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CREDIT AGREEMENT
Dated as of December 30, 1998
PERFORMANCE TECHNOLOGIES, INCORPORATED
and
THE CHASE MANHATTAN BANK
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS------------------------------------ 1
Section 1.01. Definitions----------------------------------------- 1
Section 1.02. Accounting Terms------------------------------------ 8
Section 1.03. Subsidiaries---------------------------------------- 8
ARTICLE 2. THE CREDIT 11---------------------------------------------------- 9
Section 2.01. Loans----------------------------------------------- 9
Section 2.02. Purpose--------------------------------------------- 9
Section 2.03. Changes of Commitment------------------------------- 9
Section 2.04. Extension of Revolving Credit Termination Date------ 9
Section 2.05. Letters of Credit----------------------------------- 10
Section 2.06. Facility Fee---------------------------------------- 10
ARTICLE 3. REPAYMENTS; INTEREST; LATE FEES, PREPAYMENTS--------------------- 10
Section 3.01. Repayment of Loans---------------------------------- 10
Section 3.02. Interest-------------------------------------------- 10
Section 3.03. Late Fees------------------------------------------- 10
Section 3.04. Prepayments----------------------------------------- 11
ARTICLE 4. PAYMENTS; COMPUTATIONS------------------------------------------- 11
Section 4.01. Payments-------------------------------------------- 11
Section 4.02. Computations---------------------------------------- 11
Section 4.03. Certain Notices------------------------------------- 11
Section 4.04. Minimum Amounts------------------------------------- 12
ARTICLE 5. YIELD PROTECTION AND ILLEGALITY---------------------------------- 12
Section 5.01. Additional Costs------------------------------------ 12
Section 5.02. Limitation on Types of Loans------------------------ 13
Section 5.03. Illegality------------------------------------------ 13
Section 5.04. Certain Conversions Pursuant to
xx.xx. 5.01 and 5.03------------------------------ 13
Section 5.05. Compensation---------------------------------------- 14
Section 5.06. Survival-------------------------------------------- 14
ARTICLE 6. CONDITIONS PRECEDENT--------------------------------------------- 14
Section 6.01. Initial Conditions---------------------------------- 14
Section 6.02. Additional Conditions Precedent--------------------- 14
ARTICLE 7. REPRESENTATIONS AND WARRANTIES----------------------------------- 15
Section 7.01. Incorporation, Good Standing and Due Qualification-- 15
Section 7.02. Corporate Power and Authority; No Conflicts--------- 15
Section 7.03. Legally Enforceable Agreements---------------------- 15
Section 7.04. Litigation------------------------------------------ 15
Section 7.05. Financial Statements-------------------------------- 15
Section 7.06. ERISA----------------------------------------------- 16
Section 7.07. Subsidiaries and Ownership of Stock----------------- 16
Section 7.08. Existing Credit Arrangements and Existing Liens----- 16
Section 7.09. Regulation U---------------------------------------- 16
Section 7.10. Compliance with Laws-------------------------------- 16
Section 7.11. Operation of Business------------------------------- 16
Section 7.12. Hazardous Materials--------------------------------- 16
Section 7.13. No Default on Outstanding Judgments or Orders------- 17
Section 7.14. No Defaults on Other Agreements--------------------- 17
Section 7.15. Labor Disbutes and Acts of God---------------------- 17
Section 7.16. Governmental Regulation----------------------------- 17
Section 7.17. Partnerships---------------------------------------- 17
Section 7.18. No Forfeiture--------------------------------------- 17
Section 7.19. Solvency-------------------------------------------- 17
Section 7.20 Year 2000------------------------------------------- 18
ARTICLE 8. AFFIRMATIVE COVENANTS-------------------------------------------- 18
Section 8.01. Maintenance of Existence---------------------------- 18
Section 8.02. Conduct of Business--------------------------------- 18
Section 8.03. Maintenance of Insurance---------------------------- 18
Section 8.04. Compliance with Laws-------------------------------- 19
Section 8.05. Right of Inspection--------------------------------- 19
Section 8.06. Reporting Requirements------------------------------ 19
Section 8.07. Audits---------------------------------------------- 21
Section 8.08. Lease Financings------------------------------------ 22
ARTICLE 9. NEGATIVE COVENANTS----------------------------------------------- 22
Section 9.01. Debt------------------------------------------------ 22
Section 9.02. Guarantees, etc.------------------------------------ 22
Section 9.03. Liens----------------------------------------------- 22
Section 9.04. Investments----------------------------------------- 22
Section 9.05. Sale of Assets-------------------------------------- 22
Section 9.06. Mergers, etc.--------------------------------------- 23
Section 9.07. Acquisitions---------------------------------------- 23
Section 9.08. No Activities Leading to Forfeiture----------------- 23
Section 9.09. Creation of Subsidiaries---------------------------- 23
Section 9.10. No Material Change---------------------------------- 23
ARTICLE 10. FINANCIAL COVENANTS--------------------------------------------- 23
Section 10.01. Leverage Ratio------------------------------------- 23
Section 10.02. Cash Flow Coverage Ratio--------------------------- 23
Section 10.03. Income or Loss------------------------------------- 24
Section 10.04. Current Ratio-------------------------------------- 24
ARTICLE 11. EVENTS OF DEFAULT----------------------------------------------- 24
Section 11.01. Events of Default---------------------------------- 24
Section 11.02. Remedies------------------------------------------- 26
ARTICLE 12. MISCELLANEOUS--------------------------------------------------- 26
Section 12.01. Amendments and Waivers----------------------------- 26
Section 12.02. Survival------------------------------------------- 26
Section 12.03. Usury---------------------------------------------- 26
Section 12.04. Expenses------------------------------------------- 26
Section 12.05. Assignment; Participations------------------------- 26
Section 12.06. Notices-------------------------------------------- 27
Section 12.07. Set-Off-------------------------------------------- 27
Section 12.08. Jurisdiction; Immunities--------------------------- 27
Section 12.09. Captions------------------------------------------- 27
Section 12.10. Severability--------------------------------------- 27
Section 12.11. Counterparts--------------------------------------- 28
Section 12.12. Governing Law-------------------------------------- 28
EXHIBIT A - Revolving Credit Note
EXHIBIT B - Annual Compliance Certificate
EXHIBIT C - Quarterly Compliance Certificate
SCHEDULE 1 - Schedule of Subsidiaries and Investments in Subsidiaries (ss. 7.07)
SCHEDULE 2 - Existing Credit Arrangements and Liens (ss. 7.08)
SCHEDULE 3 - Schedule of Hazardous Materials (ss. 7.12)
SCHEDULE 4 - Schedule of Partnerships and Joint Ventures (ss. 7.17)
CREDIT AGREEMENT dated as of December 30, 1998, between PERFORMANCE
TECHNOLOGIES, INCORPORATED, a corporation organized under the laws of Delaware
(the "Borrower") and THE CHASE MANHATTAN BANK, a banking corporation organized
under the laws of the State of New York (the "Bank").
The Borrower desires that the Bank extend credit as provided herein,
and the Bank is prepared to extend such credit upon the terms hereof. This
Credit Agreement amends, restates and replaces the Credit Agreement dated as of
October 31, 1996 between the Borrower and the Bank. Accordingly, the Borrower
and the Bank hereby agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. 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):
"Acquisition" means any transaction pursuant to which the Borrower or
any of its Subsidiaries (a) acquires equity securities (or warrants, options or
other rights to acquire such securities) of any Person other than the Borrower
or any Person which is not then a Subsidiary of the Borrower, pursuant to a
solicitation of tenders therefor, or in one or more negotiated block, market or
other transactions not involving a tender offer, or a combination of any of the
foregoing, or (b) makes any Person a Subsidiary of the Borrower, or causes any
such Person to be merged into the Borrower or any of its Subsidiaries, in any
case pursuant to a merger, purchase of assets or any reorganization providing
for the delivery or issuance to the holders of such Person's then outstanding
securities, in exchange for such securities, of cash or securities of the
Borrower or any of its Subsidiaries, or a combination thereof, or (c) purchases
all or substantially all of the business or assets of any Person.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of its Subsidiaries; (b) which directly or indirectly beneficially owns or
holds 5% or more of any class of voting stock of the Borrower or any Subsidiary
thereof; (c) 5% or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Borrower or Subsidiary thereof; or (d) which
is a partnership in which the Borrower or any Subsidiary thereof is a general
partner. 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 Credit Agreement, as amended or supplemented
from time to time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Annual Date" means October 31, 1999 and each October 31 thereafter.
"Applicable Libor Margin" means a rate of interest per year (expressed
in basis points), equal to seventy-five (75) basis points for the Initial Margin
Period; thereafter the Applicable Libor Margin shall be the basis points number
set forth below which corresponds to the Funded Debt/EBITDA Ratio of the
Borrower at the end of the fiscal quarter preceding the commencement of the
Margin Period:
Applicable Libor
Funded Debt/EBITDA Ratio Margin in Basis Points per Year
Greater than 2.50 150
Greater than 2.25
but less than or equal to 2.50 125
Greater than 2.00
but less than or equal to 2.25 112.5
Greater than 1.75
but less than or equal to 2.00 100
Greater than 1.50
but less than or equal to 1.75 87.5
Less than or equal to 1.50 75
E-1
To the extent that a Margin Period commences during the pendency of an Interest
Period for an existing Libor Loan, the Applicable Libor Margin shall remain the
same for the remainder of the Interest Period for such existing Libor Loan.
If the Borrower at any time shall fail to deliver such financial reports to the
Bank within the time required pursuant to ss.8.06 of this Agreement, then the
Applicable Libor Margin for the next Margin Period shall be one hundred fifty
(150) basis points until such financial reports shall have been delivered and
the Applicable Libor Margin can be determined.
"Applicable Margin" means, with respect to each Loan, (a) 0% per year
on Prime Loans, or (b) the Applicable Libor Margin per year on Libor Loans.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in Rochester, New York.
"Borrowed Money Obligation" means and includes any obligation for the
payment of borrowed cash, including any sale and lease-back or similar financing
device or scheme by a Person in respect of assets owned by such Person prior to
such financing, but excluding any obligation for payment under any lease,
installment purchase or other title retention agreement by which a Person
acquires the ownership or right to use property not previously included in such
Person's assets in accordance with GAAP.
"Capital Expenditures" means for any period the Dollar amount of gross
expenditures (including obligations under Capital Leases) made for fixed assets,
real property, plant and equipment, and all renewals, improvements and
replacements thereto (but not repairs thereof) which are deemed to be capital
expenditures in accordance with GAAP and which are incurred during such period.
"Capitalized Lease" means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated or combined
balance sheet of the lessee and its subsidiaries or related entities in
accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate present value of future
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated or
combined balance sheet of such Person.
"Closing Date" means the date this Agreement has been executed by both
the Borrower and the Bank.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means the obligation of the Bank to make the Loans and
extend Letters of Credit under this Agreement in an aggregate principal amount
up to $5,000,000, as such amount may be reduced or otherwise modified from time
to time.
"Consolidated Income" means, for any fiscal period, the income (or
loss) of the Borrower and its Subsidiaries on a consolidated after-tax basis
computed in accordance with GAAP and as reported on the Borrower's statements of
income and retained earnings (or similar statements).
"Consolidated Subsidiary" means, in respect of any Person, any
Subsidiary the accounts of which are or are required to be consolidated with the
accounts of such Person in accordance with GAAP.
E-2
"Consolidated Tangible Net Worth" means, as at any date, the sum of the
following items in respect of the Borrower and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP):
a. the amount of capital stock, plus
b. the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit), minus
c. the sum of the following: cost of treasury shares and the book value
of all assets which should be classified as intangibles (without duplication of
deductions in respect of items already deducted in arriving at surplus and
retained earnings) but in any event including goodwill, minority interests,
research and development costs, trademarks, trade names, copyrights, patents and
franchises, unamortized debt discount and expense, all reserves and any write-up
in the book value of assets resulting from a revaluation thereof subsequent to
December 31, 1995, and minus
d. the amount of all retained earnings subsequent to December 31, 1995
derived from unusual items, including without limitation all sales of assets
other than inventory.
"Current Termination Date" means the Revolving Credit Termination Date
as in effect from time to time under this Agreement.
"Debt" means, with respect to any Person: (a) indebtedness of such
Person for borrowed money; (b) indebtedness for the deferred purchase price of
property or services (except trade payables in the ordinary course of business);
(c) Unfunded Vested Liabilities of such Person (if such Person is not the
Borrower, determined in a manner analogous to that of determining Unfunded
Vested Liabilities of the Borrower); (d) the face amount of any outstanding
letters of credit issued for the account of such Person; (e) obligations arising
under acceptance facilities; (f) guaranties, endorsements (other than for
collection in the ordinary course of business) and other contingent obligations
to purchase, to provide funds for payment, to supply funds to invest in any
Person, or otherwise to assure a creditor against loss; (g) obligations secured
by any Lien on property of such Person; and (h) obligations of such Person as
lessee under Capital Leases.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by the Borrower under this
Agreement or the Note, a rate per annum equal to 4% above the Prime Rate as in
effect from time.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means for any period and in respect of any Person the sum of
(i) the net income of such Person for such period computed in accordance with
GAAP, plus (ii) the interest expense of such Person for such period, plus (iii)
the income tax expense of such Person for such period, plus (iv) the amount
reported as the depreciation of the assets of such Person for such period
computed in accordance with GAAP, plus (v) the amount reported as the
amortization of intangibles assets of such Person for such period computed in
accordance with GAAP, and as such item is used in the computation of such
Person's net income for such period, plus (vi) any one time, non-recurring cash
or non-cash losses minus (vii) any one-time, non-recurring licensing or royalty
fees received by the Person or one-time, non-recurring cash or non-cash gains.
"EBITDA/Interest Ratio" means, in respect of the Borrower and its
Consolidated Subsidiaries on a consolidated basis, the ratio of the following,
computed at each Fiscal Quarter end for the four quarter period then ended,
taken together as one accounting period: (1) EBITDA, to (2) the interest expense
for such fiscal period.
E-3
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances and rules relating to the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Borrower is a member, or (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Borrower is a member.
"Event of Default" has the meaning given such term in ss. 11.01.
"Existing Liens" means all Liens against the property or assets of the
Borrower and all Subsidiaries on the date of this Agreement and as set forth on
Schedule 2 hereto.
"Facility Documents" means this Agreement, the Note, the Guaranties and
the Security Agreements.
"Fixed Charge Coverage Ratio" means, in respect of the Borrower and its
Consolidated Subsidiaries on a consolidated basis, the ratio of the following,
computed at each Fiscal Quarter end for the four quarter period then ended,
taken together as one accounting period: (1) EBITDA, to (2) the sum of (i)
one-fifth of the outstanding principal balance under this Agreement on the last
day of the Fiscal Quarter, plus (ii) the interest expense for such fiscal
period, plus (iii) the income tax expense for such fiscal period plus (iv) cash
dividends paid by Borrower in the fiscal period.
"Forfeiture Proceeding" means any action, proceeding or investigation
affecting the Borrower or any of its Subsidiaries or Affiliates before any
court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which could reasonably be expected to have a Material Adverse
Effect.
"Funded Debt" means, in respect of any Person, (i) all Long Term
Indebtedness of such Person, (ii) all payments in respect of item (i) above that
were required to be made within one year prior to the date of any determination
of Funded Debt, if the obligation to make such payments shall constitute a
current liability of the obligor under GAAP (nothing herein shall be construed
to include accounts payable), (iii) all Capitalized Rentals of such Person, and
(iv) interest bearing Indebtedness for borrowed money (other than Long Term
Indebtedness) having a maturity of less than one year.
"Funded Debt/EBITDA Ratio" means, in respect of the Borrower and its
Consolidated Subsidiaries on a consolidated basis, the ratio of the following
computed at each Fiscal Quarter end for the four quarter period then ended,
taken together as one accounting period: (i) Funded Debt, to (ii) EBITDA.
E-4
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
ss. 7.05 (except for changes concurred in by the Borrower's independent public
accountants).
"Guarantor" means any Person who hereafter guaranties payment or
collection of the Loans or any part thereof.
"Guaranties" means all guaranty agreements hereafter granted to the
Bank by any Person whereby such Person guaranties payment or collection of the
Loans or any part thereof.
"Indebtedness" of any Person means and includes all obligations of such
Person which in accordance with GAAP shall be classified upon 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 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) Capitalized Rentals and (v) Guaranties of obligations
of others of the character referred to in this definition.
"Interest Period" shall mean with respect to any Libor Loan, the period
commencing on the date such Loan is made and ending on the numerically
corresponding day in the first, second or third calendar month thereafter, as
the Borrower may select as provided in ss. 4.03 hereof, except that each such
Interest Period which commences on the last Banking Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of such
first, second or third calendar month. Notwithstanding the foregoing, each
Interest Period which would otherwise end on a day which is not a Banking Day
shall end on the next succeeding Banking Day or if such next succeeding Banking
Day falls in the next succeeding calendar month, on the next preceding Banking
Day.
"Initial Margin Period" means the period from the date of this
Agreement through the earliest to occur of (a) delivery to the Bank of the
financial statements pursuant to ss.8.06(a) of this Agreement for the Fiscal
Year ending December 31, 1998 or (b) the last date on which such financial
statements for the Fiscal Year ending December 31, 1998 could have been
delivered in compliance with ss. 8.06.
"Lending Office" means the office of the Bank designated as such
underneath the signature of the officer of the Bank executing this Agreement.
"Letters of Credit" means all letters of credit or banker's acceptances
now existing or hereafter issued by Chase for the Borrower as the account party
from time to time.
"Letter of Credit Exposure" means the maximum amount available to be
drawn under all outstanding Letters of Credit (converted to U.S. Dollars based
on the exchange rate in effect at the time the Letter of Credit Exposure is
determined).
E-5
"Libor Base Rate" means, with respect to each Libor Loan, the rate
appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Bank from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the "Libor
Base Rate" with respect to such Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Reference
Bank in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Libor Loans" means Loans the interest rates on which are determined on
the basis of the Libor Base Rate.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loans" means the revolving credit loans made by the Bank to the
Borrower pursuant to ss. 2.01 hereof, and shall be deemed to include any
Reimbursement Obligation, and "Loan" shall mean any of the Loans.
"Long Term Indebtedness" means all Indebtedness of such Person for
borrowed money or which has been incurred in connection with the acquisition of
assets (excluding leases defined as "operating leases" under GAAP), 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 extendible at the option of the obligor for a
period or periods more than one year from the date of origin).
"Margin Period" means each quarterly period beginning on the earliest
to occur of (i) the day the financial statements of Borrower are delivered to
Bank pursuant to ss. 8.06 for the respective fiscal quarter or (ii) the last
date on which such financial statements could have been delivered in compliance
with ss. 8.06, and ending on the earliest to occur of (a) the day on which the
financial statements for the next subsequent fiscal quarter are delivered
pursuant to ss. 8.06 or (b) the last date on which such financial statements for
the next subsequent fiscal quarter could have been delivered in compliance with
ss. 8.06.
"Material Adverse Effect" means a material adverse effect on the
financial condition of the Borrower and its Subsidiaries taken as a whole in a
Dollar amount which equals or exceeds 5% of the Borrower's Consolidated Tangible
Net Worth without regard to whether such Dollar amount is reported on the
Borrower's consolidated financial statements in accordance with GAAP, or any
change in the nature of the business of the Borrower and Subsidiaries taken as a
whole.
"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by the Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Note" means the Revolving Credit Note in the form of Exhibit A annexed
hereto.
"Payment Office" means the office of the Bank designated as such
underneath the signature of the officer of the Bank executing this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
E-6
"Permitted Encumbrances" means and includes with respect to the
Borrower and its Subsidiaries:
(i) in the case of real properties, easements, restrictions,
exceptions, reservations or defects which, in the aggregate,
do not interfere materially with the continued use of such
properties for the purposes for which they are used and do not
affect materially the value thereof;
(ii) liens, if contested in good faith by appropriate proceedings;
(iii) pledges or deposits to secure obligations under workmen's
compensation laws or similar legislation or to secure
performance in connection with bids, tenders and contracts
(other than contracts for the payment of borrowed money) to
which the Borrower or any Subsidiary of the Borrower is a
party;
(iv) deposits to secure public or statutory obligations of the
Borrower and any Subsidiary of the Borrower;
(v) materialmen's mechanics', carriers', workmen's or other like
liens arising in the ordinary course of business, or deposits
of cash or United States obligations to obtain the release of
such liens;
(vi) deposits to secure surety or appeal bonds in proceedings to
which the Borrower or any Subsidiary of the Borrower is a
party;
(vii) existing leases by the Borrower or the Borrower of real and
personal property; and
(viii) purchase money security interests for Debt not exceeding
$1,000,000 in the aggregate principal amount incurred during
any fiscal year of the Borrower; and
(ix) Liens on inventory or equipment securing Subordinated Debt,
provided that such Liens are subordinated to the Bank's Liens
under a subordination agreement in form and substance
reasonably satisfactory to the Bank which provides for no
foreclosure on other realization of such subordinated Liens
prior to the Bank's foreclosure or other realization of its
Liens.
"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 employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Prime Loans" means Loans the interest rates on which are determined on
the basis of the Prime Rate.
"Prime Rate" means that rate of interest from time to time announced by
the Bank at its Principal Office as its prime commercial lending rate.
"Principal Office" means the principal office of the Bank, presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, other than an
interest as lessee under a true lease.
"Reference Bank" shall mean the principal London office of The Chase
Manhattan Bank.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
E-7
"Regulatory Change" means any change after the date of this Agreement
in United States federal, state, municipal or foreign laws or regulations
(including without limitation Regulation D) or the adoption or making after such
date of any interpretations or directives applying to a class of banks including
the Bank of or under any United States, federal, state, municipal or foreign
laws or regulations by any court of competent jurisdiction or governmental or
monetary authority charged with the interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA as to which events the PBGC by regulation has not waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA shall be a
Reportable Event regardless of any waivers given under Section 412(d) of the
Code.
"Reimbursement Obligation" means any obligation of the Borrower to
reimburse the Bank as an issuer of a Letter of Credit for any amount paid by
Bank from time to time pursuant to and under any Letter of Credit.
"Revolving Credit Termination Date" means October 31, 2000 or such
later date to which the Revolving Credit Termination Date then in effect shall
be extended in accordance with the provisions of ss. 2.04 hereof; provided that
if such date is not a Banking Day, the Revolving Credit Termination Date shall
be the next succeeding Banking Day.
"Security Agreements" means and includes, collectively, the Security
Agreements granted by the Borrower to the Bank dated as of April 3, 1985, April
13, 1993, June 17, 1993 and of even date herewith, all amendments and
modifications thereto, and all further security agreements which may hereafter
be granted by any Person to the Bank as security for payment of the Loans or any
part thereof.
"Subordinated Debt" means Debt which is unsecured or which is secured
only by a Permitted Encumbrance and which shall be subordinated in right of
payment to all Debt of the Borrower and the Guarantors to the Bank (the "Senior
Debt") under a subordination agreement in form and substance satisfactory to the
Bank which permits scheduled payments of principal and interest on the
Subordinated Debt so long as any Senior Debt is outstanding and permits such
scheduled payments of principal and interest only if no default under the Senior
Debt shall have occurred or shall be created by such payment.
"Subsidiary" means, with respect to any Person, any corporation or
other Person of which at least one-half of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Total Liabilities" means, in respect of any Person, the total
liabilities of such Person computed in accordance with GAAP and as such item is
reported from time to time on such Person's balance sheets.
"Unfunded Vested Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all benefit liabilities (within
the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the fair
market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
Section 1.03. Subsidiaries. All references to Subsidiaries or
Consolidated Subsidiaries shall be deemed to mean if any shall exist. For so
long as Borrower has no Subsidiary, all definitions and covenants referring to
Borrower and its Subsidiaries or Consolidated Subsidiaries on a consolidated
basis and all references to consolidated and consolidating financial statements
shall be deemed to refer to Borrower alone and to Borrower's financial
statements alone, respectively, but shall remain applicable in all other
respects.
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ARTICLE 2. THE CREDIT.
Section 2.01. Loans. The Bank agrees, on the terms of this Agreement,
to make one or more revolving credit loans and issue Letters of Credit to the
Borrower during the period from and including the date hereof to and including
the Revolving Credit Termination Date in amounts which, when added to the
aggregate amount of all Letter of Credit Exposure and the principal amount of
all Loans outstanding hereunder shall not exceed the amount of the Bank's
Commitment as then in effect. Subject to the terms of this Agreement, during
such period the Borrower may borrow, repay and reborrow up to the amount of the
Commitment. The Loans may be Prime Loans or Libor Loans (each a "type" of Loan).
The Borrower shall give the Bank notice of each borrowing to be made under this
ss. 2.01 (other than Loans created as a Reimbursement Obligation) as provided in
ss. 4.03 hereof. The Loans made by the Bank (including Loans created as
Reimbursement Obligations) shall be evidenced by the promissory note of the
Borrower in substantially the form of Exhibit A hereto, dated as of the Closing
Date, payable to the order of the Bank in a principal amount of $5,000,000, and
otherwise duly completed. The amount, type and date of each Loan made by the
Bank, and all payments made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of the Note,
endorsed by the Bank on the schedule attached to the Note or any continuation
thereof, provided, however, that the failure of the Bank to endorse the schedule
shall not affect or impair the Borrower's obligation to repay Loans and any
interest thereon or other amounts due hereunder. The proceeds of the Loans to be
made by the Bank (other than Loans created as Reimbursement Obligations) shall,
subject to the terms and conditions of this Agreement, be made available to the
Borrower by depositing such amount, in immediately available funds, in an
account of the Borrower maintained with the Bank.
Section 2.02. Purpose. The Borrower will use the proceeds of the Loans
as working capital for its general corporate purposes and the acquisition of
assets in the ordinary course of the Borrower's business.
Section 2.03. Changes of Commitment. The Borrower shall have the right
to terminate or reduce the amount of the Commitment at any time or from time to
time upon not less than 30 days' prior notice to the Bank of each such
termination or reduction, which notice shall specify the effective date thereof
(which shall be a Banking Day) and the amount of any such reduction and shall be
irrevocable and effective only upon receipt by the Bank. The Commitment once
terminated or reduced may not be reinstated.
Section 2.04. Extension of Revolving Credit Termination Date. The
Borrower may, by written request to the Bank not less than 60 and not more than
90 days prior to the Current Termination Date, request that the Revolving Credit
Termination Date be extended to the Annual Date next subsequent to such Current
Termination Date. Within 30 days following receipt of such request the Bank will
advise the Borrower in writing whether it agrees to or denies such extension,
provided that if the Bank shall fail to so advise the Borrower it will be deemed
to have denied such request. If the Bank shall agree thereto, such extension
shall become effective as of such Current Termination Date only upon
satisfaction of the following conditions as of such Current Termination Date, in
form and substance satisfactory to the Bank, unless expressly waived by the
Bank: (a) no Default shall have occurred and be continuing; (b) the
representations and warranties made by the Borrower in ss. 7 hereof shall be
true on and as of such date with the same force and effect as if made on and as
of such date; (c) the Bank and the Borrower shall have executed an extension
agreement; and (d) the Borrower shall have furnished to the Bank such corporate
documents and/or opinions of counsel with respect to such extension, as the Bank
may reasonably request. Each extension request by the Borrower under this ss.
2.04 shall constitute a certification by the Borrower to the effect set forth in
clauses (a) and (b) of the preceding sentence (both as of the date of such
notice and, unless the Borrower otherwise notifies the Bank prior to the Current
Termination Date, as of the Current Termination Date).
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Section 2.05. Letters of Credit. Subject to the terms and conditions of
this Agreement, Bank shall, upon the request of the Borrower and payment of the
Bank's customary fees and expenses in connection therewith, issue Letters of
Credit from time to time from and including the date hereof to but excluding the
Revolving Credit Termination Date up to but not exceeding the lesser of (i) the
aggregate unused amount of the Commitment (after subtracting the Letter of
Credit Exposure), or (ii) the difference between $1,000,000 and the amount of
the Letter of Credit Exposure which exists immediately prior to the issuance of
such Letter of Credit. The Borrower agrees that each Reimbursement Obligation
shall, immediately upon its creation, be and become a Prime Loan hereunder.
Section 2.06. Facility Fee. Borrower shall pay to Bank in advance on
each Annual Date a yearly Facility Fee of $7,500 if the Facility is to remain in
effect, in whole, subsequent to such Annual Date; provided however that if the
Facility shall be modified or restructured prior to the occurrence of a Default
or an Event of Default and if the Bank remains the lender under such modified or
restructured credit facility, the Bank shall refund to the Borrower a pro rata
portion of the facility fee which the Borrower has paid in advance pursuant to
this ss. 2.06 for the following year based upon the remaining portion of such
year for which the Facility shall not remain in effect. Nothing in this ss. 2.06
shall be deemed to prevent the Bank from charging a fee which is similar to the
Facility Fee and which is mutually agreed to in writing by the Borrower under
any modified or restructured credit facility.
ARTICLE 3. REPAYMENTS; INTEREST; LATE FEES, PREPAYMENTS.
Section 3.01. Repayment of Loans. All Loans shall be due and payable in
full, principal and interest, on the Revolving Credit Termination Date. In
addition, at the end of each Interest Period, the Borrower will either (i) pay
to the Bank the principal of each Loan which is a Libor Loan, or (ii) convert
the principal amount of such Libor Loan to another Loan hereunder as continuing
and subsisting indebtedness.
Section 3.02. Interest. The Borrower will pay to the Bank interest on
the unpaid principal amount of each Loan made by the Bank for the period
commencing on the date of such Loan to but excluding the date such Loan shall be
paid in full, at the following rates per annum:
(a) During such periods such Loan is a Prime Loan, the Prime Rate plus
the Applicable Margin; and
(b) During such periods such Loan is a Libor Loan, for each Interest
Period relating thereto, the Libor Rate plus the Applicable Margin.
Notwithstanding the foregoing, after an Event of Default and upon written demand
by the Bank, the Borrower will pay to the Bank interest at the applicable
Default Rate on any principal of any Loan made by the Bank, and (to the fullest
extent permitted by law) on any other amount (other than interest) payable to
the Bank by the Borrower hereunder or under the Note, which shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise), for
the period commencing on the date of such written demand, until the same is paid
in full. Accrued interest on each Loan shall be payable monthly on the first day
of each month and upon the payment or prepayment thereof (but only on the
principal so paid or prepaid), except that interest payable at the Default Rate
shall be payable from time to time when due on demand of the Bank. Promptly
after the determination of any interest rate provided for herein or any change
therein, the Bank shall notify the Borrower thereof.
Section 3.03. Late Fees. If any payment of principal or interest on any
Loan is not received by the Bank within five days after the due date thereof, a
late fee shall be imposed on such payment. The amount of the late fee shall be
(i) in respect of payments of interest, 1% of the amount of the payment which
was due, and (ii) in respect of payments of principal, 4% of the amount of the
payment which was due, provided further that in either case such late fee shall
not be less than $25 nor more than $100.
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Section 3.04. Prepayments.
(a) The Borrower shall prepay upon demand by the Bank that portion of
the outstanding principal balance of the Loans, if any, which exceeds the
Commitment.
(b) The Borrower shall have the right to prepay Loans, without penalty,
at any time or from time to time, provided that: (i) the Borrower shall give the
Bank notice of each such prepayment as provided in ss. 4.03 hereof; and (ii) no
Libor Loan may be prepaid on any day other than the last day of an Interest
Period for such Libor Loan except upon payment of a penalty computed in
accordance with ss. 5.05 hereof.
ARTICLE 4. PAYMENTS; COMPUTATIONS.
Section 4.01. Payments. Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made by the Borrower
under this Agreement and the Note shall be made in Dollars, in immediately
available funds, to the Bank at the Payment Office for account of the Lending
Office, not later than 2:30 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Banking Day). The Borrower
shall, at the time of making each payment under this Agreement or the Note,
specify to the Bank the Loans or other amounts payable by the Borrower hereunder
to which such payment is to be applied, and if the Borrower fails to so specify
or if an Event of Default has occurred and is continuing, the Bank may apply
such payment in such manner as it may determine to be appropriate, provided that
the Bank shall apply such payments first to the principal of Prime Rate loans,
then to the principal of any other Loans and then to interest on any Loans. If
the due date of any payment under this Agreement or the Note would otherwise
fall on a day which is not a Banking Day, such date shall be extended to the
next succeeding Banking Day and interest shall be payable for any principal so
extended for the period of such extension.
Section 4.02. Computations. Interest on Libor Loans shall be computed
on the basis of a year of 360 days and actual days elapsed (including the first
day but excluding the last day) occurring in the period for which payable, and
interest on Prime Loans shall be computed on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. Changes in
interest rate on Prime Loans resulting from changes in the Prime Rate shall be
effective for the full day which constitutes the effective date for such change
in the Prime Rate.
Section 4.03. Certain Notices. Notices by the Borrower to the Bank of
the termination or reduction of the Commitment, and of borrowings and
prepayments of Loans shall be irrevocable and shall be effective only if
received by the Bank not later than 12:00 noon New York time on the date, or the
number of days prior to the date, of the relevant termination, reduction,
borrowing or prepayment or the first day of such Interest Period specified
below:
-------------------------------------- -------------------------------------
Type of Notice Date or Number of Days Prior
-------------------------------------- -------------------------------------
Termination or reduction 30 days
of Commitment
-------------------------------------- -------------------------------------
-------------------------------------- -------------------------------------
Borrowing or prepayment of Same Banking Day
Prime Loans
-------------------------------------- -------------------------------------
-------------------------------------- -------------------------------------
Borrowing or prepayment of 3 Banking Days
Libor Loans
-------------------------------------- -------------------------------------
Each such notice of termination or reduction shall specify the amount of the
Commitment to be terminated or reduced. Each such notice of borrowing or
prepayment shall specify the Loans to be borrowed or prepaid and the amount
(subject to ss. 4.04 hereof) and type of the Loans to be borrowed or prepaid,
the date of borrowing or prepayment (which shall be a Banking Day), and the
duration of the Interest Period. Each notice required hereunder shall be in
writing, except that a notice of borrowing may be given orally on the telephone
provided it is confirmed in writing within two Banking Days. In the event that
the Borrower fails to notify the Bank in a timely manner as set forth above of
any Libor Loan borrowing to replace any Libor Loan having an expiring Interest
Period, such Libor Loan will be automatically converted into a Prime Loan on the
last day of the then current Interest Period for such Libor Loan.
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Section 4.04. Minimum Amounts. Except conversions or prepayments made
pursuant to ss. 5 hereof, each borrowing of principal of Loans shall be in an
amount at least equal to $25,000, and each prepayment of principal of Loans
shall be in an amount at least equal to $25,000 (borrowings or prepayments in
the case of Libor Loans having different Interest Periods outstanding at the
same time hereunder to be deemed separate borrowings and prepayments for
purposes of the foregoing, one for each distinct Interest Period). Anything in
this Agreement to the contrary notwithstanding, the aggregate principal amount
of Libor Loans of each type having the same Interest Period shall be at least
equal to $300,000 and, if any Libor Loans would otherwise be in a lesser
principal amount for any period, such Libor Loans shall be Prime Loans during
such period.
ARTICLE 5. YIELD PROTECTION AND ILLEGALITY.
Section 5.01. Additional Costs.
(a) The Borrower shall pay directly to the Bank from time to time such
amounts as the Bank may reasonably determine to be necessary to compensate it
for any costs which the Bank determines are attributable to its making or
maintaining of any Libor Loans or its obligation to make any Libor Loans, or any
reduction in any amount receivable by the Bank hereunder in respect of any Libor
Loans or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to the Bank under this Agreement or the Note in respect of any Libor
Loans (other than taxes imposed on the overall net income of the Bank or of its
Lending Office for any Libor Loans by the jurisdiction in which the Bank has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit 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 Base Rate" in ss. 1.01 hereof, but excluding any reserve requirement
or deposit insurance assessment already included in the calculation of the Libor
Rate); or (iii) imposes any other condition affecting this Agreement or the Note
(or any of such extensions of credit or liabilities) other than such portion of
the Agreement and the Note which pertains to Prime Loans. If the Bank requests
compensation from the Borrower under this ss. 5.01(a), the Borrower may, by
notice to the Bank, require that the Loans of the type with respect to which
such compensation is requested be converted into Prime Loans in accordance with
the provisions of ss. 5.04 hereof.
(b) Without limiting the effect of the provisions of ss. 5.01(a)
hereof, in the event that, by reason of any Regulatory Change, the Bank either
(i) incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of the Bank
which includes deposits by reference to which the interest rate on Libor Loans
is determined as provided in this Agreement or a category of extensions of
credit or other assets of the Bank which includes Libor Loans or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if the Bank so elects by notice to the Borrower,
the obligation of the Bank to make further Libor Loans shall be suspended until
such Regulatory Change ceases to be in effect.
(c) Without limiting the effect of the foregoing provisions of this ss.
5.01 (but without duplication), the Borrower shall pay directly to the Bank from
time to time on request such amounts as the Bank may reasonably determine to be
necessary to compensate the Bank for any costs which it determines are
attributable to the maintenance by the Bank (or any Lending Office) pursuant to
any law or regulation or any interpretation, directive or request (whether or
not having the force of law) of any court or governmental or monetary authority
following any Regulatory Change, of capital in respect of its Commitment or
Loans (such compensation to include, without limitation, an amount equal to any
reduction of the rate of return on assets or equity of the Bank (or any Lending
Office) which the Bank could have achieved but for such law, regulation,
interpretation, directive or request).
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(d) The Bank will notify the Borrower of any event occurring after the
date of this Agreement that will entitle the Bank to compensation under
paragraph (a) or (c) of this ss. 5.01 or to convert Loans under ss. 5.04 as
promptly as practicable, but in any event within 30 days after the Bank obtains
actual knowledge thereof; provided, however, that if the Bank fails to give such
notice within 30 days after it obtains actual knowledge of such an event, the
Bank shall, with respect to compensation payable pursuant to this ss. 5.01 in
respect of any costs resulting from such event, only be entitled to payment
under this ss. 5.01 or ss. 5.04 for costs incurred from and after the date that
the Bank does give such notice; and provided further, that the Bank will
designate a different Lending Office for the Loans of the Bank affected by such
event if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of the Bank, be disadvantageous
to the Bank, except that the Bank shall have no obligation to designate a
Lending Office located in the United States of America. The Bank will furnish to
the Borrower a certificate setting forth the basis and amount of each request by
the Bank for compensation under paragraph (a) or (c) of this ss. 5.01, which
amount will be determined in good faith on an equitable basis such as, if
appropriate, an allocation measured by the principal amount of Loans to the
Borrower, or commitments to make Loans to the Borrower, then outstanding in
relation to the total amount of loans, or commitments to make loans, made by the
Bank of the type or character which has given rise to the Additional Costs.
Determinations and allocations by the Bank for purposes of this ss. 5.01 of the
effect of any Regulatory Change pursuant to ss. 5.01(a) or (b) hereof, or of the
effect of capital maintained pursuant to ss. 5.01(c) hereof, on its costs or
rate of return of maintaining Loans or its obligation to make Loans, or on
amounts receivable by it in respect of Loans, and of the amounts required to
compensate the Bank under this ss. 5.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis.
Section 5.02. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if the Bank reasonably determines (which determination
shall be conclusive) that interest rates for the relevant deposits referred to
in the definition of "Libor Base Rate" in ss. 1.01 hereof are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining rates of interest for Libor Loans as provided herein, then the Bank
shall give the Borrower prompt notice thereof, and so long as such condition
remains in effect the Bank shall be under no obligation to make further Libor
Loans.
Section 5.03. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for the Bank or its Lending
Office to honor its obligation to make or maintain Libor Loans hereunder, then
the Bank shall promptly notify the Borrower thereof and the Bank's obligation to
make Libor Loans shall be suspended until such time as the Bank may again make
and maintain Libor Loans and the Bank's outstanding Libor Loans shall be
converted into Prime Loans in accordance with ss. 5.04 hereof.
Section 5.04. Certain Conversions Pursuant to xx.xx. 5.01 and 5.03. If
the Loans of the Bank of a particular type (Loans of such type being herein
called "Affected Loans" and such type being herein called the "Affected Type")
are to be converted pursuant to ss. 5.01 or 5.03 hereof, the Affected Loans
shall be automatically converted into Prime Loans on the last day(s) of the then
current Interest Period(s) for the Affected Loans (or, in the case of a
conversion required by ss. 5.01(b) or 5.03 hereof, on such earlier date as the
Bank may specify to the Borrower) and, unless and until the Bank gives notice as
provided below that the circumstances specified in ss. 5.01 or 5.03 hereof which
gave rise to such conversion no longer exist: (a) to the extent that the Bank's
Affected Loans have been so converted, all payments and prepayments of principal
which would otherwise be applied to such Affected Loans shall be applied instead
to its Prime Loans; and (b) all Loans which would otherwise be made by the Bank
as Loans of the Affected Type shall be made instead as Prime Loans. No
conversion pursuant to this ss. 5.04 shall be deemed to be a prepayment in
respect of which any prepayment premium or penalty shall be due, other than
compensation which may be payable under xx.xx. 5.01 and 5.05 (without
duplication of compensation).
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Section 5.05. Compensation. The Borrower shall pay to the Bank upon
request such amount or amounts as shall be sufficient (in the reasonable opinion
of the Bank) to compensate it for any loss, cost or expense which the Bank
determines are attributable to:
(a) any payment or prepayment of a Libor Loan made by the Bank, or
conversion of a Libor Loan pursuant to ss. 5.04, on a date other than the last
day of the Interest Period for such Loan; or
(b) any failure by the Borrower to borrow a Libor Loan from the Bank on
the date for such borrowing specified in the relevant notice of borrowing given
pursuant to ss. 4.03 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such payment,
prepayment, conversion or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan provided for herein
over (ii) the interest component of the amount the Bank would have bid in the
London interbank market for Dollar deposits of leading banks in amounts
comparable to such principal amount and with maturities comparable to such
period (as reasonably determined by the Bank). A determination of the Bank as to
the amounts payable pursuant to this ss. 5.05 shall be conclusive absent
manifest error.
Section 5.06. Survival. The obligations of the Borrower under this
Article 5 shall survive the repayment of the Loans.
ARTICLE 6. CONDITIONS PRECEDENT.
Section 6.01. Initial Conditions. The obligation of the Bank to make
the initial Loan is subject to the condition precedent that the Bank shall have
received on or before the date of such Loan each of the following, in form and
substance satisfactory to the Bank and its counsel:
(a) Facility Documents. The Facility Documents duly executed by the
parties thereto (other than the Bank);
(b) Corporate Supporting Documents. All such secretarial and officer
certificates of the Borrower pertaining to corporate action, incumbency, and
organizational documents as the Bank may reasonably require;
(c) Opinion of Counsel for Borrower and Subsidiaries. A favorable
opinion of counsel for the Borrower and its Subsidiaries, dated the Closing Date
in form and substance satisfactory to the Bank and its counsel;
(d) Insurance. A certificate of insurance evidencing coverage against
loss in respect of the Borrower's inventory in form and substance satisfactory
to the Bank and naming the Bank as loss payee; and
(e) Other Documents. The Borrower shall have furnished to the Bank such
other documents, certificates, statements, opinions of counsel and information
with respect to the transactions contemplated by this Agreement as the Bank or
its counsel may reasonably request.
Section 6.02. Additional Conditions Precedent. The obligation of the
Bank to make the Loans shall be subject to the further conditions precedent that
on the date of each Loan the following statements shall be true: (i) the
representations and warranties contained in Article 7 of this Agreement are true
and correct, in all material respects, on and as of the date of such Loan as
though made on and as of such date; and (ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loan.
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ARTICLE 7. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 7.01. Incorporation, Good Standing and Due Qualification. The
Borrower is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its assets and to transact the business in
which it is now engaged or proposed to be engaged, and is duly qualified as a
foreign corporation and in good standing under the laws of each other
jurisdiction where failure to qualify could have a Material Adverse Effect.
Section 7.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents
have been duly authorized by all necessary corporate action and do not and will
not: (a) require any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower;
(d) result in a breach of or constitute a default or require any consent under
any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it or its properties may
be bound or affected; (e) result in, or require, the creation or imposition of
any Lien upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower; or (f) cause the Borrower to be in default under any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
Section 7.03. Legally Enforceable Agreements. Each Facility Document
is, or when delivered under this Agreement will be, a legal, valid and binding
obligation of the Borrower or the Guarantor, as the case may be, enforceable
against the Borrower or the Guarantor in accordance with its terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency and other similar laws affecting creditors' rights generally.
Section 7.04. Litigation. Except as disclosed to the Bank, there are,
as of the Closing Date, no actions, suits or proceedings pending or, to the
knowledge of any officer of the Borrower, threatened, against or affecting the
Borrower directly before any court, governmental agency or arbitrator, which
have a reasonable likelihood that they may, in any one case or in the aggregate,
have a Material Adverse Effect or materially impair the ability of the Borrower
to perform its obligations under the Facility Documents.
Section 7.05. Financial Statements. The consolidated balance sheets of
the Borrower and its Consolidated Subsidiaries as at December 31, 1997 for the
fiscal year then ended and as at September 30, 1998 for the nine month period
then ended, copies of which have been furnished to the Bank, are complete and
correct and fairly present the financial condition of the Borrower and its
Consolidated Subsidiaries as at such dates and the results of the operations of
the Borrower and its Consolidated 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). There are no
liabilities of the Borrower or any of its Consolidated Subsidiaries, fixed or
contingent, which are material as to the Borrower and its Subsidiaries taken as
a whole but are not reflected in the financial statements or in the notes
thereto, other than liabilities arising in the ordinary course of business since
September 30, 1998 to the Closing Date. 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. Since September 30, 1998 to the Closing Date, there has
been no material adverse change in the condition (financial or otherwise),
business or operations of the Borrower and its Subsidiaries taken as a whole.
E-15
Section 7.06. ERISA. Each of the Borrower and the ERISA Affiliates has
fulfilled its obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code, has not incurred
any liability to the PBGC or any Plan aggregating in excess of $100,000 which it
has failed to pay when due, and does not have Unfunded Vested Liabilities in
excess of $100,000.
Section 7.07. Subsidiaries and Ownership of Stock. Schedule 1 is as of
the Closing Date a complete and accurate list of the Subsidiaries of the
Borrower, showing the jurisdiction of incorporation of each and showing the
percentage of the Borrower's ownership of the outstanding stock of each such
Subsidiary, together with all other investments, loans, advances, guaranties or
other liabilities undertaken by the Borrower in respect of such Subsidiary. All
of the outstanding capital stock of each such Subsidiary has been validly
issued, is fully paid and nonassessable and is owned by the Borrower free and
clear of all Liens.
Section 7.08. Existing Credit Arrangements and Existing Liens. Schedule
2 is as of the Closing Date a complete and correct list of all credit
agreements, indentures, guaranties and other investments, agreements and
arrangements presently in effect providing for or relating to extensions of
credit in respect of which the Borrower or any of its Subsidiaries is or may be
in any manner directly or contingently obligated; and the maximum principal or
face amounts of the credit in question, 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
Schedule. Schedule 2 is also a complete list as of the Closing Date of all Liens
pertaining to any and all property or assets of the Borrower and its
Subsidiaries.
Section 7.09. Regulation U. The Borrower warrants as of the date of
this Agreement that it does not own, directly or indirectly any "margin stock"
(as defined in Regulation U of the Board of Governors of the Federal Reserve
System), as supplemented from time to time, and the Borrower warrants as of the
date of each Loan that it does not own "margin stock" as of the date of such
Loan having an aggregate fair market value equal to or greater than 25% of the
fair market value of all of the Borrower's assets, unless the Borrower shall
have executed a Form FR U-1 (OMB No. 7100-1115) prior to obtaining the proceeds
of the Loan and, in such case, the Borrower further warrants that the proceeds
of such Loan are not used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any "margin stock".
Section 7.10. Compliance With Laws. Each of the Borrower and its
Subsidiaries have complied in all respects with all applicable laws, rules,
regulations, and orders, including without limitation, compliance with all laws
related to the disposal or handling of toxic waste, and paying before the same
became delinquent all taxes, assessments and governmental charges imposed upon
it or its property, except (a) in the case of taxes, where contested in good
faith and by proper proceedings if appropriate reserves are maintained with
respect thereto, or (b) where the failure to comply with a law (including the
failure to pay taxes, assessments and governmental charges) would not have a
Material Adverse Effect.
Section 7.11. Operation of Business. Each of the Borrower and its
Subsidiaries possesses all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto (collectively, "Permits"), to
conduct its business substantially as now conducted and as presently proposed to
be conducted, except where the absence of any Permit would not have a Material
Adverse Effect and, to the best of Borrower's knowledge, neither the Borrower
nor any of its Subsidiaries is in violation of any valid rights of others with
respect to any of the foregoing.
Section 7.12. Hazardous Materials. Except as set forth on Schedule 3
hereto:
(a) Borrower is in substantial compliance with all Environmental Laws
applicable to Borrower and has not received any written notice from any
government alleging that Borrower is not so in compliance, except where
noncompliance would not have a Material Adverse Effect;
(b) Borrower possesses all licenses, permits, registrations and
authorizations required by applicable Environmental Laws for the current
operation of Borrower's business and is in substantial compliance therewith,
except where the failure to possess same or to comply therewith would not have a
Material Adverse Effect; and
(c) To the best of Borrower's knowledge, the Borrower's assets do not
contain asbestos containing materials, polychlorinated biphenyls, urea
formaldehyde, underground storage tanks, or hazardous materials, as defined by
any Environmental Law, which have been discarded or otherwise released by
Borrower in a quantity and manner requiring that notice thereof be given by
Borrower to any government, except where such notice has been given.
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Section 7.13. No Default on Outstanding Judgments or Orders. Each of
the Borrower and its Subsidiaries has satisfied all judgments and neither the
Borrower nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, or order of any court, arbitrator or federal, state,
municipal or other governmental authority, commission, board, bureau, agency or
instrumentality, domestic or foreign, except where such non-satisfaction or
default is not likely to have a Material Adverse Effect.
Section 7.14. No Defaults on Other Agreements. Neither the Borrower nor
any of its Subsidiaries is in default in any 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, except where such default is not likely to have a Material Adverse
Effect.
Section 7.15. Labor Disputes and Acts of God. Neither the business nor
the properties of the Borrower or of any of its Subsidiaries, has been affected
during the previous two years by any strike, lockout or other labor dispute,
materially and adversely affecting such business or properties or the operation
of the Borrower or such Subsidiary.
Section 7.16. Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Power Act or any other statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.
Section 7.17. Partnerships. Except as disclosed on Schedule 4 hereto,
neither the Borrower nor any of its Subsidiaries is a partner in any
partnership.
Section 7.18. No Forfeiture. Neither the Borrower nor any of its
Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and, to the best knowledge of Borrower, no Forfeiture Proceeding
against any of them is pending or threatened.
Section 7.19. Solvency.
(a) The present fair market value of the assets of the Borrower (as a
going concern) after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities, as recorded on the Borrower's consolidated balance sheets
described in ss. 7.05, of the Borrower and its Subsidiaries as they mature.
(b) To the best knowledge of the Borrower, the Property of the Borrower
does not constitute unreasonably small capital for the Borrower to carry out its
business as now conducted and as proposed to be conducted in the immediate
future including the capital needs of the Borrower.
(c) The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower, and of
amounts to be payable on or in respect of debt of the Borrower). The cash
available to the Borrower after taking into account all other anticipated uses
of the cash of the Borrower, is anticipated to be sufficient to pay all such
amounts on or in respect of debt of the Borrower presently recorded on the
Borrower's consolidated balance sheet when such amounts are required to be paid.
(d) The Borrower does not believe that final judgments against it in
actions for money damages that are currently pending could reasonably be
expected to be rendered at a time when, or in an amount such that, the Borrower
will be unable to satisfy any such judgments promptly in accordance with their
terms (taking into account the maximum reasonable amount of such judgments in
any such actions and the earliest reasonable time at which such judgments might
be rendered). The cash available to the Borrower after taking into account all
other anticipated uses of the cash of the Borrower (including the payments on or
in respect of debt referred to in paragraph (c) of this ss. 7.19), is
anticipated to be sufficient to pay all such judgments promptly in accordance
with their terms.
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Section 7.20. Year 2000. Attached hereto as Schedule 5 is the
Borrower's statement regarding Borrower's assessment of any reprogramming
required to permit the proper functioning, in and following the year 2000, of
(i) the Borrower's computer systems, and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which
Borrower's systems interface) and the testing of all such systems and equipment.
To the extent such testing is scheduled for completion after January 1, 1999,
the Borrower will use its best efforts to adhere to that schedule. The cost to
the Borrower of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Borrower (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower to conduct its
business without Material Adverse Effect.
ARTICLE 8. AFFIRMATIVE COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank
shall have any Commitment under this Agreement, the Borrower shall:
Section 8.01. Maintenance of Existence. Preserve and maintain its
corporate existence and good standing in the jurisdiction of its incorporation
(which may be any state of the United States of America and may be changed from
time to time), and qualify and remain qualified as a foreign corporation in each
jurisdiction where failure to qualify could have a Material Adverse Effect.
Section 8.02. Conduct of Business. Continue, and cause each of its
Subsidiaries 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, provided, however, that nothing in this ss. 8.02 shall prevent the
abandonment or termination of a line of business or of any Subsidiary if the
Borrower or a Subsidiary determines that the preservation of such line of
business is no longer desirable in the conduct of the business of the Borrower
or such Subsidiary.
Section 8.03. Maintenance of Insurance. The Borrower shall maintain
insurance against risk of loss on its inventory in amounts, under policies and
with insurers reasonably acceptable to the Bank. In addition, to the extent that
other insurance is available to the Borrower and each of its Subsidiaries at a
price comparable to the price paid by other Persons in the same or similar types
of business conducted by the Borrower and each Subsidiary, maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof. To the extent such other insurance is not
obtained, adopt, in lieu of or supplemental to such insurance, such other plan
or method of protection, whether by the establishment of an insurance fund or
reserve to be held and applied to make good losses from casualties, or
otherwise, and conforming to the practices of similar corporations maintaining
systems of self-insurance.
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Section 8.04. Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders, such compliance to include without limitation,
compliance with all laws related to the disposal or handling of toxic waste, and
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property, except (a) in the case of taxes,
where contested in good faith and by proper proceedings if appropriate reserves
are maintained with respect thereto, or (b) where the failure to comply with a
law would not have a Material Adverse Effect.
Section 8.05. Right of Inspection. Upon reasonable notice and during
normal business hours, permit the Bank or any agent or representative thereof,
to examine and make copies of and abstracts from the financial records of, and
visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers and directors and the
Borrower's independent accountants, provided that the Borrower shall receive
reasonable notice of any such meetings with the Borrower's independent
accountants and the Borrower shall have the right to be present at such
meetings.
Section 8.06. Reporting Requirements. Furnish to the Bank:
(a) Audited Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year of the Borrower:
(i) if the Borrower shall have no Consolidated Subsidiaries,
the balance sheet of the Borrower as of the end of such fiscal year and
statements of income, statements of cash flows and statements of changes in
shareholders' equity of the Borrower for such fiscal year, all in reasonable
detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year, and all prepared in
accordance with GAAP, and accompanied by an opinion thereon acceptable to the
Bank by Price Waterhouse Coopers LLP or other independent accountants of
national standing selected by the Borrower, each of such statements to be
prepared in accordance with GAAP; or
(ii) if the Borrower shall have any Consolidated Subsidiaries,
the consolidated balance sheets of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal year and consolidated statements of
income, statements of cash flows and statements of changes in shareholders'
equity of the Borrower and its Consolidated Subsidiaries for such fiscal year,
all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior fiscal
year, and all prepared in accordance with GAAP, and as to the consolidated
statements accompanied by an opinion thereon acceptable to the Bank by Price
Waterhouse Coopers LLP or other independent accountants of national standing
selected by the Borrower, together with consolidating statements in respect of
all of the foregoing described consolidated financial statements, each of such
consolidating statements to be prepared in accordance with GAAP and certified by
the chief financial officer of the Borrower.
(iii) accompanying the financial statements delivered pursuant
to this Subsection (a), a certificate, in substantially the form of Exhibit B
hereto, by an appropriate officer of the Borrower certifying that the Borrower
was in compliance with xx.xx. 10.01, 10.02, 10.03 and 10.04 as at the end of the
fiscal year to which such financial statements relate, or if Borrower was not in
such compliance, describing any non-compliance in detail, and that no Default or
Event of Default has occurred during the corresponding period, or if a Default
or Event of Default has occurred, describing the same and the steps taken by the
Borrower to cure the same, and setting forth in reasonable detail calculations
showing compliance with the covenants set forth under Article 10 hereof.
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(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the Borrower's first three fiscal
quarters during each fiscal year of Borrower:
(i) if the Borrower shall have no Consolidated Subsidiaries,
the balance sheet of the Borrower as of the end of such quarter and statement of
income, of the Borrower and its Consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such fiscal quarter, all in reasonable detail and stating in comparative form
the respective figures for the corresponding date and period in the previous
fiscal year, and all prepared in accordance with GAAP, and certified by an
appropriate officer of the Borrower (subject to year-end adjustments); or
(ii) if the Borrower shall have any Consolidated Subsidiaries,
the consolidating and consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as of the end of such quarter and consolidating and
consolidated statement of income, of the Borrower and its Consolidated
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such fiscal quarter, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date and period in the previous fiscal year, and all prepared in
accordance with GAAP, and certified by an appropriate officer of the Borrower
(subject to year-end adjustments); and
(iii) accompanying the financial statements delivered pursuant
to this Subsection (b), a certificate, in substantially the form of Exhibit C
hereto, by an appropriate officer of the Borrower certifying that the Borrower
was in compliance with xx.xx. 10.01, 10.02, 10.03 and 10.04 as at the end of the
quarter to which such financial statements relate, or if Borrower was not in
such compliance, describing any non-compliance in detail, and that no Default or
Event of Default has occurred during the corresponding period, or if a Default
or Event of Default has occurred, describing the same and the steps taken by the
Borrower to cure the same, and setting forth in reasonable detail calculations
showing compliance with the covenants set forth under Article 10 hereof.
(c) Notice of Litigation. Promptly after the notice of the commencement
thereof is received by any officer of the Borrower, notice of all actions,
suits, and proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, directly
affecting the Borrower or any of its Subsidiaries which either (a) relate to the
clean-up of toxic or chemical waste, or (b) if determined adversely to the
Borrower or such Subsidiary, could have a Material Adverse Effect;
(d) Notice of Defaults and Events of Default. As soon as reasonably
practicable, and in any event within 10 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;
(e) General Information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as the Bank may from time to time reasonably request.
(f) ERISA Notices. Promptly after notifying the government, if
government notice is required, and otherwise within ten days after the Borrower
knows that any of the events or conditions specified below with respect to any
Plan or Multiemployer Plan have occurred or exist, a statement signed by a
senior financial officer of the Borrower setting forth details respecting such
event or condition and the action, if any, which the Borrower or its ERISA
Affiliate proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by the Borrower or an ERISA
Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA, with respect to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA including,
without limitation, the failure to make on or before its due date a required
installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall
be a reportable event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code) and any request for a waiver under Section
412(d) of the Code for any Plan;
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(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by the Borrower or an ERISA
Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Borrower or any ERISA Affiliate of a
notice from a Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by the Borrower or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt of the Borrower or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary or any
Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days;
(vi) the adoption of an amendment to any Plan that pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA would result in the loss
of tax-exempt status of the trust of which such Plan is a part if the Borrower
or an ERISA Affiliate fails to timely provide security to the Plan in accordance
with the provisions of said Sections.
(g) ERISA Reports. Promptly after the request of the Bank, copies of
each annual report filed pursuant to Section 104 of ERISA with respect to each
Plan (including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each Plan under Section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;
(h) Reports to Other Lenders. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other party pursuant to the
terms of any indenture, loan or credit or similar agreement to which the
Borrower is a party and not otherwise required to be furnished to the Bank
pursuant to any other clause of this ss. 8.06;
(i) Proxy Reports, Etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements which the
Borrower or any such Subsidiary files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange;
(j) Notice of Forfeiture Proceeding. Promptly after the commencement
thereof or promptly after the Borrower knows of the commencement or threat
thereof, notice of any Forfeiture Proceeding;
Section 8.07. Audits. The Bank shall have the right to conduct an audit
from time to time of the Borrower's inventory, operations and books and records,
including but not limited to the Borrower's accounts receivable. The costs of
one such audit per calendar year, computed at the Bank's standard rates for
audit charges, shall be paid by the Borrower upon demand by the Bank and the
Bank may, but is not required to, add such costs to the amount of the Prime
Loans outstanding under the Note as a borrowing hereunder. If the Bank conducts
more than one audit per calendar year, and provided the Borrower is not in
Default, the Borrower shall not be responsible for the cost of the additional
audits.
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Section 8.08. Lease Financings. Provide Bank with an opportunity to
furnish a quotation on any lease financing to be undertaken by the Borrower or
any of its Consolidated Subsidiaries.
ARTICLE 9. NEGATIVE COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank
shall have any Commitment under this Agreement, the Borrower shall not:
Section 9.01. Debt. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist any Debt,
except:
(a) Debt of the Borrower under this Agreement or the Note;
(b) Debt currently outstanding and reflected on the balance sheet of
the Borrower described in ss. 7.05 hereof, but no renewals, extensions,
increases or refinancings thereof;
(c) Purchase Money Debt not exceeding an aggregate principal amount of
$1,500,000 incurred during any fiscal year of the Borrower;
(d) Subordinated Debt (provided that the incurrence of such
Subordinated Debt does not cause the Borrower to be in violation of the
Covenants set forth in Article 10); and
Section 9.02. Guarantees, Etc. Assume, guarantee, endorse or otherwise
be or become directly or contingently responsible or liable, or permit any of
its Subsidiaries to assume, guarantee, 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, 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 Person against loss) for the
obligations of any Person, except guarantees by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business.
Section 9.03. Liens. (a) Create, incur, assume, or suffer to exist or
permit any of its Subsidiaries to create, incur, assume, or suffer to exist at
any one time, any Lien, upon or with respect to any of its Property, including
without limitation, inventory, accounts, accounts receivable, contract rights,
chattel paper, instruments, acceptances, drafts and general intangibles, all as
defined in the Uniform Commercial Code of the State of New York, except for (i)
Existing Liens, (ii) Permitted Encumbrances, and (iii) Liens granted to the
Bank.
(b) Enter into any sale and lease-back or similar financing device or
scheme in respect of its Property owned prior to such financing, or permit any
Subsidiary to do so.
Section 9.04. Investments. Make, or permit any of its Subsidiaries to
make, any loan or advance to any Person or purchase or otherwise acquire, or
permit any such Subsidiary to purchase or otherwise acquire, any capital stock,
assets, obligations or other securities of, make any capital contribution to, or
otherwise invest in, or acquire any interest in, any Person, except: (a)
investment grade securities; (b) deposits in financial institutions; (c)
investments listed on Schedule 1 hereto; and (d) loans or advances to employees
not to exceed $50,000 in the aggregate during any fiscal year of the Borrower;
provided further that each such loan advance shall be required to be repaid
within one year from the date such advance shall be made (and, if not, the
Borrower shall take appropriate action for collection).
Section 9.05. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of any of its now owned or hereafter acquired
assets, (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests and including any transfers to
any parent corporation of the Borrower or to any other Affiliate of the
Borrower), except for (i) inventory disposed of in the ordinary course of
business and (ii) not more than twenty percent (20%) of each or any class of
capital stock of any Subsidiary, and (iii) other assets disposed of having an
aggregate fair market value not exceeding $200,000 during any fiscal year of the
Borrower and sold for a price which is within a fair market value for such
assets.
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Section 9.06. Mergers, Etc. Sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired), to any Person;
Merge or consolidate with any Person, or acquire all or substantially all of the
stock or assets or the business of any Person, or permit any of its Subsidiaries
to do so, unless (i) no Default or Event of Default shall exist or shall occur
after giving effect to the contemplated transaction, (ii) the Borrower is the
surviving entity, (iii) the currency for the transaction is entirely the stock
of the Borrower, or, in a cash transaction, the total cost of the transaction is
less than $7,500,000; and (iv) the Borrower provides the Bank with (a) pro-forma
financial statements for the twelve month period ending on the last day of the
preceding month, for the combined entity, (and including any Indebtedness
incurred by Borrower in connection with the transaction) demonstrating
compliance with all of the terms of this Agreement and (b) pro-forma financial
statements for the twelve month period commencing on the projected date of
closing of the contemplated transaction, for the combined entity, (and including
any Indebtedness incurred by Borrower in connection with the transaction)
demonstrating compliance with all of the terms of this Agreement.
Section 9.07. Acquisitions. Make any Acquisition or permit any
Subsidiary to do so, unless (i) no Default or Event of Default shall exist or
shall occur after giving effect to the contemplated transaction, (ii) the
Borrower is the surviving entity, (iii) the currency for the transaction is
entirely the stock of the Borrower, or, in a cash transaction, the total cost of
the transaction is less than $7,500,000; and (iv) the Borrower provides the Bank
with (a) pro-forma financial statements for the twelve month period ending on
the last day of the preceding month for the combined entity (and including any
Indebtedness incurred by Borrower in connection with the transaction)
demonstrating compliance with all of the terms of this Agreement and (b)
pro-forma financial statements for the twelve month period commencing on the
projected date of closing of the contemplated transaction, for the combined
entity, (and including any Indebtedness incurred by Borrower in connection with
the transaction) demonstrating compliance with all of the terms of this
Agreement.
Section 9.08. No Activities Leading to Forfeiture. Engage or permit any
Subsidiaries to engage in the conduct of any business or activity which could
reasonably be expected to result in a Forfeiture Proceeding.
Section 9.09. Creation of Subsidiaries. Create or permit to exist any
Subsidiary with assets or operations unless such Subsidiary shall have first
executed and delivered a Guaranty to the Bank, together with corporate
supporting documentation and a favorable opinion of counsel in respect of such
Guaranty, all in form and substance satisfactory to the Bank.
Section 9.10. No Material Change. Make or permit any material change in
the management or direction of the Borrower's business or operations, including,
but not limited to, a change in its executive management, which is not
satisfactory to the Bank.
ARTICLE 10. FINANCIAL COVENANTS.
So long as any portion of the Note shall remain unpaid or the Bank
shall have any Commitment under this Agreement:
Section 10.01. Funded Debt/EBITDA Ratio. The Borrower shall not permit
the Funded Debt/EBITDA Ratio to exceed 3.0 to 1 measured as at the end of each
fiscal quarter of the Borrower.
Section 10.02. Fixed Charge Coverage Ratio. The Borrower will not
permit the Fixed Charge Coverage Ratio to be less than 1.5 to 1.0 measured as at
the end of each fiscal quarter of the Borrower.
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Section 10.03. Income or Loss. The Borrower shall not permit
Consolidated Income to be a negative amount (a loss) for any fiscal quarter
commencing on or after July 1, 1998 or for any fiscal year commencing on or
after January 1, 1998.
Section 10.04. EBITDA/Interest Expense Ratio. The Borrower will not
permit the EBITDA/Interest Expense Ratio to be less than 4.0 to 1.0 measured as
at the end of each fiscal quarter of the Borrower.
ARTICLE 11. EVENTS OF DEFAULT.
Section 11.01. Events of Default. Any of the following events shall be
an "Event of Default":
(a) The Borrower shall fail to pay the principal of or interest on the
Note within 15 Banking Days after such principal or interest shall be due and
payable, or shall fail to pay any amount of a fee or any other amount payable
under this Agreement within 30 Banking Days after such amount or fee shall be
due and payable;
(b) Any representation or warranty made or deemed made by the Borrower
in this Agreement or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Facility Document shall prove to have been incorrect in any material respect
on or as of the date made;
(c) The Borrower shall fail to perform or observe any term, covenant or
agreement contained in xx.xx. 8.03, 8.04, 8.05 or 8.06, and, if the Borrower
provided the Bank with the notice required under ss. 8.06(d), such failure shall
remain unremedied for 15 consecutive calendar days after written notice thereof
shall have been given to the Borrower by the Bank, and if such notice under ss.
8.06(d) is not provided, then such failure shall remain unremedied for 30
consecutive days after its occurrence; provided, however, that if a breach or
failure specified in this Subsection (c) be such that (i) it is not a breach of
xx.xx. 8.03 or 8.05 and (ii) it can be corrected but not within the period
specified herein, it shall not constitute the basis of an event of default
hereunder (a) if corrective action capable of remedying such breach or failure
is instituted by the Borrower within 5 days of notice of such breach or failure
and diligently pursued until such breach or failure is corrected, (b) if the
Borrower shall within such 5 day period furnish to the Bank a certificate
executed by the President of the Borrower and the Vice President of Finance of
the Borrower certifying (i) that such breach or failure is such that it can be
corrected but not within the applicable period, (ii) that corrective action
capable of remedying such breach or failure has been instituted and is being
diligently pursued and will be diligently pursued until the breach or failure is
corrected, and (iii) that the Borrower shall notify the Bank by certificate
executed as above when such breach or failure has been corrected, and (c) such
breach or failure shall be fully corrected within a reasonable period mutually
agreed to in writing by the Bank and the Borrower not exceeding 30 days;
(d) The Borrower or any Guarantor shall fail to perform or observe any
term, covenant or agreement contained in any Facility Document (other than the
obligations described in (a) and (c) above on its part to be performed or
observed) and such failure shall remain unremedied for 30 consecutive calendar
days after written notice thereof shall have been given by the Bank to the other
parties to such Facility Document in the manner required by such Facility
Document; provided, however, that if a breach or failure specified in this
Subsection (d) be such that (i) it is not a breach of xx.xx. 8.02, 8.07, 9.01,
9.02, 9.03, 9.04, 9.05, 9.06, 9.07, 9.09, 10.01, 10.02, 10.03, or 10.04 and (ii)
it can be corrected but not within the period specified herein, it shall not
constitute the basis of an event of default hereunder (a) if corrective action
capable of remedying such breach or failure is instituted by the Borrower within
5 days of notice of such breach or failure and diligently pursued until such
breach or failure is corrected, (b) if the Borrower shall within such 5 day
period furnish to the Bank a certificate executed by the President of the
Borrower and the Vice President of Finance of the Borrower certifying (i) that
such breach or failure is such that it can be corrected but not within the
applicable period, (ii) that corrective action capable of remedying such breach
or failure has been instituted and is being diligently pursued and will be
diligently pursued until the breach or failure is corrected, and (iii) that the
Borrower shall notify the Bank by certificate executed as above when such breach
or failure has been corrected, and (c) such breach or failure shall be fully
corrected within a reasonable period mutually agreed to in writing by the Bank
and the Borrower not exceeding 30 days;
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(e) The Borrower or any of its Subsidiaries shall: (i) fail to pay any
Borrowed Money Obligation of the Borrower or any Subsidiary in an aggregate
principal amount outstanding exceeding Two Hundred-Fifty Thousand Dollars
($250,000) (other than the payment obligations described in (a) above), or any
interest or premium thereon, within 15 days of when due after any applicable
grace or cure period for such payment (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise); or (ii) fail to perform or
observe any material term, covenant or condition on its part to be performed or
observed under any agreement or instrument relating to any such indebtedness
referred to in (i) above, 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;
(f) The Borrower or any of its Subsidiaries which in accordance with
GAAP would be deemed to be a material Subsidiary: (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its debts as such
debts become due in the ordinary course of business, except for failure to pay
trade creditors provided that such delay in payment is in accordance with normal
business practices; or (ii) shall make an assignment for the benefit of
creditors, 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 (iii) 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 (iv) shall have had any
such petition or application filed, or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered and which remains undismissed or unstayed for a period of
90 days or more; or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its properties; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 90 days or more;
(g) One or more judgments, decrees or orders for the payment of money
in excess of Two Hundred-Fifty Thousand Dollars ($250,000) in the aggregate
shall be rendered against the Borrower and any of its Subsidiaries or any such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal;
(h) Any of the following events shall occur or exist with respect to
the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving
any Plan; (ii) any Reportable Event shall occur with respect to any Plan; (iii)
the filing under Section 4041 of ERISA of a notice of intent to terminate any
Plan or the termination of any Plan; (iv) any event or circumstance exists which
might constitute grounds entitling the PBGC to institute proceedings under
Section 4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of any such
proceedings; (v) complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan or the reorganization, insolvency, or
termination of any Multiemployer Plan; and in each case above, such event or
condition, together with all other events or conditions, if any, could in the
opinion of the Bank subject the Borrower to any tax, penalty, or other liability
to a Plan, Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed or may exceed $250,000.
(i) (A) any Forfeiture Proceeding shall have been commenced or the
Borrower shall have given the Bank written notice of the commencement of any
Forfeiture Proceeding as provided in ss. 8.06(j) or (B) the Bank has a good
faith basis to believe that a Forfeiture Proceeding has been threatened or
commenced;
(j) any of the Guaranties 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 any of the Guarantors or any of the Guarantors shall deny it has
any further liability or obligation thereunder or shall fail to perform its
obligations thereunder; provided further, however that with respect to the death
or incompetency of any Guarantor who is a natural person, the Borrower shall
have 30 days after notice from the Bank to provide the Bank with a substitute or
replacement guaranty satisfactory to the Bank in its sole discretion;
(k) the Security Agreements shall at any time and for any reason cease:
(A) to create a valid and perfected priority security interest in and to the
property subject to such Agreements, other than if due to the Bank's actions or
omissions; or (B) 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 the Security Agreements or the Borrower shall fail to perform any of its
obligations thereunder after the expiration of any cure, waivers or grace
periods; or
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Section 11.02. Remedies. If any Event of Default shall occur, the Bank
may, by notice to the Borrower, (a) declare the Commitment to be terminated,
whereupon the same shall forthwith terminate, and (b) declare the outstanding
principal of the Note, all interest thereon and all other amounts payable under
this Agreement and the Note to be forthwith due and payable, whereupon the Note,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided that, in the case
of an Event of Default referred to in ss. 11.01(f) above, the Commitment shall
be automatically terminated, and the Note, all interest thereon and all other
amounts payable under this Agreement shall be automatically immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE 12. MISCELLANEOUS
Section 12.01. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower
therefrom, 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 which given. No failure on
the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof or preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 12.02. Survival. All representations and warranties made herein
shall survive the borrowings hereunder.
Section 12.03. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Note shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
the Bank limiting rates of interest which may be charged or collected by the
Bank.
Section 12.04. Expenses. The Borrower shall reimburse the Bank for all
reasonable costs, expenses, and charges (including, without limitation, fees and
charges of external legal counsel for the Bank and costs allocated by its
internal legal department) incurred by the Bank in connection with the
preparation, performance or enforcement of this Agreement.
Section 12.05. Assignment; Participations. This Agreement shall be
binding upon, and shall inure to the benefit of, the Borrower, the Bank and
their respective successors and assigns (except that the Borrower may not assign
or transfer its rights or obligations hereunder), and such successors and
assigns shall thereupon become vested with all the benefits in respect thereof
granted to the Bank herein or otherwise; provided, however, that (i) the Bank
may assign all or any part of any Loan or Loans made by it only with the prior
consent of the Borrower (which shall not be unreasonably withheld), and (ii) the
Bank may sell participations therein, only to a bank, insurance company, trust
company, brokerage house, pension fund, or other financial institution, in which
event (a) in the case of an assignment, the assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights and
benefits and obligations as it would have if it were the Bank hereunder, and (b)
in the case of a participation, the participant shall not have any rights under
this Agreement, the Note, or any other documents referred to herein (the
participant's rights against the Bank in respect of such participation to be
those set forth in the agreement executed by the Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower under
Article 5 hereof shall be determined as if the Bank had not sold such
participation, provided, however, that the Bank may not sell participations
under any agreement which gives the participant a right to approve or disapprove
of any consent, waiver or amendment by the Bank with respect to any provision of
this Agreement (except for any provision hereof relating to the payment of any
amount, the date on which such payment is due, the rate at which interest
accrues on any Loan or any other amount payable hereunder, or the release of any
guarantee of, or the substitution or release of any collateral security for,
such Loans). The Bank may furnish any information concerning the Borrower in the
possession of the Bank from time to time to assignees and participants
(including prospective assignees and participants).
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Section 12.06. Notices. Except in respect of service of process in
respect of any legal action or proceeding arising out of or relating to this
Agreement, unless the party to be notified otherwise notifies the other party in
writing, notices shall be given to the Bank and to the Borrower by ordinary mail
or telex addressed to such party at its address on the signature page of this
Agreement. Notices to the Bank shall be effective upon receipt.
Section 12.07. Set-Off. The Borrower agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or counterclaim the
Bank may otherwise have, the Bank shall be entitled, at its option, to offset
balances held by it for the account of the Borrower at any of the Bank's
offices, in dollars or in any other currency, against any principal of or
interest on any of the Loans or any other amount payable by the Borrower under
this Agreement or the Note, which is not paid when due, in which case it shall
promptly notify the Borrower thereof; provided that the Bank's failure to give
such notice shall not affect the validity thereof.
Section 12.08. Jurisdiction; Immunities. (a) The Borrower hereby
irrevocably submits to the jurisdiction of any New York State or United States
Federal court sitting in Monroe County, New York, over any action or proceeding
arising out of or relating to this Agreement or the Note, and the Borrower
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal court.
The Borrower agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. The Borrower further waives any
objection to venue in such State and any objection to an action or proceeding in
such State on the basis of forum non conveniens. The Borrower further agrees
that any action or proceeding brought against the Bank shall be brought only in
New York State or United States Federal court sitting in Monroe County.
(b) Nothing in this ss. 12.08 shall affect the right of the Bank to
serve legal process in any other manner permitted by law or affect the right of
the Bank to bring any action or proceeding against the Borrower or its property
in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Agreement and the Note.
Section 12.09. Captions. The captions and headings hereunder are for
convenience only and shall not affect the interpretation or construction of this
Agreement.
Section 12.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
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Section 12.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 12.12. Governing Law. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of New York;
provided that the foregoing is not intended to limit the maximum rate of
interest which may be charged or collected by the Bank hereunder if, under the
laws applicable to it, the Bank may charge or collect such interest at a higher
rate than is permissible under the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PERFORMANCE TECHNOLOGIES, INCORPORATED
By:_________________________________
Name:_______________________________
Title:______________________________
Address for notices:
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
ATTN: President
THE CHASE MANHATTAN BANK
By:_________________________________
Name:_______________________________
Title:______________________________
Lending and Payment Office:
The Chase Manhattan Bank
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Address for notices:
The Chase Manhattan Bank
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
ATTN: Performance Technologies
Account Representative
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