuant to subsection (a) above shall rescind such notice promptly upon the
cessation of such unlawfulness by giving
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notice to each of the other parties hereto, in which case any affected LIBOR
Loans shall continue for the original Interest Period selected.
ARTICLE VI
CONDITIONS OF LENDING
The Banks shall not make the Credit Facility available on the Closing Date and
shall not make any Revolving Credit Advances on or after the Closing Date,
unless and until each of the following events shall have occurred, and each of
the following documents shall have been delivered to the Agent and the Banks, in
form and substance satisfactory and at no cost to the Agent and the Banks, and
duly executed and/or notarized by the intended signatories thereto, and when
appropriate, in proper form for filing or recording; provided that, the Company
Affiliates need not duplicate, as a condition to an Advance, a delivery made at
the Closing:
Section 6.01. Execution of Principal Loan Documents.
(a) This Agreement executed by each Company Affiliate;
(b) For each Bank, a Revolving Credit Note dated the date hereof and
in the form of Exhibit 2.02, each such Note to be dated and delivered on the
date hereof and executed by the Borrower;
(c) The Security and Pledge Agreement executed by each Company
Affiliate, securing the Obligations and covering substantially all of the
assets, properties and rights of and all securities issued by each Company
Affiliate other than securities issued by Borrower (including the real property
interests secured by the Mortgages, the "Collateral");
(d) Mortgages as to all real property now or hereafter owned by any
Company Affiliate, securing the Obligations;
(e) The Surety Agreement with respect to the Obligations executed by
each Company Affiliate; and
(f) The Subrogation and Contribution Agreement executed by each
Company Affiliate.
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Section 6.02. Additional Collateral Documentation.
(a) Evidence satisfactory to the Banks and their counsel that
financing statements under the Uniform Commercial Code with respect to the
Collateral have been executed and filed in such form and in such public offices
such that the security interests granted to the Banks hereunder shall constitute
fully perfected first priority security interests, subject only to Senior Liens;
(b) As reasonably required by the Agent from time to time, searches
with respect to the Company Affiliates and their former names and any trade
names under which they do or have previously done business, in all appropriate
filing offices and jurisdictions with respect to Uniform Commercial Code
financing statements, judgments and tax liens, showing none of the foregoing
applicable to the Collateral except Permitted Liens;
(c) UCC Termination Statements as to any lien or encumbrance other
than Permitted Liens;
(d) Evidence of insurance of each Company Affiliate, including, but
not limited to, policies for property and casualty (which policies shall, at all
times, reflect the Agent as loss payee and shall be in an amount equal to the
full replacement value of the Collateral), business interruption, workers'
compensation and liability, in a form and in amounts satisfactory to the Banks;
(e) Landlord's waivers and estoppel certificates with respect to the
Collateral, executed by the landlord of each Company Affiliate at each of their
locations and facilities; and
(f) Share certificates and other documentation representing or
evidencing all securities issued by each Company Affiliate other than Borrower,
accompanied by executed stock powers and other documents of transfer and
executed proxies.
Section 6.03. Additional Loan Documentation.
(a) As reasonably required by the Agent from time to time, a favorable
opinion of counsel for Borrower (in form similar to that delivered at Closing,
subject to changes reasonably requested by the Agent to take into account
changed or different facts and circumstances) and local counsel as to such
matters as the Banks may reasonably request;
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(b) On or prior to the Closing Date and before any Permitted
Acquisition, a certificate, dated the Closing Date, of a responsible officer of
each Company Affiliate certifying as true and correct (i) its
Articles/Certificate of Incorporation, as certified by the Secretary of State of
the state of incorporation of each such Person; (ii) good standing certificates
with respect to each such Person from the Secretary of State of the state in
which it was organized and in each state in which it is required to qualify to
do business; (iii) the Bylaws of each such Person, (iv) the names, incumbency
and signatures of the officers of each such Person authorized to execute this
Agreement and the Loan Documents, upon which the Banks may conclusively rely
until they shall receive a further certificate amending the prior certificate,
(v) resolutions or consents of the Board of Directors of each such Person,
authorizing, as appropriate, the consummation of the Loans, and all related
transactions and the execution of this Agreement and the Loan Documents and all
documents related thereto, and (vi) all documents evidencing other necessary
corporate action and governmental and other approvals, if any, with respect to
the foregoing transactions;
(c) A true and complete Compliance Certificate, dated the Closing Date
and the date of each Permitted Acquisition;
(d) Within sixty (60) days after Closing, the purchase of interest
rate protection in form and substance reasonably acceptable to the Agent and the
Banks for at least Fifteen Million Dollars ($15,000,000) of the Credit Facility
and for a minimum of three (3) years, capping the Adjusted LIBOR Rate at eight
percent (8%) per annum or less.
Section 6.04. Financial Information.
(a) At the Closing, the financial statements described in Section
7.05;
(b) At the Closing, five (5) years of consolidated financial
projections of the Company Affiliates reasonably satisfactory to Agent and the
Banks; and
(c) At the Closing, an operations business plan for the Company
Affiliates.
Section 6.05. Additional Conditions for Each Revolving Credit Advance. In
addition to the other conditions set forth in
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this Article VI, the Banks shall not make any Revolving Credit Advance after the
Closing unless the Agent shall have received a true and complete Credit Request
executed by Borrower's Chief Executive Officer or Chief Financial Officer dated
the date of the requested Revolving Credit Advance.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Company Affiliates jointly and severally represent and warrant to the
Agent and the Banks as follows, such representations and warranties being made
as of the Closing:
Section 7.01. Organization and Authority.
(a) Each Company Affiliate is a corporation, duly organized, validly
existing and in good standing under the laws of its state of incorporation with
full power and authority to own and operate its properties, carry on its
businesses as and where presently conducted, enter into and to perform its
obligations under this Agreement and the Loan Documents, and consummate the
transactions contemplated hereby and thereby.
(b) Attached hereto as Exhibit 7.01 is a true, correct and complete
list of all of the Company Affiliates, showing the relationship of each to the
others.
(c) Each Company Affiliate is duly qualified or otherwise authorized
to do business as a foreign corporation or partnership and are in good standing
in the jurisdictions set forth in Exhibit 7.01, which are the only jurisdictions
(domestic or foreign) in which the businesses of each Company Affiliate are
conducted or the assets of each Company Affiliate are located and in which such
qualification or authorization is required by law and with respect to which the
failure to so qualify or be authorized would have a material adverse effect on
the properties, assets, business, operations or financial condition of each
Company Affiliate taken as a whole. Except as shown in Exhibit 7.01, no Company
Affiliate has any direct or indirect equity interest in any corporation,
partnership, joint venture or other entity or business enterprise other than
non-business passive investments or the ownership of five percent (5%) or less
of any class of stock of a corporation that is listed for trading on a national
stock exchange or the NASDAQ system.
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Section 7.02. Authorization and Binding Nature of Loan Documents. The
execution, delivery and performance of this Agreement and of the Loan Documents
by each Company Affiliate have been duly authorized by all necessary
actions, and this Agreement and the Loan Documents have been duly executed and
delivered by each Company Affiliate and constitute the valid, binding and
enforceable obligations of each Company Affiliate, subject to bankruptcy,
insolvency and other similar laws and to general equitable principles.
Section 7.03. No Conflicts.
(a) The execution, delivery and performance of this Agreement and the
Loan Documents by each Company Affiliate and the consummation of the
transactions contemplated hereby and thereby do not and will not (with or
without the giving of notice) (i) conflict with the Articles/Certificate of
Incorporation or Bylaws of any Company Affiliate, or (ii) conflict with, or
result in the breach or termination of, or constitute a default under, (A) any
material authorization, permit, lease, agreement, contract, commitment or other
instrument, or (B) any order, judgment, injunction or decree of any court or
Governmental Authority, foreign or domestic, to which any Company Affiliate is a
party or by which any of any Company Affiliate's assets or properties are bound,
in the case of each of clause (A) and (B) above, where such conflict, breach,
termination or default could have a material adverse effect on any Company
Affiliate's ability to consummate the transactions to be performed by it
pursuant to this Agreement and the Loan Documents, or upon the properties,
assets, business, operations or financial condition of the Company Affiliates
taken as a whole; (iii) to Borrower's Knowledge, constitute a violation of any
law, statute or regulation of any Governmental Authority, domestic or foreign,
applicable to any Company Affiliate, the enforcement of which could have a
material adverse effect on any Company Affiliate's ability to consummate the
transactions to be performed by it pursuant to this Agreement and the Loan
Documents, or upon the properties, assets, business, operations or financial
condition of the Company Affiliates taken as a whole; (iv) result in the
creation of any lien, charge or encumbrance upon any Company Affiliate's assets
(other than those created hereunder); or (v) give to others any material rights,
including rights of termination, cancellation or acceleration, in or with
respect to any Company Affiliate's assets.
(b) Except as set forth on Exhibit 7.03, no Company Affiliate has
received any notice of violation of, and no
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Company Affiliate, to its knowledge, is in violation of, any applicable law,
statute, ordinance, order, rule or regulation, or any judgment entered by any
federal, state, local or foreigncourt or Governmental Authority, relating in
each case to the operation, conduct or ownership of the properties or businesses
of each Company Affiliate, the failure to comply with which could have a
material adverse effect on the properties, assets, business, operations or
financial condition of the Company Affiliates taken as a whole, including but
not limited to the federal antitrust laws, the state antitrust laws, the federal
securities laws, the state securities laws (so called "Blue Sky" and similar
laws), the Occupational Safety and Health Act, and all other federal, state or
local laws, regulations or ordinances pertaining to the businesses of each
Company Affiliate.
(c) (i) No proceeding is pending or, to Borrower's knowledge,
threatened by any Person seeking to revoke or deny the renewal of any
authorization or permit necessary to the current operations of any Company
Affiliate; and (ii) no Company Affiliate has been advised in writing by any
relevant authority that any authorization or permit necessary to the current
operations of any Company Affiliate will not in the ordinary course be renewed
upon its expiration or that, by virtue of the transactions contemplated hereby,
the authorizations or permits necessary to the current operations of each
Company Affiliate will not be granted or renewed where, with respect to clauses
(i) or (ii) above, the revocation, denial or failure to renew or obtain any such
authorization or permit, individually or in the aggregate, would have a material
adverse effect on the properties, assets, business, operations or financial
condition of the Company Affiliates taken as a whole. All material
authorizations and permits necessary to the operations of each Company Affiliate
are, except as set forth on Exhibit 7.03 and except for those the absence of
which would not have a Material Adverse Effect, in full force and effect, and,
except as set forth on Exhibit 7.03, no Company Affiliate has received any
notice, written or oral, of any claim or charge that any Company Affiliate is
currently in violation of or in default under any authorization or permit
necessary to the past operations of any Company Affiliate which could have such
a material adverse effect.
Section 7.04. Consents. No consent, approval or authorization of, or
designation, declaration or filing with, any Governmental Authority or other
Person is required on the part of any Company Affiliate in connection with the
execution, delivery and performance of this Agreement or the Loan Documents.
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Section 7.05. Financial Information.
(a) The financial statements of the Company Affiliates contained in
Borrower's Registration Statement on Form S-1 declared effective on December 3,
1997 (the "Registration Statement"), the balance sheet of each Company Affiliate
and the related statement of operations for the period ended December 31, 1997,
and the consolidated pro forma balance sheet of the Company Affiliates and the
related consolidated statements of operations, statements of shareholders'
equity, and statements of cash flows as of December 31, 1997, giving effect to
the acquisitions described in the Registration Statement, and in each case the
notes thereto, and based on the historical interim financial statements
referenced above in this subsection, fairly present in all material respects in
conformity with GAAP the financial position of the Company Affiliates as of such
dates and for such periods, and copies of such Financial Statements have been
delivered to the Banks.
(b) Upon giving effect to the execution of the Loan Documents and the
consummation of the transactions contemplated by the Loan Documents, the
following are true and correct after diligent investigation:
(i) The fair saleable value of the assets of each of the Company
Affiliates exceeds the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including, without limitation,
pending or overtly threatened litigation in amounts in excess of effective
insurance coverage and all other contingent liabilities) of each such Person as
they mature;
(ii) The assets of each of the Company Affiliates do not
constitute unreasonably small capital for such Company Affiliate to carry out
its business as now conducted and as proposed to be conducted including the
capital needs of such Company Affiliate, taking into account the particular
capital requirements of the business conducted by such Company Affiliate, and
projected capital requirements and capital availability thereof;
(iii) Each of the Company Affiliates do not intend to incur debts
beyond its ability to pay as they mature
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(taking into account the timing and amounts of cash to be received by each of
the Company Affiliates, and of amounts to be payable on or in respect of the
debt of each of the Company Affiliates);
(iv) The fair saleable value of the assets of each of the Company
Affiliates is greater than the total fair value of the liabilities, including
contingent, subordinated, absolute, fixed, matured or unmatured, and liquidated
or unliquidated liabilities, of such Company Affiliate.
(c) For purposes of subsection (b) above, "debt" means any liability
on a claim, and "claim" means (i) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(d) Each of the Company Affiliates has determined that its liabilities
and obligations under the Loan Documents may reasonably be expected to benefit
it substantially, directly or indirectly, because through the Borrower it will
have access to credit under the Credit Agreement and its board of directors has
made that determination. Each of the Company Affiliates has had full and
complete access to the Loan Documents and all other papers executed by Borrower
or any other Person in connection with the Obligations, has reviewed them and is
fully aware of the meaning and effect of their contents. Each of the Company
Affiliates is fully informed of all circumstances which bear upon the risks of
executing the Loan Documents and which a diligent inquiry would reveal, and each
has adequate means to obtain on a continuing basis information concerning the
consolidated and consolidating financial condition of the Company Affiliates,
and is not depending on the Agent or any Bank to provide such information, now
or in the future. It agrees that neither the Agent nor any Bank shall have an
obligation to advise or notify any Company Affiliate or to provide it with any
such data or information.
Section 7.06. Absence of Certain Developments. Since December 31, 1997,
there has not been any material adverse change in the properties, assets,
business, operations or financial condition of the Company Affiliates,
separately or taken as a whole.
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Section 7.07. Material Leases and Contracts.
(a) All leases and other contracts, commitments and agreements of each
Company Affiliate are valid, binding and enforceable on such Company Affiliate
in accordance with their terms, subject to bankruptcy, insolvency and other
similar laws and to general equitable principles, except to the extent that the
failure, individually or in the aggregate, of any such lease, contract,
commitment or agreement to be valid, binding and enforceable could not have a
material adverse effect on the properties, assets, business, operations or
financial condition of the Company Affiliates taken as a whole. Except as set
forth in Exhibit 7.07, to Borrower's knowledge, there are no defaults or,
threatened defaults under any lease or other contract, commitment or agreement
by any Company Affiliate or any other party thereto which default or defaults
could, individually or in the aggregate, have a material adverse effect on the
properties, assets, business, operations or financial condition of the Company
Affiliates taken as a whole.
(b) Except as set forth in Exhibit 7.07 or as described in or filed as
an exhibit to the Registration Statement or other subsequent filings with the
Securities and Exchange Commission (such filings to be provided to the Banks
upon filing), no Company Affiliate is a party to a material contract as defined
in Item 601(10) of Regulation S-K promulgated under the Securities Act.
Section 7.08. ERISA Matters.
(a) Neither Borrower nor any Related Party maintains or contributes to
or has any obligation to any Person (including current and former employees)
under any Plan other than those listed on Exhibit 7.08 hereto. No Plan listed on
Exhibit 7.08 is a Multiemployer Plan or a Pension Benefit Plan subject to
Section 412 of the Code or Title IV of ERISA. All of Borrower Plans have been
maintained and administered by the Borrower and/or Related Parties in material
compliance with ERISA, the Code, and the Uniformed Services Employment and
Reemployment Rights Act, to the extent applicable. Neither Borrower nor any
Related Party has failed to make any contribution or pay any amounts due and
owing as required by the terms of any Borrower Plan or any Law which would have
a material adverse effect on the Company Affiliates.
(b) Except as disclosed on Exhibit 7.08 hereto, each Pension Benefit
Plan listed on Exhibit 7.08 (and all
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amendments thereto) that is intended to qualify under section 401 of the Code
has been determined by the IRS to so qualify and the trusts created thereunder
(and all amendments thereto) have been determined by the IRS to be exempt from
tax under the provisions of section 501 of the Code, and to the knowledge of
Borrower or any Related Parties, nothing has occurred which would cause the loss
of such qualification or the imposition of any material liability or penalty
under the Code. Each Pension Benefit Plan listed on Exhibit 7.08 (and any
amendment thereto) that is intended to qualify under section 401 of the Code
which has not been determined by the IRS to qualify under section 401 of the
Code and the trusts created thereunder (and any amendment thereto) which have
not been determined to be exempt from tax under section 501 of the Code, have
been, or will be submitted to the IRS for such determination before the
expiration of the time period established in section 401(b) of the Code and the
regulations promulgated thereunder.
(c) Except as disclosed on Exhibit 7.08, all Welfare Benefit Plans
listed on Exhibit 7.08 are fully insured, and all premium payments required to
be made to date under such Welfare Benefit Plans have been made by the Borrower
and/or Related Parties on a timely basis. The Borrower and/or Related Parties
have in all material respects complied with the health care continuation
requirements under Sections 4980B and/or 162(l) of the Code and any proposed or
final regulations promulgated thereunder.
(d) The Borrower and/or Related Parties do not, to the knowledge of
Borrower or any Related Party, participate in any Plan in which a "disqualified
person" or "party-in-interest" with respect to any Plan have engaged in a
"prohibited transaction" (as such terms are defined in section 4975 of the Code
and Title I of ERISA) which would subject Borrower or any Related Party (after
giving effect to any exemption) to a tax on prohibited transactions imposed by
section 4975 of the Code or to any other liability under Title I of ERISA.
(e) No Pension Benefit Plan subject to Title IV of ERISA or any trust
created under any such Plan which has been maintained or contributed to by
Borrower or any Related Party at any time since the effective date of ERISA has
been terminated, except as set forth in Exhibit 7.08. Any such termination has
received approval from the IRS and the Pension Benefit Guaranty Corporation
("PBGC"). To the knowledge of the Borrower, there are no circumstances pursuant
to which the Borrower or any
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Related Party has or may incur any material liability under Sections 4062, 4063
or 4064 of ERISA.
(f) There are no actions, suits, investigations or proceedings,
pending or, to the knowledge of the Borrower threatened against, or affecting
any Borrower Plan, the assets of any Borrower Plan or any Borrower Plan
fiduciary, at law or in equity, by or before any court or governmental
department, agency or instrumentality that could result in any material
liability to Borrower or any Related Party, and Borrower and Related Parties are
not aware of any basis for any such action, suit, investigation, or proceeding.
There are presently no outstanding judgments, decrees or orders of any court or
any government or administrative agency against or affecting any Borrower Plan,
the assets of any Borrower Plan or any Borrower Plan fiduciary that will or
could result in any material liability to Borrower or a Related Party.
(g) The execution and delivery of this Agreement and the other Loan
Documents, and the consummation of the transactions contemplated thereby, will
not involve any transaction which will be prohibited by Section 406 of ERISA or
in connection with which a tax could be imposed pursuant to section 4975 of the
Code or otherwise fail to satisfy or invoke Title I of ERISA.
(h) Neither Borrower nor any Related Party maintains retired life and
retired health insurance plans which provide for continuing benefits or coverage
for any participant or any beneficiary of a participant after such participant's
termination of employment.
Section 7.09. Litigation.
(a) There are no judicial or administrative actions, proceedings or
investigations pending or, to the knowledge of Borrower, threatened, that
question the validity of this Agreement and the Loan Documents or any action
taken or to be taken by any Company Affiliate in connection with this Agreement
and the Loan Documents.
(b) Except as set forth in Exhibit 7.09, there are no material suits,
actions, claims or legal, administrative, arbitration or other proceedings or
governmental investigations pending or, to the knowledge of the Borrower
threatened, and there are no material orders, injunctions or decrees
outstanding, against any Company Affiliate.
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Section 7.10. Tax and Other Returns and Reports. Except as set forth in
Exhibit 7.10:
(a) all federal, state, local and foreign tax returns and tax reports
(or extensions relating thereto) required to be filed by any Company Affiliate
have been filed on a timely basis with the appropriate governmental agencies in
all jurisdictions in which such returns and reports are required to be filed,
and all such returns and reports were true and correct in all material respects
when filed;
(b) all federal, state, local and foreign income, profits, franchise,
sales, use, premium, occupancy, property, severance, excise, withholding, value
added and other taxes (including interest and penalties) due from any Company
Affiliate (i) have been fully and timely paid or adequately provided for on the
Financial Statements or on the books and records of Company Affiliates, as
appropriate, in all material respects, or (ii) are being contested in good faith
by appropriate proceedings and are not material, individually or in the
aggregate, to any Company Affiliate;
(c) no material issues have been raised with a representative or
employee of any Company Affiliate (and are currently pending) by the Internal
Revenue Service or any other taxing authority in connection with any of the
returns and reports referred to in the foregoing clause (a) or otherwise;
(d) no waivers of statutes of limitation have been given or requested
with respect to any Company Affiliate in connection with any tax returns
covering any Company Affiliate or with respect to any taxes payable by any
Company Affiliate; and
(e) there are no unpaid deficiencies asserted or assessments made by
any taxing authority against any Company Affiliate, except for items which do
not exceed $100,000 individually or in the aggregate.
Section 7.11. Absence of Undisclosed Liabilities.
(a) Except as set forth in Exhibit 7.11, no Company Affiliate has any
liabilities or obligations, either accrued, contingent or otherwise, which have
not been reflected in the Financial Statements that have or are reasonably
likely to have a Material Adverse Effect, except for liabilities arising after
the date of the Financial Statements in the ordinary course of business.
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(b) Except as set forth in Exhibit 7.11, whether or not in the
ordinary course of business, since December 31, 1997 there has not been,
occurred or arisen: (i) any damage or destruction to properties or assets of any
Company Affiliate, whether covered by insurance or not, which has had or could
have a material adverse effect on the properties, assets, business, operations
or financial condition of Company Affiliates taken as a whole; (ii) any
extraordinary loss (as defined in Opinion Number 30 of the Accounting Principles
Board of the American Institute of Certified Public Accountants) suffered by any
Company Affiliate which, individually or in the aggregate, could have a material
adverse effect on the properties, assets, business, operations or financial
condition of Company Affiliates taken as a whole; or (iii) any waiver by any
Company Affiliate of any rights of substantial value which, individually or in
the aggregate, would have a Material Adverse Effect.
Section 7.12. Affiliate Agreements. Except as set forth on Exhibit 7.12,
there are no material written or oral agreements, contracts, commitments or
understandings which are between or among any of the Company Affiliates,
including, without limitation, any such agreements, contracts, commitments or
understandings relating to the provision of any services by any Company
Affiliate to its shareholders, or by its shareholders to any Company Affiliate.
Section 7.13. Personal Property. Each Company Affiliate now has legal and
valid title to all material tangible personal property purported to be owned,
and valid leasehold rights in all material tangible personal property purported
to be leased, in each case as reflected on the Financial Statements on the
respective dates thereof, other than such inventory as has been sold in the
ordinary course of business and personal property not material in aggregate
amount. None of such assets or property the value of which is reflected on the
Financial Statements is owned by any Affiliate of any Company Affiliate, as the
case may be, or is under or subject to any lease, conditional sale or other
title retention agreement, and such assets or property are free and clear of all
liens, security interests, mortgages and encumbrances of any nature whatsoever
except for Permitted Liens.
Section 7.14. Real Property.
(a) Except as specifically set forth on Exhibit 7.14, each Company
Affiliate has good and marketable title to all fee interests and valid ownership
of all leasehold estates and
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other real property rights purported to be owned by it, free and clear of all
liens, security interests, mortgages and encumbrances, except Permitted Liens.
(b) Except as set forth in Exhibit 7.14, all of the properties,
buildings and structures owned or leased by the Company Affiliates are suitable
for the purposes for which they are used, and each has adequate rights of
ingress and egress for the operation of the business of the Company Affiliate in
the ordinary course. To the knowledge of Borrower's executive officers, except
as disclosed in Exhibit 7.14, (i) no such property, building or structure, or
any appurtenance thereto or equipment therein, or the operation or maintenance
thereof, violates any restrictive covenants or any provisions of any federal,
state, local or foreign law, ordinance or zoning regulation, or encroaches on
any property owned by others (other than permitted by easement or license),
which violation or encroachment could materially interfere with the present or
future use of such property, building, structure or appurtenance by any Company
Affiliate; (ii) no condemnation proceeding is pending or threatened with respect
to any such real property nor is any change in any of the foregoing laws,
ordinances or regulations pending or threatened, which would materially
interfere with the present use by any Company Affiliate of any building,
structure, appurtenance or other property; and (iii) each lease of real property
and improvements (if any) is in full force and effect and is valid, binding and
enforceable in accordance with its terms, and there are no outstanding defaults
by any Company Affiliate or any of the other parties with respect to any such
lease, which could have a material adverse effect upon the Company Affiliates.
Section 7.15. Intellectual Property. Each Company Affiliate owns, leases,
licenses or has the right to use all material Intellectual Property which is
necessary or desirable for the conduct of its business as it has been conducted
heretofore and as it is contemplated to be conducted. All material Intellectual
Property is listed and described in Exhibit 7.15. Except as set forth in Exhibit
7.15, (a) none of the Intellectual Property is subject to any outstanding order,
decree, judgment, stipulation, settlement, lien, charge, encumbrance or
attachment; (b) there is no pending or to Borrower's knowledge threatened
proceeding, litigation or other adverse claim affecting or with respect to the
Intellectual Property, and there is no basis for any of the foregoing; (c) to
Borrower's knowledge no Person is infringing upon any of the Intellectual
Property; and (d) no Intellectual Property is owned
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or controlled by any officer, director or employee of any Company
Affiliate.
Section 7.16. Laws and Permits; Environmental Protection.
(a) Each Company Affiliate has all Permits which are required for the
operation of its business under any Laws except where the failure to obtain a
Permit would not be reasonably expected to have a Material Adverse Effect.
(b) To Borrower's knowledge after due inquiry and investigation, each
Company Affiliate is in compliance with all terms and conditions of its Permits,
and are also in compliance with all applicable Laws, in each case except where
the failure to be in compliance could not have a material adverse effect on the
properties, assets, business, operations or financial condition of the Company
Affiliates.
(c) There are no pending or threatened investigations, actions and
proceedings of whatsoever nature involving any Company Affiliate or their
properties, assets or businesses, arising under any Laws which, if decided
adversely or held to be applicable to any Company Affiliate, could have a
Material Adverse Effect. Borrower has no knowledge that any additional such
action, investigation or proceeding is contemplated or that any facts or
circumstances exist which could give rise to any of the matters described in
this Section.
Section 7.17. Insurance. Exhibit 7.17 contains an accurate and complete
list of all policies of insurance owned or maintained by each Company Affiliate
under which each Company Affiliate or any of their properties or assets are
insured. All such policies (a) are in full force and effect, (b) are sufficient
for compliance by each Company Affiliate with all applicable requirements of law
and all agreements to which each Company Affiliate is a party or subject,
including, but not limited to, the Loan Documents, and (c) provide insurance
coverage with responsible companies of the assets, operations and employees of
each Company Affiliate generally equivalent in type and amount to that which is
customarily carried by other entities engaged in similar businesses and of
approximately the same size and similarly situated as Company Affiliates,
including without limitation (i) workmen's compensation insurance, and (ii)
casualty insurance on all of the Collateral which shall name the Agent as sole
loss payee.
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Section 7.18. Employee Relations. The employees of no Company Affiliate are
unionized and Borrower has no knowledge of any union organizing efforts in
respect of such employees which are currently being conducted. No Company
Affiliate has had at any time an organized strike, picket, work stoppage, work
slowdown, or other labor trouble that had or may have a material adverse effect
on the properties, assets, business, operations or financial condition of the
Company Affiliates taken as a whole, nor has any Company Affiliate received
written notification pursuant to the terms of any collective bargaining
agreement, or otherwise, that such is now threatened. To the knowledge of
Borrower, there is not any pending or threatened organized union activity,
strike, picketing, work stoppage, work slowdown or other labor trouble with
respect to the employees of any of the suppliers or customers of any Company
Affiliate that could reasonably be expected to have a material adverse effect on
the properties, assets, business operations or financial condition of the
Company Affiliates taken as a whole.
Section 7.19. Adequacy of Assets. The Permits and all other assets and
rights, tangible and intangible, which are owned, leased or licensed by any
Company Affiliate constitute sufficient assets, property and rights which are
necessary for the operation of such Company Affiliate's business as it has
operated and as proposed to be operated in the future.
Section 7.20. Regulation U. No Company Affiliate is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as
that term is defined in Regulation U issued by the Board of Governors of the
Federal Reserve System) and no part of the proceeds of the Credit Facility
hereunder will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.
Section 7.21. Year 2000 Compliance. All material computer
software licensed by any Company Affiliate, as licensor or as licensee, is and
shall remain "Year 2000 Compliant" (as hereinafter defined), except as disclosed
on Exhibit 7.21. For purposes of this Agreement, "Year 2000 Compliant" shall
mean (i) all such software shall operate without errors in the recognition,
calculation and processing of date data relating to century recognition, leap
years, single and multi-century formulae, date values and interfaces of
date-related functionalities; (ii) all date processing shall be conducted in a
four-digit year format and all date sorting that includes a "year field" or
"year category" shall be based upon a four-digit year
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format; and (iii) any date arithmetic programs or calculators in the software
shall operate in accordance with the related user documentation in the Year
2000, and the years following, without degrading functionality or performance.
Section 7.22. Full Disclosure. In furtherance and not in limitation of the
other provisions of this Agreement, to Borrower's knowledge, the representations
contained in this Article with respect to the Company Affiliates does not
contain any untrue statement of material fact or omit to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Company Affiliates jointly and severally covenant and agree that from
the date hereof, unless the Agent shall otherwise consent in writing:
Section 8.01. Corporate Existence, Properties, Etc. Each Company Affiliate
shall:
(a) do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, organization, rights,
franchises and permits and comply with all laws applicable to it, where the
failure to comply could have a Material Adverse Effect;
(b) consistent with good business practice and to the extent
commercially reasonable, maintain, preserve and protect all material franchises
and trade names and protect, preserve or replace all of its material property
used or useful in the conduct of its business and keep the same, taken as a
whole, in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly conducted
at all times in accordance with prudent business management;
(c) without limiting the foregoing, maintain all its properties,
whether owned or leased, in substantial conformity with applicable Laws, except
to the extent that
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noncompliance (i) is caused by a party other than Borrower, in which case
Borrower shall use best efforts to cause such noncompliance to be remedied; or
(ii) does not have a Material Adverse Effect;
(d) keep satisfactory books and records in accordance with reasonable
business practice; and
(e) maintain insurance as described in Section 7.17 and such other
additional insurance as the Agent may from time to time reasonably request.
Certified copies of all such policies, as well as all renewals and modifications
thereof, providing for thirty (30) days' prior written notice of cancellation or
other lapse to the Agent, shall be delivered to the Agent upon request. After
one Business Day's prior written notice to Borrower, if any Company Affiliate
fails to effect and continuously keep in full force and effect such insurance or
fails to pay the premiums thereon when due, the Agent may (but shall not be
obligated to) do so for the account of such Company Affiliate and add the cost
thereof to the Obligations hereunder.
Section 8.02. Payment of Indebtedness, Taxes, Etc. Each Company Affiliate
shall: (a) pay all of its material Indebtedness promptly and in accordance with
normal terms, and (b) file when due, and pay and discharge or cause to be paid
and discharged when due, all taxes, assessments, and governmental charges or
levies imposed upon it or upon its income and profits, or upon any of its
property, real, personal or mixed, or upon any part thereof, as well as all
lawful claims for labor, materials and supplies or otherwise which, if unpaid,
might become a lien or charge upon such properties or any part thereof;
provided, however, that no Company Affiliate shall be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in good
faith by appropriate proceedings and Borrower or such Company Affiliate, as the
case may be, shall have set aside on its books adequate reserves (as may be
required in accordance with generally accepted accounting principles) with
respect to any such tax, assessment, charge, levy or claim, so contested.
Section 8.03. Statements, Reports and Certificates to be Delivered by
Borrower.
(a) Borrower will deliver to each Bank, at the Bank's address
specified in Exhibit 2.01 hereto, the following:
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(i) As soon as available and in any event within forty-five (45)
days after the end of each of the first three fiscal quarters of each fiscal
year, consolidated and consolidating balance sheets of the Company Affiliates as
at the end of such fiscal quarter, consolidated and consolidating statements of
operations, and consolidated statements of changes in shareholders' equity and
statements of cash flows of the Company Affiliates for the period commencing at
the end of the previous fiscal year and ending with the end of such fiscal
quarter in reasonable detail and stating in comparative form the respective
consolidated and consolidating figures for the corresponding date and period in
the previous fiscal year and certified by the Chief Financial Officer of the
Borrower as being prepared consistent with the Company Affiliates' audited
annual financial statements (subject to year-end adjustments and changes in
accounting policies permitted by GAAP which have been disclosed in writing to
the Banks);
(ii) As soon as available and in any event within ninety (90)
days after the end of each fiscal year, a consolidated and consolidating balance
sheet of the Company Affiliates as at the end of such fiscal year and
consolidated and consolidating statements of operations, and consolidated
statements of changes in shareholders' equity and statements of cash flows of
the Company Affiliates for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date and period in the prior fiscal year and all prepared in
accordance with GAAP and as to the consolidated statements, audited and
accompanied by an unqualified opinion thereon reasonably acceptable to the Agent
by Borrower's Accountants;
(iii) (A) Simultaneously with the delivery of the annual
financial statements referred to in subsection (ii) above, a certificate of the
Accountants to the effect that, in making the examination necessary for the
audit of such statements, they have obtained no knowledge of any condition or
event which constitutes a Default or Event of Default, or if the Accountants
shall have obtained knowledge of any such condition or event, specify in such
certificate each such condition or event of which they have knowledge and the
nature and status thereof; and (B) promptly upon receipt thereof, copies of any
reports submitted to any Company Affiliate by the Accountants in connection with
examination of the financial statements of the Company Affiliate made by the
Accountants;
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(iv) Simultaneously with the delivery of the items referred to in
subsections (i) and (ii) above (as the case may be), a Compliance Certificate,
in substantially the form attached hereto as Exhibit 8.03, signed on behalf of
each Company Affiliate by the chief executive officer or chief financial officer
of Borrower;
(v) Within a reasonable period after request, reports of accounts
receivable and accounts payable aging as to each Company Affiliate, said reports
to be in the form reasonably required by the Agent;
(vi) Promptly after the receipt thereof by the Borrower, a copy
of any "management letter" from the Borrower's Accountants;
(vii) As soon as available but no later than fifteen (15) days
after the first day of each fiscal year of the Company Affiliates, a budget for
the Company Affiliates using a format reasonably satisfactory to the Agent and
the Banks (including budgeted statements of income and sources and uses of cash
and balance sheets) prepared by the Borrower for (A) each fiscal month of such
fiscal year except in the case of the sources and uses of cash and balance
sheets, and each fiscal quarter, and (B) the five (5) fiscal years immediately
following such fiscal year, in each case, prepared in reasonable detail with
appropriate presentation and discussion of the principal assumptions upon which
such budgets are based, accompanied by the statement of the chief financial
officer of the Borrower to the effect that, to the best of his knowledge, the
budget is a reasonable estimate for the period covered thereby; and
(viii) Such other data and information as from time to time may
be reasonably requested by the Agent, subject to normal confidentiability
restrictions.
(b) Each Company Affiliate hereby irrevocably authorizes and directs
the Borrower's Accountants to provide to each Bank such other data and
information as from time to time may be reasonably requested by the Agent.
(c) In the event that any Indebtedness of any Company Affiliate in
excess of $100,000 is declared due and payable before its expressed maturity or
any holder of such Indebtedness shall have demanded payment of such Indebtedness
before its expressed maturity because of the occurrence of any default
thereunder, or upon the occurrence and continuance of an
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event known to any executive officer of Borrower which, with the passage of time
or the giving of notice (or both) will, unless cured, give rise to a right in
favor of any person to make such a declaration or demand, Borrower will promptly
give the Banks written notice of such declaration or demand, or of the
occurrence of such event, and deliver to the Banks copies of all relevant
notices, demands, correspondence and other information promptly upon receipt.
(d) Borrower will, and will cause each Company Affiliate to, upon
reasonable notice, permit such person or persons as the Agent may designate to
visit and inspect any of the properties of any Company Affiliate, to examine
(either by such persons or by independent accountants employed by the Agent),
the books of account of each Company Affiliate, to discuss the affairs, finances
and accounts of said corporations with their executive officers, or with their
independent accountants, all at such reasonable times and as often as the Agent
may reasonably desire.
Section 8.04. Other Reports and Notices. Borrower shall furnish to the
Agent:
(a) As soon as any executive officer of Borrower or any Company
Affiliate becomes aware of the occurrence of any Default or Event of Default,
or, with respect to the occurrence of a Default described in Section 10.01(d)
hereof, immediately upon any such occurrence, a written statement by the chief
executive officer or the chief financial officer of Borrower setting forth
details of such Default known to such officer stating whether or not the same is
continuing and, if so, the action that Borrower proposes to take with respect
thereto;
(b) Within five (5) Business Days after receiving knowledge thereof,
notice in writing of any uninsured action, suit or proceeding before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Company Affiliate that
involves an uninsured claim of $100,000 or more or otherwise materially
adversely affects the assets or business of any Company Affiliate;
(c) As soon as possible, and in any event within five (5) Business
Days after any executive officer of Borrower has knowledge of any regulatory
investigation or potential investigation regarding any environmental hazard or
condition or any spill, release, discharge or disposal of any Hazardous
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Substance, having a potential material adverse effect on the financial condition
or business of any Company Affiliate or involving any real property then owned
or at any time heretofore or hereafter owned or leased by any Company Affiliate;
(d) As soon as possible and in any event within five (5) Business Days
after any executive officer of Borrower becomes aware of the occurrence of a
material adverse change in the business, properties, operations, or conditions
(financial or otherwise) of any Company Affiliate, a statement by the chief
executive officer or chief financial officer of Borrower setting forth details
of such material adverse change and the action that any Company Affiliate
proposes to take with respect thereto; and
(e) Such other information respecting the business, properties,
condition or operations (financial or otherwise), of any Company Affiliate as
the Agent may at any time and from time to time reasonably request be furnished
to it.
Section 8.05. ERISA Reports. Borrower will furnish to each Bank:
(a) Upon the request of the Agent, promptly after the filing thereof
with the DOL or the IRS, copies of each annual and other report with respect to
each Borrower Plan, together with certified financial statements for each
Borrower Plan;
(b) Promptly after receipt thereof a copy of any notice (other than of
a ministerial nature) of audit, investigation or other matter, determination
letter, ruling, or opinion the Borrower and/or Related Party may receive from
the DOL or IRS with respect to any Borrower Plan;
(c) Notification of any material increases in the benefits of any
existing Borrower Plan, or the establishment of any new Plans, or the
commencement of contributions to any Plan to which Borrower or any Related Party
were not previously contributing, or in the case of any Plan to which Borrower
or any Related Party were previously maintaining or contributing, the
maintenance of a plan or the commencement of contributions to a plan on behalf
of a new group of employees whether or not as a result of any business
acquisition of Borrower or any Related Party; and
(d) At least thirty (30) days prior to any filing by any administrator
of a Borrower Plan of a notice of intent to
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terminate such Plan (as required by ERISA), a copy of such notice.
Section 8.06. Additional Uniform Commercial Code Searches. From time to
time after the Closing Date, giving consideration to the time delay in the
offices recording filings of financing statements, as reasonably requested by
the Agent, Borrower shall deliver to the Agent Uniform Commercial Code, tax lien
and judgment searches with respect to each Company Affiliate and all former
names or trade name then or previously used by any Company Affiliate in all
appropriate filing offices effective for all dates up to and including the
filing of record of each financing statement filed pursuant to this Agreement
and other Loan Documents, showing that the Agent for the benefit of the Banks
has a first priority perfected security interest in and on all personal property
included in the Collateral, subject only to Senior Liens, and that there are no
other Liens on the Collateral except Permitted Liens.
Section 8.07. Formation of Company Affiliates. In the event that Borrower
hereafter forms or acquires any Company Affiliates, Borrower shall cause such
Company Affiliate to execute such agreements and documents, including this
Agreement, the Notes, the Contribution Agreement, the Surety Agreement, the
Security Agreement and Mortgages with respect to the Obligations and the
Collateral, in satisfactory form and substance, as the Banks may reasonably deem
necessary or desirable. Neither this Section nor any reference in this Agreement
to Company Affiliates or consolidation of financial statements shall imply that
any Company Affiliates may do or omit any act which would violate the terms and
conditions of this Agreement, including without limitation Section 9.09 or 9.10.
Section 8.08. Bank Accounts.
(a) The Company Affiliates shall establish a concentration account
(the "Concentration Account") and operating accounts with the Agent in
Philadelphia, Pennsylvania or as otherwise mutually agreeable. Borrower shall be
responsible for all costs and fees arising with respect to such accounts at the
Agent's standard rates.
(b) The Company Affiliates agree to remit promptly to the
Concentration Account all payments, Cash Proceeds and other funds which may be
directly received by Borrower.
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(c) (i) All funds and Instruments in the Concentration Account, the
operating accounts of any Company Affiliate with the Agent, and any other
account of any Company Affiliate with the Agent or any Bank, shall be further
security for the payment of the Obligations, and each Company Affiliate hereby
collaterally assigns and transfers to the Agent for the benefit of the Banks all
of its right, title and interest in and to such accounts, funds and instruments.
Such assignment shall be irrevocable, absolute and continuing, and shall be
independent of any right of banker's lien or set-off.
(ii) Each Company Affiliate expressly authorizes and consents to
the ability of the Agent and any Bank to charge, in their sole discretion, the
Concentration Account and any other account, and recover from the funds on
deposit therein, from time to time during the continuance of an Event of
Default, any and all Obligations due the Agent and/or the Banks. All such
Obligations, as well as chargebacks to the Borrower for protested remittances,
negative float charges and other such items, may also be charged as Revolving
Credit Advances by the Banks to the Company Affiliates to be repaid in
accordance with this Agreement.
ARTICLE IX
NEGATIVE COVENANTS
The Company Affiliates jointly and severally covenant and agree that, from
the date hereof, unless the Agent shall otherwise give prior consent in writing:
Section 9.01. Minimum Cash Flow. For each period of four (4) consecutive
fiscal quarters, the Company Affilites shall maintain minimum Adjusted Cash Flow
as follows:
Fiscal Quarters Ending
In the Following Periods Amount
Closing through 09/30/98 $ 5,000,000
10/01/98 through 09/30/99 6,250,000
10/01/99 through 09/30/2000 7,500,000
10/01/2000 through 09/30/2001 9,000,000
10/01/2001 through 09/30/2002 10,800,000
Section 9.02. Ratio of Funded Debt to Cash Flow. The Company Affiliates
shall not permit the ratio of Funded Debt at
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the end of any fiscal quarter to its Adjusted Cash Flow for such fiscal quarter
the immediately preceding three (3) fiscal quarters to exceed the following
ratios:
Fiscal Quarters Ending
In the Following Periods Ratio
Closing through 06/30/98 2.0 to 1.0
07/01/98 through 12/31/98 2.5 to 1.0
01/01/99 through 12/31/99 3.0 to 1.0
01/01/00 through 12/31/00 3.5 to 1.0
01/01/01 through 12/31/01 3.0 to 1.0
01/01/02 and thereafter 2.5 to 1.0
Section 9.03. Cash Flow Coverage. The Company Affiliates will not permit
the ratio of Adjusted Cash Flow to Fixed Charges to be less than 1.50 to 1.0 for
any period of four (4) consecutive fiscal quarters, commencing for the four (4)
fiscal quarters ending March 31, 1998.
Section 9.04. Capitalization. The Company Affiliates will not permit
Consolidated Capitalization to be less than, at any time (a) $[40,010,000], plus
(b) 100% of cumulative net income after December 31, 1997, after tax, without
any reduction for losses.
Section 9.05. Employee Plans.
(a) Borrower or any Related Party will not maintain, or contribute to,
a Multiemployer Plan or a Pension Benefit Plan subject to section 412 of the
Code or Title IV of ERISA.
(b) Borrower will not take, or omit to take, and will cause all
Related Parties not to take, or omit to take, any action which will result in
any representation or warranty becoming materially incorrect as of the date of
such action.
(c) Borrower or any Related Party will not increase the benefits of
any Borrower Plan, adopt, or contribute to, any Plan that is not listed on
Exhibit 7.08 or commence coverage under, or contributions to, any Plan on behalf
of a new group of employees whether or not as a result of any business
acquisition of Borrower or any Related Party, except (i) that, in connection
with any Permitted Acquisition, Borrower may add employees to existing Borrower
Plans or may adopt additional Plans that cover added employees and (ii) that
Borrower may make
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non-material changes to the benefits under any Plan. The level of benefits under
any such adopted additional plans may only be increased as required by law or as
otherwise permitted under this Agreement.
Section 9.06. Indebtedness. No Company Affiliate shall incur, create,
assume or suffer to exist, directly or indirectly, any Indebtedness except (a)
the Obligations; (b) Indebtedness secured by Permitted Liens; (c) Indebtedness
incurred by reason of a Permitted Acquisition, (d) intercompany Indebtedness as
between any two Company Affiliates; (e) Indebtedness for money borrowed
disclosed in the Financial Statements, in the amount of Indebtedness shown
herein, but not including extension or acceleration of maturity thereof, or
payment dates thereunder, increase of principal, interest or other amounts due
thereunder, change of interest rate thereunder or any other modification of the
terms or provisions thereof; and (f) current trade accounts payable and other
liabilities and accruals incurred in the ordinary course of business.
Section 9.07. Guaranties. No Company Affiliate shall assume, guarantee,
endorse or otherwise be or become liable upon or with respect to any obligations
of any Person (other than of Company Affiliates) other than the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business.
Section 9.08. Negative Pledge. No Company Affiliate will create, assume,
incur or permit to exist any Lien in respect of any of its property or assets of
any character (whether owned on the date hereof or hereafter acquired) nor
covenant with any creditor, by way of making a negative pledge to such creditor
comparable in any respect to the foregoing negative pledge, provided, however,
that the restriction set forth in this Section shall not prohibit any of the
following ("Permitted Liens"), none of which shall have priority over the Liens
described in subsection (a) except for Senior Liens:
(a) Liens granted in the Collateral to the Banks;
(b) Liens for taxes or assessments or other governmental charges or
levies not yet due and payable, or otherwise, if and to the extent that the
amount, validity or applicability thereof shall currently be contested in good
faith by appropriate proceedings by the owner of the property so charged and
such owner shall have set aside on its books reserves
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(segregated to the extent required by sound accounting practice)
deemed by it or them to be adequate with respect thereto;
(c) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(d) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), or public or statutory
obligations;
(e) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens, (i)
securing obligations incurred in the ordinary course of business which are not
past due for more than thirty (30) days; (ii) which do not in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Company
Affiliates, or (iii) which are being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and for which
appropriate reserves have been established and so long as no foreclosure,
distraint, sale or other similar proceedings shall have been commenced with
respect thereto;
(f) Purchase-money security interests or other Liens not exceeding in
amount 100% of the purchase price of the property encumbered thereby and
securing not more than $500,000 in the aggregate at any one time outstanding,
which have been created or exist at the time of purchase or within 120 days
thereafter, on property or assets acquired after the date hereof for the purpose
of securing payment of the remainder due of the purchase price; provided that,
no such Liens shall extend to or cover any other property or assets;
(g) Judgments and other similar Liens, in the aggregate amount of
$100,000 or less, arising in connection with court proceedings, provided that
such Liens are removed and vacated within 90 days, or the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being contested in good faith any by appropriate proceedings;
(h) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use, and enjoyment by Borrower or any Company Affiliate of the
property or assets
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encumbered` thereby in the normal course of business or materially impair the
value of the property subject thereto; and
(i) Liens existing on the date hereof listed on Exhibit 9.08, but
not the extension of the Lien to other property, or the granting of the Lien to
secure the extension of the maturity, refunding, or modification of such
obligation, in whole or in part.
Section 9.09. Corporate Reorganizations. No Company Affiliate shall create
or acquire any new Company Affiliate, merge with or into or consolidate with any
Person, acquire all or a substantial portion of the assets of any Person, or
permit any Person to merge with or into or consolidate with it, or agree to do
any of the foregoing, or engage in any material business other than those
engaged in on the date hereof, or assume or agree to discharge the liabilities
or obligations of any other Person, unless permitted under Section 9.10 hereof
or unless:
(a) the proposed transaction is an internal reorganization, not
involving any Person other than one or more Company Affiliates;
(b) Borrower gives at least fifteen (15) days' prior written
notice and all reasonably requested information to the Agent;
(c) any new Company Affiliate complies with Section 8.07 and
executes and joins in this Agreement and the other Loan Documents (other than
the Notes);
(d) any new Company Affiliate grants to the Banks a security
interest and/or mortgage on all of its assets pursuant to the Security and
Pledge Agreement, a Mortgage or Mortgages and any other necessary documents; and
(e) Borrower and any new Company Affiliate deliver to the Banks
such legal opinions, record searches and other documents as may be reasonably
requested.
Section 9.10. Restriction on Acquisitions.
(a) Other than pending transactions described on Exhibit 9.10A,
no Company Affiliate shall create or acquire any new Company Affiliate, acquire
all or a substantial portion of the assets or securities of any other Person, or
assume or agree to discharge the liabilities or obligations of any other Person,
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or agree to do any of the foregoing (by merger, consolidation or otherwise) (any
such transaction, an "Acquisition"), unless it does so in a Non-Material
Acquisition or Material Acquisition, each as defined below (each referred to
herein as a "Permitted Acquisition").
(b) Non-Material Acquisitions. For the purposes hereof, an Acquisition
shall be deemed a "Non-Material Acquisition" if:
(i) (x) the total Consideration in the Acquisition is less than
the lesser of $5 million or ten percent (10%) of the consolidated net worth of
the Company Affiliates immediately prior to completion of the proposed
Acquisition, or (y) less than fifty percent (50%) of the total Consideration in
the Acquisition will be funded from the Revolving Credit Facility;
(ii) the Acquisition satisfies each of the conditions set forth
in subsection (d) below; and
(iii) the Required Banks receive, at least ten (10) Business Days
prior to the proposed Acquisition, written notice thereof and information and
documents reasonably sufficient to show that the Acquisition is a Permitted
Acquisition, and prior to the expiration of such ten (10) day period the
Borrower has not received notice from the Agent, either orally or in writing,
that the Required Banks disagree that the applicable conditions herein are
satisfied.
(c) Material Acquisitions. For the purposes hereof, an Acquisition
shall be deemed a "Material Acquisition" if it does not satisfy the requirement
of subsection 9.10(b)(i) above, but:
(i) the Acquisition satisfies each of the conditions set forth in
subsections (d) and (e) below; and
(ii) the Required Banks receive at least fifteen (15) Business
Days prior to the consummation of such Acquisition written notice thereof and
information and documents reasonably sufficient to show that the Acquisition is
a Permitted Acquisition, and prior to the expiration of such fifteen (15) day
period the Borrower has not received notice from the Agent, either orally or in
writing, that the Required Banks disagree that the applicable conditions herein
are satisfied.
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(d) Conditions to Non-Material Acquisitions and Material Acquisitions.
No Acquisition shall qualify as a Non-Material Acquisition or a Material
Acquisition unless it satisfies each of the following conditions precedent:
(i) The aggregate amount of Consideration with respect to all
Acquisitions shall not exceed $25,000,000 during any twelve (12) month period,
and with respect to a single Acquisition shall not exceed $7,000,000;
(ii) no Default or Event of Default is in existence at the time
of the consummation of such Acquisition or would exist after giving effect
thereto;
(iii) the Required Banks shall be reasonably satisfied that no
liabilities (contingent or otherwise) are being assumed in connection with the
Acquisition except for ordinary course liabilities in connection with any
operating lease for equipment, trade payables incurred in the ordinary course of
business and employment agreements in a reasonable amount as determined by the
Required Banks, and other ordinary course liabilities in amount and nature
reasonably satisfactory to the Required Banks;
(iv) each Company Affiliate shall grant to the Agent a first
priority perfected security interest and lien in all securities, real and
personal property acquired in such Acquisition, assets acquired in such
Acquisition to be subject only to Permitted Liens, and shall execute and deliver
to the Agent written confirmations of the liens and obligations provided for in
the Security and Pledge Agreement and Surety Agreement (the "Confirmations") and
all other documents and items required by Article VI;
(v) Borrower shall deliver to the Agent a certificate signed by
its chief executive officer or its chief financial officer showing, on a pro
forma basis using historical Adjusted Cash Flow of the Person being acquired in
the Acquisition, compliance with the financial covenants contained in Sections
9.01 through 9.04 hereof for the full fiscal quarter most recently ended and for
the full fiscal year most recently ended, as though such Acquisition had
occurred on the first day of such respective periods, and the Required Banks
shall be satisfied, in their reasonable discretion, with such calculations and
the assumptions used in connection therewith;
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(vi) Borrower shall deliver to the Agent a certificate signed by
its chief executive officer or its chief financial officer, certifying as to
such officer's good faith belief that the financial covenants contained in
Sections 9.01 through 9.04 hereof will continue to be met for the first four (4)
full fiscal quarters following the consummation of such Acquisition, to which
shall be attached computations as to such financial covenants in form and
substance reasonably satisfactory to the Agent;
(vii) Borrower shall deliver to the Agent updated exhibits to the
Security and Pledge Agreement as to real property, owned or leased;
(viii) the Acquisition must constitute an entire business,
division or product line of the seller and the business, division or product
line must be one in which the Company Affiliates are already engaged;
(ix) the Consideration therefor must consist solely of cash,
stock of Borrower and/or notes issued to sellers in connection with the
Acquisition in accordance with this Section 9.10, which notes shall be
unsecured, provide that no principal, interest, premium or other payment
thereunder shall be due until after the sixth (6th) anniversary of issuance, be
subject to the subordination provisions in the form of Exhibit 9.10B hereto and
otherwise be in form and substance reasonably satisfactory to the Agent as
determined in good faith ("Permitted Seller Notes").
(e) Additional Conditions to Material Acquisitions. No Acquisition
shall qualify as a Material Acquisition unless it satisfies each of the
following conditions precedent as well as each condition precedent in subsection
(d) above:
(i) the aggregate amount of cash paid in connection with the
Acquisition shall not exceed (x) 70% of the total Consideration, if the total
Consideration is under $5 million, or (y) 60% of the total Consideration if the
total Consideration is $5 million or greater;
(ii) total Consideration may not exceed 7.0 times the Adjusted
Cash Flow of the business being acquired for the immediately preceding four (4)
consecutive fiscal quarters;
(iii) a business appraisal and analysis of the business, division
or product line being acquired, which can be
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prepared internally by Borrower or obtained from an independent party, shall
have been submitted to the Required Banks and shall have been approved in the
Required Banks' reasonable discretion; and
(iv) the Required Banks shall be satisfied in their reasonable
discretion with the nature and type of assets being acquired in connection with
any such Acquisition, all Acquisition documentation and all due applicable
material diligence relating to the Acquisition, to include due diligence in
connection with all matters set forth on the Acquisition and Due Diligence
Checklist attached as Exhibit 9.10C hereto, all of the foregoing matters to be
certified in writing by the chief executive officer or the chief financial
officer of Borrower Agent.
Section 9.11. Disposition of Assets. No Company Affiliate shall sell,
transfer, lease or otherwise dispose of any of its material properties, rights
or assets except for, subject to Section 2.04, (a) obsolete equipment in the
ordinary course of business, and (b) transactions permitted under Section 9.09
or 9.13.
Section 9.12. Loans, Investments, Etc. No Company Affiliate shall make any
loans or advances to, or purchase, acquire, own or make any investment in the
stock or obligations of any other Person except (a) the purchase of interest
bearing obligations of, or guaranteed by, the United States of America, (b) the
purchase of interest bearing obligations, having an original maturity of one (1)
year or less, issued by FDIC insured commercial banks and which at the time of
purchase shall have an "A" bond rating, (c) the purchase of prime commercial
paper which at the time of purchase shall have one (1) of the two (2) highest
ratings given to commercial paper by Standard & Poors Rating Group or Xxxxx'x
Investor Service, Inc., (d) ordinary course travel and payroll advances to
employees, and (e) as specifically permitted in Section 9.10.
Section 9.13. Sales and Leasebacks; Capital Expenditures. No Company
Affiliate shall sell or otherwise transfer and lease back, any real or personal
property, or make any Capital Expenditures, except:
(a) if the aggregate dollar amount thereof expended in any fiscal year
does not exceed 125% of the Company Affiliates' consolidated annual depreciation
expense for the
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prior fiscal year (carryovers of unused expenditures being permitted);
(b) Permitted Acquisitions; and
(c) The sale and lease back of the property in Chesterton, Indiana.
Section 9.14. Payments and Distributions to Affiliates.
(a) No Company Affiliate shall:
(i) transfer property or make payments to (whether salary, bonus
or otherwise) or enter into any other transaction with any present or former
shareholder, officer or other Affiliate, or any successor, assign, Affiliate or
transferee of any such Person; or
(ii) make or agree to make any payment or distribution on account
of the purchase, redemption, retirement or other acquisition of any of its
shares of capital stock or other securities, whether now or hereafter issued; or
(iii) declare or pay, or agree to declare or pay, any dividend or
other distribution of assets, whether by way of partial liquidation or
otherwise, on or with respect to any shares of capital stock or other
securities, whether now or hereafter issued.
(b) Notwithstanding subsection (a) above, the following shall be
permitted:
(i) Payments specifically set forth in Exhibit 7.12;
(ii) intercompany transfers or payments as between Company
Affiliates;
(iii) reasonable compensation for services rendered, but total
compensation for Senior Management paid in each fiscal year commencing December
31, 1999 shall not in the aggregate exceed by more than twenty-five percent
(25%) total compensation for Senior Management paid in the immediately preceding
fiscal year; provided that, compensation permitted but not paid in any fiscal
year may be carried over and paid in either of the next two fiscal years.
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Section 9.15. Lines of Business. No Company Affiliate shall make any change
in its line of business. In addition, no Company Affiliate shall make any
material change in its charter, by-laws or other constituent documents without
at least fifteen (15) days' prior written notice to the Agent.
ARTICLE X
DEFAULT AND REMEDIES
Section 10.01. Default. Each of the following shall be a default (a
"Default") hereunder:
(a) any Company Affiliate shall fail to pay any principal, whether at
maturity thereof, on a date fixed for prepayment, by acceleration, or otherwise,
or shall fail to pay interest on any Note, or shall fail to pay any other
Obligation which is not being disputed in good faith within five (5) days after
the date due and payable;
(b) any Company Affiliate shall fail to perform or observe any
covenant, condition or agreement contained in this Agreement (other than those
referenced in subsection (a) above) or any other Loan Document and, if such
failure does not relate to a covenant contained in Article IX and such failure
is curable, it shall continue for a period of thirty (30) days;
(c) any Company Affiliate shall default in the payment, performance or
observance of, or there shall occur any default, breach, violation or event of
default in connection with, any agreement under which arises Indebtedness in an
amount equal to or exceeding $100,000, and there shall have been no cure with
respect thereto within the applicable grace period, if any;
(d) Any proceedings shall be instituted, or a case shall be commenced
by any Company Affiliate, seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any present or
future law relating to bankruptcy, insolvency or reorganization or relief of
debtors or seeking the entry of an order for the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property; or if any of the foregoing proceedings shall be instituted or a case
commenced against any Company Affiliate seeking the relief and/or remedies above
described in this subsection and such proceeding or case
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shall continue for sixty (60) days, or any order, judgment or decree shall be
entered against any Company Affiliate granting the relief sought in any such
proceeding or case and shall not be stayed or set aside or vacated within sixty
(60) days; or any Company Affiliate shall generally not pay its debts as such
debts become due or shall make an assignment for the benefit of creditors or to
an agent authorized to liquidate any substantial amount of its assets; or shall
take any corporate action to authorize any of the actions set forth above;
(e) Any representation or warranty made by or on behalf of any Company
Affiliate to the Agent or the Banks in this Agreement or in any other Loan
Document shall prove to have been materially (as to the Company Affiliates as a
whole) false and misleading on the date as of which made;
(f) A final judgment or judgments for the payment of money (other than
those which an insurance company has agreed in writing to pay) in excess of an
aggregate of $500,000 shall be rendered against any Company Affiliate and such
judgment or judgments shall remain undischarged, unstayed on appeal, unbonded
and undismissed for a period of thirty (30) consecutive days or such longer
period as shall be permitted by rules of practice of the judicial body which has
jurisdiction during which the execution shall not be effectively stayed;
(g) Any attachment, levy, tax lien or garnishment shall be issued
against any property having a value of $100,000 or more in which any Company
Affiliate has an interest and shall remain undischarged, unstayed on appeal,
unbonded and undismissed for a period of thirty (30) consecutive days;
(h) Any attachment, levy, garnishment or similar legal process
involving $100,000 or more shall be served upon the Agent as a result of any
claim against any Company Affiliate and shall remain undischarged, unstayed on
appeal, unbonded and undismissed for a period of thirty (30) consecutive days;
(i) The dissolution, merger, consolidation, or the sale or change in
control (as "control" is defined in Rule 12b-2 under the Securities Exchange Act
of 1934 as amended) of Borrower, or transfer of any substantial portion of
Borrower's assets, or if any agreement for such dissolution, merger,
consolidation, change in control, sale or transfer is entered into by Borrower.
There shall be conclusively presumed to have been a change in control if any one
of the Chief Executive Officer, Chief Financial Officer or Chief Operating
Officer of
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Borrower in office on the date hereof ceases to serve in such capacity for
whatever reason and is not replaced within sixty (60) days with a person
reasonably satisfactory to the Required Banks;
(j) If any Company Affiliate shall fail to remit promptly when due to
the appropriate government agency or authority depository, any amount in excess
of $100,000 in the aggregate collected or withheld from employees of any Company
Affiliate for payroll taxes, Social Security payments or similar payroll
deductions;
(k) If any Company Affiliate shall attempt to terminate or disclaim
the Obligations or its liability therefor or if any Company Affiliate shall
attempt to invalidate or declare unenforceable or void any Loan Document or the
Banks' Liens in the Collateral or challenge the first priority status thereof;
or
(l) The occurrence of any one or more of the following, which, in the
opinion of the Required Banks, would have a material adverse effect either
individually or cumulatively, on the financial condition of Borrower:
(i) With respect to any Plan, Borrower and/or any Subsidiary or
any other "party-in-interest" or "disqualified person" engages in any
transaction or transactions which in the aggregate would foreseeably result in a
direct or indirect material liability to Borrower and/or any Subsidiary under
Title I of ERISA or Section 4975 of the Code;
(ii) With respect to any Pension Benefit Plan, Borrower and/or
and Subsidiary permits any accumulated funding deficiency (as defined in Section
412 of the Code) to exist, whether or not waived, or seeks or is granted a
waiver or extension of any amortization period of the minimum funding standard
(as defined in Section 412 of the Code);
(iii) With respect to any Pension Benefit Plan, Borrower and/or
any Subsidiary incurs material liability under Section 4062, 4063 and/or 4064 of
ERISA;
(iv) With respect to any Multiemployer Plan, Borrower and/or any
Subsidiary incurs any withdrawal liability as a result of a complete or partial
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, or any
material liability as a result of a termination within the meaning of Sections
4041A of
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ERISA, or any other material liability under Section 4201 or 4204 of ERISA;
(v) With respect to any Pension Benefit Plan or Multiemployer
Plan, the occurrence of a Reportable Event (if after the application of any
exception or waiver of the notice requirement, any Company Affiliate is subject
to any material liability in addition to the notice requirement);
(vi) With respect to any Pension Benefit Plan, the IRS determines
that a Pension Benefit Plan fails to qualify under Code Section 401 and the
trust created thereunder is not exempt under Code Section 501; or
(vii) With respect to any Plan, the Borrower and/or any
Subsidiary incurs material liability under Sections 4980B of the Code.
Section 10.02. Remedies. At any time and from time to time, in the event
any one or more of the foregoing Defaults shall occur and be continuing, the
Agent in its discretion may, or if requested by the Required Banks shall, by
written notice to Borrower, at the same or different times, terminate forthwith
the Credit Facility and/or refuse to make any further Loans and/or declare all
outstanding Notes and interest accrued thereon, and all other Obligations
hereunder and thereunder to be immediately due and payable, and in the case of
such notice, and automatically without the necessity of such notice or
declaration in the case of an Default under Section 10.01(d) above:
(a) The Banks shall have no further obligation to make any further
Loans or extend credit hereunder, and all Notes, interest an other Obligations
of the Company Affiliates to the Agent or the Banks shall become and be
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived, and the Credit Facility shall
automatically terminate;
(b) The Agent shall have such rights and remedies in respect of the
Collateral or any portion thereof as provided by applicable law, including,
without limitation, the Uniform Commercial Code, and such other rights and
remedies in respect thereof which it may have at law or in equity under this
Agreement or the other Loan Documents, including without limitation, the right
to enter any premises where any Collateral is located and take possession of the
same without demand or notice and without prior judicial hearing or legal
proceedings,
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which each Company Affiliate hereby expressly waives, and to sell all or any
portion of the Collateral at public or private sale without prior notice except
as otherwise required by law (and if notice is required by law, after ten (10)
days' prior written notice) at such place or places and at such time or times
and in such manner and upon such terms, whether for cash or on credit, as the
Agent in its sole discretion may determine; upon any such sale of any of the
Collateral, the Agent or any Bank may purchase all or any of the Collateral
being sold, free from any equity or right of redemption;
(c) The Company Affiliates shall promptly upon demand by the Agent
assemble the Collateral and make it available to the Agent at a place to be
designated by the Agent which shall be reasonably convenient to the Agent and
Borrower; the right of the Agent under this Section 11.02 to have the Collateral
assembled and made available to it is of the essence of this Agreement and the
Agent may, at its election, enforce such right by a xxxx in equity for specific
performance;
(d) Each Company Affiliate waives and releases any right to require
the Agent to collect any of the Obligations from any item of the Collateral
under any theory of marshalling of assets, or otherwise, and specifically
authorizes the Agent to apply any of the Collateral against any of the
Obligations in any manner that the Agent may determine;
(e) The Agent shall apply the moneys held by it hereunder and the
proceeds of any realization on Collateral, first, to the payment of the
reasonable costs and expenses incurred by the Agent in connection with any such
sale or collection, including without limitation reasonable legal expenses and
costs relating to the maintenance, preservation and/or storage of the
Collateral; second, to the payment of outstanding fees, charges, expenses and
other costs (including reasonable attorney's fees) owed to the Agent pursuant to
the performance of its obligations under this Agreement and under the Master
Letter of Credit Facility; third, to the Banks pari passu and in proportion to
their Distributable Shares, to be applied as the Agent may elect in its sole
discretion in payment of the Obligations evidenced by the Notes and arising
under the Master Letter of Credit Agreement (including interest thereon) or any
extension, renewal, refinancing or refunding thereof, first to interest and then
to principal; and fourth, to the Banks pari passu and in proportion to their
Distributable Shares in payment of Obligations (including interest thereon)
other than those
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described above to be applied as the Agent may elect in its sole discretion in
payment of the Obligations; and
(f) If such moneys and proceeds are insufficient to pay all of the
foregoing and any other amounts required by law, the Company Affiliates shall be
liable for any deficiency.
Section 10.03. Remedies Cumulative. No remedy herein conferred upon the
Agent or the Banks or the holder of any Note is intended to be exclusive of any
other remedy and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise.
Section 10.04. Remedies Not Waived. No course of dealing between the
Company Affiliates and the Agent or any Bank or the holder of any Note or any
delay on the part of any of them in exercising any rights or remedies hereunder
or under applicable law shall operate as a waiver of any rights or remedies of
any of them, whether arising hereunder or under any loan document related hereto
or under applicable law.
ARTICLE XI
THE AGENT
The Banks and the Agent agree among themselves as follows and no Company
Affiliate nor any other Person shall have any obligations, rights or remedies
with respect to this Article:
Section 11.01. Appointment and Authority of Agent.
(a) Each Bank, and each subsequent holder of any Note, by its
acceptance or purchase thereof, hereby appoints the Agent to serve in such
capacity under this Agreement and the other Loan Documents. Each Bank, and each
subsequent holder of any Note, by its acceptance thereof, hereby irrevocably
authorizes the Agent: (i) to take such action on its behalf under this Agreement
and the Loan Documents and to exercise such powers and to perform such duties
under this Agreement and the Loan Documents as are delegated to or required by
this Agreement and the Loan Documents together with all such powers as are
reasonably incidental thereto, (ii) to take such action as the Agent shall
consider necessary or advisable for the protection, collection or enforcement of
the Notes, the other Obligations and the Collateral, including, without
limitation, the institution
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and maintenance of any action, suit, or claim for the collection and enforcement
of the foregoing and the filing of proofs, claims and documents in connection
therewith, and (iii) to perfect the Banks' security interest in Collateral
which, in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession.
(b) In furtherance and not in limitation of subsection (a) above, but
subject to Section 11.02(a) below, the Agent may, without notice to or consent
from any Bank, obtain, waive or otherwise deal with all instruments (including
instruments for the payment of money), certificates (including those evidencing
securities), insurance, titles, issues concerning perfection of liens, landlord
and mortgagee waivers, recordation taxes, filing fees and any other document and
matter whatsoever relating to the Collateral or the Obligations.
(c) The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent may exercise
its powers and execute its duties by or through its employees, co-agents or
agents. Neither the Agent nor any of its directors, officers, employees,
co-agents or agents shall be liable to the Banks for any action taken or omitted
to be taken by it or them under or in connection with the Loan Documents or this
Agreement: (i) at the request or with the approval of the Required Banks, or
(ii) unless it is clearly shown that there has been gross negligence or willful
misconduct on the part of the Agent.
(d) The Agent shall be entitled to rely on any communication,
instrument or document believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons and with respect to all legal
matters shall be entitled to rely on the advice of legal advisors selected by it
concerning all matters relating to this Agreement or the other Loan Documents
and its duties hereunder and thereunder, and shall not be liable to any of the
Banks or to any holder of a Note for the consequences of such reliance.
(e) The Agent, as such, shall not be required to expend any of its own
money to make up the full amount required to make any Loan. Should the Agent
nevertheless incur any expense as a consequence of the failure of any Bank to
make available to the Agent its Ratable Share of the Facility as requested in
accordance with this Agreement, such Bank shall be obligated to pay to the Agent
on demand the amount expended by
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the Agent out of its own funds as a consequence of the failure of such Bank
while such Bank is in default to the Agent hereunder. During the continuance of
any such default, as between the Agent and such Bank, the principal amount of
Loans owed to the Bank for whose account such Loan was made shall be deemed to
be reduced, so long as the default continues, by the amount not remitted by it
to the Agent to make up the amount of such Loan and such principal amount and
interest thereon shall be deemed assigned to and collectible by the Agent for
its own account against the amount of its claim under the preceding sentence. If
and to the extent any Bank shall not have made any amount available to the Agent
on the date due under this Agreement, such Bank agrees to pay interest on such
amount to the Agent forthwith on demand for each day from and including the date
on which such payment was to be made but excluding the date such amount is made
available to the Agent. Such interest shall be determined at a rate per annum
equal to the Federal Funds Rate from time to time in effect, based upon a year
of 360 days.
(f) The Agent may at all times deal solely with the several Banks for
all purposes of this Agreement and the other Loan Documents and the protection,
enforcement and collection of the Notes and the Obligations, including the
acceptance and reliance upon any certificate, consent or other document of such
Banks, notwithstanding possession by the Agent of actual notice that the
participation of any Bank in all or part of the Facility has been assigned to
another person or entity. The Agent may, however, in its discretion, but on
notice to such Bank, (i) pay to any assignee of all or part of a Bank's Ratable
Share in the Credit Facility the share so assigned by said Bank of any division
of payments pursuant to this Agreement, and (ii) in lieu of dealing with a Bank
hereunder, deal with any person or entity whom said Bank shall have advised the
Agent to be the assignee of all of said Bank's participations in the Credit
Facility hereunder and rely upon any certificate, consent or other document of
said person or entity (in lieu of any such document on the part of said Bank),
for all purposes of this Agreement and the other Loan Documents and the
protection, enforcement and collection of the Notes and the other Obligations,
and the Agent shall be fully protected in taking or omitting to take any action
permitted by the foregoing clauses (i) and (ii). In the event that the Agent
shall have requested, by notice in writing sent by registered mail, the consent
of the Banks in any matter relating to this Agreement, and the Banks shall fail,
for fifteen (15) days after the giving of any such notice, to respond to the
Agent, the Agent may take such action and assert such rights as it deems to be
advisable in its
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discretion for the protection of the interests of the holders of the Notes.
(g) In relation to its Ratable Share of the Revolving Credit Facility
and the Notes, the Agent, in its capacity as a Bank, shall have the same rights,
powers and obligations hereunder as any Bank and may exercise such rights and
powers as though it were not the Agent.
(h) This Agreement is not to be deemed a loan by any Bank to the other
Banks nor a pledge of the rights hereunder by the Agent to the Banks. Each of
the Banks shall be deemed an owner of the debt evidenced by the Notes held by
such Bank.
Section 11.02. Responsibilities of Agent.
(a) In performing its duties and functions under this Agreement and
the Loan Documents, the Agent will endeavor to exercise the same care which it
normally exercises in making and handling loans and in handling collateral in
which it alone is interested, but it does not assume any further responsibility.
Agent shall act solely as an administrative representative 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 Bank or Borrower.
(b) In the event that (i) the Borrower fails to pay when due the
principal of or interest on any Note or any fee required by this Agreement or
any other Obligation, or (ii) the Agent receives a Notice of Default or obtains
actual knowledge of the occurrence of a Default, the Agent shall give telephonic
notice thereof to the Banks (promptly confirmed in writing), and shall take such
action with respect to such Default as it shall be directed in writing to take
by the Required Banks. Unless and until the Agent shall have received directions
as described above, the Agent may take such action or refrain from taking such
action with respect to any matter, including without limitation a Default, as it
shall deem advisable and in the best interests of the Banks, and shall have no
liability for such actions or omissions. The Agent shall make available to each
Bank copies of any and all documents in the possession of the Agent in
connection with this Agreement.
(c) The Agent (as used in this Section and in Section 11.03 below, the
term "Agent" shall include reference to its Affiliates and its own and its
Affiliates' respective officers, shareholders, directors, employees and agents)
shall
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not: (i) have any duties or responsibilities except those expressly set forth in
this Agreement or the other Loan Documents, and shall not by reason of this
Agreement or the other Loan Documents be a trustee for any Bank; (ii) be
responsible to any Bank for any recitals, statements, representations or
warranties contained in this Agreement or the other Loan Documents, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or the other Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency of
this Agreement or the other Loan Documents or any other document referred to or
provided for herein or therein or any property covered thereby or for any
failure by any Person to perform any of its obligations hereunder or thereunder,
and shall have no duty to inquire into or pass upon any of the foregoing
matters; (iii) be responsible for any mistake of law or fact or any action taken
or omitted to be taken by it hereunder or under the other Loan Documents or any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, including, without limitation, pursuant to its
own negligence, except for its own gross negligence or willful misconduct; (iv)
be bound by or obliged to recognize any agreement among or between Borrower and
any Bank, regardless of whether the Agent has knowledge of the existence of any
such agreement or the terms and provisions thereof other than as described in
any Notice of Default (as defined in Section 12.04 below) received by the Agent
or if the Agent has actual knowledge thereof; (v) be charged with notice or
knowledge of any fact or information not herein set out or provided to the Agent
in accordance with the terms of this Agreement or the other Loan Documents; (vi)
be responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator; or (vii) be responsible for the acts or
edicts of any Governmental Authority.
(d) The Agent may treat the payee of any Note as the holder thereof
until written notice of the transfer thereof shall have been received by it. The
Agent shall not be responsible for any recitals, statements, representations or
warranties set forth in this Agreement or for the execution, effectiveness,
genuineness, validity or enforceability of this Agreement or the Loan Documents,
or be liable for failing to make any inquiry concerning the performance or
conveyance of any of the terms, provisions or conditions hereof or thereof. The
Agent shall not be deemed to have knowledge of the occurrence of a Default or an
Event of Default (other than a failure by the
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Borrower to pay the fees required under this Agreement or to pay when due the
principal of, or interest on, any Note) unless the Agent has received written
notice from a Bank or the Borrower specifying such Default and stating that such
notice is a "Notice of Default."
(e) Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under this Agreement. Each of the Banks agrees that the Agent shall not have any
responsibility for the accuracy or adequacy of any information contained in any
document, or any oral information, supplied to such Bank by the Borrower
directly or through the Agent.
(f) The Agent shall not be bound by any waiver, amendment, supplement
or modification to this Agreement or the other Loan Documents which affects its
duties under this Agreement and the other Loan Documents unless it shall have
given its prior written consent, as Agent, thereto.
(g) Each Bank acknowledges that under the Uniform Commercial Code and
other applicable law, there are many circumstances in which the Banks' Liens in
the Collateral may be subordinate to other Liens, even if such Liens do not
appear in record searches conducted on or about the date of this Agreement, that
such record searches will necessarily predate the filing or recording date or
dates of items filed to evidence the Banks' Liens and other Liens may be filed
or recorded in the interim, and that the Banks' Liens in all types of Collateral
may not be perfected.
Section 11.03. Indemnification of Agent. Each of the Banks agrees to
indemnify the Agent (to the extent not reimbursed by the Borrower) in amounts
according to such Bank's Ratable Share, on demand, from and against any and all
losses, claims, obligations, damages, liabilities, expenses or disbursements of
any kind and nature whatsoever (including but not limited to reasonable fees and
disbursements of counsel, interest, penalties, attorneys' fees and amounts paid
in settlement) which may be imposed on, incurred by or asserted against the
Agent in
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any way related to or arising out of the Loan Documents or this Agreement or any
other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents, including but not
limited to the negligence of the Agent, or any action taken or omitted by the
Agent, except only such losses, claims, damages, liabilities or expenses clearly
and directly resulting from the Agent's gross negligence or willful misconduct.
If in the opinion of the Agent the distribution of any amount received by it in
its capacity as Agent for the Banks might result in liability, it may refrain
from making such distribution until it shall have been indemnified to its
satisfaction by the intended recipient or recipients. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
shall be repaid, each Bank or other recipient to whom any such distribution
shall have been made shall either repay to the Agent its proportionate share of
the amount so adjudged to be repaid or shall pay over the same in such manner
and to such persons or entities as shall be determined by such court. The
obligations of the Banks under this Section shall survive the termination of
this Agreement and the repayment of the Obligations.
Section 11.04. Sharing of Set-Offs. Each Bank and each holder of
participations in a Note (a "Sharing Bank") agree each with the others (the
"Other Banks") that, if at any time a Sharing Bank desires to apply to the
Obligations any property of Borrower (including deposit account balances and
other credits) which comes into the possession of such Sharing Bank, it shall
make such disposition and arrangements with the Other Banks with respect to such
property as shall result in each Bank or holder receiving, in respect of the
Obligations, its Distributable Share of such property, based upon the
outstanding principal amounts of the Obligations and all participations therein,
without giving effect to any such application; provided however, that each Bank
and holder shall also be obligated at any time and from time to time to make
such disposition and arrangements as may be necessary to the end that each Bank
and holder receives in respect of the Obligations and all participations
therein, its Distributable Share of all applications by reason of the fact that
all or any of the moneys obtained by the exercise of its right of set-off or
banker's lien must at any time for any reason be restored by the Other Banks to
a Company Affiliate or any trustee or receiver for a Company Affiliate or
otherwise.
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Section 11.05. Option to Purchase.
(a) In the event that any Bank fails, becomes insolvent, closes or is
operated by any regulatory authority (a "Failed Bank"), the other Banks shall
have the option to purchase all or a portion of the Failed Bank's Loans for a
purchase price equal to the principal amount outstanding of the Failed Bank's
Loans being purchased, plus accrued interest thereon.
(b) The option provided in this Section shall be exercisable by the
sending of written notice to the Failed Bank either (i) signed by all of the
Banks other than the Failed Bank, designating the amount of the Failed Bank's
Loans being purchased by each such Bank and/or any designee of such Banks, or
(ii) signed severally by one or more of the other Banks, each such notice
designating the amount of the Failed Bank's Loans to be purchased by the
signatory Bank; provided that, in the event that the aggregate amount of the
Loans to be purchased designated in all notices sent pursuant to this subsection
(ii) exceeds the amount of the Failed Bank's Loans, then each signatory Bank
shall have the right and the obligation to purchase that portion of the Failed
Bank's Loans as shall result in the Ratable Share of such Banks remaining as
nearly as possible proportionate to the Ratable Shares of the other signatory
Banks as set forth in Exhibit 2.01 to this Agreement immediately prior to the
giving of such notices (not to exceed the amount of the Failed Bank's Loans
which such signatory Bank opted to purchase in its notice).
(c) (i) In the event of the purchase of all or part of a Failed Bank's
Loans under this Section, (i) if all of the Failed Bank's Loans are purchased,
the Failed Bank unconditionally agrees to forward immediately to the Agent the
original of this Agreement and the other Loan Documents (as executed)
(including, without limitation, the original of the Borrower's Notes evidencing
the Failed Bank's Loans) in its possession, together with such other documents,
files and records as may be necessary, in the opinion of the Agent, to institute
appropriate collection and/or foreclosure proceedings under the Loans; (ii) in
the event of the purchase of less than all of a Failed Bank's Loans under this
Section, the Failed Bank unconditionally agrees to return immediately all Notes
in its possession to the Agent, and the Borrower shall issue new Notes to the
Failed Bank and the purchasing Bank(s) in accordance with the amounts of the
Failed Bank's Loans being purchased, (iii) Exhibit 2.01 to this Agreement shall
be automatically amended to reflect the amounts of the Loans then held by the
Banks, and this Agreement and all other Loan Documents shall automatically be
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amended to reflect the amounts of the Loans thereafter being held by each of the
Banks; (iv) the Failed Bank shall immediately turn over any Collateral in its
possession to the Agent to be held pro rata for the Banks in accordance with
their Ratable Shares, as amended; (v) the Failed Bank shall join in any demand
letter or other communications forwarded by the purchasing Banks to the
Borrower; and (vi) the Failed Bank shall execute and deliver such additional
documents and instruments in favor of the purchasing Bank(s) or the Agent as may
be deemed to be necessary or desirable by the Agent to permit the purchasing
Bank(s) or the Agent to foreclose against Collateral securing the Loans under
applicable state law procedures, to exercise any right or remedy with this
Agreement, this Agreement or the Loan Documents, or otherwise to evidence or
perfect the purchase of the Loans pursuant to this Section.
(d) In furtherance of the provisions of this Section, the Failed Bank
hereby unconditionally and irrevocably grants (such grant being coupled with an
interest) to the Agent a power of attorney to execute, deliver, file, and/or
record all such instruments of transfer, agreements, certificates, forms and
other documents, and to take such other actions which are necessary or desirable
in the sole discretion of the Agent to consummate the transactions set forth in
this Section, or to otherwise carry out the intent of this Section.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Right of Set-Off. In addition to all other rights and
remedies available to each Bank, each Bank and the holder of any Note or
participation in a Note, after the occurrence but only during the continuance of
a Default, independent of any security interest, shall have the right to set-off
against the unpaid balance of all the Notes and all other Obligations of any
Company Affiliate any debt owing to any Company Affiliate by such Bank or
holder, including, without limitation, any funds in any deposit account now or
hereafter maintained by Borrower with such Bank or holder. Each Company
Affiliate hereby confirms each Bank's and each such holder's right of banker's
lien or set-off. Each Company Affiliate agrees that any holder of such
participation may exercise any and all rights of set-off in accordance with this
Section with respect to any and all moneys now or hereafter owing by such holder
to such Company Affiliate in the amount of such participation.
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Section 12.02. No Discharge. Until the Obligations have been fully and
finally paid and may not under applicable law be required to be repaid by the
Banks, the Obligations of the Company Affiliates under this Agreement and under
the Notes shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any way
affected by: (a) any exercise or nonexercise of any right, remedy, power or
privilege under or in respect of this Agreement or applicable law, including,
without limitation, any failure to set off or release in whole or in part by the
Agent or any Bank any balance of any deposit account or credit on its books in
favor of Borrower or any waiver, consent, extension, indulgence or other action
or inaction in respect of any thereof, or (b) any other action or thing (other
than payment) or omission or delay to do any other action or thing which may or
might in any manner or to any extent vary the risk of the Banks or would
otherwise operate as a discharge of Borrower as a matter of law.
Section 12.03. Amendment; Waiver. No amendments or waiver of any provision
of the Loan Documents or the Notes, nor consent to any departure by the Company
Affiliates or the Banks therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Company Affiliates and the Required
Banks; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the following: (a) waive any of
the conditions specified in Article VI hereof, (b) increase the amounts or
extend the terms of the Banks' commitments or subject the Banks to any
additional obligations, (c) reduce the principal of, or interest on, the Notes
or any fees hereunder, (d) postpone any date fixed for any payment of principal
of, interest on, the Notes or any fees hereunder, (e) change the percentage of
the Ratable Shares or of the aggregate unpaid principal amount of the Notes, or
the number of Banks which shall be required to take action hereunder, (f)
release any of the Collateral, (g) subordinate the Agent's Lien in the
Collateral or consent to another Lien in the Collateral on a basis pari-passu
with that of the Agent, or permit any additional indebtedness to be secured by
the Agent's Lien in the Collateral, or (h) change any provisions of this
Section; provided, further, that an amendment, waiver or consent with respect to
Article XI hereof shall be effective if signed by the Agent and the Required
Banks, but no approval thereof by any Company Affiliate shall be necessary. Any
waiver, consent or approval shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any Company Affiliate
in any case shall entitle any Company Affiliate to any other or further notice
or demand in the same, similar or
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other circumstances. Each holder of any Note outstanding shall be bound by any
modification, waiver, or consent authorized under this Section, whether or not
such Note shall have been marked to indicate such modification, waiver or
consent.
Section 12.04. Severability. Any provision of this Agreement prohibited by
the laws of any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, or modified to conform with such laws, without
invalidating the remaining provisions of the Loan Documents, and any such
prohibition in any jurisdiction shall not invalidate such provisions in any
other jurisdiction. All rights, remedies and powers provided in the Loan
Documents may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions of the Loan
Documents are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render the Loan Documents illegal, invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered, or filed under the
provisions of any applicable law.
Section 12.05. Borrower Assignees. No interest in the Loan Documents may be
delegated or assigned by any Company Affiliate without the prior written
approval of the Banks. Any permitted assignee of or successor to a party hereto
shall succeed to all rights and benefits, and be bound by all obligations,
inuring to such party.
Section 12.06. Bank Assignees; Participations. Each Company Affiliate
hereby acknowledges and agrees that a Bank may at any time:
(a) grant participations in all or any portion of its Ratable Share of
the Loans or its Note or of its right, title and interest therein or in or to
this Agreement (collectively, "Participations") to any other lending office or
to any other bank, lending institution or other entity which has the requisite
sophistication to evaluate the merits and risks of investments in Participations
("Participants"); provided, however, that:
(i) all amounts payable by the Company Affiliates shall be
determined as if such Bank had not granted such Participation; and
(ii) any agreement pursuant to which any Bank may grant a
Participation: (x) shall provide that such Bank shall
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retain the sole right and responsibility to enforce the obligations of the
Company Affiliates including, without limitation, the right to approve any
amendment, modification or waiver of any provisions of this Agreement; (y) such
participation agreement may provide that such Bank will not agree to any
modification, amendment or waiver of the Loan Documents without the consent of
the Participant if such modification, amendment or waiver would reduce the
principal of or rate of interest on the Loans or related fees or postpone the
date fixed for any payment of principal of or interest on the Loans or related
fees; and (z) shall not relieve such Bank from its obligations, which shall
remain absolute, to make Advances hereunder; and
(b) assign all or any portion of its rights under the Loans in minimum
amounts of $5,000,000 with prior written consent of the Agent, together with the
payment by such Bank to the Agent of a $3,500 transfer fee, and, except after
the occurrence of an Event of Default, with the prior written consent of the
Borrower, which shall not be unreasonably withheld. Promptly upon any such
assignment, the assignee shall execute a joinder to this Agreement in form
satisfactory to the Agent and then shall be deemed a Bank for all purposes
hereunder, Exhibit 2.01 shall be amended to reflect the assignment, and the
Borrower shall execute and deliver new Notes in the form of Exhibit 2.02 and
such other documents as may be appropriate to reflect such assignment. All
assignments and participations shall be subject to normal confidentiality with
respect to information relating to the Company Affiliates preventing disclosure
except in accordance with applicable law, in order to enforce rights and
remedies under the Loan Documents and in order to make credit decisions with
respect to the Borrower.
Section 12.07. Governing Law. The Loan Documents have been negotiated and
executed in the Commonwealth of Pennsylvania and shall be construed in
accordance with and governed by the laws, including equitable principles but
without regard to principles of conflict of laws, of the Commonwealth of
Pennsylvania, except to the extent that the effectiveness, perfection or
priority of its lien in Collateral is governed by the laws of a state other than
the Commonwealth of Pennsylvania.
Section 12.08. Headings. The Article and Section headings in the Loan
Documents are for convenience only and shall not affect the construction hereof.
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Section 12.09. Notices. Any notice under the Loan Documents shall be in
writing and shall be conclusively deemed to have been received by a party hereto
and to be effective on the day on which delivered to such party at its address
set forth on the signature pages hereto (or at such other address as such party
shall specify to the other parties hereto in writing), or, if sent by certified
mail, on the third business day after the day on which mailed, addressed to such
party at such address.
Section 12.10. Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the other Loan Documents are
for the benefit of the Agent and the Banks, shall survive the making by the
Banks of the Revolving Credit Advances and the execution and delivery by
Borrower to the Banks of the Notes and shall continue in full force and effect
until the date on which all Obligations have been fully and finally paid and
satisfied.
Section 12.11. Counterparts. The Loan Documents may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together shall constitute but one instrument.
Section 12.12. Canceled Notes. Upon the payment in full of the principal
of, and interest on, the Notes and all other Obligations hereunder, and the
occurrence of the Termination Date, the Banks shall xxxx such Notes "canceled"
or "paid" or some similar phrase and shall return the same promptly to Borrower,
and the Banks shall in a reasonably prompt manner after request by Borrower,
execute and deliver to Borrower all UCC Termination Statements, mortgage
releases and other necessary documents presented to them by the Borrower in
order to evidence the release of the Liens securing the Obligations.
Section 12.13. Conflicts Among Loan Documents; Merger. In the case of any
inconsistency between a provision of this Agreement and a provision of another
Loan Document, the provision of this Agreement shall control. In addition, the
$3,000,000 Master Demand Note dated January 20, 1998 issued by Borrower to
CoreStates Bank, N.A. and the related Security Agreement dated January 20, 1998
shall merge into and be superseded and restated by, respectively, the Notes and
the Security Agreement dated the date hereof.
Section 12.14. Appointment and Authorization of Borrowing Agent. Each
operating Company Affiliate hereby designates and appoints Borrower as its
borrowing agent under
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this Agreement and each of the other Loan Documents and Borrower hereby
acknowledges such designation and accepts such appointment. Each Company
Affiliate hereby irrevocably authorizes and directs Borrower to take such action
on its behalf under the respective provisions of this Agreement and the other
Loan Documents, and any other instruments, documents and agreements referred to
herein or therein, and to exercise such powers and to perform such duties
hereunder and thereunder as Borrower may deem necessary or desirable.
Section 12.15. Joinder of Additional Company Affiliates. From time to time
following the Closing Date, each additional Subsidiary of the Borrower shall be
joined as an additional Company Affiliate hereunder by means of the execution
and/or delivery to Agent of (a) a joinder agreement in form and substance
satisfactory to Agent and the Required Banks and (b) such other agreements,
documents and instruments as Agent and the Required Banks shall deem necessary
or desirable.
Section 12.16. Jurisdiction and Venue. IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THE
LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER, THE COMPANY AFFILIATES
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE
THE BANK MAINTAINS AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH
JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING
IN SUCH COUNTY. THE COMPANY AFFILIATES AGREE THAT SERVICE OF PROCESS IN ANY SUCH
PROCEEDING MAY BE DULY EFFECTED UPON Borrower BY MAILING A COPY THEREOF, BY
REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER.
Section 12.17. Waiver of Jury Trial. EACH PARTY HERETO WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATED TO THE LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE BANKS TO ENTER INTO THE
LOAN DOCUMENTS.
THE COMPANY AFFILIATES REPRESENT AND ACKNOWLEDGE THAT EACH HAS REVIEWED ALL
OF THE PROVISIONS OF THE LOAN DOCUMENTS WITH AN ATTORNEY, INCLUDING WITHOUT
LIMITATION THE IMMEDIATELY PRECEDING CAPITALIZED SECTIONS. THE COMPANY
AFFILIATES UNDERSTAND THAT THE PROVISIONS OF SUCH SECTIONS INVOLVE THE WAIVER OF
CERTAIN CONSTITUTIONAL RIGHTS, AND ACKNOWLEDGE THAT
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EACH HAS KNOWINGLY AND VOLUNTARILY WAIVED SUCH RIGHTS AFTER REVIEWING THE
PROVISIONS OF SUCH SECTIONS WITH ITS ATTORNEY.
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IN WITNESS WHEREOF, the Company Affiliates, the Agent and the Banks have
caused this Agreement to be duly executed and delivered as of the day and year
first above written.
CORESTATES BANK, N.A. for itself
and as Agent
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------
Xxxxxxx Xxxxxxxx
Vice President
Address: Broad & Xxxxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxxx, XX 00000
With a copy to:
Corestates Bank, N.A.
Meetinghouse Business Center
0000 Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
IMAGEMAX, INC.
IMAGEMAX OF INDIANA, INC.
IMAGEMAX OF SOUTH CAROLINA, INC.
IMAGEMAX OF TENNESSEE, INC.
IMAGEMAX OF ARIZONA, INC.
IMAGEMAX OF NEBRASKA, INC.
IMAGEMAX OF OHIO, INC.
IMAGEMAX OF NEW YORK, INC.
IMAGEMAX OF OREGON, INC.
IMAGEMAX OF CALIFORNIA, INC.
IMAGEMAX OF VIRGINIA, INC.
AMMCORP ACQUISITION CORP.
IMAGEMAX OF DELAWARE, INC.
Attest:
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
---------------------- -------------------
Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
Secretary Treasurer
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
[corporate seal] Attn: President
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Exhibit 2.01
Banks and Ratable Shares
Revolving Credit
Facility
CoreStates Bank, N.A.
Broad & Chestnut Streets $30,000,000
Xxxxxxxxxxxx, XX 00000
Exhibit 2.02(A)
Revolving Credit Note
Philadelphia, PA
$25,000,000 As of March ____, 1998
For value received, the undersigned ("Borrower") promises to pay to the
order of CORESTATES BANK, N.A., as Agent (the "Agent"), on or before the date
referenced in paragraph 3 below, the lesser of Twenty-Five Million Dollars
($25,000,000) or the unpaid principal amount outstanding under the Acquisition
Facility made available by the Banks to Borrower pursuant to the Credit
Agreement referred to in paragraph 1 below, together with interest (computed on
the basis of a 360-day year for the actual number of days elapsed) on the unpaid
principal balance from time to time outstanding hereunder from the date hereof
until payment hereunder in full. Both principal and interest shall be paid in
federal funds or other immediately available lawful money of the United States
at the main office of the Agent at Xxxxx & Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, XX
00000, Attention: Loan Department (or such other address as may be designated by
the holder hereof in writing).
1. This Note has been executed under, is governed by, and is entitled to
the benefits of a Credit Agreement dated as of March _____, 1998, as it may be
further amended or restated from time to time (the "Agreement") among Borrower,
its Subsidiaries, CoreStates Bank, N.A, for itself and as Agent, and any other
Banks becoming party thereto, which Agreement, among other matters, contains
provisions for the acceleration of the maturity hereof upon the occurrence of
certain stated events. All capitalized terms used herein shall have the same
meanings as are assigned to such terms in the Agreement.
2. This Note is secured by Liens on certain Collateral of the Company
Affiliates under a Security and Pledge Agreement and Mortgages referenced in the
Agreement.
3. Borrower shall pay the principal hereof and all accrued interest on or
before the Termination Date.
4. Borrower shall pay interest on the unpaid principal balance from time to
time outstanding hereunder from the date hereof until such unpaid principal
balance has been paid in full at the rate or rates, and at the times, set forth
in the Agreement. Any payment of principal, and, to the extent permitted by law,
interest, of or on this Note which is not paid in full when due shall bear
interest at the Default Rate.
5. The Agent's records as to the Revolving Credit Advances made by the
Banks to Borrower pursuant to the Agreement and the payments made on account of
principal hereof, the Revolving Credit Balance, shall be presumed to be complete
and correct absent manifest error.
6. The Credit Agreement is incorporated herein by reference, including
without limitation Article XII.
7. JURISDICTION AND VENUE. IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THE LOAN DOCUMENTS OR THE
RELATIONSHIP ESTABLISHED HEREUNDER, THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN ANY
COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE THE BANK MAINTAINS AN OFFICE
AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR
MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. THE BORROWER
AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON
BORROWER BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
BORROWER.
8. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO
THE LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE AGENT AND THE BANKS TO ENTER INTO THE LOAN
DOCUMENTS.
-2-
THE BORROWER REPRESENTS AND ACKNOWLEDGES THAT EACH HAS REVIEWED ALL OF THE
PROVISIONS OF THE LOAN DOCUMENTS WITH AN ATTORNEY, INCLUDING WITHOUT LIMITATION
THE IMMEDIATELY PRECEDING CAPITALIZED SECTIONS. THE BORROWER UNDERSTANDS THAT
THE PROVISIONS OF SUCH SECTIONS INVOLVE THE WAIVER OF CERTAIN CONSTITUTIONAL
RIGHTS, AND ACKNOWLEDGES THAT IT HAS KNOWINGLY AND VOLUNTARILY WAIVED SUCH
RIGHTS AFTER REVIEWING THE PROVISIONS OF SUCH SECTIONS WITH ITS ATTORNEY.
Attest:
By: By:
---------------------- -----------------------
Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
Secretary Treasurer
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx 00000
[corporate seal] Attn: President
-3-
Exhibit 2.02(B)
Revolving Credit Note
Philadelphia, PA
$5,000,000 As of March ____, 1998
For value received, the undersigned ("Borrower") promises to pay to the
order of CORESTATES BANK, N.A., as Agent (the "Agent"), on or before the date
referenced in paragraph 3 below, the lesser of Five Million Dollars ($5,000,000)
or the unpaid principal amount outstanding under the Working Capital Facility
made available by the Banks to Borrower pursuant to the Credit Agreement
referred to in paragraph 1 below, together with interest (computed on the basis
of a 360-day year for the actual number of days elapsed) on the unpaid principal
balance from time to time outstanding hereunder from the date hereof until
payment hereunder in full. Both principal and interest shall be paid in federal
funds or other immediately available lawful money of the United States at the
main office of the Agent at Xxxxx & Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, XX 00000,
Attention: Loan Department (or such other address as may be designated by the
holder hereof in writing).
1. This Note has been executed under, is governed by, and is entitled to
the benefits of a Credit Agreement dated as of March _____, 1998, as it may be
further amended or restated from time to time (the "Agreement") among Borrower,
its Subsidiaries, CoreStates Bank, N.A, for itself and as Agent, and any other
Banks becoming party thereto, which Agreement, among other matters, contains
provisions for the acceleration of the maturity hereof upon the occurrence of
certain stated events. All capitalized terms used herein shall have the same
meanings as are assigned to such terms in the Agreement.
2. This Note is secured by Liens on certain Collateral of the Company
Affiliates under a Security and Pledge Agreement and Mortgages referenced in the
Agreement.
3. Borrower shall pay the principal hereof and all accrued interest on or
before the Termination Date.
4. Borrower shall pay interest on the unpaid principal balance from time to
time outstanding hereunder from the date hereof until such unpaid principal
balance has been paid in full at the rate or rates, and at the times, set forth
in the Agreement. Any payment of principal, and, to the extent permitted by law,
interest,
-4-
of or on this Note which is not paid in full when due shall bear interest at the
Default Rate.
5. The Agent's records as to the Revolving Credit Advances made by the
Banks to Borrower pursuant to the Agreement and the payments made on account of
principal hereof, the Revolving Credit Balance, shall be presumed to be complete
and correct absent manifest error.
6. The Credit Agreement is incorporated herein by reference, including
without limitation Article XII.
7. JURISDICTION AND VENUE. IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THE LOAN DOCUMENTS OR THE
RELATIONSHIP ESTABLISHED HEREUNDER, THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN ANY
COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE THE BANK MAINTAINS AN OFFICE
AND AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR
MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. THE BORROWER
AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY EFFECTED UPON
BORROWER BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
BORROWER.
8. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO
THE LOAN DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE AGENT AND THE BANKS TO ENTER INTO THE LOAN
DOCUMENTS.
-5-
THE BORROWER REPRESENTS AND ACKNOWLEDGES THAT EACH HAS REVIEWED ALL OF THE
PROVISIONS OF THE LOAN DOCUMENTS WITH AN ATTORNEY, INCLUDING WITHOUT LIMITATION
THE IMMEDIATELY PRECEDING CAPITALIZED SECTIONS. THE BORROWER UNDERSTANDS THAT
THE PROVISIONS OF SUCH SECTIONS INVOLVE THE WAIVER OF CERTAIN CONSTITUTIONAL
RIGHTS, AND ACKNOWLEDGES THAT IT HAS KNOWINGLY AND VOLUNTARILY WAIVED SUCH
RIGHTS AFTER REVIEWING THE PROVISIONS OF SUCH SECTIONS WITH ITS ATTORNEY.
Attest:
By: By:
---------------------- --------------------
Xxxxxx X. Xxxxx Xxxxx X. Xxxxx
Secretary Treasurer
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx 00000
[corporate seal] Attn: President
-6-
Exhibit 2.03
Credit Request
CoreStates Bank, N.A.
Broad and Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Gentlemen:
The undersigned ("Borrower") hereby requests a Revolving Credit Advance, as
follows, pursuant to the terms of the Credit Agreement dated as of March _____,
1998 (the "Agreement") among Borrower, its Subsidiaries, the Agent and the Banks
therein named. Capitalized terms as defined herein shall have the meaning set
forth in the Agreement.
The requested Revolving Credit Advance is in the amount of $_________ and
it shall be disbursed or issued on __________.
A. Current Revolving Credit
Balance under Acquisition
Facility $_________________
Requested Advance $_________________
TOTAL BALANCE AFTER ADVANCE $_________________
(but not more than
$25,000,000)
Total Available under
Acquisition Facility
After Advance $_________________
B. (1) Current Revolving Credit
Balance under Working
Capital Facility $_________________
(2) Eligible Accounts
x 80% $_________________
(3) Excess Availability $_________________
Requested Advance - Cash $_________________
- Letter of
Credit $_________________
TOTAL BALANCE AFTER ADVANCE $_________________
(but not more than
lesser of $5,000,000
or 80% of Eligible
Accounts
Total Available under
Working Capital Facility
After Advance $_________________
C. Total Revolving Credit
Balance under Revolving
Credit Facility After
Advance $_________________
(but not more than
$30,000,000)
Total Available
under Revolving
Credit Facility
After Advance $_________________
The above Revolving Credit Advance(s) shall bear interest at the Base Rate
unless Borrower elects another rate pursuant to the Interest Rate Election
Notice.
Borrower certifies that the foregoing is true, correct and complete as
shown on its books and records as of the date hereof. The Revolving Credit
Balance outstanding following the disbursement of the proceeds of the requested
Revolving Credit Advance will not exceed the Revolving Credit Limit.
The Company Affiliates have performed and are in compliance with each of
the covenants and agreements to be performed by and/or complied with as of the
date hereof under the Agreement and the Loan Documents.
No Event of Default or Default has occurred and is continuing. There has
been no material adverse change in the consolidated business, operations,
properties, or condition,
-2-
financial or otherwise, of the Company Affiliates since the date of the last
financial statements which have been delivered to the Banks.
All representations and warranties made by the Company Affiliates in the
Agreement are true and correct as of the date hereof, and all conditions
precedent to the Agent's and the Banks' obligations thereunder have been
satisfied.(1)
IMAGEMAX, INC.
By:
-----------------------
Name:
Title:
Dated:
-------------
--------------------------------------------------------------------------------
(1) If this Certificate cannot be accurately delivered because of any
non-performance, non-compliance, material adverse change, Default or Event of
Default, the nature thereof, the period of existence thereof and the action
which has been taken or is proposed with respect thereto, shall be set forth on
Exhibit A hereto.
-3-
Exhibit 4.02
Interest Rate Election Notice
CoreStates Bank, N.A.
Broad and Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Syndication Unit
Gentlemen:
The undersigned ("Borrower") hereby elects the following Interest Rate and
Interest Period for the Credit Facility, pursuant to the terms of the Credit
Agreement dated as of March ____, 1998 (the "Agreement") among Borrower, its
Subsidiaries, the Agent and the Banks therein named. Capitalized terms as
defined herein shall have the meaning set forth in the Agreement.
The Loan to which this notice applies is in the amount of $___________ and
was disbursed or issued on ______________.
Interest Rate:
___ Borrower elects to continue present Interest Rate
or
___ Borrower elects to convert present Interest Rate
LIBOR Loan into Base Rate Loan ___
Base Rate Loan into LIBOR Loan ___
Interest Period:
___ Borrower elects to continue present Interest Period
or
___ Borrower elects to change present Interest Period to:
LIBOR Loans: ___ 1 month
___ 2 months
___ 3 months
___ 6 months
Borrower certifies that, upon the making of the elections set forth herein,
it will not have outstanding more than six (6) different LIBOR Loans and Base
Rate Loans, combined.
IMAGEMAX, INC.
Dated: By:
----------------------- ------------------------
Name:
Title:
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Exhibit 8.03
Compliance Certificate
CoreStates Bank, N.A.
Broad and Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
ImageMAX, Inc., a Pennsylvania corporation ("the Borrower"), and all of the
Company Affiliates, have performed and are in compliance with each of the
covenants and agreements to be performed and/or complied with by them as of the
date hereof under the Credit Agreement dated as of March _____, 1998 (the
"Agreement") among the Borrower, its Subsidiaries and the Banks named therein,
and the Loan Documents. All capitalized terms used herein shall be defined as
described in the Agreement.
No Event of Default or Default has occurred and is continuing. There has
been no material adverse change in the consolidated business, operations,
properties, or condition, financial or otherwise, of the Company Affiliates
since the date of the last financial statements which have been delivered to the
Banks. All representations and warranties made by the Borrower in the Agreement
are true and correct as of the date hereof, and all conditions precedent to the
Banks' obligations thereunder have been satisfied.(1)
Attached hereto are computations showing compliance with all financial
covenants set forth in the Agreement for the fiscal quarter or year as to which
this Certificate is being delivered. The undersigned agrees to re-submit such
computations until they are in form and substance satisfactory to the Banks.
IMAGEMAX, INC.
By:
---------------------
Name:
Title:
-------------------------------------------------------------------------------
(1) If this Certificate cannot be accurately delivered because of any
non-performance, non-compliance, material adverse change, Default or Event of
Default, the nature thereof, the period of existence thereof and the action
which has been taken or is proposed with respect thereto, shall be set forth on
Exhibit A hereto.
Exhibit 9.10B
Subordination Provisions
The Subordination Agreement shall be in the form attached, and it shall be
specifically stated that the "Indebtedness of Borrower to Bank" shall include
without limitation all of the Obligations under the Credit Agreement; however,
the Subordination Agreement shall permit payments as to the "Indebtedness of
Borrower to Creditor" (but no prepayments or other deviation from the terms of
the subordinated note) unless and until an Event of Default under the Credit
Agreement has occurred.
