AMENDED AND RESTATED
REVOLVING LOAN,
LETTER OF CREDIT FACILITY AND
FOREIGN EXCHANGE FACILITIES AGREEMENT
AGREEMENT made as of September 27, 1996 by and between Mestek, Inc., a
Pennsylvania corporation having a principal place of business at 000 Xxxxx Xxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as the
"Borrower"), and BayBank, N.A., a national banking association, having a
principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(hereinafter referred to as the "Bank") amends and restates in its entirety an
Amended and Restated Loan Agreement, Letter of Credit Facility and Foreign
Exchange Facilities Revolving Loan Agreement and Letter of Credit Facility
originally dated December 20, 1995.
In consideration of the mutual covenants herein contained, it is agreed as
follows:
1. DEFINITIONS AND ACCOUNTING TERMS.
1.1. Defined Terms. As used in this Agreement, the
following terms have the following meanings (terms defined
in the singular to have the same meaning when used in the
plural and vice versa):
"Affiliate" means any Person (1) which directly or indirectly controls,
or is controlled by, or is under common control with the Borrower or a
Subsidiary; (2) which directly or indirectly beneficially owns or holds five
percent (5%) or more of any class of voting stock of the Borrower or any
Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this Amended and Restated Revolving
Loan , Letter of Credit Facility and Foreign Exchange
Facilities Agreement, as amended, supplemented, or modified
from time to time.
"Back-Up L/C Demand Note" shall have the meaning assigned to such term
in Section 2.14.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in Massachusetts are authorized or required to
close under the laws of The Commonwealth of Massachusetts 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.
"Capitalization" means, as of the date of any
determination thereof, the sum of (i) Consolidated Funded
Debt and (ii) Consolidated Net Worth.
"Capital Lease" or "Capitalized Lease" means any lease the obligation
for rentals with respect to which have been or should be capitalized on the
balance sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" means, as of the date of any determination, the
amount at which the aggregate Rentals due and to become due under all
Capitalized Leases of which the Borrower or any Subsidiary is a lessee would
be reflected as a liability on the consolidated balance sheet of the
Borrower and its Subsidiaries.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time and the regulations and published interpretations thereof.
"Commitment" shall have the meaning set forth in
Section 2.1 below.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 414(b) or 414(c) of the Code.
"Consolidated Current Assets" and "Consolidated Current Liabilities"
means such assets and liabilities of the Borrower and its Subsidiaries on a
consolidated basis as shall be determined in accordance with GAAP to
constitute current assets and current liabilities respectively.
"Consolidated Net Income" for any period means the gross revenues of
the Borrower and its Subsidiaries for such period less all expenses and
other proper charges (including taxes on income), determined on a
consolidated basis in accordance with GAAP consistently applied and after
eliminating earnings or losses attributable to outstanding Minority
Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary
accrued prior to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than a
Subsidiary), substantially all the assets of which have been acquired
in any manner, realized by such other corporation prior to the date of
such acquisition;
(e) net earnings and losses of any corporation (other than a
Subsidiary) with which the Borrower or a Subsidiary shall have
consolidated or which shall have merged into or with the Borrower or a
Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Subsidiary)
in which the Borrower or any Subsidiary has an ownership interest
unless such net earnings have been actually received by the Borrower or
the Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any
Subsidiary which for any reason is unavailable for
payment of dividends to the Borrower or any other
Subsidiary;
(h) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any
Securities of the Borrower or any Subsidiary; and
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from
income arising during such period.
"Consolidated Net Tangible Assets" means, as of the date of any
determination thereof, the total amount of all assets of the Borrower and
its Subsidiaries (less depreciation, depletion and other properly deductible
valuation reserves) after deducting (i) all items which in accordance with
GAAP would be included on the liability side of a consolidated balance
sheet, except capital stock (less treasury stock), surplus and retained
earnings, deferred taxes and funded debt, and (ii) goodwill, patents,
tradenames, trademarks, copyrights, franchises, experimental expense,
organization expense, unamortized debt discount and expense, deferred assets
other than prepaid insurance and prepaid taxes, the excess of cost of shares
acquired over book value of the related assets and such other assets as are
properly classified as "intangible assets" in accordance with GAAP.
"Consolidated Net Worth" means, as of the date of any determination
thereof, the aggregate amount of the capital stock (less treasury stock),
surplus and retained earnings of the Borrower and its Subsidiaries after
deducting Minority Interests to the extent included in the capital stock
accounts of the Borrower, all as determined on a consolidated basis by the
Borrower and its Subsidiaries.
"Current Debt" of any person means all Indebtedness for money borrowed
other than Funded Debt.
"Default" means any of the events specified in Section 9, whether or
not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and the sign "$" mean lawful money of the
United States of America.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereof.
"Event of Default" means any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Eurocurrency Reserve Requirement" means, for any LIBOR Loan for any
Interest Period therefor, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal,
supplemental, or emergency reserves), if any, are required to be maintained
during such Interest Period under Regulation D by the Bank against
"Eurocurrency Liabilities" (as such term is used in Regulation D) but
without benefit or credit of proration, exemptions, or offsets that might
otherwise be available to the Bank from time to time under Regulation D.
Without limiting the effect of the foregoing, the Eurocurrency Reserve
Requirement shall reflect any other reserves required to be maintained by
the Bank against (1) any category of liabilities that includes deposits by
reference to which the LIBOR Interest Rate for LIBOR Loans is to be
determined; or (2) any category of extension of credit or other assets that
includes LIBOR Loans.
"Foreign Exchange Facility" or "FX Facility" means the facility or
facilities described in Section 2.18 below.
"Funded Debt" of any Person means (i) all Indebtedness for borrowed
money or which has been incurred in connection with the acquisition of
assets in each case having a final maturity of one or more than one year
from the date of origin thereof (or which is renewable or extendable at the
option of the obligor for a period or periods of more than one year from the
date of origin), excluding all payments in respect thereof that are required
to be made within one year from the date of any determination of Funded
Debt, whether or not included in Consolidated Current Liabilities; and (ii)
all Capitalized Rentals. "Consolidated" when used as a prefix to any Funded
Debt shall mean the aggregate amount of such Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis eliminating intercompany items.
"GAAP" means generally accepted accounting principles consistently
applied, in accordance with financial reporting standards from time to time
in effect among nationally recognized certified public accounting firms in
the United States, including the statements and interpretations of the
United States Financial Accounting Standards Board and any successor entity.
"Indebtedness" of any Person means and includes all obligations of such
Person which in accordance with GAAP shall be classified on a balance sheet
of such Person as liabilities of such Person, and in any event shall include
all (i) obligations of such Person for borrowed money or which has been
incurred in connection with the acquisition of property or assets, (ii)
obligations secured by any lien or other charge upon property or assets
owned by such Person, even though such Person has not assumed or become
liable for the payment of such obligations, (iii) obligations created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact that
the rights and remedies of the seller, lender, or lessor under such
agreement in the event of default are limited to repossession or sale of
property, (iv) all guaranties of payment or performance of any obligations
of others for borrowed money, or accrued as liabilities in accordance with
GAAP, or as shown on Borrower's financial statements, and (v) Capitalized
Rentals under any Capitalized Lease. For purpose of computing the
"Indebtedness" of any Person there shall be excluded any particular
Indebtedness to the extent that, upon or prior to the maturity thereof,
there shall have been deposited with the proper depository in trust the
necessary funds (or evidences of such Indebtedness, if permitted by the
instrument creating such Indebtedness) for the payment, redemption or
satisfaction of such Indebtedness; and thereafter such funds and evidences
of Indebtedness so deposited shall not be included in any computation of the
assets of such Person.
"Insolvent" The Borrower, its Subsidiaries or any other person shall be
considered to be "Insolvent" when any of the following events shall have
occurred whereby the Borrower or any of its Subsidiaries (a) shall generally
not pay, or shall be unable to pay, or shall admit in writing its inability
to pay its debts as such debts become due; or (b) shall make an assignment
for the benefit of creditors, or petition or apply to any tribunal for the
appointment of a custodian, receiver, or trustee for it or a substantial
part of its assets; or (c) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution,
or liquidation law or statute of any jurisdiction, whether now or hereafter
in effect; or (d) shall have had any such petition or application filed or
any such proceeding commenced against it in which an order for relief is
entered or an adjudication or appointment is made, and which remains
undismissed for a period of ninety (90) days or more; or (e) shall take any
corporate action indicating its consent to, approval of, or acquiescence in
any such petition, application, proceeding, or order for relief or the
appointment of a custodian, receiver, or trustee for all or any substantial
part of its properties; or (f) shall suffer any such custodianship,
receivership, or trusteeship to continue undischarged for a period of ninety
(90) days or more.
"Interest Charges" for any period means all interest (including the
imputed interest factor in respect of Capitalized Leases) and all
amortization of debt discount and expense on any particular Indebtedness for
which such calculations are being made. Computations of Interest Charges on
a proforma basis for Indebtedness having a variable interest rate shall be
calculated at the rate in effect on the day of any determination.
"Interest Period" means with respect to any LIBOR Loan, the period
commencing on the Business Day such loan is made and ending, as the Borrower
may select, pursuant to Section 2.2, on the corresponding day which is no
more than twelve months thereafter provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(a) No Interest Period may extend beyond the
Termination Date without prior approval by the Bank;
(b) If an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next
Business Day unless such Business Day would fall in the next calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(c) If an Interest Period is other than the typical LIBOR market
interest period of 7, 14, 21, 30, 60, 90, 180, 270 or 360 days, the
Bank will nonetheless facilitate such Borrower-requested atypical
Interest Period, utilizing reasonable extrapolation methodology to
establish the LIBOR Interest Rate for such Interest Period.
"Lending Office" means the Bank's office at 0000 Xxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000.
"Letter of Credit" means any documentary, standby or other type of
Letter of Credit issued by the Bank for the account of the Borrower or any
Subsidiary as provided in Section 2.14 below.
"Letter of Credit Facility" means the credit accommodation facility for
the issuance of Letters of Credit being made available to the Borrower or
any of its Subsidiaries pursuant to Section 2.14 below.
"LIBOR Interest Rate" means, for each LIBOR Loan, the rate per annum
(rounded upward, if necessary, to the nearest 1/16 of 1%) determined by the
Bank to be equal to the quotient of (1) the London Interbank Offered Rate
for such LIBOR Loan for such Interest Period utilizing reasonable
extrapolation methodology, if necessary, depending upon the Interest Period
selected by the Borrower divided by (2) one minus the Eurocurrency Reserve
Requirement, if any, for such Interest Period.
"LIBOR Loan" means any Loan when and to the extent that the interest
rate therefor is determined by reference to the LIBOR Interest Rate.
"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 filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction to evidence any of the foregoing).
"Loan" means a LIBOR or Prime Rate Revolving Line of Credit Loan or
Loans (or, after substitution at Borrower's election, an Overnight Loan) or
any outstanding reimbursement obligation under (i) the Letter of Credit
Facility as evidenced by the Back-Up L/C Demand Note or
otherwise or (ii) the FX Facility as evidenced by the Back-Up FX Demand Note
described in Section 2.18 below.
"Loan Documents" means this Agreement, the Notes, and other documents
related to the transactions discussed in this Agreement.
"London Interbank Offered Rate" applicable to any Interest Period for a
LIBOR Loan means the rate of interest per annum (rounded upward, if
necessary, to the nearest 1/16 of 1%) quoted on the applicable page of the
Daily Telerate Financing Reporting Service as the LIBOR Rate or Xxxxxx'x
LIBOR page (or, if such reporting services are no longer provided, at the
LIBOR Rate published in comparable financial reporting services) offered for
deposits in immediately available United States Dollars for a period of time
comparable to the specified Interest Period, at 11:00 a.m. (London time) on
the Business Day which is two Business Days preceding the first Business Day
of the requested LIBOR Loan for such Interest Period.
"Minority Interests" means any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law) that
are not owned by the Borrower and or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus
applicable thereto adjusted, if necessary, to reflect any changes from the
book value of such common stock required by the foregoing method of valuing
minority interests in preferred stock.
"Multiemployer Plan" means a Plan described in
Section 4001(a)(3) of ERISA.
"Net Income Available for Fixed Charges" means, as of the date of any
determination thereof, the sum of the following for the twelve (12) full
consecutive calendar months immediately preceding such date of
determination:
(a) Consolidated Net Income for such period;
PLUS
(b) Income taxes and excess profit taxes paid or accrued by the
Borrower and its Subsidiaries on account of such Consolidated Net Income during
such periods;
PLUS
(c) The sum of (i) Interest Charges in respect of Consolidated
Funded Debt during said period (whether or not paid or payable but only to the
extent deducted in computing Consolidated Net Income for such period) and (ii)
the aggregate rentals paid by the Borrower and its Subsidiaries under all leases
(other than Capitalized Leases) during such period.
"Notes" mean the Revolving Note, the Back-Up L/C Demand Note, the
Backup Foreign Exchange Facility Note and any other notes executed by the
Borrower in favor of the Bank from time to time.
"Obligation" and "Obligations" means any and all liabilities and
obligations of the Borrower or any of its Subsidiaries to the Bank of every
kind and description, direct or indirect, absolute or contingent, primary or
secondary, due or to become due, now existing or hereafter arising,
regardless of how they arise or by what agreement or instrument they may be
evidenced or whether evidenced by any agreement or instrument, and includes
(i) obligations to perform acts and refrain from taking action as well as
obligations to pay money, (ii) reimbursement obligations of the Borrower or
any of its Subsidiaries pursuant to any documentation executed in
conjunction with or related to the issuance by the Bank of any Letters of
Credit or Foreign Exchange Facilities, and (iii) guaranty obligations.
"Overnight Lending Rate" means the rate designated as the Overnight
Federal Funds Rate charged among commercial banks for overnight use of one
million dollars or more and applicable and charged to the Bank as such.
"Overnight Loan" means any Loan when and to the extent that the
interest rate therefor is determined by reference to the Overnight Lending
Rate.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"Plan" means any pension plan which is covered by Title IV of ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"Prime Loan" means any Loan when and to the extent that the interest
rate therefor is determined by reference to the Prime Rate.
"Prime Rate" means that rate announced from time to time by the Bank as
its Prime Rate, which rate is not necessarily the lowest rate charged by the
Bank to its customers.
"Principal Office" means the Bank's office at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
"Pro Forma Fixed Charges" shall mean as of the date of any
determination thereof the sum of (i) Interest Charges in respect of
Consolidated Funded Debt (other than Funded Debt then proposed to be
retired) for the twelve full consecutive calendar months period immediately
preceding such date of determination, plus (ii) Interest Charges on all
Funded Debt then proposed to be issued for the twelve full consecutive
calendar months after such date of determination, plus (iii) the maximum
aggregate Rentals payable during any period of twelve full consecutive
calendar months after such date of determination and prior to July 15, 1997
under all long-term Leases under which the Borrower or a Subsidiary is then
lessee.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as amended or supplemented from time to time.
"Rentals" means and includes all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination
of the lease or surrender the property) payable by the Borrower or a
Subsidiary, as lessee or sublessee under lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Borrower or
a Subsidiary (whether or not designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage lease" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
"Revolving Line of Credit Loan(s)" or "Revolving Credit Loan(s)" shall
have the meaning assigned to such terms in Section 2.1.
"Revolving Note" shall have the meaning assigned to such term in
Section 2.4.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Subsidiary(ies)" means, as to the Borrower, a corporation of which
more than 80% (by number of votes) of shares of stock having ordinary voting
power (other than stock having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other
managers of such corporation are at the time owned, or the management of
which is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by the Borrower and/or by one or more Subsidiaries.
"Termination Date" means April 30, 1997, but if the Revolving Line of
Credit Loan is extended or renewed, at the Bank's discretion, the
Termination Date shall be that date set forth by the Bank as of the
extension or renewal as the new Termination Date, or as otherwise determined
by the Bank.
1.2. "Accounting Terms". All accounting terms not
specifically defined herein shall be construed in accordance
with GAAP consistent with those applied in the preparation
of the financial statements referred to in Section 5.3, and
all financial data submitted pursuant to this Agreement
shall be prepared in accordance with such principles.
2. AMOUNT AND TERMS OF LOAN.
2.1. Revolving Line of Credit. The Bank agrees, on the terms and
conditions hereinafter set forth, to make loans (the "Revolving Line of
Credit Loans") to the Borrower from time to time during the period from the
date of this Agreement up to but not including the Termination Date in an
aggregate principal amount not to exceed outstanding, at any time,
Fifty-Five Million Dollars ($55,000,000.00) (the "Commitment"). Each
Revolving Line of Credit Loan which is a LIBOR Loan and which shall not
utilize the Commitment in full shall be in an amount not less than Five
Hundred Thousand Dollars ($500,000.00) or multiples of One Hundred Thousand
Dollars ($100,000.00) thereabove. Prime Loans (or Overnight Loans, after
that method of interest calculation has been substituted for the Prime Loan
method) may be in any amount within the limits of the Commitment and within
such limits, the Borrower may borrow, repay pursuant to Section 2.7, and
reborrow under this Section 2.1. On such terms and conditions as are
contained herein, the Loans may be outstanding as either Prime Loans (or
Overnight Loans, after that method of interest calculation has been
substituted for the Prime Loan method) or LIBOR Loans. Each type of Loan
shall be made and maintained at the Bank's Lending Office for such type of
Loan.
2.2. Notice and Manner of Borrowing; Conversion and Renewals. The
Borrower may elect from time to time to initiate a Loan, to convert all or a
part of a Prime Loan (or Overnight Loan, after that method of interest
calculation has been substituted for the Prime Loan method) into a LIBOR
Loan and vice versa or to renew all or part of a Loan by giving the Bank
written, telefax or telegraphic notice (effective upon receipt) at least one
(1) Business Day before the initiation of or conversion into a Prime Loan
(or Overnight Loan, after that method of interest calculation has been
substituted for the Prime Loan method), or at least two (2) Business Days
before the initiation of, conversion into or renewal of a LIBOR Loan,
specifying (1) the initial, renewal or conversion date of the Loan; (2) the
amount of the Loan to be provided, converted or renewed; (3) in the case of
conversions, a specification that the Loan is to be converted from a Prime
Loan (or Overnight Loan, after that method of interest calculation has been
substituted for the Prime Loan method) to a LIBOR Loan or vice versa, as the
case may be; and (4) in the case of initiations of, renewals of or a
conversion into LIBOR Loans, the duration of the Interest Period applicable
thereto; provided that (a) the minimum principal amount of each Loan
outstanding after an initiation, a renewal or conversion shall be One
Hundred Thousand Dollars ($100,000.00) in the case of Prime Loans (or
Overnight Loans, after that method of interest calculation has been
substituted for the Prime Loan method), and Five Hundred Thousand Dollars
($500,000.00) or One Hundred Thousand Dollars ($100,000.00) multiples
thereabove in the case of LIBOR Loans; and (b) LIBOR Loans can be renewed or
converted only as of the last day of the Interest Period for such Loan. In
the absence of Borrower specifying the type of loan, advances made pursuant
to any cash management arrangement between the Bank and the Borrower will be
made as Prime Loans (or Overnight Loans, after that method of interest
calculation has been substituted by Borrower for the Prime Loan method).
All notices given under this Section 2.2 shall be irrevocable and shall
be given not later than 11:00 a.m. (EST) on the day which is not less than
the number of Business Days specified above for such notice. If the Borrower
shall fail to give the Bank the notice as specified above for the renewal or
conversion of a LIBOR Loan prior to the end of the Interest Period with
respect thereto, such LIBOR Loan shall automatically be converted into a
Prime Loan (or Overnight Loan, after that method of interest calculation has
been substituted by Borrower for the Prime Loan method) on the last day of
the Interest Period for such Loan.
2.3. Interest. The Borrower shall pay interest to the
Bank on the outstanding and unpaid principal amount of the
Revolving Line of Credit Loans made under this Agreement at
a rate per annum as follows:
(1)(a) For a Prime Loan at a rate equal to the
Prime Rate less one percent (1.00%);
or in the alternative upon Borrower's election prior to the
Termination Date and upon payment of an annual fee of $25,000.00
prorated for the number of days outstanding from the date of
Borrower's election to the Termination Date:
(b) For an Overnight Loan at a rate equal to the Overnight Lending
Rate plus 75 basis points. At the time of such election all
existing Prime Loans shall be converted to Overnight Loans and the
Prime Rate option shall not be available thereafter;
(2) For a LIBOR Loan at a rate equal to the LIBOR Interest Rate
plus an amount expressed in terms of "basis points" or whole or
fractional percentage points quoted by an authorized
representative of the Bank, based upon the Interest Period
selected by the Borrower, the amount of the requested LIBOR Loan,
the market conditions and the date of the request, and confirmed
in writing to Borrower on the Business Day following Borrower's
request for a LIBOR Loan or conversion to a LIBOR Loan.
Any change in the interest rate based on the Prime Rate resulting from
a change in the Prime Rate shall be effective as of the opening of business
on the day on which such change in the Prime Rate becomes effective.
Any change in the interest rate based on the Overnight Rate resulting
from a change in the Overnight Rate shall be effective as of the opening of
business on the day on which such change in the Overnight Rate becomes
effective.
Interest on each Prime Loan, or Overnight Loan, as the case may be,
shall be calculated on the basis of a year of 360 days for the actual number
of days elapsed for any payment period. Interest on each LIBOR Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed for the Interest Period.
Interest on the Loans shall be paid in immediately available funds at
the Principal Office or the Lending Office for the account of the applicable
Lending Office as follows:
(1) For each Prime Loan, or Overnight Loan, as the case may be, on
the first day of each month, commencing the first such day after such
Loan and at maturity for such Loan, and
(2) For each LIBOR Loan, on the last day of the
Interest Period with respect thereto and, in the case
of an Interest Period greater than one month, at one-month intervals
after the first day of such Interest Period.
Any principal amount not paid when due (at maturity, by acceleration or
otherwise) shall bear interest thereafter until paid in full, payable on
demand, at a rate per annum equal to:
(a) For each Prime Loan at a rate equal to the Prime Rate plus one
percent (1%)(or, after the Overnight Lending Rate method has been
selected by the Borrower, then at a rate equal to the Overnight Lending
Rate plus 000 xxxxx xxxxxx); and
(b) For each LIBOR Loan at a rate equal to the LIBOR Interest rate
plus three percent (3%) from the time of default in payment of
principal until the end of the then current Interest Period therefor,
and thereafter at a rate equal to the Prime Rate plus one percent (1%).
2.4. The Revolving Line of Credit Note. All Revolving Line of Credit
Loans made by the Bank under this Agreement shall be evidenced by, and
repaid with interest in accordance with, a single promissory Revolving Line
of Credit Note (the "Revolving Note") of the Borrower in substantially the
form of Exhibit A, duly completed, dated the date of this Agreement, and
payable to the Bank, such Revolving Note to represent the obligation of the
Borrower to repay the Revolving Line of Credit Loans. The Bank is hereby
authorized by the Borrower to endorse on the schedule attached to the
Revolving Note the amount and type of each Revolving Line of Credit Loan and
each renewal, conversion, and payment of principal amount received by the
Bank for the account of the applicable Lending Office on account of the
Revolving Line of Credit Loans, which endorsement shall, in the absence of
manifest error, be conclusive as to the outstanding balance of the Revolving
Line of Credit Loans made by the Bank; provided, however, that the failure
to make such notation with respect to any Revolving Line of Credit Loan or
renewal, conversion, or payment shall not limit or otherwise affect the
obligations of the Borrower under this Agreement or the Revolving Note.
On and after the Termination Date, the unpaid principal amount of the
Revolving Note shall be repaid ON DEMAND.
2.5. Cross Default. A material default in any of the terms and
conditions of (i) any other obligation of the Borrower to the Bank
(including, without limitation, any guaranty obligations or any
reimbursement obligations arising out of the Letter of Credit Facility),
shall constitute a default in the Revolving Note, the Back-Up L/C Demand
Note, the Foreign Exchange Facility Notes and any other obligations of the
Borrower to the Bank whether evidenced by notes or otherwise or (ii) the
obligations of the Borrower under any Indebtedness to any other
institutional lender shall constitute a default hereunder. A default in any
of the terms and conditions of the Revolving Note, the Back-Up L/C Demand
Note, the Letter of Credit Facility, the Back-up Foreign Exchange Notes or
the Foreign Exchange Facility shall constitute a default of this Agreement
and any default of this Agreement shall constitute a default of the
Revolving Note, the Back-Up L/C Demand Note, the Letter of Credit Facility,
the Back-up Foreign Exchange Notes and the Foreign Exchange Facility.
2.6. Use of Proceeds. The proceeds of the Loans hereunder shall be used
by the Borrower (i) to refinance or retire previously incurred debt, and
(ii) for working capital and acquisition purposes. The Borrower will not,
directly or indirectly, use any part of such proceeds for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System or to extend credit
to any Person for the purpose of purchasing or carrying any such margin
stock, or for any purpose which violates, or is inconsistent with,
Regulation X of such Board of Governors.
2.7. Method of Payment. The Borrower shall make each payment under this
Agreement and under the Revolving Note not later than 1:00 p.m. (EST) on the
date when due in lawful money of the United States to the Bank at its
Principal Office or Lending Office for the account of the applicable Lending
Office in immediately available funds. The Borrower hereby authorizes the
Bank, if and to the extent payment is not made when due under this Agreement
or under the Revolving Note, to charge from time to time against any account
of the Borrower with the Bank any amount so due. Whenever any payment to be
made under this Agreement or under the Revolving Note shall be stated to be
due on a day other than 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 the payment of interest except, in the
case of a LIBOR Loan, if the result of such extension would be to extend
such payment into another calendar month, such payment shall be made on the
immediately preceding Business Day.
2.8. Prepayment. The Borrower may, with respect to Prime Loans only (or
Overnight Loans, after that method of interest calculation has been
substituted by Borrower for the Prime Loan method), upon at least one (1)
Business Day's notice to the Bank, prepay the Revolving Note in whole or in
part with accrued interest to the date of such prepayment on the amount
prepaid. LIBOR Loans may not be prepaid.
2.9. Late Payment. Any payment on the Loans received
more than fifteen (15) days after its due date shall be
subject to an additional charge of five percent (5.00%) of
the periodic installment due.
2.10. Illegality. Notwithstanding any other provision in this
Agreement, if the Bank determines that any applicable law, rule, or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof,
or compliance by the Bank (or its Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank, or comparable agency shall make it unlawful or impossible for
the Bank (or its Lending Office) to (1) maintain this credit facility, then
upon notice to the Borrower by the Bank this credit facility shall
terminate; or (2) maintain or fund LIBOR Loans, then upon notice to the
Borrower by the Bank the outstanding principal amount of the LIBOR Loans,
together with interest accrued thereon, and any other amounts payable to the
Bank under this Agreement shall be repaid or converted to a Prime Loan (or
Overnight Loans, after that method of interest calculation has been
substituted by Borrower for the Prime Loan method) (a) immediately upon
demand of the Bank if such change or compliance with such request, in the
judgment of the Bank, requires immediate repayment; or (b) at the expiration
of the last Interest Period to expire before the effective date of any such
change or request.
2.11. Disaster. Notwithstanding anything to the
contrary herein, if the Bank determines (which determination
shall be conclusive) that:
(1) Quotations of interest rates for the relevant deposits
referred to in the definition of LIBOR Interest Rate are not being
provided in the relevant amounts or for the relative maturities for
purposes of determining the rate of interest on a LIBOR Loan as
provided in this Agreement; or
(2) The relevant rates of interest referred to in the definition
of LIBOR Interest Rate, upon the basis of which the rate of interest
for any such type of loan is to be determined do not accurately cover
the cost to the Bank of making or maintaining such type of Loans;
then the Bank shall forthwith give notice thereof to the Borrower, whereupon
(a) the obligation of the Bank to make LIBOR Loans shall be suspended until
the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist; and (b) the Borrower shall repay in full, or
convert to a Prime Loan in full, the then outstanding principal amount of
each LIBOR Loan together with accrued interest thereon, on the last day of
the then current Interest Period applicable to such Loan.
2.12. Additional Costs; Regulatory Changes; Capital Adequacy. The
Borrower shall pay to the Bank from time to time such amounts as the Bank
may reasonably determine to be necessary to compensate the Bank for any
costs incurred by the Bank which the Bank determines are attributable to its
making or maintaining any Loans hereunder or its obligation to make any such
Loans hereunder, or any reduction in any amount receivable by the Bank under
this Agreement or the Revolving Note in respect of any such Loans or such
obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any change after the
date of this Agreement in U.S. federal, state, municipal, or foreign laws or
regulations (including Regulation D), or the adoption or making after such
date of any interpretations, directives, or requirements applying to a class
of banks including the Bank of or under any U.S. federal, state, municipal,
or any foreign laws or regulations (whether or not having the force of law)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof ("Regulatory Change"); which (1)
changes the basis of taxation of any amounts payable to the Bank under this
Agreement or the Revolving Note in respect of any of such Loans (other than
taxes imposed on the overall net income of the Bank or of its Lending Office
for any of such Loans by the jurisdiction where the Principal Office or such
Lending Office is located); or (2) imposes or modifies any reserve, special
deposit, compulsory loan, or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of,
the Bank (including any of such Loans or any deposits referred to in the
definition of LIBOR Interest Rate); or (3) requires an increase in the
amount of capital required or expected to be maintained by the Bank or any
entity controlling the Bank, or (4) imposes any other condition affecting
this Agreement or the Revolving Note (or any of such extensions of credit or
liabilities). The Bank will notify the Borrower of any event occurring after
the date of this Agreement which will entitle the Bank to compensation
pursuant to this Section 2.12 as promptly as practicable after it obtains
knowledge thereof and determines to request such compensation. The
provisions of this Section 2.12 however shall not be applied retrospectively
or during any LIBOR Interest Period in effect when a Regulatory Change
resulting in Additional Costs occurs.
Determinations by the Bank for purposes of this Section 2.12 of the
effect of any Regulatory Change on its costs of making or maintaining Loans
after the date of notification of such Regulatory Change by the Bank to the
Borrower or on amounts receivable by it in respect of Loans, and of the
additional amounts required to compensate the Bank in respect of any
Additional Costs, shall be conclusive, provided that such determinations are
made on a reasonable basis.
2.13. Funding Loss Indemnification. The Borrower
shall pay to the Bank, upon the request of the Bank, such
amount or amounts as shall be sufficient (in the reasonable
opinion of the Bank) to compensate it for any loss, cost, or
expense incurred as a result of:
(1) Any payment of a LIBOR Loan on a date other than the last day of
the Interest Period for such Loan including, but not limited to,
acceleration of the Loans by the Bank pursuant to Section 9; or
(2) Any failure by the Borrower to borrow or convert, as the case may
be, a LIBOR Loan on the date for borrowing or conversion, as the
case may be, specified in the relevant notice provision under
Sections 2.2.
2.14. Letter of Credit Facility. So long as no Default hereunder has
occurred, the Bank shall make available to the Borrower and its Subsidiaries
a credit facility (the "Letter of Credit Facility") whereby the Bank will
issue up to an aggregate of Ten Million Dollars ($10,000,000.00) of letters
of credit (a "Letter of Credit") for the Borrower's or one of its
Subsidiaries' account with an expiration date on any specific Letter of
Credit no later than the Termination Date, unless the Bank chooses to issue
a Letter of Credit to expire after the Termination Date. The individual
Letters of Credit shall be issued in accordance with the Bank's customary
practices at the time of issuance, utilizing documentation prevailing at
such times and, if drawn upon, amounts paid thereon will be repaid upon
demand by the Borrower (and, if applicable, its Subsidiary for whose account
the Letter of Credit was issued) in full reimbursement to the Bank of all
such amounts drawn upon under any or all Letters of Credit, pursuant hereto,
or to such additional reimbursement obligations as may be contained in any
documentation executed by the Borrower in conjunction with the issuance of
such Letter(s) of Credit.
To the extent repayment of such amounts as are reimbursable to the Bank
for such drawings against Letters of Credit is not immediately made, and to
the extent there is availability sufficient under the Commitment, the amount
of such drawings shall be charged as Revolving Line of Credit Loans. To the
extent there is insufficient availability under the Commitment, the
reimbursement obligations resulting from such drawings shall be evidenced by
and subject to the terms of a single, master back-up demand note (the
"Back-Up L/C Demand Note") in the form attached hereto as Exhibit "B".
This Letter of Credit Facility will be made available to those
Subsidiaries of Borrower listed in the attached Exhibit "C" as well as to
Borrower and Borrower's reimbursement obligations described herein shall
apply regardless of whether Borrower or one of its Subsidiaries is the
account party of a particular Letter of Credit.
2.15. Letter of Credit Fees. Whenever a Letter of Credit is issued,
extended or renewed for the Borrower's (or one of its Subsidiaries')
account, a per annum fee of three quarters of one percent (.75%) of the face
amount of the Letter of Credit shall be charged (the "Letter of Credit Fee")
together with an issuance, extension or renewal fee of Two Hundred Dollars
($200.00) covering document preparation costs. An amendment fee of Forty
Dollars ($40.00) per amendment and a drawing fee equal to the greater of (i)
one eighth of one percent (.125%) of the amount drawn or (ii) Seventy Five
Dollars ($75.00), payable if a draw occurs, constitute additional fees
associated with the Letters of Credit. If a Letter of Credit is returned to
the Bank prior to twelve (12) months from its date of issue, the Bank will
refund to the Borrower the pro rata portion of the Letter of Credit Fee for
that period of time during which the Letter of Credit is no longer in
effect.
2.16. Uniform Customs and Practice. The Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the Bank
(the "Uniform Customs and Practice"), shall be binding on the Borrower and
the Bank except to the extent otherwise provided herein, in any Letter of
Credit or in any other credit document. Anything in the Uniform Customs and
Practice to the contrary notwithstanding:
(a) Neither the Borrower nor any beneficiary of
any Letter of Credit shall be deemed an agent of the
Bank.
(b) With respect to each Letter of Credit, neither the Bank nor
its correspondents shall be responsible for or shall have any duty to
ascertain:
(i) the genuineness of any signature;
(ii) the validity, form, sufficiency,
accuracy, genuineness or legal effect of any
endorsements;
(iii) delay in giving, or failure to give, notice of arrival,
notice of refusal of documents or of discrepancies in respect of
which the Bank refuses the documents or any other notice, demand
or protest;
(iv) the performance by any beneficiary
under any Letter of Credit of such beneficiary's
obligations to the Borrower;
(v) inaccuracy in any notice received by the
Bank;
(vi) the validity, form, sufficiency, accuracy, genuineness
or legal effect of any instrument, draft, certificate or other
document required by such Letter of Credit to be presented before
payment of a draft, or the office held by or the authority of any
Person signing any of same; or
(vii) failure of any instrument to bear any reference or
adequate reference to such Letter of Credit, or failure of any
Person to note the amount of any instrument on the reverse of such
Letter of Credit or to surrender such Letter of Credit or to
forward documents in the manner required by such Letter of Credit;
(c) the occurrence of any of the events referred to in the Uniform
Customs and Practice or in the preceding clauses of this Section 2.16
shall not affect or prevent the vesting of any of the Bank's rights or
powers hereunder or the Borrower's obligation to make reimbursement of
amounts paid under any Letter of Credit or any draft accepted
thereunder.
(d) The Borrower will promptly examine (i) each Letter of Credit
(and any amendments thereof) sent to it by the Bank and (ii) all
instruments and documents delivered to it from time to time by the
Bank. The Borrower will notify the Bank of any claim of noncompliance
by notice actually received within three Business Days after receipt of
any of the foregoing documents, the Borrower being conclusively deemed
to have waived any such claims against the Bank and its correspondents
unless such notice is given. The Bank shall have no obligation or
responsibility to send any such Letter of Credit or any such instrument
or document to the Borrower.
(e) In the event of any conflict between the provisions of this
Agreement and the Uniform Customs and Practice, the provisions of this
Agreement shall govern.
2.17. Subrogation. Upon any payment by the Bank under any Letter of
Credit and until the reimbursement of the Bank by the Borrower (and
appropriate Subsidiary) with respect to such payment, the Bank shall be
entitled to be subrogated to, and to acquire and retain, the rights which
the Person to whom such payment is made may have against the Borrower, all
for the benefit of the Bank. The Borrower will use all commercially
reasonable efforts to take such action as the Bank may reasonably request,
including requiring the beneficiary of any Letter of Credit to execute such
documents as the Bank may reasonably request, to assure and confirm to the
Bank such subrogation and such rights, including the rights, if any, of the
beneficiary to whom such payment is made in accounts receivable, inventory
and other properties and assets of any obligor.
2.18. $2,200,000.00 Foreign Exchange Line. In addition to the Revolving
Line of Credit and the Letter of Credit Facility established hereby, the
Bank hereby establishes a line of credit in Borrower's favor in the amount
of $2,200,000.00 (the "$2,200,000.00 FX Facility") or as otherwise may be
determined by the Bank from time to time which line of credit may be used
for the purchases of such foreign currencies as may be hereafter agreed to
by the Bank pursuant to contracts or other agreements to purchase such
currency from the Bank (as principal or agent) (the "Foreign Exchange
Contracts") with settlement dates up to the Termination Date; it being
understood, however, that the Foreign Exchange Line is intended for
contracts necessary for payments to suppliers rather than for speculative
purposes. In the event that the Bank is required to advance funds on account
of its obligation (as Borrower's principal or agent) to purchase foreign
currency, the Bank may charge Borrower's account therefor and such charges
shall be deemed to be advances made under the Revolving Line of Credit.
To the extent there is insufficient availability under the Commitment,
the reimbursement obligations resulting from such drawings shall be
evidenced by and subject to the terms of a single, master back-up demand
note (the "$2,200,000.00 Back-Up Foreign Exchange Facility Note") in the
form attached hereto as Exhibit "D".
3. CONDITIONS PRECEDENT. The obligation of the Bank to make a Revolving Line
of Credit Loan, issue a Letter of Credit or make a Foreign Exchange Facility
Loan shall be subject to the condition precedent that the Bank shall have
received on or before the day of such transaction each of the following, in form
and substance satisfactory to the Bank and its counsel:
3.1. Execution of Notes. The Notes duly executed by
the Borrower.
3.2. Evidence of Borrower's Authority and Incumbency of
Representatives. Certified (as of the date of this Agreement) copies of all
corporate action taken by the Borrower, including resolutions of its Board
of Directors, authorizing the execution, delivery, and performance of the
Loan Documents to which it is a party and each other document to be
delivered pursuant to this Agreement together with a certificate (dated as
of the date of this Agreement) of the Clerk or Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower
authorized to sign the Loan Documents to which it is a party and the other
documents to be delivered by the Borrower under this Agreement.
3.3. Opinion. A favorable opinion of counsel for the
Borrower, dated the date of the Loan, in such form as is
acceptable to the Bank and as to such other matters as the
Bank may reasonable request.
3.4. Officer's Certificate, etc. The following
statements shall be true and the Bank shall have received a
certificate signed by a duly authorized officer of the
Borrower dated the date of the Loan stating that:
a) The representations and warranties
contained in Section 5 of this Agreement are
correct on and as of the date of the Loan as
though made on and as of such date; and
b) No Default or Event of Default has
occurred and is continuing, or would result from
the making of the Loan.
3.5. Other Related Documents. The Bank shall have
received such other approvals, opinions, certificates or
documents as the Bank may reasonably request.
4. PROMISE TO PAY. Borrower promises to pay:
4.1. Obligations. All Obligations of the Borrower to
the Bank, including, but not limited to, the Obligations
evidenced by the Notes of even date with interest at the
rate set forth or in the manner determined in accordance
with this Agreement and the Notes.
4.2. Taxes. Any and all taxes, charges and expenses of every kind or
description which are the binding and legal obligations of the Borrower,
paid or incurred by the Bank (after notice to the Borrower) with respect to
the loans or financial accommodations made or the collection or realization
upon the same, together with interest thereon at the highest rate specified
in Section 2.3 above.
5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To
induce the Bank to enter into this Agreement, the Borrower
represents and warrants as follows:
5.1. Corporate Existence; Authority; Standing. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of The Commonwealth of Pennsylvania. Borrower has full corporate power
to own its properties and conduct its business as now conducted, and to
enter into and perform this Agreement. Borrower is in good standing in each
jurisdiction in which the failure to qualify would have a material, adverse
effect upon its financial condition, business or properties. The execution
and delivery of this Agreement, the Notes and all related documents has been
duly authorized and evidence valid and binding obligations of the Borrower.
5.2. Legally Enforceable Agreement. This Agreement is, and each of the
other Loan Documents when delivered under this Agreement will be, legal,
valid, and binding obligations of the Borrower in accordance with their
respective terms, except to the extent that such enforcement may be limited
by applicable bankruptcy, insolvency, and other similar laws affecting
creditors' rights generally.
5.3. Financial Statements. The balance sheet of the Borrower and any of
its Subsidiaries and the related statements of income and retained earnings
and cash flow of the Borrower and any of its Subsidiaries for the fiscal
year then ended, and the accompanying footnotes, together with any interim
financial statements of the Borrower and any of its Subsidiaries, copies of
which have been furnished to the Bank, are complete and correct and fairly
present the financial condition of the Borrower and any of its Subsidiaries
as at such dates and the results of the operations of the Borrower and any
of its Subsidiaries for the periods covered by such statements, all in
accordance with GAAP consistently applied (subject to year-end adjustments
in the case of the interim financial statements), and there has been no
material adverse change in the condition (financial or otherwise), business,
or operations of the Borrower or any Subsidiary since the presentation to
the Bank of the most recently dated financial statements, nor are there any
liabilities of the Borrower or any Subsidiary, fixed or contingent, which
are material but are not reflected in such financial statements or in the
notes thereto, other than liabilities arising in the ordinary course of
business. No information, exhibit or report furnished by the Borrower to the
Bank in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any
fact necessary to make the statement contained therein not materially
misleading.
5.4. Labor Disputes and Acts of God. Neither the business nor the
properties of the Borrower or any Subsidiary are affected by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy, or other
casualty (whether or not covered by insurance), materially and adversely
affecting such business or properties or the operation or financial
condition of the Borrower.
5.5. Other Agreements. Neither the Borrower nor any Subsidiary is a
party to any indenture, loan or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a material adverse effect on the business, properties,
assets, operations, or conditions, financial or otherwise, of the Borrower
or any Subsidiary, or the ability of the Borrower to carry out its
obligations under the Loan Documents to which it is a party. Neither the
Borrower nor any Subsidiary is in default in any material respect in the
performance, observance, or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material
to its business to which it is a party.
5.6. Litigation. There is no pending or threatened action or proceeding
against or affecting the Borrower or any of its Subsidiaries before any
court, governmental agency, or arbitrator, which may, in any one case or in
the aggregate, materially adversely affect the financial condition,
operations, properties, or business of the Borrower or the ability of the
Borrower to perform its obligations under the Loan Documents to which it is
a party.
5.7. No Defaults. The Borrower and each of its Subsidiaries have
satisfied all judgments, and neither the Borrower nor any Subsidiary is in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court, arbitrator, or Federal, state, municipal, or other
governmental authority, commission, board, bureau, agency, or
instrumentality, domestic or foreign.
5.8. Subsidiaries. Set forth in Exhibit "C" is a complete and accurate
list of the Subsidiaries of the Borrower, showing the jurisdiction of
incorporation of each. All of the outstanding capital stock of any
Subsidiary which is owned by Borrower has been validly issued, is fully paid
and nonassessable, and is owned by the Borrower free and clear of all Liens.
5.9. ERISA. The Borrower and each of its Subsidiaries are to the best
of its knowledge in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction
has occurred and is continuing with respect to any Plan; no notice of intent
to terminate a Plan has been filed, nor has any Plan been terminated, the
effect of either of which would have a material adverse effect upon the
Borrower; no circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings; neither the Borrower
nor any Commonly Controlled Entity has completely or partially withdrawn
from a Multiemployer Plan such that Borrower has any outstanding withdrawal
liability; the Borrower and each Commonly Controlled Entity have met their
minimum funding requirements under ERISA with respect to all of their Plans
and the present value of all vested benefits under each Plan does not exceed
the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance
with the provisions of ERISA; and neither the Borrower nor any Commonly
Controlled Entity has incurred any outstanding liability to the PBGC under
ERISA.
5.10. Operation of Business. The Borrower and each of its Subsidiaries
possess all licenses, permits, franchises, patents, copyrights, trademarks,
and trade names, or rights thereto, to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted,
and the Borrower and any of its Subsidiaries are not in violation of any
valid rights of others with respect to any of the foregoing that would have
a material adverse effect on Borrower.
5.11. Taxes. The Borrower and each of its Subsidiaries have filed all
tax returns (Federal, state, and local) required to be filed and have paid
all taxes, assessments, and governmental charges and levies thereon to be
due, including interest and penalties unless such taxes are being contested
in good faith by appropriate action with adequate reserves established on
Borrower's financial statements.
5.12. Debt. Set forth in the financial statements referred to in this
Agreement, to the extent required by GAAP, is a complete and correct list of
all credit agreements, indentures, purchase agreements, guaranties, Capital
Leases, and other investments, agreements, and arrangements presently in
effect providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or for
acceptance financing) in respect of which the Borrower or any Subsidiary is
in any manner directly or contingently obligated; and the maximum principal
or face amounts of the credit in question, which are outstanding and which
can be outstanding, are correctly stated, and all Liens of any nature given
or agreed to be given as security therefor are correctly described or
indicated in such financial statements.
5.13. Environment. To the best of Borrower's knowledge, the Borrower
and each of its Subsidiaries have duly complied with, and their businesses,
operations, assets, equipment, property, leaseholds, or other facilities are
in compliance with, the provisions of all Federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules
and regulations promulgated thereunder. The Borrower and any Subsidiary have
been issued (or have applications pending) and will maintain all required
Federal, state, and local permits, licenses, certificates, and approvals
relating to (1) air emissions; (2) discharges to surface water or
groundwater; (3) noise emissions; (4) solid or liquid waste disposal; (5)
the use, generation, storage, transportation, or disposal of toxic or
hazardous substances or wastes (intended hereby and hereafter to include any
and all such materials listed in any Federal, state, or local law, code or
ordinance, and all rules and regulations promulgated thereunder as hazardous
or potentially hazardous); or (6) other environmental, health, or safety
matters. Neither the Borrower nor any Subsidiary has received notice of, nor
knows of, or suspects, facts which might constitute any material violations
of any Federal, state, or local environmental, health, or safety laws, codes
or ordinances, and any rules or regulations promulgated thereunder with
respect to its businesses, operations, assets, equipment, property,
leaseholds, or other facilities. Except in accordance with a valid
governmental permit, license, certificate, or approval, there has been no
emission, spill, release, or discharge into or upon (1) the air; (2) soils,
or any improvements located thereon; (3) surface water or groundwater; or
(4) the sewer, septic system or waste treatment, storage or disposal system
servicing the premises, of any toxic or hazardous substances or wastes at or
from the premises; and accordingly the premises of the Borrower and any of
its Subsidiaries are free of all such toxic or hazardous substances or
wastes. There has been no complaint, order, directive, claim, citation, or
notice by any governmental authority or any person or entity with respect to
(1) air emissions; (2) spills releases, or discharges to soils or
improvements located thereon, surface water, groundwater or the sewer,
septic system or waste treatment, storage or disposal systems servicing the
premises; (3) noise emissions; (4) solid or liquid waste disposal; (5) the
use, generation, storage, transportation, or disposal of toxic or hazardous
substances or waste; or (6) other environmental, health, or safety matters
affecting the Borrower or its business, operations, assets, equipment,
property, leaseholds, or other facilities. Neither the Borrower nor any of
its Subsidiaries have any indebtedness, obligation, or liability, absolute
or contingent, matured or not matured, with respect to the storage,
treatment, cleanup, or disposal of any solid wastes, hazardous wastes, or
other toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current
regulation, law, or statute regarding such storage, treatment, cleanup, or
disposal).
6. AFFIRMATIVE COVENANTS. So long as any Loan shall
remain unpaid or any credit accommodation or commitment remains
in effect hereunder, the Borrower will:
6.1. Maintenance of Existence. Except as otherwise permitted herein,
preserve and maintain, and cause each Subsidiary to preserve and maintain,
its corporate existence and good standing in the jurisdiction of its
incorporation, and qualify and remain qualified, and cause any Subsidiary to
qualify and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is required.
6.2. Maintenance of Records. Keep, and cause each Subsidiary to keep,
adequate records and books of account, in which complete entries will be
made in accordance with GAAP consistently applied, reflecting all financial
transactions of the Borrower and any of its Subsidiaries.
6.3. Maintenance of Properties. Maintain, preserve and keep, and will
cause each Subsidiary to maintain, preserve and keep, its properties which
are used or useful in the conduct of its business (whether owned in fee or a
leasehold interest) in good repair and working order and from time to time
will make all necessary repairs, replacements, renewals and additions so
that at all times the efficiency thereof shall be maintained.
6.4. Conduct of Business. Except as otherwise
permitted herein, continue, and cause each Subsidiary to
continue, to engage in an efficient and economical manner in
a business of the same general type as conducted by it on
the date of this Agreement.
6.5. Maintenance of Insurance. Maintain and will cause each Subsidiary
to maintain, insurance coverage by financially sound and reputable insurers
in such forms and amounts and against such risks as are customary for
corporations of established reputation engaged in the same or a similar
business and owning and operating similar properties.
6.6. Compliance With Laws. Promptly pay and discharge and will cause
each Subsidiary promptly to pay and discharge, all lawful taxes, assessments
and governmental charges or levies imposed upon the Borrower or such
Subsidiary, respectively, or upon or in respect of all or any part of the
property or business of the Borrower or such Subsidiary, all trade accounts
payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a lien or
charge upon any property of the Borrower or such Subsidiary; provided the
Borrower or such Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (i) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or sale
of any property of the Borrower or such Subsidiary or any material
interference with the use thereof by the Borrower or such Subsidiary, and
(ii) the Borrower or such Subsidiary shall set aside on its books, reserves
deemed by it to be adequate with respect thereto. The Borrower will promptly
comply and will cause each Subsidiary to comply with all laws, ordinances or
governmental rules and regulations to which it is subject, including without
limitation, the Occupational Safety and Heath Act of 1970, ERISA, the
Americans with Disabilities Act and all laws, ordinances, governmental rules
and regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely affect
the properties, business, prospects, profits or condition of the Borrower
and its Subsidiaries or would result in any lien or charge upon any property
of the Borrower or any Subsidiary.
6.7. Right of Inspection. At any reasonable time and from time to time,
permit the Bank or any agent or representative thereof to examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any Subsidiary, and to discuss the
affairs, finances, and accounts of the Borrower and any Subsidiary with any
of their respective officers and directors and the Borrower's independent
accountants.
6.8. Environment. Be and remain, and cause each Subsidiary to be and
remain, in compliance with the provisions of all federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules
and regulations issued thereunder; notify the Bank immediately of any notice
of a hazardous discharge or environmental complaint received from any
governmental agency or any other party; notify the Bank immediately of any
hazardous discharge from or affecting its premises; immediately contain and
remove the same, in compliance with all applicable laws; promptly pay any
fine or penalty assessed in connection therewith, except such assessments as
are being contested in good faith, against which adequate reserves have been
established; permit the Bank to inspect the premises, to conduct tests
thereon, and to inspect all books, correspondence, and records pertaining
thereto; and at the Bank's request, and at the Borrower's expense, provide a
report of a qualified environmental engineer mutually acceptable to the Bank
and the Borrower, satisfactory in scope, form, and content to the Bank, and
such other and further assurances reasonably satisfactory to the Bank that
the condition has been corrected.
6.9. Place of Business. Promptly notify the Bank in writing of any
addition to, change in, or discontinuance of its place of business as shown
in this subsection. The Borrower has its chief executive office and
principal place of business only at 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx.
6.10. Principal Depositary. Conduct its principal banking business with
the Bank, including maintaining the Bank as its principal depository for its
funds, including deposits for payroll taxes and income taxes, savings,
certificates of deposit, general demand deposit account, and such other
accounts as may be permitted.
7. NEGATIVE COVENANTS. So long as any Loan shall remain
unpaid or any credit accommodation or commitment remains in
effect hereunder, neither the Borrower nor any Subsidiary will:
7.1. Liens. Create, incur, assume, or suffer to
exist, or permit any Subsidiary to create, incur, assume, or
suffer to exist, any Lien upon or with respect to any of its
properties, now owned or hereafter acquired, except:
7.1.1. Liens in favor of the Bank;
7.1.2. Liens for taxes or assessments or other
government charges or levies if not yet due and payable
or, if due and payable, if they are being contested in
good faith by appropriate proceedings and for which
appropriate reserves are maintained;
7.1.3. Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business
which are not past due for more than fifteen (15) days or which are
being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established;
7.1.4. Liens under workers' compensation,
unemployment insurance, Social Security, or similar
legislation;
7.1.5. 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), public or
statutory obligations, surety, stay, appeal, indemnity, performance or
other similar bonds, or other similar obligations arising in the
ordinary course of business;
7.1.6. Judgment and other similar Liens arising in connection with
court proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
7.1.7. Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with
the occupation, use, and enjoyment by the Borrower or any Subsidiary of
the property or assets encumbered thereby in the normal course of its
business or materially impair the value of the property subject
thereto; and
7.1.8. Liens securing obligations of a Subsidiary
to the Borrower or another Subsidiary.
7.1.9. Liens which the Borrower grants or assumes pursuant to or
by reason of any merger, stock acquisition or asset acquisition
otherwise permitted hereby.
7.2. Indebtedness. Create, incur, assume, or suffer
to exist, or permit any Subsidiary to create, incur, assume,
or suffer to exist, any Indebtedness, except:
7.2.1. Indebtedness of the Borrower under this
Agreement or the Note;
7.2.2. Indebtedness of up to Forty Million
Dollars ($40,000,000) excluding current liabilities
except for the current portion of long-term debt, and
other than Indebtedness to the Bank;
7.2.3. Indebtedness of the Borrower subordinated
on terms satisfactory to the Bank to the Borrower's
obligations under this Agreement and the Note; and
7.2.4. Accounts payable to trade creditors for goods or services
which are not aged more than one hundred and twenty (120) days from the
billing date and current operating liabilities (other than for borrowed
money) which are not more than sixty (60) days past due, in each case
incurred in the ordinary course of business, as presently conducted,
and paid within the specified time, unless contested in good faith and
by appropriate proceedings.
7.2.5. Indebtedness which Borrower assumes or which is otherwise
includable as a liability on its financial statements pursuant to or by
reason of any merger, stock acquisition or asset acquisition otherwise
permitted hereby.
7.3. Mergers, Etc.
(a) (i) consolidate with or be a party to a merger with any other
corporation, or (ii) sell, lease or otherwise dispose of all or any
substantial part of the assets of the Borrower and its Subsidiaries,
provided, however that:
(1) any Subsidiary may merge or consolidate with or into the
Borrower or any wholly-owned Subsidiary so long as in any merger
or consolidation involving the Borrower, the Borrower shall be the
surviving or continuing corporation;
(2) the Borrower may consolidate or merge with any other
corporation if (i) the Borrower shall be the surviving or
continuing corporation, (ii) at the time of such consolidation or
merger and after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, and (iii) after
giving effect to such consolidation or merger the Borrower on a
consolidated basis is in full compliance with the covenants set
forth in Section 8.2 below.
(3) any Subsidiary may sell, lease or otherwise dispose of all or
any substantial part of its assets to the Borrower or any
wholly-owned Subsidiary.
(b) permit any Subsidiary to issue or sell any shares of stock of
any class (including as "stock" for the purpose of this Section 7.3 any
warrants, rights or options to purchase or otherwise acquire stock or
other Securities exchangeable for or convertible into stock) of
Borrower or such Subsidiary to any Person other than
the Borrower, a Subsidiary or to the management-employees of Borrower
or a Subsidiary, except for the purpose of qualifying directors, or
except in satisfaction of the validly pre-existing preemptive rights of
minority shareholders in connection with the simultaneous issuance of
stock to the Borrower and/or a Subsidiary whereby the Borrower and/or
such Subsidiary maintain their proportionate interest in such
Subsidiary.
(c) sell, transfer or otherwise dispose of any
shares of stock in any Subsidiary (except to qualifying
directors or other Subsidiaries or the management-employees of a
Subsidiary) or any Indebtedness of any Subsidiary, and will not permit
any Subsidiary to sell, transfer or otherwise dispose of (except to the
Borrower, a Subsidiary or the management-employees of a Subsidiary) any
shares of stock or any Indebtedness of any other Subsidiary, without
the consent of the Bank, which will not be unreasonably withheld or
delayed unless:
(1) simultaneously with such sale, transfer, or disposition, all
shares of stock and all Indebtedness of such Subsidiary at the
time owned by the Borrower and by every other Subsidiary shall be
sold, transferred or disposed of as an entirety;
(2) the Board of Directors of the Borrower shall have determined,
as evidenced by a resolution thereof, that the retention of such
stock and Indebtedness is no longer in the best interest of the
Borrower;
(3) such stock and Indebtedness is sold, transferred or otherwise
disposed of to a Person, for a cash consideration and on terms
reasonably deemed by the Board of Directors to be adequate and
satisfactory;
(4) the Subsidiary being disposed of shall not have any continuing
investment in the Borrower or any other Subsidiary not being
simultaneously disposed of; and
(5) such sale or other disposition does not involve a substantial
part (as hereinafter defined) of the assets of the Borrower and
its Subsidiaries.
As used in this Section 7.3 a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the
Borrower and its Subsidiaries only (i) if the book value of such assets when
added to the book value of all other assets sold, leased or otherwise
disposed of by the Borrower and its Subsidiaries (other than in the ordinary
course of business) during the same fiscal year, exceeds 33 1/3% of the
Consolidated Net Tangible Assets of the Borrower and its Subsidiaries
determined as of the end of the immediately preceding fiscal year and (ii)
the proceeds of such sale, lease or other disposition are not reinvested in
the purchase of assets of comparable value. Sales or other realization on
(i) delinquent receivables and (ii) land held for investment or disposal
purposes as of the date of this Agreement shall not be included in any
computation of sales or other dispositions hereunder.
7.4. Leases.
(a) become obligated, as lessee, to any Person other than the
Borrower or a Subsidiary or an Affiliate under any long-term Lease
unless at the time of entering into any such long-term Lease and after
giving effect thereto, the average of the Net Income Available for
Fixed Charges for any two of the three immediately preceding fiscal
years shall have been at least 250% of the average of the Pro Forma
Fixed Charges for such two fiscal years and Net Income Available for
Fixed Charges for such two fiscal years and Net Income Available for
Fixed Charges for the immediately preceding fiscal year shall have been
at least 250% of Pro Forma Fixed Charges for such fiscal year.
(b) enter into any arrangement whereby the Borrower or any
Subsidiary shall sell or transfer any property owned by the Borrower or
any Subsidiary to any Person other than the Borrower or a Subsidiary
and thereupon the Borrower or Subsidiary shall lease or intend to
lease, as lessee, the same or substantially the same property.
7.5. No Loans or Investments. Make any loans to or investments in any
individual or entity, other than in normal course of business without the
prior approval of the Bank, which will not be unreasonably withheld; except
loans to or investments (i) in EAFCO, Inc., (ii) in X.X. Xxxxx Company,
Inc., (iii) in joint ventures to a maximum to $10,000,000.00 in the
aggregate and (iv) as otherwise permitted herein or reasonably approved by
the Bank.
7.6. Guaranties, Etc. Assume, guaranty, endorse, or otherwise be or
become directly or contingently responsible or liable, or permit any
Subsidiary to assume, guaranty, endorse, or otherwise be or become directly
or contingently responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods, or services, or
to supply or advance any funds, assets, goods, or services of any person, or
an agreement to maintain or cause such Person to maintain a minimum working
capital or net worth, or otherwise to assure the creditors of any such
Person against loss) for obligations of any Person, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, guaranties of obligations
of a Subsidiary, or guaranties for the benefit of the Bank.
7.7. Transactions With Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property
or the rendering of any service, with any Affiliate, or permit any
Subsidiary to enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service,
with any Affiliate, except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
7.8. Dividends.
(a) declare or pay any dividends, either in cash or property, on
any shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the
Borrower); or
(b) directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its
capital stock (other than in exchange for or out of the net proceeds to
the Borrower from the substantially concurrent issue or sale of other
shares of capital stock of the Borrower or warrants, rights or options
to purchase or acquire any shares of its capital stock); or
(c) make any other payment or distribution,
either directly or indirectly or through any
Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all such other
distributions being herein collectively called "Restricted Payments"), if after
giving effect thereto the aggregate amount of Restricted Payments made during
the period from and after December 31, 1990 to and including the date of the
making of the Restricted Payment in question, would exceed 50% of Consolidated
Net Income for such period, computed on a cumulative basis for said entire
period (or if such Consolidated Net Income is a deficit figure, then minus 100%
of such deficit).
(d) declare any dividend which constitutes a Restricted Payment
payable more than sixty (60) days after the date of declaration
thereof.
For the purposes of this Section 7.8 the amount of any Restricted
Payment declared, paid or distributed in property of the Borrower shall be
deemed to be the greater of the book value or fair market value (as determined
in good faith by the Board of Directors of the Borrower) of such property at the
time of the making of the Restricted Payment in question.
8. FINANCIAL COVENANTS. The following financial covenants may, at the Bank's
discretion, be altered, amended, or revised, prior to the Termination Date, to
reflect or address changes in Borrower's Capitalization and capital structure,
including its Funded Debt. So long as any Loan shall remain unpaid or any credit
accommodation or commitment remains in effect hereunder:
8.1. Reporting Requirements. The Borrower and any of
its Subsidiaries will furnish to the Bank:
8.1.1. Quarterly Statements. As soon as
available and in any event within 45 days after the end
of each quarterly fiscal period (except the last) of
each fiscal year, duplicate copies of:
(1) consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the close of such quarter
setting forth in comparative form the amount for the corresponding
period of the preceding fiscal year,
(2) consolidated and consolidating statements of income and
retained earnings of the Borrower and its Subsidiaries for such
quarterly period, setting forth in comparative form the amount for
the corresponding period of the preceding fiscal year, and
(3) consolidated statements of cash flow of the Borrower and
its Subsidiaries of the portion of the fiscal year ending with
such quarter, setting forth in comparative form the amount for the
corresponding period of the preceding fiscal year,all in
reasonable detail and certified as complete and
correct, by an authorized financial officer of the Borrower.
8.1.2. Annual Statements. As soon as available
and in any event within 105 days after the close of
each fiscal year of the Borrower, duplicate copies of:
(1) consolidated balance sheets of the
Borrower and its Subsidiaries as of the close of
such fiscal year, and
(2) consolidated statements of income and
retained earnings and cash flow of the Borrower
and its Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Borrower to the effect
that the consolidated financial statements have been prepared in
accordance with GAAP consistently applied (except for changes in
application in which such accountants concur) and present fairly the
financial condition of the Borrower and its Subsidiaries and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and accordingly, includes such tests of the accounting
records and such other auditing procedures as were considered necessary
in the circumstances; and
(3) a consolidating statement of the Borrower and its Subsidiaries
prepared by the Borrower in support of the consolidated statements
referred to in clauses (1) and (2) above.
The financial statements delivered pursuant to paragraphs (a) and (b)
above shall set forth the amounts charged in each of the periods involved
for depreciation, interest expense and Rentals payable under long-term
Leases;
8.1.3. Audit Reports. Promptly upon receipt
thereof, one copy of each interim or special audit made
by independent accountants of the books of the Borrower
or any Subsidiary;
8.1.4. SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice or
proxy statement sent by the Borrower to stockholders generally and of
each regular or periodic report, and any registration statement or
prospectus filed by the Borrower or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency, and copies of any orders in any proceedings to which the
Borrower or any of its Subsidiaries is a party, issued by any
governmental agency, Federal or state, having jurisdiction over the
Borrower or any of its Subsidiaries;
8.1.5. Requested Information. With reasonable
promptness, such other data and information as the Bank
may reasonably request;
8.1.6. Officers' Certificates. Within the periods provided in
Sections 8.1.1 and 8.1.2 above, a certificate of an authorized
financial officer of the Borrower stating that he has reviewed the
provisions of this Agreement and setting forth: (i) the information and
computations (in sufficient detail) required in order to establish
whether the Borrower was in compliance with the requirements of Section
8.2.1 through 8.2.4, inclusive, at the end of the period covered by the
financial statements then being furnished, and (ii) whether there
existed as of the date of such financial statements and whether, to the
best of his knowledge, there exists on the date of the certificate or
existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition
or event exists on the date of the certificate, specifying the nature
and period of existence thereof and the action the Borrower is taking
and proposes to take with respect thereto;
8.1.7. Accountant's Certificates. Within the period provided in
Sections 8.1.2 above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and stating further, whether in making
their audit, such accountants have become aware of any Default or Event
of Default under any of the terms or provisions of this Agreement
insofar as any such terms or provisions pertain to or involve
accounting matters or determinations, and if any such condition or
event then exists, specifying the nature and period of existence
thereof;
8.1.8. Notice of litigation. Promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any court
or governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, affecting the Borrower or any
Subsidiary, which, if determined adversely to the Borrower or such
Subsidiary, could have a material adverse effect on the financial
condition, properties, or operations of the Borrower or such
Subsidiary;
8.1.9. Notice of Defaults and Events of Default. As soon as
possible and in any event within five (5) days after the occurrence of
each Default or Event of Default, a written notice setting forth the
details of such Default or Event of Default and the action which is
proposed to be taken by the Borrower with respect thereto;
8.1.10. ERISA reports. As soon as possible, and in any event
within thirty (30) days after the Borrower knows or has reason to know
that any circumstances exist that constitute grounds entitling the PBGC
to institute proceedings to terminate a Plan subject to ERISA with
respect to the Borrower or any Commonly Controlled Entity, and promptly
but in any event within two (2) Business Days of receipt by the
Borrower or any Commonly Controlled Entity of notice that the PBGC
intends to terminate a Plan or appoint a trustee to administer the
same, and promptly but in any event within five (5) Business Days of
the Receipt of notice concerning the imposition of withdrawal liability
(in excess of $10,000.00 with respect to the Borrower or any Commonly
Controlled Entity, the Borrower will deliver to the Bank a certificate
of the chief financial officer of the Borrower setting forth all
relevant details and the action which the Borrower proposes to take
with respect thereto;
8.1.11. Reports to other creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other party
pursuant to the terms of any indenture, loan, credit, or similar
agreement and not otherwise required to be furnished to the Bank
pursuant to any other clause of this Section; and
8.2. Financial Covenants. For purposes of the
following financial covenants the Borrower and its
Subsidiaries shall be treated on a consolidated basis, and
all ratios, except as otherwise specified, will be tested on
a quarterly basis:
8.2.1. Debt to Net Worth; Leverage Ratio. The
ratio of the Borrower's total Indebtedness and all
other liabilities to its tangible Consolidated Net
Worth shall be maintained at or less than 3.00 to 1.00:
8.2.2. Current Ratio. The ratio of combined
tangible Consolidated Current Assets of the Borrower to
the combined Current Liabilities of the Borrower shall
at all times be not less than 1.25 to 1.00.
8.2.3. Minimum Consolidated Net Worth. At all
times the Borrower will maintain Consolidated Net Worth
at an amount not less than $75,000,000.
8.2.4. Working Capital. At all times Borrower's
Consolidated Current Assets shall exceed its
Consolidated Current Liabilities by $25,000,000.00.
9. EVENTS OF DEFAULT. If any of the following events
shall occur:
9.1. The Borrower shall fail to pay the principal of,
or interest on, the Notes or any other payment Obligations
of Borrower to the Bank, or any amount of a commitment or
other fee, as and when due and payable;
9.2. Any representation or warranty made or deemed made by the Borrower
in this Agreement or which is contained in any certificate, document,
opinion, or financial or other statement furnished at any time under or in
connection with any Loan Document shall prove to have been incorrect,
incomplete, or misleading in any material respect on or as of the date made
or deemed made;
9.3. The Borrower shall fail, after thirty (30) days of notice thereof,
to perform or observe any term, covenant, or agreement contained herein
(other than failure under Section 9.1 or 9.2 above for which no notice is
required);
9.4. Dissolution, merger or consolidation of the
Borrower (other than as permitted in this Agreement);
9.5. The Borrower or any of its Subsidiaries shall, after the
expiration of any applicable notice or grace periods, (a) fail to pay any
Indebtedness for borrowed money to Persons other than the Bank, or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise), or (b) fail to
perform or observe any term, covenant, or condition on its part to be
performed or observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed, if the effect of
such failure to perform or observe is to accelerate, or to permit the
acceleration of after the giving of notice or passage of time, or both, the
maturity of such Indebtedness, whether or not such failure to perform or
observe shall be waived by the holder of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof;
9.6. The Borrower or any of its Subsidiaries shall
become Insolvent (and, in the case of Insolvency of a
Subsidiary, such Insolvency has a material adverse effect
upon Borrower);
9.7. One or more judgments, decrees, or orders for the payment of money
in excess of One Hundred Thousand Dollars ($100,000.00) in the aggregate
shall be rendered against the Borrower or any of its Subsidiaries, and such
judgments, decrees, or orders shall continue unsatisfied and in effect for a
period of ninety (90) consecutive days without being vacated, discharged,
satisfied, or stayed or bonded pending appeal;
9.8. This Agreement shall at any time after its execution and delivery
and for any reason cease to be in full force and effect or shall be declared
null and void, or the validity or enforceability thereof shall be contested
by the Borrower, or the Borrower shall deny it has any further liability or
obligation under this Agreement;
9.9. Any of the following events shall occur or exist with respect to
the Borrower and any Commonly Controlled Entity under ERISA: any Reportable
Event shall occur; complete or partial withdrawal from any Multiemployer
Plan shall take place; any Prohibited Transaction shall occur; a notice of
intent to terminate a Plan shall be filed, or a Plan shall be terminated; or
circumstances shall exist which constitute grounds entitling the PBGC to
institute proceedings to terminate a Plan, or the PBGC shall institute such
proceedings; and in each case above, such event or condition, together with
all other events or conditions, if any, could subject the Borrower to any
tax, penalty, or other liability which in the aggregate may exceed One
Hundred Thousand Dollars ($100,000.00);
then, and in any such event, the Bank may, notwithstanding any time or credit
allowed by any instrument evidencing a liability, without notice or demand (i)
refuse to make any additional advances or Loans, and/or (ii) declare the
outstanding Note, all interest thereon, and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Note, all such
interest, and all such amounts shall become and be forthwith due and payable.
Upon the occurrence and during the continuance of any Event of Default, the Bank
is hereby authorized at any time and from time to time, without notice, to
exercise any or all of its rights and remedies provided in this Agreement or
otherwise permitted by law, including all rights of set-off.
10. DEPOSITS. Any and all deposits or other sums at any time credited by or
due from the Bank to Borrower, and any securities or other property of Borrower
being held by the Bank or on account of Borrower, may at all times be held and
treated as collateral for any and all obligations of the Borrower to the Bank,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising. The Bank may apply or set-off such deposits or
other sums against any obligations at any time, whether or not said obligations
or other security held by the Bank is considered by the Bank to be adequate. The
Bank, on or after an Event of Default, may sell any such securities or other
property held as collateral for the repayment or performance of such obligations
in a commercially reasonable manner.
11. WAIVERS. The Borrower waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, or any
action taken in reliance hereon, and all other demands and notice of any
description. With respect to liabilities, the Borrower assents to any extension
or postponement of the time of payment or any other indulgence to the addition
or release of any party or person primarily or secondarily liable, to the
acceptance of partial payments thereon and the settlement thereof, all in such
manner and at such time or times as the Bank may deem advisable. No delay or
omission on the part of the Bank in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall not
be construed as a bar to or waiver of any right on any future occasion. All
rights and remedies of the Bank, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised singularly or
concurrently.
12. MISCELLANEOUS
12.1. Amendments, Etc. No amendment, modification, termination, or
waiver of any provision of any Loan Document to which the Borrower is a
party, nor consent to any departure by the Borrower from any Loan Document
to which it is a party, shall in any event be effective unless the same
shall be in writing and signed by the Bank, and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given.
12.2. Notices, Etc. All notices and other communications provided for
under this Agreement and under the other Loan Documents to which the
Borrower is a party shall be in writing (including telegraphic, telex, and
facsimile transmissions) and mailed or transmitted or delivered, if to the
Borrower, at its address at 000 Xxxxx Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, Attention: Xxxx X. Xxxx, Chairman, and if to the Bank, at its address
at 0000 Xxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: M. Xxxx
Xxxxx, Executive Vice President; or, as to each party, at such other address
as shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section. Except as is
otherwise provided in this Agreement, all such notices and communications
shall be effective when deposited in the mails or delivered to the telegraph
company, or sent, answerback received, respectively, addressed as aforesaid.
12.3. Survival. All representations, warranties,
covenants, and agreements contained herein shall survive the
execution and delivery of this Agreement, the Note and any
other agreements or documents required for this transaction.
12.4. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower may not assign or transfer
any of its rights under any Loan Document to which the Borrower is a party
without the prior written consent of the Bank.
12.5. Costs, Expenses, and Taxes. The Borrower agrees to pay on demand
all reasonable costs and expenses, incurred by the Bank in connection with
the preparation, execution, delivery, filing, and administration of the Loan
Documents, and of any amendment, modification, or supplement to the Loan
Documents, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Bank incurred in connection with
advising the Bank as to its rights and responsibilities hereunder. The
Borrower also agrees to pay all such costs and expenses, including court
costs, incurred in connection with enforcement of the Loan Documents, or any
amendment, modification, or supplement thereto, whether by negotiation,
legal proceedings, or otherwise. In addition, the Borrower shall pay any and
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing, and recording of any of the
Loan Documents and the other documents to be delivered under any such Loan
Documents, and agree to hold the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees. This provision shall survive
termination of this Agreement.
12.6. Integration. This Agreement and the Loan
Documents contain the entire agreement between the parties
relating to the subject matter hereof and supersede all oral
statements and prior writings with respect thereto.
12.7. Indemnity. The Borrower hereby agrees to defend, indemnify, and
hold the Bank harmless from and against any and all claims, damages,
judgments, penalties, costs, and expenses (including attorney fees and court
costs now or thereafter arising from the aforesaid enforcement of this
clause) arising directly or indirectly from the activities of the Borrower
and any of its Subsidiaries, its predecessors in interest, or third parties
with whom it has a contractual relationship (with respect to that
contractual relationship), or arising directly or indirectly from the
violation of any environmental protection, health, or safety law, whether
such claims are asserted by any governmental agency or any other person.
This indemnity shall survive termination of this Agreement.
12.8. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the
laws of The Commonwealth of Massachusetts.
12.9. Severability of Provision. Any provision of any Loan Document
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in
any other jurisdiction.
12.10. Captions, Counterparts and Modifications. The
captions of this Agreement are for convenience only and
shall not affect the construction hereof. This Agreement
may be executed in several counterparts, each of which shall
be deemed an original, but may not be terminated or modified
orally.
12.11. Jury Trial Waiver. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN
CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED
TO THIS AGREEMENT OR THE LOAN DOCUMENTS. NO OFFICER OF THE BANK HAS
AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals to
this Agreement the day and year first above written.
In the presence of:
Mestek, Inc.
By /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Its Sr.Vice President - Finance
BayBank, N.A.
By /s/ Xxxx Xxxxx
Xxxx Xxxxx
Its Executive Vice President
