SECOND AMENDED AND RESTATED LOAN AGREEMENT
by and among
X. X. XXXXXX COMPANY
as Borrower
and
MELLON BANK, N.A.,
PNC BANK, NATIONAL ASSOCIATION
and
FIRST UNION NATIONAL BANK
(the "Banks")
and
MELLON BANK, N.A.,
as Agent for the Banks
Dated as of August 13, 1998
-i-
TABLE OF CONTENTS
Page
ARTICLE I. CERTAIN DEFINITIONS; ACCOUNTING PRINCIPLES ............... 2
Section 1.01. Definitions................................... 2
Section 1.02. Accounting Principles......................... 16
ARTICLE II. THE CREDITS ......................................... 17
Section 2.01. Commitments................................... 17
Section 2.02. Letters of Credit............................. 18
(a) Documentary Letters of Credit............ 18
(b) Standby Letters of Credit................ 18
(c) Letter of Credit Fees.................... 19
(d) Payments With Respect to Letters of
Credit........................................ 19
(e) Pro Rata Treatment of Payments........... 20
(f) Participating Interests in Letters
of Credit..................................... 21
(g) Additional Understandings Regarding
Letters of Credit............................. 21
Section 2.03. Making of Revolving Credit Loans.............. 23
Section 2.04. Notes......................................... 24
Section 2.05. Interest Rates................................ 25
(a) Interest Rate Options.................... 25
(b) Funding Periods.......................... 27
(c) Transactional Amounts.................... 29
(d) CD Rate or EuroRate
Unascertainable; Impracticability............. 29
(e) Conversion or Renewal.................... 30
(f) Failure to Convert or Renew.............. 31
(g) Effect of Funding Periods on Loan
Maturities.................................... 32
(h) Changes in Interest Rates;
Consolidated Total Indebtedness
to EBITDA Ratio.......................... 32
Section 2.06. Prepayment of Loans........................... 32
Section 2.07. Payments...................................... 33
(a) Interest Payment Dates................... 33
(b) Principal Payment Dates.................. 33
(c) Place, Time and Amounts.................. 33
Section 2.08. Additional Compensation in Certain
Circumstances................................. 34
(a) Compensation for Taxes, Reserves
and Expenses on Outstanding Loans............. 34
(b)Indemnity.................................. 35
Section 2.09. Funding By Branch, Subsidiary or
Affiliate..................................... 36
(a) Notional Funding......................... 36
(b) Actual Funding........................... 36
Section 2.10. Fees; Termination or Reduction of
Commitments................................... 37
(a) Fees..................................... 37
(b) Reduction/Termination of Commitments..... 38
Section 2.11 Extension of Expiration Date.................. 38
(a) Request for Extension.................... 38
(b) Extension................................ 39
(c) Additional Extension..................... 39
ARTICLE III. REPRESENTATIONS AND WARRANTIES.......................... 39
Section 3.01. Organization and Qualification................. 39
Section 3.02 Power and Authority............................ 39
Section 3.03 Financial Statements........................... 40
Section 3.04 Litigation or Proceedings; Commitments
and Contingencies.............................. 40
Section 3.05 Material Adverse Change........................ 40
Section 3.06 Title to Properties............................ 40
Section 3.07. No Conflict with Other Documents;
Authorizations and Approvals................... 41
Section 3.08. Tax Returns.................................... 41
Section 3.09. Validity and Binding Effect.................... 42
Section 3.10. Regulations G, U, T and X; Investment
Company Status................................. 42
Section 3.11. ERISA Compliance............................... 42
Section 3.12. Defaults....................................... 43
Section 3.13. Compliance with Laws........................... 43
Section 3.14. Disclosure..................................... 44
Section 3.15. Continuing Effect.............................. 44
ARTICLE IV. CONDITIONS OF LENDING ......................................44
Section 4.01. First Revolving Credit Loans................... 44
Section 4.02. Subsequent Revolving Credit Loans; Letters
of Credit...................................... 46
(a) Effect of Borrowing Request or
Application.................................... 46
(b) Legal Details............................. 47
ARTICLE V. COVENANTS ..................................................47
Section 5.01. Affirmative Covenants Other Than
Reporting Requirements......................... 47
(a) Preservation of Corporate
Existence, etc................................. 47
(b)Payment of Taxes, etc....................... 47
(c) Compliance with Laws...................... 48
(d) Maintenance of Insurance.................. 48
(e) Maintenance of Properties, etc............ 48
(f) Financial Accounting Practices............ 48
(g) Visitation Rights......................... 49
(h) Maintenance of Minimum Consolidated
Fixed Charge Coverage Ratio.................... 49
(i) Maintenance of Minimum Consolidated
Tangible Net Worth............................. 49
(j) Maintenance of Maximum Consolidated
Total Indebtedness to EBITDA
Ratio................................... 49
(k) ERISA Covenants........................... 49
(l) Satisfaction of Judgments................. 50
(m) Maintenance of Minimum Eligible
Accounts....................................... 50
(n)Environmental Covenant...................... 50
(o) Guarantors................................ 51
Section 5.02. Negative Covenants............................. 51
(a)Indebtedness................................ 51
(b)Negative Pledge; Liens...................... 53
(c) Contingent Liabilities.................... 55
(d)Mergers, Etc................................ 55
0 (e)Sales of Assets, Etc........................ 55
(f) Investments............................... 56
(g)Transactions with Controlling
Persons........................................ 59
(h)Debt Retirement, Purchases and
Redemptions.................................... 59
(i)Operating Leases............................ 60
(j)Change of Control........................... 60
Section 5.03. Reporting Requirements......................... 60
(a)Financial Statements........................ 60
(b) Accounts Receivable-Inventory
Reports; Officer's Certificates................ 61
(c)Proxy/Registration Statements............... 61
(d)ERISA Notifications......................... 61
(e)Notices of Default.......................... 62
(f)Notices of Material Litigation.............. 62
(g)Notices of Adverse Judgments................ 63
(h)Material Adverse Changes.................... 63
(i)Copies of Reports, Filings, etc............. 63
(j)Returns, etc................................ 63
(k)Other Information........................... 63
Section 5.04 Designated Subsidiaries........................ 64
ARTICLE VI. DEFAULT ............................................... 64
Section6.01. Events of Default.............................. 64
Section6.02. Consequences of Event of Default............... 66
Section 6.03. Rights of Set-Off.............................. 66
ARTICLE VII. THE AGENT............................................... 67
Section7.01. Appointment.................................... 67
Section 7.02. Delegation of Duties........................... 67
Section 7.03. Nature of Duties; Independent Credit
Investigation.................................. 67
Section 7.04. Actions in Discretion of Agent;
Instructions from the Banks.................... 68
Section 7.05. Exculpatory Provisions......................... 68
Section 7.06. Reimbursement and Indemnification.............. 69
Section 7.07. Reliance by Agent.............................. 69
Section 7.08. Agent in its Individual Capacity............... 69
Section 7.09. Holders of Notes............................... 70
Section 7.10. Equalization of Banks.......................... 70
Section 7.11. Successor Agent................................ 70
ARTICLE VIII. MISCELLANEOUS ......................................71
Section 8.01. Modifications, Amendments or Waivers........... 71
Section 8.02. No Implied Waivers; Cumulative Remedies;
Writing Required............................... 72
Section 8.03. Reimbursement of Expenses; Taxes............... 72
Section 8.04. Indemnity...................................... 73
Section 8.05. Holidays....................................... 73
Section 8.06. Notices........................................ 73
Section 8.07. Survival....................................... 74
Section 8.08. Governing Law.................................. 75
Section 8.09. Successors and Assigns......................... 75
Section 8.10. Severability................................... 76
Section 8.11. Nature of Liabilities.......................... 76
Section 8.12. Marshalling; Payments Set Aside................ 76
Section 8.13. Prior Understandings........................... 77
Section 8.14. Counterparts................................... 77
Section 8.15. Section Headings............................... 77
Section 8.16. Waiver of Right to Trial by Jury............... 77
EXHIBITS AND SCHEDULES
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Letter of Credit Agreement
Exhibit C-1 Form of Application For Documentary Letter of Credit
Exhibit C-2 Form of Application For Standby Letter of Credit
Exhibit D Form of Letter of Credit Summary
Exhibit E Form of Agreement Regarding Bailments
Exhibit F Form of Accounts Receivable - Inventory Report
Exhibit G Form of Subsidiary Guaranty and Suretyship Agreement
Exhibit H Form of Guarantor Security Agreement
Schedule 3.04 Litigation
Schedule 3.11 ERISA Plans
Schedule 3.13 Compliance with Laws
Schedule 5.02(b) Existing Indebtedness
Schedule 5.02(d) Existing Guarantees
Schedule 5.04 Designated Subsidiaries
-1-
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT (this
"Agreement") made as of this 13th day of August, 1998, by and among X. X. XXXXXX
COMPANY, a Pennsylvania corporation (hereinafter referred to as "Xxxxxx" or as
the "Borrower"), and MELLON BANK, N.A., PNC BANK, NATIONAL ASSOCIATION and FIRST
UNION NATIONAL BANK (separately called a "Bank" and collectively the "Banks")
and MELLON BANK, N.A., as agent for the Banks (in such capacity the "Agent");
WITNESSETH THAT:
WHEREAS, the Borrower and the Banks are parties to a Loan
Agreement dated as of February15, 1990, as amended by the First Amendment to
Loan Agreement dated November29, 1990, by the Second Amendment to Loan Agreement
dated May22, 1991, by the Third Amendment to Loan Agreement dated as of
January29, 1992, by the Fourth Amendment to Loan Agreement dated as of May11,
1992, by the Fifth Amendment to Loan Agreement dated as of September25, 1992, by
the Sixth Amendment to Loan Agreement dated April20, 1993, by the Seventh
Amendment to Loan Agreement dated as of December31, 1993, by the Eighth
Amendment to Loan Agreement dated as of February22, 1995 and by the Ninth
Amendment to Loan Agreement dated as of May 3, 1995 (as so amended, the
"Original Loan Agreement");
-240 WHEREAS, the Borrower and the Banks are parties to that certain Amended and
Restated Loan Agreement, dated as of November1, 1995, as amended by that certain
First Amendment to Amended and Restated Loan Agreement dated as of January1,
1996, by that certain Second Amendment to Amended and Restated Loan Agreement
dated as of December31, 1996, by that certain Third Amendment to Amended and
Restated Loan Agreement dated as of April9, 1997, by that certain Fourth
Amendment to Amended and Restated Loan Agreement dated as of November12, 1997
and by that certain Fifth Amendment to Amended and Restated Loan Agreement dated
as of April27, 1998 (as so amended, the "Amended and Restated Loan Agreement").
WHEREAS, the Borrower and the Banks desire to amend and
restate the Amended and Restated Loan Agreement to, among other things, provide
for an extension of the Expiration Date; and
WHEREAS, it is the intention of the Borrower and the Banks
that this Agreement and the execution and delivery of substituted promissory
notes by the Borrower not effectuate a novation of the obligations of the
Borrower to the Banks under either the Original Loan Agreement or the Amended
and Restated Loan Agreement, but merely a restatement and, where applicable, a
substitution of the terms governing, evidencing and securing the Borrower's
obligations thereunder.
NOW, THEREFORE, in consideration of the terms and provisions
herein contained and subject to the terms and conditions hereof, the Amended and
Restated Loan Agreement is hereby amended, consolidated and restated in its
entirety, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS; ACCOUNTING PRINCIPLES
Section 1.01. Definitions. In addition to the words and terms
defined elsewhere in this Agreement, as used in this Agreement, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Accounts Receivable - Inventory Report" shall mean the
Accounts Receivable - Inventory Reports to be delivered to the Agent pursuant to
Section 4.01(a) hereof, in substantially the form attached as Exhibit F hereto,
as amended and supplemented by the Borrower and each Guarantor from time to time
hereafter pursuant to Section 5.03(b) hereof.
"Affiliate" of a person or entity (the "Specified Person")
shall mean (a) any person or entity which directly or indirectly controls, or is
controlled by, or is under common control with, the Specified Person, (b) any
director or officer (or, in the case of a person or entity which is not a
corporation, any individual having analogous powers) of the Specified Person or
of a person or entity who is an Affiliate of the Specified Person within the
meaning of the preceding clause (a), and (c) for each individual who is an
Affiliate of the Specified Person within the meaning of the foregoing clauses
(a) or (b), any other individual related to such Affiliate by consanguinity
within the third degree or in a step or adoptive relationship within such third
degree or related by affinity with such Affiliate or any such individual. For
purposes of the preceding sentence, "control" of a person or entity means (a)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person or entity, whether
through the ownership of voting securities, by contract or otherwise and (b) in
any case shall include direct or indirect ownership (beneficially or of record)
of, or direct or indirect power to vote, 5% or more of the outstanding shares of
any class of capital stock of such person or entity (or in the case of a person
or entity that is not a corporation, 5% or more of any class of equity
interest).
"Agreement" shall mean this Second Amended and Restated Loan
Agreement and all exhibits, schedules, documents and instruments attached
hereto, as any or all of the foregoing may be amended, modified or supplemented
from time to time.
"Anniversary Date" shall mean each August 13th during the term
of this Agreement.
Applicable Margin" shall have the meaning set forth in Section 2.05(h) hereof.
"Application" shall mean, (i)with respect to Letters of Credit
issued prior to November1, 1995, in the case of Documentary Letters of Credit, a
duly executed and completed Application and Agreement for Documentary Letter of
Credit in substantially the form attached as Exhibit B to the Original Loan
Agreement and, in the case of Standby Letters of Credit, a duly executed and
completed Application and Agreement for Standby Letter of Credit in
substantially the form attached as Exhibit C to the Original Loan Agreement, as
either such form of application or agreement may be amended, modified or
supplemented from time to time, (ii)with respect to Letters of Credit issued
prior to August 13, 1998 but on or after November1, 1995, a duly executed and
completed Letter of Credit Agreement in the form attached as ExhibitB to the
Amended and Restated Loan Agreement together with a duly executed and completed
Application for Documentary Letter of Credit in substantially the form attached
as ExhibitC1 to the Amended and Restated Loan Agreement or a duly executed and
completed Application for Standby Letter of Credit in substantially the form
attached as ExhibitC2 to the Amended and Restated Loan Agreement, as the case
may be, as either such form of agreement or application may be amended, modified
or supplemented from time to time, and (iii)with respect to Letters of Credit
issued on or after August 13, 1998, a duly executed and completed Letter of
Credit Agreement in the form attached hereto as ExhibitB together with a duly
executed and completed Application for Documentary Letter of Credit in
substantially the form attached hereto as ExhibitC-1 or a duly executed and
completed Application for Standby Letter of Credit in substantially the form
attached hereto as ExhibitC-2, as the case may be, as either such form of
agreement or application may be amended, modified or supplemented from time to
time.
"Base Rate" shall mean at any time the interest rate per annum
equal to the higher of (a)the Prime Rate or (b) the sum of 1/2 of 1% plus the
Federal Funds Effective Rate for such day; provided, however, if the Federal
Reserve Bank of New York (or its successor) does not announce such rate on any
day, the Federal Funds Effective Rate for such day shall be equal to the Federal
Funds Effective Rate for the last day on which such rate was announced by the
Federal Reserve Bank of New York (or its successor).
"Base Rate Funding Period" shall have the meaning assigned to such term in
Section2.05(b)hereof.
"Base Rate Loan" shall mean a Loan bearing interest at any
time under the Base Rate Option.
"Base Rate Option" shall have the meaning assigned to such
term in Section2.05(a)(i) hereof.
"Base Rate Portion" shall mean, at any time, the portion,
including the whole, of a loan bearing interest under the Base Rate Option at
such time, or at a rate calculated by reference to the Base Rate under
Section2.05(a) hereof.
"Business Day" shall mean (a)in the case of an outstanding or
proposed Base Rate Portion or CD Rate Portion of a Loan, any day other than a
Saturday, Sunday or other day on which commercial banks in Pittsburgh,
Pennsylvania are required or authorized to close under applicable law, and (b)in
the case of an outstanding or proposed EuroRate Portion of a Loan, any day on
which dealings for Dollar deposits are transacted in the London interbank market
and commercial banks are open for domestic and international business in
Pittsburgh, Pennsylvania.
"Capitalized Lease" shall mean a lease under which the
obligations of the lessee would, in accordance with GAAP, be included in
determining total liabilities as shown on the liability side of a balance sheet
of the lessee. The term "Capitalized Lease Obligations" shall mean the amount of
the liability reflecting the aggregate discounted amount of future payments
under all Capitalized Leases calculated in accordance with GAAP.
"CD Rate" and "CD Rate Option" shall have the meanings
assigned to such terms in Section 2.05(a)(ii) of this Agreement.
"CD Rate Funding Period" shall mean an interest period
applicable to a Loan bearing interest at the CD Rate, as determined in
accordance with Section 2.05(b) of this Agreement.
0
"CD Rate Loan" shall mean a Loan bearing interest at any time
under the CD Rate Option.
"CD Rate Portion" shall mean, at any time, that portion,
including the whole, of a Loan bearing interest under the CD Rate Option at such
time, or at a rate calculated by reference to Section 2.05(a) hereof.
"Change of Control" shall mean any person or group of persons
(as used in Sections13 and 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder) shall have
become the beneficial owner (as defined in Rules 13d-3 and 13d-5 promulgated by
the Securities and Exchange Commission (the "SEC") under the Exchange Act) of
20% or more of the combined voting power of all the outstanding voting
securities of the Borrower and, at any time following any merger, consolidation,
acquisition, sale of assets or other corporate restructuring of Borrower, during
any period of six consecutive calendar months, individuals who were directors of
the Borrower on the first day of such period, together with individuals elected
as directors by not less than two-thirds of the individuals who were directors
of the Borrower on the first day of such period, shall cease to constitute a
majority of the members of the board of directors of the Borrower.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute, and the rules and regulations promulgated
thereunder. References to sections or provisions of the Code shall be deemed to
also refer to corresponding or similar sections or provisions of any successor
statute or of the Internal Revenue Code of 1954, as amended.
"Collateral" means, collectively, all of the Borrower's and
each Guarantor's present and future right, title and interest in and to the
following property, whether now or hereafter existing or acquired and wherever
located: (a)all inventory (including returned or repossessed goods but excluding
any inventory of third parties which has been consigned to the Borrower or such
Guarantor (as the case may be) and material owned by third parties for which the
Borrower has performed coating or other services), accounts, open accounts,
chattel paper, receivables, and other amounts owing to the Borrower or such
Guarantor (as the case may be) and arising out of the sale or lease of goods or
the rendition of services, whether or not they arise or are acquired in the
Borrower's or such Guarantor's ordinary course of business, including without
limitation, all such property described specifically or by type in the Accounts
Receivable Inventory Report; (b)all Guarantees, letters of credit, collateral
security, claims, rights, remedies and privileges relating to any of the
foregoing; and (c)all products and proceeds of any of the foregoing (including,
without limitation, any and all instruments, notes, drafts, chattel paper and
insurance policies and proceeds).
"Commitment" shall mean, at any time, with respect to each
Bank, the commitment of such Bank hereunder as set forth in Section 2.01 hereof,
as such commitment may have been reduced by termination or reduction under
Section 2.10(b) hereof.
"Consolidated Capital Expenditures" shall mean all amounts
debited to the fixed asset accounts on the consolidated balance sheet of
Borrower and its Consolidated Subsidiaries (or required to be so debited in
accordance with GAAP) in respect of the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any
other fixed assets or leaseholds, and shall include, without limitation, all
amounts so debited in respect of Capitalized Lease Obligations, but shall
exclude all amounts so debited in respect of inventory constituting equipment
acquired for the purpose of leasing or resale to others.
"Consolidated EBIT" for any period, with respect to the
Borrower and its Consolidated Subsidiaries, shall mean the sum of
(a)Consolidated Net Income for such period (provided that, in the event that the
Borrower realizes a net loss on the disposition of its Xxxxxxxxx, Texas
property, a maximum of $1,000,000 of such net loss shall be excluded from
calculating Consolidated Net Income in determining Consolidated EBIT as of the
end of each of the twelve consecutive months beginning with the month in which
such disposition occurs), (b)Consolidated Interest Expense for such period,
(c)charges against income for foreign, federal, state and local income taxes for
such period, (d)extraordinary losses to the extent included in determining such
Consolidated Net Income, minus (e)extraordinary gains to the extent included in
determining such Consolidated Net Income, minus (f)equity earnings (or plus any
losses) of Affiliates to the extent included in Consolidated Net Income for such
period, all as determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" for any period, with respect to the
Borrower and its Consolidated Subsidiaries, shall mean the sum of
(a)Consolidated EBIT for such period, (b)depreciation expense for such period,
and (c)amortization expense for such period, all as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean, as to
any period for which such amount shall be determined, the ratio of (a)the sum of
Consolidated EBITDA for such period minus Consolidated Capital Expenditures
(other than expenditures related to permitted Investments in the nature of
acquisitions, whether by stock or asset purchase, consolidation or merger) for
such period, to (b)the sum of Consolidated Interest Expense for such period plus
amount of all Distributions (other than intercompany Distributions between any
Subsidiary of the Borrower and the Borrower) by the Borrower or any Subsidiary
of the Borrower for such period plus payments actually made in respect of
federal, state and foreign income taxes during such period.
"Consolidated Interest Expense" shall mean, for any period for
which such amount shall be computed, all interest accrued during such period on
the Indebtedness, including without limitation all interest required under GAAP
to be capitalized during such period, determined on a consolidated basis for
Borrower and its Consolidated Subsidiaries.
"Consolidated Net Income" shall mean, for any period, the
consolidated net income after taxes of Borrower and its Consolidated
Subsidiaries for such period determined in accordance with GAAP; provided,
however, that Consolidated Net Income shall not include any gain or loss
attributable to extraordinary items or any taxes or tax savings as a result
thereof; and provided, further, that net income of any Subsidiary shall not be
included for any period prior to the time at which such Subsidiary first becomes
a Subsidiary.
"Consolidated Subsidiary" shall mean any Subsidiary of
Borrower whose accounts are consolidated with the accounts of Borrower in
accordance with the Borrower's policy of consolidation in effect from time to
time and with GAAP.
"Consolidated Tangible Net Worth" means the stockholders'
equity of Borrower and its Consolidated Subsidiaries, determined, both as to
classification of items and amounts, in accordance with GAAP, except that there
shall be deducted from stockholders' equity all intangible assets of Borrower
and its Consolidated Subsidiaries, including, but not limited to, organization
costs, securities issuance costs, unamortized debt discount and expense,
goodwill, excess of purchase price over net assets acquired, agreements not to
compete, patents, trademarks, copyrights, trade secrets, know-how, licenses,
franchises, research and development expenses and any amount reflected as
treasury stock.
"Consolidated Total Indebtedness" shall mean: (a) all
obligations of Borrower and its Consolidated Subsidiaries on account of money
borrowed by, or credit extended to or on behalf of, or for or on account of
deposits with or advances to, Borrower or its Consolidated Subsidiaries; (b) all
obligations of Borrower and its Consolidated Subsidiaries evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of Borrower and
its Consolidated Subsidiaries for the deferred purchase price of property or
services; (d) all obligations secured by a Lien on property owned by Borrower
and its Consolidated Subsidiaries (whether or not assumed); (e) all obligations
of Borrower and its Consolidated Subsidiaries under Capitalized Leases (without
regard to any limitation of the rights and remedies of the holder of such Lien
or the lessor under such Capitalized Lease to repossession or sale of such
property); (e) the face amount of all letters of credit issued for the account
of Borrower and its Consolidated Subsidiaries and, without duplication, the
unreimbursed amount of all drafts drawn thereunder, and all other obligations of
Borrower and its Consolidated Subsidiaries associated with such letters of
credit or draws thereon; (f) all obligations of Borrower and its Consolidated
Subsidiaries in respect of acceptances or similar obligations issued for the
account of Borrower and its Consolidated Subsidiaries; (g) all obligations of
Borrower and its Consolidated Subsidiaries under a product financing or similar
arrangement described in paragraph 8 of FASB Statement of Accounting Standards
No. 49 or any similar requirement of GAAP; (h) all obligations and liability of
Borrower and its Consolidated Subsidiaries under any Guarantee, and (i) all
obligations of Borrower and its Consolidated Subsidiaries under any interest
rate or currency protection agreement, interest rate or currency future,
interest rate or currency option, interest rate or currency swap or cap or other
interest rate or currency hedge agreement. For the purpose of calculating
Consolidated Total Indebtedness, (a) Consolidated Total Indebtedness shall not
include any obligation of the Borrower and its Consolidated Subsidiaries under
any performance, supply or payment bond posted by the Borrower and its
Consolidated Subsidiaries in connection with any construction project undertaken
by the Borrower and its Consolidated Subsidiaries, and (b) the items in clause
(i) of the foregoing definition shall be calculated on an annual basis as of the
end of the Borrower's most recent fiscal year just ended.
"Consolidated Total Indebtedness to EBITDA Ratio" shall mean,
as to any period for which such amount shall be determined, the ratio of (i)
Consolidated Total Indebtedness as of the last day of such period to (ii)
Consolidated EBITDA for such period.
"Controlled Group" shall mean a "controlled group of
corporations" as that term is defined in Section 1563 of the Code, of which
Borrower is a part from time to time, and all "trades or businesses (whether or
not incorporated) which are under common control" as that term is defined in
Section 414 of the Code, of which Borrower is a part from time to time.
"Controlling Person" shall mean any person or entity who is,
or is an associate of any person or entity who either alone or with one or more
of its associates is, in control of Borrower, including any executive officer
and any person who is both an employee and director of Borrower. A person,
entity or group of persons or entities shall be deemed to be in control of
another person or entity (including Borrower) when the first person, entity or
group of persons or entities possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of such other person
or entity, whether through the ownership of voting securities, by contract or
otherwise. A person or entity shall not be deemed to be in control of another
person or entity (including Borrower) by reason of the fact that such person or
entity serves as a member of the board of directors but not as an employee of
such other person or entity. A person or entity shall be deemed to be an
associate of another person or entity when (a)either shall be in control of the
other, (b)either shall be an officer, an employee and director, a partner or a
manager of the other, or (c)there shall exist between them any contract,
arrangement or understanding (express or otherwise) with respect to the actual
or potential exercise of control of the other.
"Corresponding Source of Funds" shall mean (a)in the case of
any Funding Segment of a CD Rate Portion, the proceeds of hypothetical issuances
by a Bank of one or more of its certificates of deposit at the beginning of the
CD Rate Funding Period corresponding to such Funding Segment, having maturities
approximately equal to such CD Rate Funding Period and in an aggregate amount
approximately equal to such Funding Segment; and (b)in the case of any Funding
Segment of a EuroRate Portion, the proceeds of hypothetical receipts by a
Notional EuroRate Funding Office or by a Bank through a Notional EuroRate
Funding Office of one or more Dollar deposits in the interbank eurodollar market
at the beginning of the EuroRate Funding Period corresponding to such Funding
Segment, having maturities approximately equal to such EuroRate Funding Period
and in an aggregate amount approximately equal to such Funding Segment.
"Debt" means, collectively, (a)all loans and advances made
hereunder by any Bank to or at the request of Borrower, including all interest
and other charges thereon, (b)all obligations of Borrower arising out of the
issuance of Letters of Credit by the Agent at Borrower's request, (c)all
covenants, agreements, liabilities and other obligations of Borrower hereunder,
and (d)all costs, expenses, liabilities and obligations, including attorneys'
fees and expenses, incurred by the Agent or any Bank enforcing any or all of
this Agreement or the Debt, in collecting any or all of the Debt or in taking
any other action permitted under this Agreement.
"Designated Subsidiary" shall have the meaning assigned to
such term in Section5.04 hereof.
"Distribution" shall mean (a)the declaration or payment of any
Dividend on or in respect of any shares of any class of capital stock of
Borrower or any Subsidiary, other than Dividends payable solely in shares of
common stock of the corporation involved; (b)the purchase, redemption or other
acquisition of any shares of any class of capital stock of Borrower or any
Subsidiary directly or indirectly through a Subsidiary or otherwise.
"Dividend" shall mean a distribution of cash, securities or
other property (other than capital stock) on capital stock of the corporation
involved.
"Documentary Letters of Credit" shall mean documentary letters
of credit issued pursuant to an Application and Section 2.02(a) hereof.
"Documentary Letter of Credit Limit" shall have the meaning
assigned to such term in Section 2.02(a) hereof.
"Dollar" and the symbol "$" shall mean lawful money of the
United States of America, and the symbol "CAN$" shall mean lawful money of
Canada.
"Eligible Accounts" shall mean trade accounts receivable
created or acquired by Borrower and each Guarantor (as the case may be) in the
ordinary course of business in which the Agent has a Prior Security Interest for
the benefit of the Banks, which are not more than ninety (90) days past due from
the date of the invoice or sales journal entry therefor and which are and at all
times continue to be acceptable to the Agent in the exercise of the Agent's
reasonable judgment; provided, however, without limiting the generality of the
foregoing, that, if 50% or more of the accounts of an account debtor are more
than ninety (90) days past due from the date of invoice or sales journal entry
therefor, any other accounts of such account debtor shall also be ineligible.
"Eligible Inventory" means Borrower's and each Guarantor's (as
the case may be) inventory, excluding works in process, of saleable raw
materials and finished goods manufactured or acquired by Borrower and each
Guarantor (as the case may be) in the ordinary course of business, subject to
the Borrower's and each Guarantor's (as the case may be) control or sole
possession, stored in an Eligible Location and in a manner acceptable to the
Agent, valued at the lower of cost or market value, which inventory is and at
all times continues to be acceptable to the Agent in the exercise of the Agent's
reasonable judgment and in which the Agent has a Prior Security Interest at all
times. Standards of acceptability shall be fixed and may be revised from time to
time solely by the Agent in its exclusive judgment.
"Eligible Location" shall mean one of the addresses listed on
Schedule1 to the Security Agreement or any Guarantor Security Agreement at which
Borrower or any Guarantor, as the case may be, maintains, keeps or stores
Collateral. The Borrower and the Agent and the Banks may agree jointly to add
other addresses of the Borrower to such list at any time by substituting an
amended Schedule1 to either the Security Agreement or any Guarantor Security
Agreement. The Agent may in its reasonable discretion, at any time after thirty
(30) days' notice to the Borrower, delete any address from the list of Eligible
Locations.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may from time to time be amended including, but not limited
to, the Multiemployer Pension Plan Amendments Act of 1980, and the rules and
regulations promulgated thereunder by any governmental agency or authority, as
from time to time in effect, and any successor statute.
"EuroRate" and "EuroRate Option" shall have the meanings
assigned to such terms in Section 2.05(a)(iii) of this Agreement.
"EuroRate Funding Period" shall mean any interest period
applicable to a Loan bearing interest at the EuroRate, as determined in
accordance with Section 2.05(b) of this Agreement.
"EuroRate Loan" shall mean a Loan bearing interest at any time
under the EuroRate Option.
"EuroRate Portion" shall mean, at any time, that portion,
including the whole, of a Loan bearing interest under the EuroRate Option at
such time, or at a rate calculated by reference to Section 2.05(a) hereof.
"Event of Default" or "Default" shall mean any of the events
of default described in Section 6.01 of this Agreement.
"Expiration Date" shall mean August 13, 2002, unless extended
pursuant to Section2.11 hereof.
"Extension Request" shall have the meaning assigned to such
term in Section 2.11(a) hereof.
"Facility Fees" shall mean the Facility Fees described in
Section 2.10(a) hereof.
"Federal Funds Effective Rate" shall mean for any day the
weighted average of the rates on overnight federal funds transactions arranged
on such day by Federal Funds Brokers computed and released by the Federal
Reserve Bank of New York (or any successor) in substantially the same manner as
such Federal Reserve Bank currently computes and releases the weighted average
it refers to as the "Federal Funds Effective Rate."
"Financial Provisions" shall have the meaning assigned to such
term in Section 1.02(d) hereof.
"Funding Period Maturity Date" shall have the meaning assigned
to such term in Section 2.05(b) hereof.
"Funding Periods" shall have the meaning assigned to such term
in Section 2.05(b) of this Agreement.
"Funding Segment" of a CD Rate Portion or a EuroRate Portion,
as the case may be, at any time shall mean the entire principal amount of such
Portion to which at such time there is applicable a particular Funding Period
beginning on a particular day.
"GAAP" shall have the meaning assigned to such term in Section
1.02 hereof.
"Guarantee" shall include any guarantee of the payment or
performance of any Indebtedness or other obligation and any other arrangement
whereby credit is extended to one obligor on the basis of any promise of another
person, firm or corporation, whether that promise is expressed in terms of an
obligation to pay the Indebtedness of such obligor, or to purchase an obligation
owed by such obligor, or to purchase goods and services from such obligor
pursuant to a take-or-pay contract, or to maintain the capital, working capital,
solvency or general financial condition of such obligor, whether or not any such
arrangement is listed in the balance sheet of such other person, firm or
corporation, or referred to in a footnote thereto, but shall not include
endorsements of items for collection in the ordinary course of business.
"Guarantor Security Agreement" shall mean a Security Agreement
(in substantially the form of Exhibit H to this Agreement) executed and
delivered by a Guarantor and "Guarantor Security Agreements" shall mean all of
them.
"Guarantor" shall at any time mean any Subsidiary of the
Borrower other than a Designated Subsidiary and "Guarantors" shall mean all of
them.
"Guaranty and Suretyship Agreement" shall mean the Guaranty
and Suretyship Agreement, dated as of May11, 1992 and executed and delivered by
Borrower in favor of the Banks, as the same may be amended, modified or
supplemented from time to time.
The phrases "herein", "hereof", "hereunder", and the like mean
this Agreement as a whole and not any particular section or other subdivision.
"Holding Company Subsidiary" shall mean Natmaya, Inc., a
Delaware corporation which is a Wholly-Owned Subsidiary of the Borrower.
"Indebtedness" shall include all obligations, contingent or
otherwise, which in accordance with GAAP should be classified on the obligor's
balance sheet as liabilities.
"Intercreditor Agreement" shall mean the agreement described
in Section 5.02(b)(6) hereof.
"Interest Rate Option" shall have the meaning set forth in
Section 2.05(a) of this Agreement.
"Investments" means amounts paid or agreed to be paid, whether
in cash or in other consideration, for stock, securities, liabilities or assets
of, or loaned, advanced or contributed to others (including, without limitation,
to a joint venture partnership or trust). The term Investments shall not include
any increase or decrease in the assets of any corporation derived from the
earnings or losses thereof or any assets purchased in the ordinary course of
business but shall include the acquisition of a business. If any Investment is
made by the transfer or exchange of property other than cash, the amount of such
Investment shall be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Letters of Credit" shall mean Documentary Letters of Credit
and Standby Letters of Credit issued by the Agent pursuant to Section 2.02
hereof together with (i)Documentary Letters of Credit and Standby Letters of
Credit outstanding on the date hereof and issued by the Agent pursuant to
Section 2.02 of the Original Loan Agreement and (ii)Documentary Letters of
Credit and Standby Letters of Credit outstanding on the date hereof and issued
by the Agent pursuant to Section2.02 of the Amended and Restated Loan Agreement.
"Lien" shall mean any mortgage, pledge, security interest,
bailment, encumbrance, claim, lien or charge of any kind, including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" shall mean the revolving credit loans made
by the Banks to the Borrower under this Agreement as described in Article II of
this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Security Agreement, the Guaranty and Suretyship Agreements, the Applications and
Letters of Credit, the Guarantor Security Agreements, the Subsidiary Guaranty
and Suretyship Agreements, and all other instruments, certificates and
agreements and documents contemplated by or delivered or required to be
delivered under this Agreement or in connection herewith, in each instance as
the same may be amended, modified or supplemented from time to time.
"Margin Stock" shall mean all margin stock as that term is
from time to time defined in Regulation U of the Board of Governors of the
Federal Reserve System, or any regulations, interpretations or rulings
thereunder.
"Measurement Period" shall have the meaning assigned to such
term in Section 5.02(f)(5).
"Note" or "Notes" shall mean the fourth amended and restated
promissory note(s) of Borrower executed and delivered under this Agreement,
together with all extensions, renewals, refinancings, or refundings of any
thereof in whole or in part.
"Notice of Borrowing" shall have the meaning assigned to such
term in Section 2.03 of this Agreement.
"Notice of Conversion" shall have the meaning assigned to such
term in Section 2.05(e) of this Agreement.
"Notice of Renewal" shall have the meaning assigned to such
term in Section 2.05(e) of this Agreement.
"Notional EuroRate Funding Office" shall have the meaning
assigned to such term in Section 2.09(a) of this Agreement.
"Office" shall mean the office of the Agent located at Three
Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000.
"Official Body" shall mean the United States of America or any
foreign government or state, any state and any political subdivision thereof,
and any agency, department, court, commission, board, bureau or instrumentality
of any of them.
"Operating Lease" shall mean any lease other than a
Capitalized Lease.
"Option" shall mean, when used in conjunction with CD Rate,
EuroRate or Base Rate, an Interest Rate Option bearing interest at such
specified rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA, or any successor to the PBGC.
"Percentage Share" of any Bank, when used with reference to
any Letter of Credit, shall mean an undivided participating interest in such
Letter of Credit in the proportion that such Bank's Commitment at such time
bears to the total Commitments of all the Banks hereunder at such time, and when
used in any other context, shall mean such Bank's pro rata share of the amount
involved, determined in the proportion that such Bank's Commitment at such time
bears to the total Commitments of all the Banks hereunder at such time.
"Plan" shall mean any plan, including a single employer plan,
multiple employer plan or multiemployer plan, established, sponsored or
maintained at any time or from time to time by or for a Plan Employer for its
employees to which Section 4021(a) of ERISA applies.
"Plan Employer" shall mean Borrower, any Subsidiary or any
member of a Controlled Group which is the sponsor of or contributor to a Plan
for the benefit of some or all of its or their employees.
"Portion" shall mean a Base Rate Portion or a EuroRate
Portion, as the case may be.
"Potential Event of Default" shall mean an event, condition,
act or omission to act constituting a default in the performance or observance
of an act, covenant, agreement or provision of this Agreement, the other Loan
Documents or any Note, which event, condition, act or omission to act with the
passage of time or the giving of notice, or both, and without subsequent cure
within any applicable period of time, would become or constitute an Event of
Default or Default.
"Prime Rate" shall mean the interest rate per annum announced
from time to time by Mellon Bank, N.A., at its principal office in Pittsburgh,
Pennsylvania, as its Prime Rate. The Prime Rate is determined from time to time
by Mellon Bank, N.A. as a means of pricing some loans to its customers, is not
tied to any external rate of interest, and does not necessarily reflect the
lowest rate of interest actually charged by Mellon Bank, N.A. to any particular
category of customers.
"Prior Security Interest" means an enforceable, perfected
security interest under the UCC which is prior to all Liens, except Liens for
taxes not yet due and payable to the extent given priority by statute.
"Private Placement Debt" shall mean Indebtedness of Borrower
in an aggregate principal amount not to exceed an amount equal to the difference
between (a)the sum of $60,000,000 and (b)the Commitment, which is purchased by
and placed with an entity which is acceptable to, and has been approved by, the
Agent on behalf of the Banks, and which involves such terms and conditions which
are acceptable to the Agent on behalf of the Banks.
"RPF" shall have the meaning set forth in Section 5.02(f)
hereof.
"Relevant Date" shall have the meaning set forth in Section
1.02(a) hereof.
"Reportable Event" shall mean any of the events described in
paragraphs (5) or (6) of Section 4043(b) of ERISA.
"Required Banks" shall mean, until and including the
Expiration Date, Banks whose Commitments aggregate at least 662/3% of the total
Commitments of all the Banks and thereafter the holders of at least 66-2/3% of
the aggregate unpaid principal amount of all Loans outstanding at such time.
"Responsible Officer" of Borrower shall mean the president,
chief financial officer, treasurer or controller of Borrower.
0 "Rollover Loan" shall mean any Loan made on the Funding Period Maturity Date
of any preceding Loan or Loans, with the aggregate principal amount of such
Rollover Loan being less than or equal to the aggregate principal amount of such
preceding Loan or Loans, as the case may be.
"Security Agreement" shall mean the Security Agreement dated
as of January29, 1992, by and between the Borrower and the Banks, as the same
may be amended, modified or supplemented from time to time.
"Standby Letters of Credit" shall mean standby letters of
credit issued by the Agent pursuant to an Application and Section 2.02(b)
hereof.
"Standby Letter of Credit Limit" shall have the meaning
assigned to such term in Section 2.02(b) hereof.
"Stock Purchase" means any redemption, acquisition or other
retirement of any capital account or other equity interest in the Borrower or of
warrants, rights or other options to purchase any such capital account or other
equity interest.
"Subsidiary" shall mean any corporation of which a majority of
the outstanding capital stock entitled to vote for the election of directors
(otherwise than as the result of a default) is owned by Borrower directly or
indirectly through Subsidiaries. The term "Wholly-Owned Subsidiary" shall mean
any Subsidiary of which Borrower shall at the time own, directly or indirectly
through a Wholly-Owned Subsidiary, 100% of the outstanding voting stock or other
voting interest, other than directors' qualifying shares.
"Subsidiary Guaranty and Suretyship Agreement" shall mean a
guaranty and suretyship agreement (in substantially the form of Exhibit G to
this Agreement) executed and delivered by a Guarantor and "Subsidiary Guaranty
and Suretyship Agreements" shall mean all of them.
"UCC" shall mean the Uniform Commercial Code (or any successor
statute thereto) as in effect in the Commonwealth of Pennsylvania or in such
other jurisdiction where a security interest shall be granted to the Agent in
the Collateral. Terms and phrases defined in the UCC are used herein as therein
defined except where the context otherwise requires.
1.02. Accounting Principles.
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles as such principles shall be in effect at the Relevant
Date, subject to the provisions of this Section 1.02. As used herein, "Relevant
Date" shall mean the date a relevant computation or determination is to be made
or the date of relevant financial statements, as the case may be.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
ARTICLE II
THE CREDITS
Section 2.01. Commitments. Subject to the terms and conditions
hereof, and relying upon the representations and warranties of the Borrower
herein set forth, each Bank severally agrees to make Loans to Borrower, on any
Business Day, at any time or from time to time prior to the Expiration Date, in
an aggregate principal amount not exceeding at any one time outstanding the
amount set forth opposite its name below (such amount, as the same may be
reduced from time to time hereafter in accordance with Section 2.10(b) hereof,
being herein referred to as the "Commitment"):
Name and Commitment until
Address of Bank Expiration Date Percentage
MELLON BANK, N.A. $19,406,250 43.125%
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
PNC BANK, N.A. $12,796,875 28.4375%
PNC Xxxx Xxxxxxxx
Xxxxx & Xxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
FIRST UNION NATIONAL BANK $12,796,875 28.4375%
Xxxxx & Xxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Total $45,000,000 100%
provided, that if for any day when the Borrower's Consolidated Fixed Charge
Coverage Ratio for the period of twelve consecutive months ending on the day
before the first day of the then most recently completed month is less than or
equal to 1.75 to 1, the aggregate amount of Debt attributable to the Loans
outstanding on such day shall not exceed an amount equal to the sum of (a)75% of
Eligible Accounts plus (b)45% of Eligible Inventory (the sum of such percentage
of Eligible Accounts and Eligible Inventory being referred to herein
collectively as the "Borrowing Base"); provided, further, that the sum of all
Loans outstanding at any one time plus the face amount of all outstanding
Letters of Credit shall not exceed the sum of the Banks' Commitments; provided,
further, that the sum of the face amounts of all outstanding Letters of Credit
shall not exceed $15,000,000 at any time.
It is the intention of the parties that (a)the aggregate
outstanding principal balances of all Loans hereunder shall at no time exceed
the lesser of (i)the sum of the Banks' Commitments less the face amounts of all
outstanding Letters of Credit and (ii)the Borrowing Base, and if, at any time,
an excess shall for any reason exist, the Borrower shall forthwith repay to the
Agent for the ratable account of the Banks, in funds immediately available, the
amount of such excess, together with all interest on the amount so repaid.
Within such limits of time and amount and provided that the
conditions of lending set forth in Section4.02 hereof are satisfied and that no
Event of Default or Potential Event of Default has occurred and is continuing or
exists, Borrower may borrow, prepay, repay and reborrow hereunder until the
Expiration Date, when the Commitment of each Bank shall cease and all Loans
shall become immediately due and payable in full. The proceeds of the Loans
shall be used by Borrower for working capital, general corporate purposes.
Section 2.02. Letters of Credit.
(a) Documentary Letters of Credit. At the request of Borrower
(which shall be made at least five (5) Business Days prior to the date, which
shall be a Business Day, on which such Letter of Credit is proposed to be
issued), and pursuant to an Application duly executed by Borrower, one or more
Documentary Letters of Credit will be issued by the Agent for the account of
Borrower in an aggregate face amount not exceeding the lesser of (i)an amount
equal to the Borrowing Base at such time minus the aggregate principal amount of
all then outstanding Loans (including the aggregate face amount of outstanding
Letters of Credit, as the same may be changed from time to time by amendment or
otherwise pursuant to the terms thereof) and (ii)$15,000,000 (the "Documentary
Letter of Credit Limit"). The aggregate face amount of outstanding Documentary
Letters of Credit, as the same may be changed from time to time by amendment or
otherwise pursuant to the terms thereof, shall be charged against the
Documentary Letter of Credit Limit and against the total Commitments of the
Banks hereunder. The Banks shall participate in such Documentary Letters of
Credit as provided in Section 2.02(f) hereof.
(b) Standby Letters of Credit. At the request of Borrower
(which shall be made at least five (5) Business Days prior to the date, which
shall be a Business Day, on which such Letter of Credit is proposed to be
issued), and pursuant to an Application duly executed by Borrower one or more
Standby Letters of Credit will be issued by the Agent for the account of
Borrower in an aggregate face amount not exceeding the lesser of (i)an amount
equal to the Borrowing Base at such time minus the aggregate principal amount of
all then outstanding Loans (including the aggregate face amount of outstanding
Letters of Credit, as the same may be changed from time to time by amendment or
otherwise pursuant to the terms thereof) and (ii)$15,000,000 (the "Standby
Letter of Credit Limit"). The aggregate face amount of outstanding Standby
Letters of Credit, as the same may be changed from time to time by amendment or
otherwise pursuant to the terms thereof, shall be charged against the Standby
Letter of Credit Limit and against the sum of the Banks' Commitments. The Banks
shall participate in such Standby Letters of Credit as provided in the Section
2.02(f) hereof.
(c) Letter of Credit Fees. In lieu of any letter of credit
fronting fees provided for in the Applications or otherwise, the Borrower agrees
to pay to the Agent upon the issuance of each Standby Letter of Credit a fee
equal to 1/10 of 1% of the face amount of such Standby Letter of Credit, and the
Borrower further agrees to pay to the Agent from time to time any issuance,
amendment, payment, telex, postage and courier fees, at the Agent's standard
rates (a schedule of which has been provided to the Borrower), in respect of
Letters of Credit. The Borrower agrees that upon and following the issuance of a
Standby Letter of Credit, the Agent shall be paid a fee per annum based upon the
amount of the Standby Letter of Credit issued, which fee shall be calculated at
a rate per annum for each day equal to the Applicable Margin with respect to the
Euro-Rate in effect pursuant to Section2.05(h) hereof for such day. Such letter
of credit commission shall be payable on the last Business Day of each calendar
quarter, and on the last date on which any Standby Letter of Credit issued
hereunder expires, in each case for the preceding period from which such fee has
not been paid. The Borrower agrees that upon the issuance of a Documentary
Letter of Credit, the Agent shall be paid a fee equal to 1/2 of 1% of the face
amount of the Documentary Letter of Credit issued; provided, however, that in
the case of the acceptance by the Agent of any time draft with respect to a
Documentary Letter of Credit issued hereunder, the Borrower agrees to pay to the
Agent an acceptance fee per annum based upon the amount of the Documentary
Letter of Credit issued, which acceptance fee shall be calculated at a rate per
annum for each day during the period from the acceptance of such draft through
its maturity equal to the Applicable Margin with respect to the Euro-Rate in
effect pursuant to Section2.05(h) hereof at the time of the acceptance of any
such time draft.
(d) Payments with Respect to Letters of Credit. As to each
Letter of Credit:
(i) Reimbursement. Borrower shall reimburse the Agent,
forthwith and otherwise in accordance with the terms of any related
Application or reimbursement or other like agreement, for any payment
made by the Agent under a Letter of Credit issued for the benefit of
such entity. Any such reimbursement to the Agent shall be made
absolutely and unconditionally and without any set-off, counterclaim or
reduction and free and clear of any withholding or similar taxes other
than any tax, levy, impost or duty based, in whole or in part, upon the
income, revenues or operations of the Agent. Borrower shall pay to the
Agent interest on any unreimbursed portion of each such payment made by
the Agent from the date of such payment by the Agent until
reimbursement in full therefor at a rate per annum equal to 2.0% above
the rate applicable to the Base Rate Option from time to time.
(ii) Funding. If at any time the Agent honors a draft drawn
under a Letter of Credit in accordance with the terms of such Letter of
Credit and is not reimbursed therefor on the same Business Day, the
Agent shall promptly notify each other Bank of such payment. Forthwith
upon and not later than one Business Day after its receipt of such
notice, each other Bank shall transfer to the Agent, in immediately
available funds, an amount equal to such other Bank's Percentage Share
of such payment. If any Bank shall fail to so transfer to the Agent its
percentage of any unreimbursed payment made by the Agent on account of
any Letter of Credit, such Bank shall pay to the Agent interest on its
Percentage Share of such unreimbursed payment from the date of such
Bank's receipt of such notice from the Agent until payment by such Bank
of such Percentage Share in full at a rate per annum for each day equal
to the Federal Funds Effective Rate for such day, such interest rate to
change automatically from time to time effective as of the date of each
change in the Federal Funds Effective Rate.
(e) Pro Rata Treatment of Payments. If at any time after the
Agent has made a payment on account of any Letter of Credit and has received
from any other Bank such Bank's Percentage of such payment, the Agent shall hold
any reimbursement (in whole or in part) for such payment, any other amount
received from the account party, Borrower or any other person in respect of such
payment (including any payment of interest or fees, any payment under any
guarantee of the obligations of the account party and any amount received by way
of set-off, but excluding any funds received by the Agent from any other Bank
pursuant to Section 2.02(c)(ii) hereof), any documents evidencing the right to
reimbursement for such payment for the pro rata benefit of the Agent and any
other Bank from whom the Agent has received such Bank's Percentage Share of such
payment and shall forthwith transfer to such other Bank such other Bank's
Percentage Share of such reimbursement or other amount; provided, however, that
in the event that the receipt by the Agent of such reimbursement or other amount
is found to have been a transfer in fraud of creditors or a preferential payment
under the United States Bankruptcy Code or is otherwise required to be returned
pursuant to a final order of a court of competent jurisdiction, such other Bank
shall, upon demand therefor by the Agent, return to the Agent any portion
thereof previously transferred by the Agent to such other Bank.
(f) Participating Interests in Letters of Credit. Subject to
the terms and conditions and relying upon the representations and warranties
herein set forth, effective as of the date hereof in the case of outstanding
Letters of Credit and effective as of the date of issuance of other Letters of
Credit, the Agent agrees to allot and does allot, and each Bank severally and
irrevocably agrees to take and does take, such Bank's Percentage Share of each
such Letter of Credit. Within five Business Days after the issuance of any
Letter of Credit by the Agent under this Agreement, the Agent shall send to each
Bank and to the Borrower a letter of credit summary substantially in the form of
Exhibit D hereto.
Notwithstanding anything to the contrary contained herein, in
any other Loan Document or in any document to be delivered in connection
herewith or therewith, Borrower acknowledges and agrees that all rights of the
Agent under any Application and any reimbursement or like agreement with respect
to any Letter of Credit shall inure to the benefit of each Bank to the extent of
its Percentage Share as fully as if such Bank was a party to such Application or
such reimbursement or like agreement.
(g) Additional Understandings Regarding Letters of Credit. In
order to induce the Agent to establish each Letter of Credit and to induce each
other Bank to take its Percentage Share thereof:
(i) Borrower agrees that neither the Agent nor any
other Bank shall be responsible or liable for, and the
obligation of Borrower to reimburse the Agent for any payment
made by the Agent under or in respect of any Letter of Credit
shall not be affected by (A)the validity, enforceability or
genuineness of any instrument or document (or any endorsement
thereof) presented under such Letter of Credit which, upon
examination by the Agent and in the absence of gross
negligence or willful misconduct, appears on its face to be in
accordance with the terms and conditions of such Letter of
Credit, even if such instrument or document (or such
endorsement) is proven to be invalid, unenforceable,
fraudulent or forged, or (B)any dispute between Borrower and
the beneficiary or beneficiaries under such Letter of Credit;
(ii) Borrower agrees that any action taken or omitted
to be taken by the Agent in connection with any Letter of
Credit, if taken or omitted to be taken in good faith and in
the absence of gross negligence or willful misconduct, shall
be binding upon Borrower and shall not create any liability
for the Agent or any other Bank to the Borrower and agrees
that no other Bank shall be liable to the Borrower for any
such action taken or omitted to be taken by the Agent in bad
faith or constituting gross negligence or willful misconduct;
(iii) Borrower agrees that the provisions of each
Application and each reimbursement or like agreement in
respect of any Letter of Credit, including provisions
providing for reimbursement to the Agent in the event of the
imposition or implementation of, or increase in, any reserve,
special deposit or similar requirement in respect of the
Letter of Credit relating thereto, shall apply equally to each
other Bank in respect of its Percentage Share in such Letter
of Credit as fully as if such Bank was a party to such
Application or reimbursement or like agreement;
(iv) Borrower agrees that (A)drawings under any
Letter of Credit issued hereunder may be made only upon
presentation of an appropriate sight draft or upon
presentation of a time draft which requires payment at no
later than 180 days, (B)no Letter of Credit will be issued
hereunder at or after the Expiration Date and (C)no Letter of
Credit will be issued hereunder which expires later than the
Expiration Date, after giving effect to the foregoing
provision for time drafts requiring payment not later than 180
days after the issuance thereof;
(v) Each Bank severally and not jointly agrees to
reimburse the Agent for all expenses (including, without
limitation, reasonable counsel fees and the expenses incurred
by officers or employees of the Agent's assetbased lending
division or credit recovery group) incurred by the Agent and
not reimbursed by Borrower in enforcing the obligations and
liabilities of Borrower under any Application or other
reimbursement agreement relating to a Letter of Credit in
accordance with such Bank's Percentage Share. Each Bank
further severally and not jointly agrees to indemnify the
Agent (to the extent not reimbursed by Borrower) against any
and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses
(including, without limitation, reasonable counsel fees and
expenses incurred by officers or employees of the Agent's
asset-based lending division or credit recovery group) or
disbursements of any kind or nature whatsoever (A)which may at
any time be imposed on, incurred by or asserted against the
Agent in any way relating to any Letter of Credit or any
action taken or omitted by the Agent under or in connection
with any of the foregoing, and (B)which would not have been
imposed on, incurred by or asserted against the Agent but for
its having entered into any Application; provided, however,
that the Banks shall in no event be liable for any portion of
such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements
resulting from the gross negligence or willful misconduct of
the Agent. In determining whether to pay any drawing under a
Letter of Credit, the Agent shall have no obligation to the
Banks other than to confirm in good faith that any documents
required to be delivered under such Letter of Credit appear to
have been delivered in compliance and that they appear to
comply on their face with the requirements of such Letter of
Credit. The agreements in the three preceding sentences shall
survive the termination of any Application or this Agreement;
and
(vi) Each Bank by its execution hereof represents and
warrants that its participation in Letters of Credit is
without recourse to the Agent, that it expressly assumes all
risk of loss in connection with its participation therein as
if it had issued said Letters of Credit, that it has not
relied upon any statement, information or representation
furnished or made by the Agent and that it has made, and will
continue to make, its own independent investigation,
evaluation and analysis of Borrower. Except as otherwise
expressly provided herein, the Agent has no duty or
responsibility, either initially or on a continuing basis, to
provide any Bank with any credit, financial or other
information with respect to Borrower, whether coming into its
possession prior to the issuance of any Letter of Credit or at
any time thereafter.
Section 2.03. Making of Revolving Credit Loans. All Loans
shall be made ratably from the Banks in proportion to their respective
Commitments; provided, however, that the failure of any Bank to make a Loan
shall not relieve any other Bank of its obligation to lend hereunder. Whenever
Borrower desires that the Banks make Loans (including Rollover Loans), Borrower
shall give to the Agent at its Office at least three (3) Business Days' notice
in the case of a EuroRate Loan, two (2) Business Days' notice in the case of a
CD Rate Loan, and notice on the same Business Day in the case of a Base Rate
Loan, of the date, which shall be a Business Day, on which such Loans are to be
made. Each notice (a "Notice of Borrowing") required pursuant to this Section
2.03 shall be given no later than 11:00 a.m., Pittsburgh time, in the case of
Base Rate Loans, or no later than 10:00 a.m., Pittsburgh time, in the case of CD
Rate Loans or EuroRate Loans, on the last date permitted for such Notice of
Borrowing, shall be signed by a Responsible Officer of Borrower, and shall state
(a)the date on which the Loan is to be made, (b)the amount of the Loan, which
shall be the sum of the principal amounts selected pursuant to subsection (c) of
this Section 2.03 and, (c)the Interest Rate Option or Options selected in
accordance with Section 2.05(a) hereof and the principal amounts of Portions
selected in accordance with Section 2.05(c) hereof and, in the case of a
EuroRate Portion or a CD Rate Portion, the EuroRate Funding Period or CD Rate
Funding Period, as the case may be. Each Notice of Borrowing shall be
irrevocable and shall be written, telecopied, by telephone confirmed in writing
or by electronic request. The rights and obligations of the parties set forth in
this Agreement, including without limitation all representations, warranties and
covenants, shall not be affected by the medium chosen by Borrower to make a Loan
request, except that Borrower assumes all liability for any and all losses,
liabilities, obligations, costs or damages ("Losses") arising from the chosen
medium, including without limitation, in the case of electronic Loan requests,
any Losses arising from transmission errors, delayed transmissions,
transmissions not received or unauthorized transmissions. The Agent shall
promptly give telecopied or telexed notice or telephoned notice confirmed in
writing to each Bank of its Percentage Share and the date of such borrowings. On
the date specified in such Notice of Borrowing, each Bank shall make the
proceeds of its Loan available at the Office of the Agent, no later than 12:00
noon, Pittsburgh time, in immediately available funds, and upon fulfillment of
all applicable conditions set forth herein (and against delivery to the Agent of
an appropriate Note for the initial Loans, with payment schedules attached
thereto, for each Bank, payable to the order of such Bank as provided in Section
2.04 hereof), the Agent shall pay or deliver the proceeds of the borrowing to or
upon the order of Borrower. Upon making the initial Loans, the Agent shall
deliver each such Note to or upon the order of the Bank to, which it is payable.
Section 2.04. Notes. The obligations of Borrower to repay the
aggregate unpaid principal amount of the Loans made by the Banks shall be
evidenced by three amended and restated promissory notes of Borrower payable to
the respective Banks in the aggregate amount of each Bank's Commitment, dated
the date of this Agreement (hereinafter called a "Note" or the "Notes") in
substantially the form attached hereto as Exhibit A with the blanks
appropriately filled, payable at the Office of the Agent to the order of each
Bank in a face amount equal to each Bank's initial Commitment, and bearing
interest as provided in Section 2.05 hereof and in said form of Note, and
maturing as provided in said form of Note. Each Note of Borrower payable to each
Bank shall be dated, and shall be delivered to the Agent on behalf of such Bank,
on or prior to the date of the initial Loans to Borrower hereunder. Each holder
shall, and is hereby authorized by Borrower to, endorse on the schedule annexed
to its Note an appropriate notation evidencing the date and amount of each Loan
made by such Bank as well as the date and amount of each payment by Borrower
with respect thereto; provided, however, that the failure to make any such
notation shall not limit or otherwise affect the obligations of Borrower under
any such Note.
Section 2.05. Interest Rates.
(a) Interest Rate Options. Borrower agrees to pay interest
upon the unpaid principal balance of the Loans disbursed and outstanding from
time to time on a basis selected by Borrower from one of the three interest rate
options set forth below (each an "Interest Rate Option" and, collectively, the
"Interest Rate Options"), it being understood that subject to the provisions of
this Agreement, Borrower may select any number of such Interest Rate Options to
apply simultaneously to different parts of a Loan and may select any number of
different Funding Segments to apply simultaneously to different parts of the
EuroRate Portion of a Loan:
(i)Base Rate Option. Interest shall accrue on Base Rate Loans
at a rate per annum for each day equal to the Base Rate for such day
plus the Applicable Margin for such day.
Loans accruing interest pursuant to the Base Rate Option shall
be referred to herein as "Base Rate Portions". The rate of interest on
Base Rate Portions shall be calculated on the basis of a year of 365 or
366 days, as the case may be, and shall change automatically from time
to time effective on and as of the effective date of each change in the
Base Rate. The Agent shall promptly notify the Borrower and each Bank
of any such change in the Base Rate and the effective date thereof;
however, any failure of the Agent to so notify shall not relieve the
Borrower of its obligations hereunder or under the Notes.
(ii) CD Rate Option. Interest shall accrue on CD Rate Loans at
a rate per annum (based on a year of 360 days and actual days elapsed)
for each day at a rate equal to the CD Rate plus the Applicable Margin
for such day.
"CD Rate" for any day, as used herein, shall mean for each
Funding Segment of the CD Rate Portion corresponding to a proposed or
existing CD Rate Funding Period the rate per annum determined by the
Agent by adding:
(A) the rate per annum obtained by dividing (the
resulting quotient to be rounded upward to the nearest 1/100
of 1%) (1)the rate of interest (which shall be the same for
each day in such CD Rate Funding Period) determined in good
faith by the Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest
error) to be the average of the secondary market bid rates at
or about 11:00 a.m., Pittsburgh time, on the first day of such
CD Rate Funding Period by dealers of recognized standing in
negotiable certificates of deposit for the purchase at face
value of negotiable certificates of deposit of the Agent for
delivery on such day in amounts comparable to such Funding
Segment and having maturities comparable to such CD Rate
Funding Period by (2)a number equal to 1.00 minus the CD Rate
Reserve Percentage; and
(B) the Assessment Rate.
The "CD Rate" described in this Section 2.05(a)(ii) may also
be expressed by the following formula:
[average of the secondary market]
[bid rates determined by the Agent]
[per subsection (ii)(A)(1) of this]
CD Rate = [Section 2.05(a)] + AssessmentRate
[1.00 - CD Rate Reserve Percentage]
The "CD Rate Reserve Percentage" for any day is the maximum
effective percentage (expressed as a decimal, rounded upward to the
nearest 1/100 of 1%), as determined in good faith by the Agent (which
determination shall be conclusive absent manifest error), which is in
effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including without limitation supplemental, marginal and
emergency reserve requirements) for a member bank of such system in
respect of nonpersonal time deposits in Dollars in the United States.
The CD Rate shall be adjusted automatically as of the effective date of
each change in the CD Rate Reserve Percentage.
The "Assessment Rate" for any day is the rate per annum
(rounded upward to the nearest 1/100 of 1%) determined in good faith by
the Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the maximum effective
assessment rate per annum payable by a bank insured by the Federal
Deposit Insurance Corporation (or any successor) for such day for
insurance on Dollar time deposits, exclusive of any credit allowed
against such annual assessment on account of assessment payments made
or to be made by such bank. The CD Rate shall be adjusted automatically
as of the effective date of each change in the Assessment Rate.
The Agent shall give prompt notice to Borrower of the CD Rate
so determined or adjusted, which determination or adjustment shall be
conclusive if made in good faith and absent manifest error.
(iii) EuroRate Option. Interest shall accrue on
EuroRate Loans at a rate per annum (based on a year of 360 days and
actual days elapsed) for each day at a rate equal to the Euro-Rate plus
the Applicable Margin for such day.
"EuroRate" as used herein shall mean, for each
Funding Segment of a proposed or existing EuroRate Portion of the Loans
corresponding to a proposed or existing EuroRate Funding Period, the
rate per annum obtained by dividing (the resulting quotient to be
rounded upward to the nearest 1/100 of 1%) (A)the rate per annum (which
shall be the same for each day in such EuroRate Funding Period)
determined in good faith by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest
error) to be the average of the rates per annum for deposits in Dollars
offered to the Agent in the London interbank market at approximately
11:00 a.m., London time, two (2) Business Days prior to the first day
of such EuroRate Funding Period for delivery on the first day of such
EuroRate Funding Period in amounts comparable to such Funding Segment
and having maturities comparable to such EuroRate Funding Period by
(B)a number equal to 1.00 minus the EuroRate Reserve Percentage.
The "EuroRate" may also be expressed by the following formula:
[average of the rates offered to]
[the Agent estimated ]
[by the Agent per subsection ]
EuroRate= [(iii) of this Section 2.05(a) ]
[1.00 - EuroRate Reserve Percentage)]
The "EuroRate Reserve Percentage" for any EuroRate Funding
Period for each Bank's EuroRate Loan applicable to such EuroRate
Funding Period bearing interest as provided in this Section
2.05(a)(iii) is that percentage which is specified on the first day of
such EuroRate Funding Period in Regulation D of the Board of Governors
of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement with respect to Eurocurrency Liabilities
(as defined in such Regulation D), but only to the extent demonstrated
to have been actually incurred by such Bank, such Bank's determination
thereof to be conclusive in the absence of manifest error.
The Agent shall give prompt notice to Borrower of the EuroRate
so determined, which determination shall be conclusive if made in good
faith and absent manifest error.
(b) Funding Periods. At any time when the Borrower shall
select, convert to or renew the CD Rate Option, EuroRate Option or Base Rate
Option to apply to any part of the Loans, Borrower shall fix one or more periods
during which such Option shall apply, such periods (the "Funding Periods") being
set forth in the chart below:
Interest Rate Option Available Funding Periods
CD Rate Option 30, 60 or 90 days or other
period as agreed to among
Borrower, the Agent and
the Banks ("CD Rate Funding
Period")
EuroRate Option One, two,
three or six month
or other period as
agreed to among
Borrower, the
Agent and the
Banks ("EuroRate
Funding Period")
Base Rate Option One (1) day
The selection of Funding Periods shall be subject to the following limitations:
(i) Each CD Rate Funding Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding
Business Day.
(ii) The initial EuroRate Funding Period for any EuroRate
Portion shall begin on the day the EuroRate Portion is made (including
the day of any conversion from another Interest Rate Option to a
EuroRate Portion) and each renewed EuroRate Funding Period thereafter
in respect of such EuroRate Portion shall begin on the day upon which
the next preceding EuroRate Funding Period expires. Interest payable
with respect to any EuroRate Funding Period shall include the first
day, but not the last day, of such Funding Period, provided that (to
the extent not repaid on such last day) interest under another Interest
Rate Option is accruing on and after the last day on the Funding
Segment in respect of which a EuroRate Funding Period is terminating.
(iii) If any EuroRate Funding Period would otherwise end on a
day which is not a Business Day, such EuroRate Funding Period shall
expire on the next succeeding Business Day unless such next succeeding
Business Day falls in another calendar month, in which case such
EuroRate Funding Period shall end on the next preceding Business Day.
(iv) Borrower may not fix a Funding Period that would end
after the Expiration Date.
Each Loan made hereunder shall mature, and the principal amount thereof shall
become due and payable, on the last day of each CD Rate Funding Period, EuroRate
Funding Period or Base Rate Funding Period (each such date being referred to
herein as a "Funding Period Maturity Date") for such Loan.
(c) Transactional Amounts. Every selection of, conversion
from, conversion to or renewal of an Interest Rate Option and every payment in
respect of the Loans (other than a payment in full) shall be in a principal
amount such that after giving effect thereto the principal amount of each
Portion of the Loans or of each Funding Segment of such Portion of the Loans, as
the case may be, shall be as set forth in the table below:
Portion or Funding Segment Allowable Principal Amounts
Base Rate Portion $100,000 minimum;
Each Funding Segment of the $1,000,000 or an integral
CD Rate Portion multiple thereof; and
Each Funding Segment $1,000,000 or an integral
of the EuroRate Portion multiple thereof.
(d) CD Rate or EuroRate Unascertainable; Impracticability
If:
(i) on any date on which a CD Rate or a EuroRate would
otherwise be set a Bank shall have in good faith determined
(which good faith determination shall be conclusive) that:
(A) adequate and reasonable means do not exist
for ascertaining such CD Rate or EuroRate, or
(B) a contingency has occurred which materially and
adversely affects the secondary market for negotiable
certificates of deposit maintained by dealers of recognized
standing or the interbank eurodollar market, as the case may
be, or
(C) the effective cost to such Bank of funding a
proposed Funding Segment of a CD Rate Portion or a EuroRate
Portion of the Loans from a Corresponding Source of Funds
shall exceed the CD Rate or the EuroRate, as the case may be,
applicable to such Funding Segment, or
(ii) at any time a Bank shall have determined in good faith
(which good faith determination shall be conclusive) that the making,
maintenance or funding of any part of a CD Rate Portion or a EuroRate
Portion of the Loans has been made impracticable or unlawful by (A)the
occurrence of a contingency which materially and adversely affects the
interbank eurodollar market, or (B)compliance by such Bank or a
Notional EuroRate Funding Office in good faith with any Law or
guideline or interpretation or administration thereof by any Official
Body charged with the interpretation or administration thereof or with
any request or directive of any such Official Body (whether or not
having the force of Law);
then, and in any such event, such Bank (a "Terminating Bank") may notify
Borrower and the Agent of such determination. Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice
is given) the obligation of the Terminating Bank to allow Borrower to select,
convert to or renew the CD Rate Option or the EuroRate Option, as the case may
be, shall be suspended until the Terminating Bank shall have later notified
Borrower of the Terminating Bank's determination in good faith (which good faith
determination shall be conclusive) that the circumstances giving rise to such
previous determination no longer exist.
If the Terminating Bank notifies Borrower of a determination
under this Section 2.05(d) with respect to the maintenance of any part of the CD
Rate Portion or the EuroRate Portion of the Loans, as the case may be, Borrower
shall, as to such part of the CD Rate Portion or the EuroRate Portion of the
Loans, as the case may be, on the date specified in such notice either convert
such Portion of the Loans to the Base Rate Option in accordance with Section
2.05(e) hereof or prepay such Portion of the Loans in accordance with Section
2.06 hereof. Absent due notice from Borrower of conversion or prepayment the CD
Rate Portion or the EuroRate Portion of the Loans, as the case may be, shall
automatically be converted to the Base Rate Option upon such specified date.
If at the time the Terminating Bank makes a determination
under this Section 2.05(d) Borrower has previously notified the Agent that
Borrower wishes to select, convert to or renew the CD Rate Option or the
EuroRate Option, as the case may be, but such Option has not yet gone into
effect, such notification shall be deemed to provide for selection, conversion
to or renewal of the Base Rate Option instead of the CD Rate Option or EuroRate
Option, as the case may be.
(e) Conversion or Renewal. Subject to the provisions of
Sections 2.05(c) and (d) hereof Borrower may convert any part of the Loans from
any Interest Rate Option or Options to one or more different Interest Rate
Options and may renew the CD Rate Option or the EuroRate Option as to any
Funding Segment of a CD Rate Portion or a EuroRate Portion of the Loans:
(i) at any time with respect to conversion from
the Base Rate Option;
(ii) at the expiration of any Funding Period with
respect to conversions from or renewals of the CD Rate Option
or EuroRate Option, as the case may be, as to the Funding
Segment corresponding to such expiring Funding Period; or
(iii) on the date specified in a notice by a
Terminating Bank pursuant to Section 2.05(d) hereof with
respect to conversions from the CD Rate Option or EuroRate
Option, as the case may be.
Whenever Borrower desires to convert or renew any Interest Rate Option or
Options, Borrower shall provide to the Agent at its Office a notice (a "Notice
of Conversion" or "Notice of Renewal," respectively) setting forth the following
information:
(iv) the date, which shall be a Business Day (not
earlier than the second Business Day after such notice is
given, in the case of a conversion to or renewal of a EuroRate
Option), on which the proposed conversion or renewal is to be
made;
(v) the principal amounts selected in accordance with
Section 2.05(c) hereof of the Base Rate Portion, and each
Funding Segment of the CD Rate Portion or EuroRate Portion of
the Loans, as the case may be, to be converted from or
renewed;
(vi) the Interest Rate Option or Options selected in
accordance with Section 2.05(a) hereof and the principal
amounts selected in accordance with Section 2.05(c) of the
Base Rate Portion, and each Funding Segment of the CD Rate
Portion or EuroRate Portion of the Loans, as the case may be,
to be converted to or renewed; and
(vii) with respect to each Funding Segment of a Loan
to be converted to or renewed, the Funding Period selected in
accordance with Section 2.05(b) hereof to apply to such
Funding Segment.
Notice of Conversion or Notice of Renewal having been so provided, after the
date specified in such Notice interest shall be calculated upon the principal
amount of the Loans as so converted or renewed. Interest on the principal amount
of any part of the Loans required to be converted or renewed (automatically or
otherwise) shall be due and payable on the conversion or renewal date.
(f) Failure to Convert or Renew. Absent due notice from
Borrower of conversion or renewal in the circumstances described in Section
2.05(e) hereof, any part of the CD Rate Portion or EuroRate Portion of the Loans
for which such notice is not received automatically shall be converted to the
Base Rate Option on the last day of the expiring Funding Period. Any part of the
Base Rate Portion of the Loans which is outstanding on the applicable Funding
Period Maturity Date shall be renewed automatically under the Base Rate Option
on the last day of the expiring Funding Period.
(g) Effect of Funding Periods on Loan Maturities. Without
limiting the effects of Article VI hereof, each Loan hereunder shall mature and
the principal amount thereof shall become due and payable on the applicable
Funding Period Maturity Date. On each day on which a Loan so matures, Borrower
may request that a Rollover Loan be made in the same principal amount by
exercising its rights to convert or renew the applicable Interest Rate Option
under Section 2.05(e) hereof for such principal amount; provided, however, that
(i)the making of each such Rollover Loan shall be subject to the conditions set
forth in Section 4.02 hereof, and (ii)the proceeds of each Rollover Loan shall
simultaneously and automatically be applied on the applicable Funding Period
Maturity Date to the payment of the principal of such Loan maturing on such
Funding Period Maturity Date.
(h) Changes in Interest Rates; Consolidated Total Indebtedness
to EBITDA Ratio. The Applicable Margin for any day and for each type of Loan
shall be determined with reference to the Consolidated Total Indebtedness to
EBITDA Ratio for the period of four consecutive fiscal quarters most recently
completed prior to such day, as follows:
Consolidated Total Indebtedness Applicable Margin
to EBITDA Ratio (X) Base Rate CD Rate Euro-Rate
X > 4.25 0.125 1.375% 1.375%
3.75 < X < 4.25 0 1.15% 1.15%
3.25 < X < 3.75 0 0.90% 0.90%
2.75 < X < 3.25 0 0.70% 0.70%
2.00 < X < 2.75 0 0.50% 0.50%
1.25 < X < 2.00 0 0.425% 0.425%
X < 1.25 0 0.35% 0.35%
Borrower shall provide evidence of the Consolidated Total
Indebtedness to EBITDA Ratio to the Agent and the Banks within twenty days of
the end of each fiscal quarter.
Section 2.06. Prepayment of Loans. Subject to the provisions
of Section 2.08(b) hereof, Borrower shall have the right at Borrower's option
from time to time to pay the Loans in whole or part:
(a) with respect to any part of the Base Rate Portion, at any
time without premium or penalty; provided, however, that the minimum prepayment
amount with respect to payment of a Base Rate Portion shall be $100,000;
(b) with respect to payment of any Funding Segment of the CD
Rate Portion or the Euro-Rate Portion of the Loans:
(i) at the expiration of any CD Rate Funding Period
or Euro-Rate Funding Period without premium or penalty;
(ii) on the date specified in a notice by a
Terminating Bank pursuant to Section2.05(d) hereof, with respect to any
part of the CD Rate Portion or the Euro-Rate Portion, without premium
or penalty; or
(iii) at any time prior to the expiration of any CD
Rate Funding Period or any Euro-Rate Funding Period, as the case may
be, by giving not less than five(5) Business Days' prior telecopied or
telexed notice or telephone notice confirmed in writing to such effect
to the Agent; provided, however, that in such event the Borrower shall
forthwith pay to the Agent for the ratable account of the Banks an
amount equal to the sum of any costs, expenses and lost profits
incurred by any of the Banks as a result of such voluntary prepayment,
as determined in the sole discretion of the Banks;
provided, however, that the minimum prepayment amount with respect to payment or
prepayment of the Funding Segment of the CD Rate Portion or the Euro-Rate
Portion shall be $1,000,000 and any prepayment amounts in excess of $1,000,000
shall be integral multiplies of $500,000.
Section 2.07. Payments.
(a) Interest Payment Dates. Interest on the Loans shall be due
and payable monthly in arrears on the first day of each month and on the
Expiration Date. After maturity of any part of the Loans by demand or otherwise,
interest on such part of the Loans shall be due and payable on demand.
(b) Principal Payment Dates. Loans shall be due and payable on
the Expiration Date without demand or, after the occurrence of an Event of
Default, immediately upon demand made by the Agent and the Banks at any time
under Section 6.02(a) hereof or automatically under Section 6.02(b) hereof, as
the case may be.
(c) Place, Time and Amounts. All payments to be made in
respect of principal, interest, Facility Fees, Administrative Fee, or other
charges or amounts due from the Borrower hereunder shall be payable at the
Agent's Office at 12:00 Noon, Pittsburgh time, on the day when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and an action therefor shall immediately accrue. Such payments
shall be, made to the Agent in Dollars in immediately available funds without
setoff, counterclaim or other deduction of any nature. After the principal
amount of any part of the Base Rate Portion of the Loans shall have become due
(by acceleration or by maturity at the Expiration Date, but excluding Funding
Period Maturity Dates), such amounts shall bear interest for each day until paid
(before and after judgment), payable on demand, at a rate per annum (based on a
year of 365 or 366 days, as the case may be) equal to two percent (2%) above the
rate applicable to the Base Rate Option, such interest rate to change
automatically from time to time effective on and as of the effective date of
each change in the Prime Rate. After the principal amount of any part of the CD
Rate Portion or the EuroRate Portion of the Loans shall have become due (by
acceleration or by maturity at the Expiration Date, but excluding Funding Period
Maturity Dates), such amounts shall bear interest for each day until paid
(before and after judgment), payable on demand, (i)until the end of the
applicable then current Funding Period at a rate per annum equal to two percent
(2%) above the rate otherwise applicable to such amounts and (ii)thereafter in
accordance with the immediately preceding sentence. All payments to the Agent
shall be made in the amount due, absolutely free, clear and net of any charges,
taxes or other amounts withheld. -240
Section 2.08. Additional Compensation in Certain
Circumstances.
(a) Compensation for Taxes, Reserves and Expenses on
Outstanding Loans. If any Law or guideline or interpretation or application
thereof by any Official Body charged with the interpretation or administration
thereof or compliance with any request or directive of any central bank or other
Official Body (whether or not having the force of Law):
(i) subjects any Bank (including the Agent) or any
Notional EuroRate Funding Office to any tax, or changes the
basis of taxation with respect to this Agreement, the Notes,
the Loans, or payments by Borrower of principal, interest or
other amounts due from Borrower hereunder or under the Notes
(except for taxes on the overall net income of such Bank or
such Notional EuroRate Funding Office imposed by the
jurisdiction in which such Bank's principal executive office
or Notional EuroRate Funding Office is located);
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against assets
held by, credit extended by, deposits with or for the account
of, or other acquisition of funds by, any Bank or any Notional
EuroRate Funding Office (other than requirements expressly
included herein in the determination of the CD Rate or
EuroRate, as the case may be, hereunder); or
(iii) imposes upon any Bank or any Notional EuroRate
Funding Office any other condition or expense with respect to
this Agreement, the Notes, the Commitment, or its making,
maintenance or funding of any part of the Loans, including,
without limitation, any capital adequacy or similar
requirement;
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense upon any Bank or any Notional
EuroRate Funding Office with respect to this Agreement, the Notes, or the
making, maintenance or funding of any part of the Loans by an amount which any
Bank deems to be material (such Bank being deemed for this purpose to have made,
maintained or funded each Funding Segment of the CD Rate Portion and the
EuroRate Portion of the Loans from a Corresponding Source of Funds), such Bank
shall from time to time notify Borrower of the amount determined in good faith
(using any averaging and attribution methods employed in good faith) by such
Bank (which determination shall be conclusive) to be necessary to compensate
such Bank or such Notional EuroRate Funding Office for such increase in cost,
reduction in income or additional expense. Such amount shall be due and payable
by Borrower to such Bank ten (10) Business Days after such notice is given. Such
notice shall be given to the Borrower within a reasonable time following such
Bank's determination of the amount owed.
(b) Indemnity. In addition to the compensation required by
Section 2.08(a) hereof, Borrower shall indemnify the Banks against any loss or
expense (including loss of margin) which any Bank has sustained or incurred as a
consequence of any:
(i) payment, prepayment or conversion (other than a
prepayment or conversion made pursuant to Section 2.05(d)
hereof) of any part of any Funding Segment of the CD Rate
Portion or the EuroRate Portion of the Loans on a day other
than the last day of the corresponding Funding Period (whether
or not such payment, prepayment or conversion is mandatory or
automatic and whether or not such payment or prepayment is
then due);
(ii) attempt by Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or part any
notice stated herein to be irrevocable (any Bank having in its
sole discretion the option (A)to give effect to such attempted
revocation and obtain indemnity under this Section 2.08(b) or
(B)to treat such attempted revocation as having no force or
effect, as if never made); or
(iii) default by Borrower in the performance or
observance of any covenant or condition contained in this
Agreement or the Notes or any other Loan Document, including
without limitation any failure of Borrower to pay when due (by
acceleration or otherwise) any principal, interest or any
other amount due hereunder or under the Notes or any other
Loan Document.
If any Bank sustains or incurs any such loss or expense it shall from time to
time notify Borrower of the amount determined in good faith by such Bank (which
determination shall be conclusive absent manifest error) to be necessary to
indemnify such Bank for such loss or expense (such Bank being deemed for this
purpose to have made, maintained or funded each Funding Segment of the CD Rate
Portion and the EuroRate Portion from a Corresponding Source of Funds). Such
amount shall be due and payable by Borrower to such Bank ten (10) Business Days
after such notice is given. Such notice shall be given to Borrower within a
reasonable time following such Bank's determination of the amount owed.
Section 2.09. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Any Bank shall have the right from time
to time, prospectively or retrospectively, without notice to Borrower, to deem
any branch, subsidiary or affiliate of such Bank to have made, maintained or
funded any part of the EuroRate Portion of the Loans at any time. Any branch,
subsidiary or affiliate so deemed shall be known as a "Notional EuroRate Funding
Office." Any Bank shall deem any part of the EuroRate Portion of the Loans or
the funding therefor to have been transferred to a different Notional EuroRate
Funding Office if such transfer would avoid or cure an event or condition
described in Section 2.05(e) hereof or would lessen any compensation or
indemnity payable to such Bank under Section 2.08 hereof, and if such Bank
determines in its sole discretion that such transfer would be practicable and
would not have a material adverse effect on such part of the Loans, such Bank or
any Notional EuroRate Funding Office (it being assumed for purposes of such
determination that each part of the EuroRate Portion of the Loans is actually
made or maintained by or funded through the corresponding Notional EuroRate
Funding Office). Notional EuroRate Funding Offices may be selected by each Bank
without regard to such Bank's actual methods of making, maintaining or funding
the Loans or any sources of funding actually used by or available to such Bank.
(b) Actual Funding. Any Bank shall have the right from time to
time to make or maintain any part of the EuroRate Portion of the Loans by
arranging for a branch, subsidiary or affiliate of such Bank to make or maintain
such part of the EuroRate Portion of the Loans. Any Bank shall have the right to
(i)hold any applicable Note payable to its order for the benefit and account of
such branch, subsidiary or affiliate or (ii)request Borrower to issue one or
more promissory notes in the principal amount of such part of the EuroRate
Portion of the Loans in substantially the form attached hereto as Exhibit A,
with the blanks appropriately filled, payable to such branch, subsidiary or
affiliate and with appropriate changes reflecting that the holder thereof is not
obligated to make any additional Loans to Borrower. Borrower agrees to comply
promptly with any request under subsection (ii) of this Section 2.09(b). If any
Bank causes a branch, subsidiary or affiliate to make or maintain any part of
the Loans hereunder, all terms and conditions of this Agreement shall, except
where the context clearly requires otherwise, be applicable to such part of the
Loans and to any note payable to the order of such branch, subsidiary or
affiliate to the same extent as if such part of the EuroRate Portion of the
Loans were made or maintained by such Bank and Such note were a Note payable to
such Bank's order.
Section 2.10. Fees; Termination or Reduction of Commitments.
(a) Fees.
(i)_ Amendment Fee. Borrower agrees to pay to the Agent, for
the account of each Bank in accordance with such Bank's
Percentage Share, as consideration for each Bank's agreement
to extend the Expiration Date of the Amended and Restated
Loan Agreement a fee payable on the date of the execution and
delivery of this Second Amended and Restated Loan Agreement
equal to 0.125% of the aggregate Commitments of the Banks
hereunder.
(ii) Facility Fees. Borrower agrees to pay to the
Agent, for the account of each Bank in accordance with such
Bank's Percentage Share, as consideration for each Bank's
Commitment hereunder, for each day during the period from the
date hereof through and including the Expiration Date, fees
(the "Facility Fees"), payable quarterly in arrears on the
last day of each fiscal quarter, on the average daily amount
of the sum of the Banks' Commitments (whether borrowed or
unborrowed) at a rate per annum (based on a year of 365 or 366
days, as the case may be) determined with reference to the
Consolidated Total Indebtedness to EBITDA Ratio for the period
of four consecutive fiscal quarters most recently completed
prior to such day, as follows: :
Consolidated Total Indebtedness
to EBITDA Ratio (X) Fee Rate
X > 4.25 .50%
3.75 < X < 4.25 .40%
3.25 < X < 3.75 .35%
2.75 < X < 3.25 0.30%
2.00 < X < 2.75 0.25%
1.25 < X < 2.00 0.20%
X < 1.25 0.175%
(iii) Administration Fee. As a consideration for the
Agent's administration of the credit facility contemplated by
this Agreement, Borrower agrees to pay to the Agent for the
Agent's own account an administration fee (the "Administration
Fee") in an amount, and at such times, as set forth in a
letter from Agent to Borrower dated on or about the date of
this Agreement.
(b) Reduction/Termination of Commitments. Borrower may at any
time or from time to time terminate in whole or reduce ratably the Commitments
of the Banks hereunder to an amount not less than the aggregate principal amount
of the Loans then outstanding, by giving not less than five (5) Business Days'
prior telecopied or telexed notice or telephoned notice confirmed in writing to
such effect to the Agent, provided that any such reduction shall be in the
aggregate amount of $1,000,000 or an integral multiple thereof. After each such
termination or reduction, the Facility Fees payable hereunder shall be
calculated upon the Commitments of the Banks as so reduced. Facility Fees shall
be paid quarterly on the last day of each fiscal quarter after the date hereof
to and including the Expiration Date of the Commitments and on the date of each
termination or reduction of the Banks' Commitments on the amount so terminated
or reduced, for the preceding period for which such fee has not been paid.
Section 2.11. Extension of Expiration Date.
(a) Request for Extension. Not more than 120 days, but not
later than the date 60 days, prior to the third Anniversary Date, Borrower may,
at its option, in a written notice to the Agent request (an "Extension Request")
that the Expiration Date be extended for a period of one year. The Agent shall
promptly inform the Banks of such Extension Request. Each Bank that agrees with
such Extension Request shall deliver to Agent its express written consent hereto
no later than 30 days prior to such Anniversary Date. Each Bank shall have the
right to withhold such consent in its sole discretion, and such consent may be
withheld regardless of whether any prior consent to any extension has been given
by any Bank.
(b) Extension. If all of the Banks shall have consented to any
such Extension Request, Agent shall so notify Borrower and then as of 5:00 p.m.
Pittsburgh time, on the date which is 1 day prior to such Anniversary Date the
Expiration Date shall be deemed to have been extended for, and shall be the
date, one year after the then effective Expiration Date.
(c) Additional Extension. The foregoing procedure may be
followed with respect to additional one-year extensions requested by Borrower
not more than 120 days, but not later than the date 60 days, prior to each
successive Anniversary Date after the third Anniversary Date; provided that, in
each case, any Extension Request made by the Borrower shall be subject to the
consent of all of the Banks, which consent may be withheld by any Bank in its
sole discretion, and which consent may be withheld regardless of whether any
prior consent to any extension has been given by any Bank.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Borrower, in addition to its other representations and
warranties contained herein or made pursuant hereto, hereby represents and
warrants to the Agent and each of the Banks that:
Section 3.01. Organization and Qualification. The Borrower and
each Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, and duly qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the nature of the Borrower's and each Guarantor's activities or ownership
(or leasing) of property, or both makes such qualification or licensing
necessary and where the failure to be so qualified or licensed would have a
material adverse effect on the financial condition or business of Borrower or
any Guarantor (as the case may be).
Section 3.02. Power and Authority. Borrower and each Guarantor
has corporate power and authority to make and carry out this Agreement and the
Loan Documents to which Borrower and any Guarantor are a party, and that
Borrower has the corporate power and authority to make the borrowings provided
for herein, and to perform its obligations hereunder and under the other Loan
Documents and under the Notes; and all such action has been duly authorized by
all necessary corporate proceedings on the part of the Borrower and each
Guarantor. Borrower and each Subsidiary have all requisite corporate power and
authority to own and operate their respective properties and to carry out their
respective businesses as now conducted and as presently contemplated to be
conducted.
Section 3.03. Financial Statements. Borrower has furnished to
each Bank copies of its 1997 audited consolidated financial statements of
Borrower and its Consolidated Subsidiaries for the fiscal year ended December31,
1997. The consolidated financial statements fairly present the financial
position of Borrower and its Consolidated Subsidiaries and the results of their
operations and the changes in financial position for the periods then ended, in
conformity with GAAP.
Section 3.04. Litigation or Proceedings; Commitments and
Contingencies.
(a) There is no litigation or governmental proceeding by or
against Borrower or any Subsidiary pending or, to the knowledge of Borrower,
threatened which, in the opinion of Borrower, involves any substantial risk of
any material adverse effect on the financial condition or business of the total
enterprise represented by Borrower and its Subsidiaries on a consolidated basis.
As of the date of this Agreement, Borrower and its Subsidiaries are parties to
the pending litigation or governmental investigations or proceedings, involving
exposure to possible loss individually in the amount of $500,000 or more,
identified in the Schedule of Litigation attached hereto as Schedule3.04.
(b) Neither Borrower nor any of its Subsidiaries has any known
contingent liabilities which, in the opinion of Borrower, could have a material
adverse effect on the financial condition or business represented by Borrower
and its Subsidiaries on a consolidated basis which are not referred to (i)in the
financial statements referred to in Section 3.03 hereof, (ii)in the notes
thereto, or (iii)in Section 5.02(d) hereof.
Section 3.05. Material Adverse Change. Since December31, 1997,
there has been no material adverse change in the business, assets or financial
condition of the total enterprise represented by Borrower and its Subsidiaries
on a consolidated basis.
Section 3.06. Title to Properties.
(a) Borrower and each Guarantor have and will have good and
marketable title to all material properties, assets and other rights which they
purport to own, or which are reflected in their books and records other than
leasehold property, free and clear of all Liens (except those permitted by
Section5.02(c) hereof and those which are not material to the business or
financial condition of Borrower or such Guarantor (as the case may be)).
(b) Borrower and each Guarantor have good and marketable title
to all Eligible Accounts and all Eligible Inventory, free and clear of all Liens
except Liens permitted under clause (1), (2), (4) or (6) of Section5.02(c)
hereof.
(c) All information set forth in the financial statements,
other documents and reports furnished by Borrower to the Agent or the Banks from
time to time is true, correct and complete and is expressly incorporated herein
by this reference.
(d) On each occasion on which Borrower evidences to the Agent
the balances on and the nature and extent of those accounts in which Borrower or
any Guarantor has rights, Borrower shall be deemed to have warranted, to the
best of its knowledge after due inquiry in accordance with established credit
and accounting policies, that (i)every account so evidenced is valid and
enforceable without performance by any person of any other act, (ii)the balances
so evidenced are in fact owing to Borrower and (iii)there are no setoffs,
counterclaims or defenses against any such account.
Section 3.07. No Conflict with Other Documents; Authorizations
and Approvals. Neither the execution and delivery of this Agreement or any of
the other Loan Documents, the consummation of the transactions herein and
therein contemplated nor compliance with the terms and provisions hereof or
thereof will conflict with or result in a breach of any of the terms, conditions
or provisions of the articles or by-laws of Borrower or any Guarantor or of any
law or of any regulation, order, writ, injunction or decree of any court or
governmental instrumentality or of any material agreement or instrument to which
Borrower or any of its Subsidiaries (including without limitation any Guarantor)
is a party or by which it is bound or to which it is subject, or constitute a
default thereunder or result in the creation or imposition of any security
interest, Lien, charge or encumbrance of any nature whatsoever upon any of the
material properties of Borrower or of any of its Subsidiaries pursuant to the
terms of any such agreement or instrument. No approval, authorization or other
action by any governmental authority or any other person, firm or corporation is
required to be obtained by Borrower or any of its Subsidiaries in connection
with the execution, delivery and performance of this Agreement, the other Loan
Documents, or any other agreement between or among any or all of the Banks and
Borrower or any of its Subsidiaries or the transactions contemplated hereby or
thereby, or the making of any borrowing by Borrower hereunder.
Section 3.08. Tax Returns. The Borrower and each Guarantor has
filed all Federal tax returns which are required to be filed and all other tax
returns which are required to be filed (except for tax returns for which an
unexpired extension has been granted by the appropriate Official Body) and has
paid, or made adequate provision for the payment of, all taxes which have or may
become due pursuant to said returns or to assessments received. All Federal tax
returns of the Borrower through the fiscal years ended on December 31, 1992 have
been audited by the Internal Revenue Service or are not subject to such audit by
virtue of the expiration of the applicable period of limitations and the results
of such audits are fully reflected in the most recent balance sheet referred to
in Section 3.03 hereof. The Borrower knows of no material additional assessment
since said date for which adequate reserves appearing in the said balance sheet
have not been established. The Borrower and each Guarantor have made adequate
provision for all current taxes, and in the opinion of the Borrower there will
not be any material additional assessments for any fiscal periods prior to and
including that which ended December 31, 1988 in excess of the amounts reserved
therefor in such balance sheet.
Section 3.09. Validity and Binding Effect. This Agreement has
been duly and validly executed and delivered by Borrower. This Agreement
constitutes, and the other Loan Documents when duly executed and delivered by
Borrower and each Guarantor pursuant to the provisions hereof will constitute,
valid and binding obligations of Borrower and each Guarantor, enforceable in
accordance with their respective terms except as such enforceability may be
limited by bankruptcy, insolvency, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
Section 3.10. Regulations G, U, T and X; Investment Company
Status. Neither Borrower nor any Subsidiary is engaged principally, or as one of
its most important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock. This Agreement does not violate
Regulations G, U, T, and X of the Board of Governors of the Federal Reserve
System. Neither Borrower nor any Subsidiary, or any agent acting on the behalf
of Borrower or any Subsidiary, has taken any action or will take any action that
might cause this Agreement or any Note to violate Regulations G, U, T, and X or
any other regulation the Board of Governors of the Federal Reserve System or to
violate Section 7 of the Securities Act of 1934, as in effect from time to time.
Neither Borrower nor any Guarantor is an "investment company" or a company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as amended.
Section 3.11. ERISA Compliance. (a)Borrower or any of its
Subsidiaries or member of a Controlled Group maintains only the Plans described
on the Schedule of Plans attached hereto as Schedule 3.11; (b)each Plan has been
funded in all material respects in accordance with its terms and with the
minimum funding standards of Part Three of Title I of ERISA and will be funded
in all material respects in accordance with such terms and standards; (c)each
Plan has been maintained in accordance with its terms and with all provisions of
ERISA applicable thereto and will be maintained in all material respects in
accordance with such terms and will be in material compliance with ERISA; (d)no
Reportable Event which would have a material adverse effect on the Plan Employer
and which could cause PBGC to institute proceedings under Section 4042 of ERISA
has occurred and is continuing with respect to any Plan; (e)no material
liability to PBGC has been incurred with respect to any Plan, other than for
premiums due and payable; (f)except as disclosed on Schedule 3.11, no Plan has
been terminated, no proceedings have been instituted to terminate any Plan, and
no decision has been made by the board of directors of a Plan Employer or by the
Plan administrator to terminate or institute proceedings to terminate any Plan;
(g)no withdrawal, either complete or partial, has occurred or commenced with
respect to any multiemployer Plan and no decision has been made by the board of
directors of a Plan Employer or by the Plan administrator either to completely
or partially withdraw from any multiemployer Plan; and (h)except as disclosed on
Schedule 3.11, there has been no cessation of, and no decision has been made by
the board of directors of a Plan Employer or by the Plan administrator to cease,
operations at a facility or facilities where such cessation could reasonably be
expected to result in a separation from employment of more than 20% of the total
number of employees who are participants under a Plan. Each single-employer Plan
has been timely amended to comply with all the applicable provisions of the Tax
Equity and Fiscal Responsibility Act of 1982, the Deficit Reduction Act of 1984
and the Retirement Equity Act of 1984, and the Borrower has no knowledge of any
fact relating to any Plan which involves any substantial risk or reasonable
possibility of resulting in a material adverse change in the financial condition
of Borrower and its Subsidiaries taken together as a whole. Borrower has
provided to the Agent and each of the Banks a copy of the most recent Annual
Report (Form 5500 or 5500C), including all attachments thereto, filed with the
Internal Revenue Service in respect of each Plan and each such Annual Report
fairly presents the funding status of the Plan to which it relates. There has
been no material deterioration in the funding status of any Plan since the date
of the Annual Report filed in respect thereof.
Section 3.12. Defaults. Neither Borrower nor any Subsidiary is
in default under any provision of its charter or bylaws or, so as to affect
adversely in any material manner the business or assets or the condition,
financial or otherwise, of Borrower on an individual basis, or of the Borrower
and its Subsidiaries on a consolidated basis, under any provision of any
agreement, lease or other instrument to which it is a party or by which it is
bound.
Section 3.13. Compliance with Laws. To the best of Borrower's
knowledge, except as set forth in Schedule 3.13 hereto, neither Borrower nor any
Subsidiary is in violation of or subject to any contingent liability on account
of any Law (including but not limited to ERISA, the Code, any applicable
occupational and health or safety Law, environmental protection Law, or
hazardous waste or toxic substances management, handling or disposal Law and
including but not limited to (a)any restrictions, specifications or requirements
pertaining to products that either Borrower or any Subsidiary manufactures,
processes or sells or pertaining to the services each performs, (b)the conduct
of their respective businesses and (c)the use, maintenance or operation of the
real and personal properties owned or possessed by them), except for violations
which in the aggregate do not have a material adverse effect on the business,
operations or financial condition of Borrower or the Subsidiary which is in
violation of such Law.
Section 3.14. Disclosure. To the best knowledge of Borrower,
neither this Agreement nor any agreement, document, certificate or statement
furnished to the Agent or the Banks by or on behalf of Borrower in connection
with the transactions contemplated hereby contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading.
Section 3.15. Continuing Effect. All representations and
warranties of Borrower hereunder are and shall be continuing ones and shall be
true, correct and complete so long as Borrower or any Guarantor shall have
obligations outstanding and unperformed under this Agreement and the other Loan
Documents.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Bank to make Loans hereunder are
subject to the accuracy, as of the date hereof, of the representations and
warranties herein contained, to the performance by Borrower of its obligations
to be performed hereunder on or before the date of each such Loan and to the
satisfaction of the following further conditions:
Section 4.01. First Revolving Credit Loans. At the time of
the making of the initial Loans
after the date of this Agreement:
(a) The Agent shall have received the following
documents:
(i) Opinion of Counsel for the Borrower. A favorable
opinion of Xxxxx Xxxxx, Esq., counsel for Borrower, dated the
date of the initial Loans, in form and scope satisfactory to
Xxxx Xxxxx Xxxx & XxXxxx LLP, special counsel for the Agent
and the Banks, as to (A)the matters referred to in Sections
3.01, 3.02, 3.07, and 3.09 hereof; and (B)such other matters
incident to the transactions herein contemplated as the Agent
and said special counsel may reasonably request;
(ii) Certified Resolutions, Articles of Incorporation
and Bylaws, etc. (A)Copies of all documents evidencing
corporate action taken by Borrower relative to this Agreement
and the other Loan Documents in form and substance
satisfactory to the Agent and said special counsel for the
Agent and the Banks, certified by the Secretary of Borrower,
(B)copies of the Articles of Incorporation and By-Laws of
Borrower (such Articles of Incorporation and By-Laws being
certified by the Secretary of Borrower) and (C)certificates,
dated a recent date, of the Secretary of State or other
similar officials as to the good standing of Borrower under
the laws of the state of its incorporation;
(iii) Incumbency Certificates. Certificates, signed
by a Secretary or an Assistant Secretary of Borrower,
certifying as to the name of the officer or officers of
Borrower authorized to sign this Agreement and the other Loan
Documents and as to the specimens of the true signatures of
such officer or officers, on which the Agent and the Banks may
conclusively rely until a revised certificate is similarly so
delivered;
(iv) Officer's Certificate. Certificates,
signed by a Responsible Officer of
Borrower as to the fulfillment of the condition precedent set
forth in Sections
4.01(b)(i)-(iii) hereof;
(v) Other Loan Documents. The duly executed Notes,
initial Accounts Receivable-Inventory Report, any required
Subsidiary Guaranty and Suretyship Agreements and Guarantor
Security Agreements in form and substance satisfactory to the
Agent and the Banks, a certificate of the Borrower to the
effect that the Subsidiaries, if any, which are providing such
Agreements are the only Subsidiaries of the Borrower which are
not Designated Subsidiaries and such other Loan Documents as
the Agent and the Banks may request; and
(b) The following conditions precedent shall be
satisfied:
(i) Representations and Warranties. Borrower's
representations and warranties in Article III hereof shall be
true and accurate with the same effect as though such
representations and warranties had been made on and as of such
date (except representations and warranties which relate
solely to an earlier date);
(ii) Absence of Event of Default. No Event of
Default and no Potential Event of
Default shall have occurred and be continuing or shall exist;
(iii) Compliance with Covenants. Borrower shall
be in compliance with the
covenants set forth in Article V hereof;
(iv) Opinion of Accountants. The report of
independent certified public accountants accompanying the most
recent audited financial statements delivered pursuant to
Section 5.03 hereof shall not contain any material
qualification or exception not acceptable to the Agent;
(v) Material Adverse Change. No material adverse
change (individually or in the aggregate) shall have occurred,
in the reasonable judgment of the Agent, with respect to the
condition (financial or otherwise), business, assets or
financial condition of the total enterprise represented by
Borrower and its Subsidiaries on a consolidated basis from the
date of the last audited financial statements delivered
pursuant to Section 5.03 hereof to the date of such borrowing;
(vi) Legal Details. All legal details and proceedings
in connection with the transactions contemplated by this
Agreement and all documents delivered to the Agent pursuant to
this Section 4.01 shall be in form and substance satisfactory
to the Agent and the Agent shall have received all such
counterpart originals or certified or other copies of such
documents and proceedings in connection with such
transactions, in form and substance satisfactory to the Agent,
as the Agent shall reasonably request; and
(vii) Amendment Fee. The Borrower shall have paid to
the Agent, for the pro rata benefit of the Banks, an amendment
fee equal to 0.125% of the aggregate Commitments of the Banks.
Section 4.02. Subsequent Revolving Credit Loans; Letters of
Credit. The making of Loans made subsequent to the initial Loans made pursuant
to Section4.01 hereof and the issuance of Letters of Credit, shall be made
subject to the following terms and conditions:
(a) Effect of Borrowing Request or Application. The submission
of a Notice of Borrowing pursuant to Section 2.04 hereof subsequent to the date
of this Agreement and the submission of an Application pursuant to Section 2.02
hereof, shall be deemed to be a certification, as of the date of such submission
or request, that:
(i) Representations, Warranties and Covenants. The
representations and warranties in Article III hereof shall be
true and accurate with the same effect as though such
warranties and representations had been made on and as of such
date (except representations and warranties which relate
solely to an earlier date) and Borrower is in compliance with
the covenants set forth in Article V hereof; and
(ii) Event of Default. No Event of Default or
Potential Event of Default shall have occurred and be
continuing or shall exist.
(b) Legal Details. All legal details and proceedings in
connection with the transactions contemplated by this Agreement shall be in form
and substance satisfactory to the Agent and the Agent shall have received all
such counterpart originals or certified or other copies of such documents and
proceedings in connection with such transactions, in form and substance
satisfactory to the Agent, as the Agent shall reasonably request.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants Other Than Reporting
Requirements. Borrower covenants to the Agent and each of the Banks that, so
long as Borrower may borrow hereunder and until payment in full of all of the
Debt, Borrower will:
(a) Preservation of Corporate Existence, etc. Preserve and
maintain, and cause each Guarantor to preserve and maintain, its corporate
existence, rights, franchises, licenses, and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified as a foreign corporation in
each jurisdiction in which such qualification is necessary in view of its
business and operations or the ownership of its properties, except where the
failure to do so would not have a material adverse effect on the financial
condition or business of Borrower or any Guarantor.
(b) Payment of Taxes, etc. Pay and discharge, and cause each
Subsidiary to pay and discharge, all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any properties
owned by it, prior to the date on which penalties attach thereto, and all lawful
claims for labor, materials or supplies which, if unpaid, might become a Lien
upon any material properties of Borrower or any Subsidiary, provided that
neither Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings and for which Borrower or the Subsidiary in question shall
have set aside on its books in accordance with GAAP appropriate reserves with
respect thereto.
(c) Compliance with Laws. Comply, and cause each Subsidiary to
comply, with all applicable Laws (including but not limited to ERISA, the Code,
and any applicable tax law, occupational safety or health Law, or environmental
protection or pollution control Law) in all material respects; provided that
Borrower shall not be deemed to be in violation of this Section 5.01(c) as a
result of any failure to comply that would not result in fines, penalties,
injunctive relief or other civil or criminal liabilities which, in the
aggregate, would materially affect the business, operations or financial
condition of Borrower and its Subsidiaries taken as a whole or the ability of
the Borrower to perform its obligations under this Agreement or any other Loan
Document.
(d) Maintenance of Insurance. Maintain, and cause each
Subsidiary to maintain, insurance on its or their properties with responsible
and reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which Borrower or such
Subsidiary operates. Borrower will deliver to the Agent, at the time of making
the first Loans and on the last day of each fiscal year thereafter a statement
or insurance company certificate in such detail as the Agent may request as to
all insurance coverage of Borrower and all of its Subsidiaries.
(e) Maintenance of Properties, etc. Maintain, keep and
preserve, and cause each Subsidiary to maintain, keep and preserve, all of its
properties (tangible and intangible) which are necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted, except where the failure to do so would not effect adversely the
financial condition or business of Borrower or the Subsidiary which owns such
property.
(f) Financial Accounting Practices. Make, and shall cause each
Subsidiary to make, and keep books, records and accounts which, in reasonable
detail and determined on a consolidated basis for Borrower and its Consolidated
Subsidiaries, accurately and fairly reflect transactions and dispositions of
assets and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (i)transactions are executed in accordance
with management's general or specific authorization, (ii)transactions are
recorded as necessary (A)to permit preparation of consolidated financial
statements in conformity with GAAP and (B)to maintain accountability for assets,
(iii)access to assets is permitted only in accordance with management's general
or specific authorization and (iv)the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(g) Visitation Rights. At any reasonable time and from time to
time, permit the Agent or the Banks or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, Borrower and any of the Subsidiaries, and to
discuss the affairs, finances and accounts of Borrower and any of the
Subsidiaries with any of their respective officers, employees, or directors or
independent accountants.
(h) Maintenance of Minimum Consolidated Fixed Charge Coverage
Ratio. Maintain a Consolidated Fixed Charge Coverage Ratio greater than or equal
to 1.25 to 1 as of the end of each month on the basis of the twelve consecutive
months then ending.
(i) Maintenance of Minimum Consolidated Tangible Net Worth.
From and after July1, 1998, maintain at all times a Consolidated Tangible Net
Worth greater than or equal to the sum of (A)59,102,000 plus (b)50% of the
cumulative positive Consolidated Net Income for all completed fiscal quarters of
the Borrower commencing with the fiscal quarter ending March31, 1998, plus
(c)75% of the cumulative amount of the proceeds (net of issuance expenses) to
the Borrower of the issuance after December31, 1997 of the Borrower's capital
stock. For purposes of this Section 5.01(i) only, Consolidated Net Income shall
not include any loss attributable to any such period of determination.
(j) Maintenance of Maximum Consolidated Total Indebtedness to
EBITDA Ratio. Maintain a Consolidated Total Indebtedness to EBITDA Ratio less
than or equal to 4.75 to 1 as of the end of each month on the basis of the
period of twelve consecutive months then ending.
(k) ERISA Covenants. (i)Cause each Plan Employer with respect
to its Plans (A) to satisfy the minimum funding standards of Section 412 of the
Code with respect to any single-employer Plan and (B)to comply in all material
respects with the provisions of ERISA and the Code which are applicable to any
Plan and (ii)not permit any Plan Employer with respect to its Plans (A)to
terminate any single-employer Plan which could result in any liability to the
PBGC under Title IV of ERISA as set forth on IRS Form 5310 in an amount greater
than $500,000 for any individual Plan or greater than $750,000 for any group of
Plans terminated in any calendar year, (B)to engage in any prohibited
transaction as described in Section 406 of ERISA or to incur a Reportable Event,
(C)to withdraw from any multi-employer Plan which could result in the incurrence
of withdrawal liability in an amount greater than $500,000, (D)to adopt any new
Plan without prior written notice to the Agent and the Banks, (E)to lose the
qualified status of any Plan under Section 401 of the Code or the exempt status
of any related trust under Section 501 of the Code or (F)to cease operations at
a multiple-plant facility within the meaning of Section 4062(e) of ERISA and
which could reasonably be expected to result in liability to the PBGC under
Title IV of ERISA in an amount greater than $750,000, whether or not such
liability is paid to the PBGC or secured by the filing of a bond with the PBGC.
(l) Satisfaction of Judgments. Pay or otherwise satisfy, and
cause of each of its Subsidiaries to pay or otherwise satisfy, every final
judgment from which no further appeal may be taken in excess of $100,000 entered
against it or such Subsidiary within 60 days after entry thereof or after the
expiration of any stay of execution with respect thereto.
(m) Maintenance of Minimum Eligible Accounts. On each day when
the Borrower's Consolidated Fixed Charge Coverage Ratio for the period of twelve
consecutive months ending on the day before the first day of the then most
recently completed month is less than or equal to 1.75 to 1, maintain Eligible
Accounts which are, in the aggregate, greater than or equal to the product of
(i)forty percent (.40) times (ii)the sum of all Debt outstanding on such day
under this Agreement.
(n) Environmental Covenant. Notwithstanding the provisions of
Section5.01(d) hereof, Borrower will, and will cause each of its Subsidiaries to
(i)use and operate all of its facilities and properties in material compliance
with all environmental Laws (including, but not limited to, those Laws designed
to protect human health and the environment), keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance therewith, and
handle all hazardous substances and materials, toxic materials and all other
materials hazardous to human health or the environment in material compliance
with all applicable environmental Laws; provided that Borrower shall not be
deemed to be in violation of this Section5.01(n)(i) as a result of any failure
to comply that would not result in fines, penalties, injunctive relief or other
civil or criminal liabilities which, in the aggregate, would materially affect
the business, operations or financial condition of Borrower and its Subsidiaries
taken as a whole or the ability of the Borrower to perform its obligations under
this Agreement or any other Loan Document, (ii)immediately notify the Agent and
provide copies upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties in
connection with environmental Laws, or compliance with or responsibility under
environmental Laws, that may give rise to liability or responsibility under
applicable environmental Laws, (iii)promptly respond in an appropriate manner to
any such claims, complaints, notices or inquiries and, additionally, take action
where appropriate to remedy any such alleged condition or non-compliance with
environmental good faith by proper proceedings; and (iv)provide such information
and certifications which the Agent may reasonably request from time to time to
evidence compliance with this Section 5.01(n).
o. Guarantors. Upon the execution and delivery of this
Agreement (with respect to Subsidiaries of the Borrower on the date of such
execution and delivery ) and upon the acquisition or formation after such date
of any Subsidiary of the Borrower, Borrower immediately will provide notice to
the Agent of the Subsidiary's status as a Guarantor or a Designated Subsidiary,
as the case may be, together with such other information as the Agent or any
Bank shall reasonably request, and will cause each Subsidiary which is not a
Designated Subsidiary to execute and deliver a Subsidiary Guaranty and
Suretyship Agreement, pursuant to which such Subsidiary shall guaranty
Borrower's obligations hereunder, a Guarantor Security Agreement, pursuant to
which such Subsidiary will grant to the Agent, for the benefit of the Banks, a
security interest in its Collateral, and such other agreements, instruments or
other documents as the Agent or any Bank may reasonably request, all in form and
substance satisfactory to the Agent and the Banks. Borrower will, and will cause
any such Subsidiary to, maintain and preserve such Subsidiary's status as a
Guarantor until such time that Borrower designates such Subsidiary as a
Designated Subsidiary pursuant to Section 5.04 below.
Section 5.02. Negative Covenants. Borrower covenants that,
so long as Borrower may borrow
hereunder and until payment in full of the Debt, Borrower will not:
(a) Indebtedness. Create, incur, assume, guarantee or be or
remain liable for, contingently or otherwise, or suffer to exist, or permit any
Subsidiary to create, incur, assume, guarantee or be or remain liable for,
contingently or otherwise, or suffer to exist, any Indebtedness (including
Guarantees) other than the following:
(1) Indebtedness in respect of obligations to
the Agent and the Banks hereunder or
under the other Loan Documents;
(2) Indebtedness in the ordinary course of business,
in respect of accounts payable, accrued payroll expenses,
accrued pensions, progress xxxxxxxx and, unbilled retentions
in excess of related cost, estimated replacements on sales,
deferred income taxes, liabilities of a character described as
accrued liabilities on the consolidated balance sheet of
Borrower and its Consolidated Subsidiaries, other taxes,
assessments, governmental charges, and claims for labor,
materials or supplies to the extent that payment thereof shall
not at the time be required to be made in accordance with the
provisions of Section 5.01(b) hereof;
(3) Indebtedness not existing on the date hereof
arising in respect of the purchase of property on which Liens
are permitted under clause (5) of Section 5.02(b) hereof;
(4) Indebtedness (other than Capitalized Leases)
existing on the date hereof and set forth on Schedule 5.02(a)
attached hereto or reflected in the financial statements
delivered pursuant to Section 3.03 hereof;
(5) Indebtedness arising in respect of Capitalized
Leases which in the aggregate do not provide for payments
during any fiscal year in excess of $2,500,000;
(6) Private Placement Debt, which shall be
permissible only in the event of the execution and delivery of
an intercreditor agreement (the "Intercreditor Agreement")
between the Agent and the purchaser of the Private Placement
Debt, which agreement shall contain such terms and conditions
as are appropriate and as are satisfactory to the Agent,
including but not limited to provisions for the pari passu
treatment of any collateral and for the acceleration of any
Indebtedness;
(7) Indebtedness assumed or incurred by Borrower not
exceeding $2,045,000 principal amount evidenced by, or in
connection with, industrial development revenue bonds relating
to facilities of Precise Fabricating Corporation acquired by
Borrower;
(8) Intercompany Indebtedness in the form of a
promissory note executed by the Borrower in favor of Holding
Company Subsidiary in a maximum principal amount of
$15,000,000; provided that (i)prior notice of the execution
thereof shall have been given to the Agent and the Banks,
(ii)Borrower's board of directors has determined that such
intercompany Indebtedness is in the best interest of Borrower
and its Subsidiaries, (iii) Borrower is continuing to receive
the intended tax benefit in connection with such intercompany
Indebtedness, (iv) neither Holding Company Subsidiary nor any
Wholly-Owned Subsidiary of Holding Company Subsidiary shall
have any creditors other than the Borrower, except that
Holding Company Subsidiary and its Subsidiaries (all of which
shall be Wholly-Owned) may have creditors other than Borrower
for Indebtedness (other than Indebtedness for borrowed money)
incurred in the ordinary course of business up to an aggregate
amount outstanding at any one time of $100,000, (v) Holding
Company Subsidiary or any Wholly-Owned Subsidiary of Holding
Company Subsidiary shall continue to hold title, right and
interest to Borrower's trademarks, patents, investment
securities and debt assets (vi) Holding Company Subsidiary and
its Subsidiaries (all of which shall be Wholly-Owned) shall
continue to manage the trademarks, patents, investment
securities and debt assets of Borrower only, and shall not
engage in any other business (other than making the
intercompany loan to Borrower permitted by this Section
5.02(a)(8)) without the prior written consent of the Agent and
the Required Banks.
(9) Other Indebtedness in an aggregate principal
amount not exceeding $1,500,000 at any time outstanding.
(b) Negative Pledge; Liens. (i)Create, assume, incur, or
suffer to be created, assumed, incurred or to exist, or permit any Subsidiary to
create, incur, assume or suffer to exist, any Lien upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; or (ii)transfer or permit any Subsidiary to
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors; or
(iii)acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement, including, without limitation, Capitalized Leases; or
(iv)suffer to exist any Indebtedness which if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given priority over its general
creditors; or (v)enter, or permit or cause any Subsidiary to enter into any
agreement which purports to restrict in any manner the ability of the Borrower
or any Subsidiary to grant security interests or liens to the Agent for the
benefit of the Agent and the Banks, in respect of assets either of the Company
or of any Subsidiary, which assets have not theretofore been encumbered or made
subject to the grant of a security interest in favor of or for the benefit of
the Agent and the Banks; provided, however, that the Borrower and its
Subsidiaries may create or incur or suffer to be created or incurred or to
exist:
(1) Liens in favor of the Agent for the benefit
of the Agent and the Banks;
(2) Nonconsensual Liens to secure claims for
Indebtedness permitted by Section
5.02(b)(2) hereof;
(3) Liens existing on the date hereof and Liens
securing Indebtedness permitted by
Section 5.02(b) hereof;
(4) Deposits or pledges made in connection with, or
to secure payment of, workers' compensation, unemployment
insurance, old age pensions or other social security
obligations;
(5) Purchase money security interests (including
mortgages, conditional sales, and any other title retention or
deferred purchase devices) in personal property of Borrower or
a Subsidiary existing or created at the time of acquisition
thereof, and the renewal, extension and refunding of any such
security interest in an amount not exceeding the amount
thereof remaining unpaid immediately prior to such renewal,
extension or refunding; provided, however, that the principal
amount of Indebtedness secured by each such security interest
in each item of property does not exceed the cost (including
all such Indebtedness secured thereby, whether or not assumed)
of the item subject thereto;
(6) Liens securing taxes, assessments or governmental
charges or levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like
persons, provided the payment thereof is not at the time
required by Section 5.01(b);
(7) Liens incurred or deposits made in the ordinary
course of business (x) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases, statutory
obligations, surety, appeal and performance bonds and other
similar obligations not incurred in connection with the
borrowing of money, the obtaining of advances or the payment
of the deferred purchase price of property, or payment of the
deferred purchase price of property, or (y) on the proceeds of
insurance policies securing the borrowings to finance the
premiums thereon;
(8) Attachment, judgment and other similar Liens
arising in connection with court proceedings, so long as such
Liens have not been in force for the applicable appeal period,
execution or other enforcement has not been levied and
thereafter so long as the execution or other enforcement of
such Liens is effectively stayed, provided the claims secured
thereby are being actively contested in good faith and by
appropriate proceedings;
(9) Liens on property of a Subsidiary securing
obligations owing to Borrower or a
Wholly-Owned Subsidiary;
(10) Reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions,
leases and other similar title exceptions or encumbrances
affecting real property, provided they do not in the aggregate
materially interfere with the ordinary conduct of the business
of Borrower and its Subsidiaries;
(11) Liens or deposits made in connection with
contracts with or made at the request of the United States of
America or any department or agency thereof or resulting from
progress payments or partial payments under any such
contracts;
(12) Bailments of property (a)to bailees which have
entered into an agreement with Borrower and the Agent in
substantially the form attached hereto as Exhibit E, with
blanks appropriately filled, as the same may be amended,
supplemented or modified from time to time, provided, however,
that Borrower may enter into an agreement or agreements
regarding the bailment of commingled goods which are not
substantially in the form of Exhibit E so long as the value of
commingled goods subject to such bailments does not exceed
$250,000 in the aggregate, or (b)other bailments of property,
including bailments in connection with Borrower's relay rail
activities and consistent with Borrower's past practices,
provided, however, that the value of such bailments does not
exceed $20,000,000 in the aggregate for all such property; and
(13) Liens in favor of one or more of the Banks to
secure the obligations of the Company under one or more
Interest Rate Swap Agreements (as defined in the Security
Agreement).
(c) Contingent Liabilities. Become liable or permit any
Subsidiary to become liable in respect of any Guarantees except (i)Guarantees
existing on the date hereof and disclosed on Schedule 5.02(c) attached hereto,
(ii)Guarantees entered into by Borrower for the benefit of one or more
Wholly-Owned Subsidiaries of Borrower, (iii)Guarantees which may be required in
order to comply with applicable Law, including but not limited to ERISA,
(iv)Guarantees or obligations arising in respect of bid or performance bonds,
(v)Guarantees in favor of the Banks, and (vi)other Guarantees which in the
aggregate could not result in payments in excess of $1,000,000.
(d) Mergers, etc. Merge or consolidate with any person or
agree to do so or permit any Subsidiary to do so, or create or acquire any new
Subsidiary, except that, after notice to the Agent and the Banks, (i)any
Subsidiary of Borrower may merge with Borrower in a transaction where Borrower
is the surviving entity, (ii)any Subsidiary may merge with any other Subsidiary,
and (iii)Borrower may create Subsidiaries not existing on the date hereof for
the purpose of effecting transactions permitted under clause (5) of Section
5.02(f) hereof.
(e) Sales of Assets, etc. Sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) any of
its assets (whether now owned or hereafter acquired) to any person or entity, or
permit any Subsidiary to do so, except (i)sales of assets in the ordinary course
of business, (ii)sales of inventory previously categorized as obsolete, slow
moving or surplusage and sales of machinery, equipment or other similar
operating assets previously categorized as obsolete or surplusage and not
utilized at the time of such sale in the ordinary course of business of the
selling entity, (iii)sales of artwork, (iv)sales of the stock of Subsidiaries
permitted to be created under Section 5.02(e)(iii) hereof, (v)after notice to
the Agent and the Banks, sales of properties and assets following an approval by
Borrower's board of directors that such sales are made for cash on commercially
reasonable terms at fair market value and do not exceed 5% of Consolidated
Tangible Net Worth (at the beginning of the applicable fiscal year) in any given
fiscal year of the Borrower or 15% of Consolidated Tangible Net Worth (at the
beginning of the applicable fiscal year) in the aggregate during the term of
this Agreement (provided that the net cash proceeds of asset sales which shall
have been reinvested by the Borrower or any Subsidiary of the Borrower, in
accordance with, and as permitted by, Section 5.02(f)(5) of this Agreement, in
tangible assets having comparable value shall be deducted as of the date of such
permitted reinvestment in calculating compliance with the 15% limitation in this
clause (v)), (vi)a lease or sublease of new machining equipment valued at
approximately $1,500,000 to Rail Products & Fabrications, Inc., based in
Seattle, Washington ("RPF"), (viii)after notice to the Agent and the Banks, and
with the approval of the Borrower's board of directors, the sale of all or any
portion of the Borrower's Xxxxxxxxx, Texas manufacturing plant, and the land,
buildings, equipment, inventory, books, records and other property related
thereto at any time on or prior to June30, 1999, and (ix) sales of Borrower's
investment in Dakota, Minnesota & Eastern Railroad Corp. for a price at least
equal to the value of that investment as shown in the then most recent financial
statements of the Borrower provided to the Agent. By the Agent and the Banks
agreeing to permit a sale, assignment, lease or other disposition of assets by
the Borrower pursuant to this Section 5.02(e), the Banks shall automatically,
and without the need for further action on the part of the Agent or the Banks,
be deemed to have (1)consented to the release by the Agent, immediately prior to
the disposition of such assets, of all liens and security interests in such
assets held by the Agent for itself and as agent for the benefit of the Banks
under the Loan Documents, and (2)directed the Agent to take all appropriate and
customary action required to assure and to effect the full and complete release
of all of such liens and security interests in such assets.
(f) Investments. Make or permit any Subsidiary to make
Investments in any individual, firm or corporation except:
(1) direct obligations of or obligations directly
guaranteed by the United States of America, prime commercial
paper (rated by Xxxxx'x Investors Service at not less than A-2
and by Standard & Poors at not less than P-2), and
certificates of deposit or repurchase agreements issued by any
commercial bank having capital and surplus in excess of
$100,000,000;
(2) Investments of Borrower and the Subsidiaries in
the ordinary course of business and under usual and customary
terms in the form of advances to the Borrower's and the
Subsidiaries' suppliers and subcontractors;
(3) Investments in foreign Subsidiaries, and in
Subsidiaries (other than Wholly-Owned Subsidiaries) and joint
ventures, in each case the business of which is reasonably
related to the Borrower's principal lines of business,
provided that (i)prior notice thereof shall have been given to
the Agent and the Banks, (ii)each such Investment shall be
made in connection with and following a determination by
Borrower's board of directors that such Investment is in the
best interest of Borrower and its Consolidated Subsidiaries,
and (iii) the amount of such Investments shall not exceed
$2,500,000 in any given fiscal year of the Borrower;
(4) Deposit accounts (including time and demand) in
and bankers' acceptances of commercial banks referred to in
clause (1) of subsection 5.02(f);
(5) Investments in domestic Wholly-Owned Subsidiaries
not in existence on the date of this Agreement, domestic
product lines not part of the Borrower's business on the date
of this Agreement, or new domestic businesses not operated by
the Borrower on the date of this Agreement, in each case the
business of which is reasonably related to the Borrower's
principal lines of business and in each case in a single
transaction or related series of transactions, provided that
(i)prior notice thereof shall have been given to the Agent and
the Banks, (ii)each such Investment shall be made in
connection with, and following, a determination by Borrower's
board of directors that such Investment is in the best
interest of Borrower and its Consolidated Subsidiaries, and
(iii) the aggregate amount of such Investments during any
period of four consecutive fiscal quarters including the then
current fiscal quarter (the "Measurement Period") shall not
exceed the sum of $5,000,000 (or, if the "Pro Forma Test"
described in the next sentence is met with respect to a
particular proposed Investment, $10,000,000) plus the amount
of cash proceeds of asset sales made in accordance with, and
as permitted by, Section 5.02(e)(v) in tangible assets during
the Measurement Period through the date of the Investment. The
"Pro Forma Test" will be met with respect to a particular
proposed Investment if the Consolidated Total Indebtedness to
EBITDA Ratio would have been less than 3.0 to 1, such
determination to be made on a pro forma basis with
Consolidated EBITDA being calculated as of the end of the
prior four consecutive fiscal quarters for the Borrower and
the acquired entity and as if Consolidated Total Indebtedness
on the last day of the most recent fiscal quarter just ended
had been increased by the amount of the Investment in question
(including any assumed Indebtedness), such determination to be
made using assumptions and other calculations reasonably
satisfactory to the Agent, which assumptions in any event
shall not include any cost savings or other variations from
historical performance;
(6) Investments existing on the date of this
Agreement (including extensions or
renewals thereof);
(7) Advances to RPF under the Loan and Security
Agreement, dated June 8, 1995, between the Borrower and RPF,
aggregating, on a cumulative basis, not more than $2,500,000.
At the option of the Borrower and RPF, all or any portion of
such advances, once made to RPF, may be converted into equity
interests in RPF at any time thereafter, but such conversions,
if any, shall not have the effect of increasing the cumulative
amount of advances permitted under this Section5.02(f)(7)
above $2,500,000 in the aggregate. If requested by the Agent
or the Banks, the Borrower will cause RPF's repayment
obligation to be evidenced by a promissory note;
(8) Loans to officers of the Borrower and its
Subsidiaries for the sole purpose of purchasing common stock
of the Borrower, such loans (i)not to exceed $1,200,000 in the
aggregate and $60,000 per officer, (ii) to be made pursuant to
a plan approved by the board of directors of the Borrower and
(iii)to be secured by the common stock purchased with the
proceeds thereof;
(9) Trademarks and patent rights of Borrower held by
Holding Company Subsidiary or a Wholly-Owned Subsidiary of
Holding Company Subsidiary and associated royalty payments
from Borrower to Holding Company Subsidiary or a Wholly-Owned
Subsidiary of Holding Company Subsidiary so long as the
conditions in Section 5.02(a)(8) continue to be satisfied at
all relevant times; and
(10) Investments in existing domestic Wholly-Owned
Subsidiaries, provided that Borrower is in compliance with
Section5.04 hereof before, and will be in compliance with
Section5.04 hereof after, the Investment is made.
provided, however, that Borrower may make Investments which are not in
compliance with this Section 5.02(f) in the aggregate amount of $500,000 at any
one time outstanding.
(g) Transactions with Controlling Persons. Pay, directly or
indirectly, any funds to or for the account of, make any Investment in, or enter
into a Guarantee in respect of the Indebtedness of, or lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, other than in the
ordinary and usual conduct of business and upon fair and reasonable terms no
less favorable to Borrower than those it would obtain in a comparable arm's
length transaction with one not affiliated with Borrower, to any Controlling
Person, or permit any of its Subsidiaries to do so; provided, however, that
notwithstanding the provisions of this Section 5.02(g) Borrower or its
Subsidiaries may pay to its officers and directors salaries and fees for
services rendered in such capacities and usual and ordinary business expenses
and advances for travel expenses, incentive compensation pursuant to plans of
Borrower and its Subsidiaries existing on the date hereof and plans hereafter
adopted by the board of directors of Borrower, may make payments pursuant to
existing contractual relationships between Borrower or its Subsidiaries and
officers and employees thereof and contractual employment relationships approved
by the board of directors of Borrower between Borrower or its Subsidiaries and
employees thereof, may provide and make available to eligible employees fringe
and other usual benefits in accordance with past practices, and may, pursuant to
an agreement approved by the board of directors of Borrower, pay fees for
services and advice (in an amount which bears a reasonable relationship to the
amount and type of such services and advice) to directors and Borrower may make
loans to officers of the Borrower and its Subsidiaries for the sole purpose of
purchasing common stock of the Borrower, such loans (i)not to exceed $1,200,000
in the aggregate and $60,000 per officer, (ii)to be made pursuant to a plan
approved by the board of directors of the Borrower and (iii)to be secured by the
common stock purchased with the proceeds thereof.
(h) Debt Retirement, Purchases and Redemptions. Voluntarily
purchase, prepay, redeem or otherwise retire any preferred or preference stock,
subordinated debentures, sinking fund debentures, promissory notes or other
securities (other than capital stock) issued by Borrower or any Subsidiary, or
agree to the rescheduling to shorten scheduled maturities or principal payments
of or to increase the rate of interest payable on outstanding indebtedness under
any agreement or instrument evidencing an obligation for borrowed money of
Borrower or any Subsidiary, or permit any of its subsidiaries to do so, other
than the Indebtedness referred to in paragraphs (7) and (8) of Section 5.02(a)
hereof; provided that, in the case of Indebtedness referred to in paragraph (8)
of Section 5.02(a) hereof, an Event of Default or Potential Event of Default
shall not have occurred and be continuing or shall not exist.
(i) Operating Leases. Enter into or become subject to, or
permit any of its Subsidiaries to enter into or become subject to, Operating
Leases which in the aggregate provide for payments during any fiscal year in
excess of $6,000,000.
(j) Change of Control. Enter into any merger, consolidation,
reorganization, corporation restructuring or other transaction, or take any
other action, that shall cause or result in, or for any reason suffer, a Change
of Control.
Section 5.03. Reporting Requirements. Borrower covenants that,
so long as it may borrow hereunder and until payment in full of all Notes issued
hereunder and interest due thereon and all other amounts due hereunder and under
any other Loan Document, Borrower will furnish to each Bank:
(a) Financial Statements. (i)Within 15 calendar days after the
due date of filing with the Securities and Exchange Commission copies of forms
8-K, 10-Q and 10-K (or if any of such forms are discontinued, substantially
equivalent reports) accompanied, (A)in the case of each form 10-Q, by a
certification of a Responsible Officer of Borrower of all financial statements
set forth therein and (B)in the case of each form 10-K, by a report on the
financial statements set forth therein of independent public accountants of
recognized standing selected by Borrower which report or opinion shall not
contain any qualification or exception not reasonably acceptable to the Agent
or, if Borrower is no longer required to file such reports with the Securities
and Exchange Commission, Borrower shall furnish:
(1) within 60 days after the end of the first three
quarters of each fiscal year, consolidated statements of
profit and loss and changes in cash flow of Borrower and its
Consolidated Subsidiaries for such fiscal quarter, for the
period between the end of the preceding fiscal year and the
end of the most recent fiscal quarter and for the
corresponding periods of the preceding fiscal year, and a
balance sheet of Borrower and its Consolidated Subsidiaries at
the end of such quarter and at the end of the preceding fiscal
year, all in reasonable detail, subject, however, to year-end
audit adjustments, and certified by a Responsible Officer of
Borrower;
(2) within 90 days after the end of each fiscal year,
a consolidated statement of profit and loss and changes in
cash flow and changes in shareholders' equity of Borrower and
its Consolidated Subsidiaries for such year and a consolidated
balance sheet of Borrower and its Consolidated Subsidiaries as
of the end of such year, setting forth in each of such
statements and balance sheets in comparative form (or, if
comparative form is not required by regulations of the
Securities and Exchange Commission applicable to companies
with securities registered under the Securities Act of 1933,
in the form required by such regulations) the corresponding
statements for the preceding fiscal year, all in reasonable
detail and reported on by independent public accountants of
recognized standing selected by Borrower, whose report or
opinion accompanying such financial statements shall not
contain any qualification or exception not reasonably
acceptable to the Agent;
and (ii)as soon as practicable and in any event within twenty (20) days after
the close of each month of each fiscal year of Borrower, unaudited consolidated
statements of income and changes in cash flow of Borrower and its Consolidated
Subsidiaries for such month and for the period from the beginning of such fiscal
year to the end of such month, and an unaudited consolidated balance sheet of
Borrower and its Consolidated Subsidiaries as of the close of such month, all in
reasonable detail.
(b) Accounts Receivable-Inventory Reports; Officer's
Certificates. At the time the statements and balance sheets required by the
preceding clause (a)are furnished, (i)an updated Accounts Receivable - Inventory
Report in detail and form satisfactory to the Banks and signed by a Responsible
Officer of the Borrower and each Guarantor, and (ii)a certificate of a
Responsible Officer of Borrower and each Guarantor setting forth in reasonable
detail the data and computations necessary to indicate compliance with the
provisions of Sections 2.05, 5.01(h), 5.01(i), and 5.01(j) hereof. In addition
to the requirements set forth in this paragraph, the Borrower shall, and shall
cause each Guarantor to, from time to time upon the reasonable requests of the
Banks provide to the Banks update Accounts Receivable-Inventory Reports.
(c) Proxy/Registration Statements. Promptly upon the sending,
making available or filing of the same, a copy of each financial statement,
report and proxy statement sent by Borrower to its stockholders, of each
registration statement or information statement that shall have become effective
and of each regular or periodic report filed by Borrower or any Consolidated
Subsidiary with the Securities and Exchange Commission or any governmental
authority succeeding to the functions thereof.
(d) ERISA Notifications. (i)Notice (or cause each Plan
Employer with respect to its Plans to notify the Agent and each of the Banks
prior to taking final corporate action) (A)of the Plan Employer's intention to
adopt any new Plan, and (B)of the Plan Employer's intention to terminate for
purposes of Title IV of ERISA any single-employer Plan or to withdraw from or
cease making timely contributions to any multi-employer Plan, (ii)copies of (or
cause each Plan Employer with respect to its Plans to deliver to the Agent and
each of the Banks copies of contemporaneously with the filing with or receipt
from the applicable governmental agency or Plan) (A)IRS Form 5310 relating to a
Plan termination or transfer of Plan assets, (B)of any 30day Notice to the PBGC
of a reportable event as described in Section 4043 of ERISA, (C)of any IRS Form
5500, including all schedules, for any Plan which, on the date on which such IRS
Form 5500 is filed, has unfunded vested liabilities in excess of $100,000, (D)of
any writing from the PBGC to the effect that it may or will take action to
terminate any Plan under Title IV of ERISA or from any multi-employer Plan that
it may and will take action to assert withdrawal liability against the Plan,
(E)of any notice filed with the PBGC pursuant to Section 4041 of ERISA and (F)of
any notice from the Secretary of the Treasury to the effect that a Plan has lost
its qualified status under Section 401 of the Code or has been terminated within
the meaning of Section 411(d)(3) of the Code, and (iii)within thirty (30) days
of the filing or receipt of each such document other than IRS Form 5500, a
certificate of a Responsible Officer of Borrower certifying as to what further
action has been taken by the Plan Employer in connection therewith and whether
the matter referred to in such document is likely to cause the Plan Employer to
incur liability to the PBGC or multi-employer Plan in an amount in excess of
$100,000. For all purposes of this paragraph, Borrower shall be deemed to have
all knowledge of all facts attributable to any Plan administrator or any other
Plan Employer, or with respect to a multiemployer Plan on notice of withdrawal
liability from any multiemployer Plan.
(e) Notices of Default. As soon as possible, and in any event
within five days after the occurrence of each Event of Default or Potential
Event of Default a statement of a Responsible Officer of Borrower setting forth
details of such Event of Default or Potential Event of Default and the action
which Borrower proposes to take with respect thereto.
(f) Notices of Material Litigation. Promptly upon becoming
aware thereof, notice of the commencement, existence or threat of any proceeding
against or affecting Borrower or any Subsidiary (i)which, if adversely decided,
could have a material adverse effect on the business, operations or financial
condition of the Borrower or any Subsidiary or on the ability of Borrower or any
Guarantor to perform its obligations under this Agreement or any other Loan
Document or (ii)arising under any federal, state or local Law, regulating (A)the
discharge of materials into or the protection of the environment, (B)the
management, handling or disposal of hazardous waste or toxic substances or
(C)the public health.
(g) Notices of Adverse Judgments. Promptly after the
institution thereof, notice of all adverse judgments in excess or $250,000 or
which involve any substantial risk of any material adverse effect on the
business, operations or condition (financial or otherwise) of Borrower or any
Subsidiary entered by an Official Body against Borrower or any Subsidiary, said
notice to include the exact Dollar amount of any such adverse judgment as well
as any other estimated adverse economic impact on the Borrower or its
Subsidiaries.
(h) Material Adverse Changes. Promptly after the occurrence
thereof, notice and a reasonably detailed description of all events, conditions,
acts, facts and omissions (except general economic conditions in the United
States which are a matter of public knowledge) which would constitute a material
adverse change in or which involve any substantial risk of any material adverse
effect on the business, operations or condition (financial or otherwise) of
Borrower.
(i) Copies of Reports, Filings, etc. Promptly after the
sending or filing thereof, copies of all proxy statements, financial statements
and reports which Borrower or any Subsidiary sends to its stockholders, and
copies of all regular, periodic and special reports and all registration
statements which Borrower or any Subsidiary may file with the Securities and
Exchange Commission or any governmental authority which may be substituted
therefor, or with any national securities exchange.
(j) Returns, etc. Promptly after the occurrence thereof, and
if material individually or in the aggregate, notice of (i)all returns,
rejections, repossessions or losses of or damage to property incurred by an
account and (ii)any requests for audit or adjustment, or any dispute, relating
to an account.
(k) Other Information. Such information and documents relating
and to Borrower's or any Guarantor's financial condition, business, assets or
liabilities, at such times and in such form and detail as the Agent or any Bank
may request, including, without limitation, (i)all invoices, documents,
contracts, chattel paper, instruments and other writings pertaining to
Borrower's or any Guarantor's contracts or the performance thereof, (ii)evidence
of Borrower's or any Guarantor's accounts and statements showing the aging,
identification, reconciliation and collection thereof, (iii)reports as to the
Borrower's or any Guarantor's inventory and sales, shipment, damage or loss
thereof, and (iv)a list of all of the locations where any of Borrower's or any
Guarantor's Eligible Inventory is kept or stored, such list to be updated and
revised, if necessary, on a quarterly basis and provided to the Agent and the
Banks at the time financial statements are submitted pursuant to Section 5.03(a)
hereof or as requested by any Bank, all of the foregoing to be certified by
authorized officers or other employees of Borrower or the applicable Guarantor,
and such other information respecting the business, the properties or the
condition or operations, financial or otherwise, of Borrower or any of the
Subsidiaries as the Agent or any Bank may from time to time reasonably request.
Section 5.04. Designated Subsidiaries. Borrower may from time
to time exclude, by delivering a written notice to the Agent together with such
other information as the Agent or any Bank shall reasonably request, a
Subsidiary or Subsidiaries of the Borrower (whether now owned or acquired or
formed after the date hereof) from being a Guarantor hereunder (each such
excluded Subsidiary being called herein a "Designated Subsidiary") provided that
the Designated Subsidiaries shall not at any time have aggregate gross revenues
or assets that, individually or in the aggregate, constitute 10% or more of the
gross revenues or assets of the Borrower and its Consolidated Subsidiaries.
Schedule 5.04 sets forth a list of the Designated Subsidiaries as of the date
hereof. Holding Company Subsidiary and the Subsidiaries of Holding Company
Subsidiary (all of which shall be Wholly-Owned) shall at all times be designated
by the Borrower as Designated Subsidiaries. Any Subsidiary designated by the
Borrower as a Designated Subsidiary after the date hereof shall be deemed added
to Schedule 5.04 upon Agent's receipt of the notice provided for in the first
sentence of this Section 5.04. In the event that the Designated Subsidiaries at
any time have aggregate gross revenues or assets that, individually or in the
aggregate, constitute 10% or more of the gross revenues or assets of the
Borrower and its Consolidated Subsidiaries, the Borrower shall immediately
provide a notice to Agent specifying which Subsidiary or Subsidiaries (other
than Holding Company Subsidiary and its Wholly-Owned Subsidiaries) are to be
removed from the list of Designated Subsidiaries on Schedule 5.04. Any
Subsidiaries of the Borrower that are not Designated Subsidiaries shall be
Guarantors hereunder.
ARTICLE VI
DEFAULT
Section 6.01. Events of Default. If any one or more of the
following described Events of Default shall occur and be continuing or exist,
the Banks and the Agent shall have the rights and remedies, in addition to all
other rights and remedies available to the Banks and the Agent, set forth in
Sections 6.02 and 6.03 of this Agreement:
(a) Borrower shall fail to pay interest, principal or any
other amount due hereunder within two Business Days of the date when due; or
(b) Borrower shall default (i)in any payment of principal of
or interest on any other obligation for borrowed money beyond any period of
grace provided with respect thereto, or (ii)in the performance of any other
agreement, term or condition contained in any agreement under which any such
obligation is created and as a result of such default such obligation has become
due prior to its stated maturity and the result of an event specified in clause
(ii) is to accelerate or permit the acceleration of any such obligation in
excess of $500,000; or
(c) Any representation or warranty herein made by Borrower, or
any certificate or financial statement furnished pursuant to the provisions
hereof, shall prove to have been false or misleading in any material respect as
of the time made or furnished and Borrower shall not have taken corrective
measures satisfactory to the Agent and the Banks with respect thereto within 30
days after a written notice is sent to Borrower by the Agent; or
(d) A Default shall occur under Section 5.01(h), 5.01(i),
5.01(j), 5.01(o), 5.02(d), 5.02(g), 5.02(h), 5.02(j) or 5.04 hereof or an Event
of Default shall occur under the Security Agreement or the Guaranty and
Suretyship Agreements, any Guarantor Security Agreement or any Subsidiary
Guaranty and Suretyship Agreement; or
(e) A Default shall occur under either Section 5.01(d),
5.01(m), 5.01(n), 5.02(a), 5.02(b), 5.02(c), 5.02(e), or 5.02(f) hereof and such
Default shall not have been cured within 30 days of the occurrence of such
Default; or
(f) Borrower shall default in the performance of any other
covenant, condition or provisions hereof and Borrower shall not have taken
corrective measures satisfactory to the Agent and the Banks with respect thereto
within 30 days after a written notice is sent to Borrower by the Agent; or
(g) Both the following events shall occur: (i)a Reportable
Event, the occurrence of which would have a material adverse effect on the Plan
Employer and which could cause the imposition of a lien under Section 4068 of
ERISA, shall have occurred with respect to any Plan or Plans and be continuing
30 days after written notice of such event shall have been given to Borrower by
the Agent; and (ii)the aggregate amount of the then current value of benefit
commitments under such Plan or Plans guaranteed under Title IV of ERISA (and
determined using the PBGC actuarial assumptions for determining asset
sufficiency) exceeds the then current value of the assets allocable to such
benefit commitments by more than $1,000,000 at such time; or
(h) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
Borrower or any Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or for
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Borrower or any Subsidiary or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs, and such proceeding shall remain undismissed or unstayed and in effect
for a period of 60 consecutive days or such court shall enter a decree or order
granting the relief sought in such proceeding; or
(i) Borrower or any Subsidiary shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Borrower or Subsidiary or for any
substantial part of its property, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action in furtherance of any of the foregoing.
Section 6.02. Consequences of Event of Default.
(a) If an Event of Default specified under paragraphs (a)
through (g) of Section 6.01 shall occur, the Banks shall be under no further
obligation to make Loans hereunder and the Agent shall be under no further
obligation to issue Letters of Credit hereunder; and the Agent, upon
instructions from the Required Banks, may by written notice to Borrower declare
the unpaid balance of all Loans then outstanding and interest accrued thereon,
and all other liabilities of Borrower hereunder and thereunder to be forthwith
due and payable, and the same shall thereupon become and be immediately due and
payable, without presentment, demand or protest of any kind, all of which are
hereby expressly waived.
(b) If an Event of Default, specified under paragraphs (h) or
(i) of Section 6.01 shall occur, the Banks shall be under no further obligation
to make Loans hereunder and the Agent shall be under no further obligation to
issue Letters of Credit hereunder; and the unpaid balance of all Loans then
outstanding and interest accrued thereon and all other Debt shall be immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived.
Section 6.03. Rights of Set-Off. In case an Event of Default
shall occur and be continuing or shall exist, the Agent and each Bank shall have
the right, in addition to all other rights and remedies available to it, without
notice to the Borrower, to set-off against and to appropriate and apply to the
unpaid balance of the Debt all the Notes and all other obligations of Borrower
hereunder any debt owing to, and any other funds held in any manner for the
account of Borrower by such holder, including, without limitation, all funds in
all deposit accounts (whether general or special, time or demand, provisionally
credited or finally credited, or otherwise) now or hereafter maintained by
Borrower for its own account with such holder, and the Agent and each Bank is
hereby granted a security interest in and lien on all such debts (including all
such deposit accounts) for such purpose; provided, however, that, except for
operating expenses due the Agent from the Borrower, obligations of the Borrower
to the Banks arising in connection with the Loans shall be satisfied first with
the proceeds of any exercise of the right of set-off before any other
obligations of the Borrower to any of the Banks shall be paid. Such right shall
exist whether or not any such holder or the Agent or any Bank shall have made
any demand under this Agreement or any Note and whether or not the Notes and
such other obligations are matured or unmatured. Borrower hereby confirms each
such holder's and the Agent's and each Bank's right of banker's lien and set-off
and nothing in this Agreement shall be deemed any waiver or prohibition of any
such holder's or of the Agent's and each Bank's right of banker's lien and
set-off.
ARTICLE VII
THE AGENT
Section 7.01. Appointment. The Banks hereby appoint Mellon
Bank, N.A. to act as Agent as herein specified for the Banks hereunder and under
the Loan Documents. Each of the Banks does hereby accept and agree to all the
terms and conditions of the Loan Documents. Each of the Banks hereby irrevocably
authorizes, and each holder of any Note by the acceptance of a Note shall be
deemed irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Agreement and the Loan Documents and any other
instruments and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder and thereunder, as are specifically delegated
to or required of the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Mellon Bank, N.A. agrees to act as
the Agent on behalf of the Banks to the extent provided in this Agreement and
the Loan Documents. The Banks hereby appoint the law firm of Xxxx Xxxxx Xxxx &
XxXxxx to act as counsel to the Agent and each of the Banks as to all matters
arising in connection with this Agreement or the other Loan Documents.
Section 7.02. Delegation of Duties. The Agent may perform any
of its duties hereunder or under the Loan Documents by or through agents or
employees and shall be entitled to advice of counsel concerning all matters
pertaining to its duties hereunder.
Section 7.03. Nature of Duties; Independent Credit
Investigation. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the Loan Documents. The duties of the
Agent shall be mechanical and administrative in nature; the Agent shall not have
by reason of this Agreement or any Loan Document a fiduciary relationship in
respect of any Bank; and nothing in this Agreement or any Loan Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any Loan Document,
except as expressly set forth herein or therein. Each Bank expressly
acknowledges (a)that the Agent has not made any representations or warranties to
it and that no act by the Agent hereafter taken, including any review of the
affairs of Borrower or any of its Subsidiaries, shall be deemed to constitute
any representation or warranty by the Agent to any Bank; (b)that it has made and
will make its own independent investigation of the financial condition and
affairs and its own appraisal of the creditworthiness of Borrower in connection
with the making and continuance of the Loans hereunder; (c)that it has made its
own independent investigation of the legal matters relating to this Agreement,
the other Loan Documents and the Notes to be issued to it pursuant to the terms
hereof; and (d)that the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or other
information with respect thereto, whether coming into its possession before the
making of a Loan or at any time or times thereafter.
Section 7.04. Actions in Discretion of Agent; Instructions
from the Banks. The Agent agrees, upon the written instructions of all the Banks
to take any action of the type specified as being within the Agent's rights,
powers or discretion herein. In the absence of instructions by all he Banks the
Agent shall have authority, in its sole discretion, to take or not to take any
such action, unless this Agreement or a Loan Document specifically requires the
consent of all the Banks. Any action taken pursuant to such instructions or
discretion shall be binding on all the Banks and on all holders of Notes. No
Bank shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under the other Loan
Documents in accordance with the instructions of all Banks, or in the absence of
such instructions, in the absolute discretion of the Agent, subject to the
provisions of Section 7.06 hereof.
Section 7.05. Exculpatory Provisions. Neither the Agent nor
any of its directors, officers, employees or agents shall be liable to any Bank
for any action taken or omitted to be taken by it or them hereunder or under the
other Loan Documents, or in connection herewith or therewith, unless caused by
its or their own gross negligence or willful misconduct. In performing its
functions and duties hereunder on behalf of the Banks, the Agent shall exercise
the same care which it would exercise in dealing with loans for its own account,
but it shall not (a)be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement, any Loan Document or any of the Notes, or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any Loan
Document, or (b)be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Borrower, or the financial
condition of the Borrower, or the existence or possible existence of any Event
of Default or Potential Event of Default.
Section 7.06. Reimbursement and Indemnification. Each Bank
agrees to reimburse and indemnify the Agent (to the extent not reimbursed by
Borrower) ratably, in proportion to its Commitment, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, in its capacity as such,
in any way relating to or arising out of this Agreement, the Loan Documents, the
Letters of Credit or the Notes or any action taken or omitted by the Agent
hereunder or thereunder, provided that no Bank shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a)if the same results from
the Agent's gross negligence or willful misconduct, or (b)if such Bank was not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense, or (c)if the same results from a compromise and
settlement agreement entered into without the consent of such Bank. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including
attorney's fees) incurred by the Agent in connection with the preparation,
execution, administration or enforcement of, or the preservation of any rights
under, this Agreement and the other Loan Documents to the extent that the Agent
is not reimbursed for such expenses by Borrower.
Section 7.07. Reliance by Agent. The Agent shall be entitled
to rely upon any writing, telegram, telecopy, telex or teletype message,
resolution, notice, consent, certificate, letter, cablegram, statement, or order
or other document or conversation by telephone or otherwise believed by it to be
genuine and correct and to have been signed, sent or made by the proper person,
firm or corporation, and upon opinions of counsel and other professional
advisers selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action hereunder or under any Loan Document unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 7.08. Agent in its Individual Capacity. With respect
to its Commitments, the Loans made by it and any Note held by it, the Agent
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the terms "Banks" or
"holders of the Notes" shall, unless the context otherwise indicates, include
the Agent in its individual capacity. The Agent and its affiliates may, without
liability to account, make loans to, accept deposits from, act as trustee under
indentures of, and generally engage in any kind of banking or trust business
with, Borrower and its Subsidiaries and affiliates as though it were not acting
as Agent hereunder.
Section 7.09. Holders of Notes. The Agent may deem and treat
any payee of any Note as the owner thereof for all purposes hereof unless and
until written notice of the assignment or transfer thereof shall have been filed
with the Agent. Any request, authority or consent of any legal entity who at the
time of making such request or giving such authority or consent is the holder of
any Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 7.10. Equalization of Banks. The Banks agree among
themselves that, with respect to all amounts received by any Bank for
application on any obligation hereunder or on the Notes, after the earlier of an
exercise of any Bank's rights of set-off pursuant to the provisions of Section
6.03 or the acceleration of maturity of any of the Notes pursuant to the
provisions of Section 6.02, equitable adjustment will be made in the manner
stated in the next succeeding sentence so that, in effect, all such amounts will
be shared ratably among the Banks, in proportion to the sum of the amounts then
outstanding under the Notes, plus all other Indebtedness of Borrower to them,
whether received by voluntary payment, by realization upon security, by the
exercise of the right of set-off or banker's lien, by counterclaim or cross
action or any other non-pro rata source. Any Bank receiving any such amount
shall purchase for cash from the other Banks an interest in their Notes,
Borrower's Indebtedness to the Banks, and all other obligations of Borrower to
the Banks, if any, in such amount as shall result in a ratable participation by
each of the Banks in the aggregate unpaid amount of all outstanding Notes then
held by all of the Banks, all Indebtedness of Borrower to the Banks, and all
other obligations of Borrower to the Banks, provided that if all or any portion
of such excess amount is thereafter recovered from such Bank, such purchase
shall be rescinded and the purchase price restored to the extent of such
recovery but without interest.
Section 7.11. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and Borrower. Upon any such
resignation, the Required Banks (with the consent of Borrower, which consent
shall not be unreasonably withheld) shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed, and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent which shall be a commercial bank organized under the
laws of the United States of America or any State thereof and having a combined
capital and surplus of at least $100,000,000. Upon the acceptance by a successor
Agent of its appointment as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted by it while it was Agent under this
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Modifications, Amendments or Waivers.
With the written consent of the
Required Banks, the Agent, acting on behalf of all the Banks, and Borrower may
from time to time enter into agreements amending or changing any provision of
this Agreement or the rights of the Banks or Borrower hereunder, or the Agent,
with the written consent of the Required Banks, may grant waivers or consents to
a departure from the due performance of the obligations of Borrower hereunder,
any such agreement, waiver or consent made with such written consent being
effective to bind all the Banks; provided, that no such agreement, waiver or
consent may be made which will:
(a) Reduce or increase the amount or alter the term
of the Commitment of any Bank hereunder, or alter the
provisions relating to the Facility Fees payable to any Bank
hereunder, or amend Section2.07 hereof without the written
consent of all the Banks; or
(b) Extend the time for payment of principal or
interest on any Note, or reduce the principal amount of or the
rate of interest borne by any Note, or otherwise affect the
terms of payment of the principal of or interest on any Note,
without the written consent of the holder of such Note; or
(c) Amend Sections 2.05(d) or 2.08 hereof without
the written consent of all of the
Banks;
(d) Change the percentages specified in the
definition herein of "Required Banks", or amend this Section
8.01 without the written consent of all the Banks;
(e) Amend Section 5.02(c) hereof without the written
consent of all the Banks;
(f) Amend the definitions of "Eligible Accounts" or
"Eligible Inventory" set forth in Section 1.01 hereof, such
that the standards of eligibility are more restrictive,
without the written consent of the Required Banks, or amend
these definitions, such that the standards of eligibility are
more permissive, without the written consent of all the Banks;
(g) Release the security interest in the Collateral
granted in any of the Loan Documents without the written
consent of all of the Banks; or
(h) Grant any extension of the Expiration Date or
otherwise amend Section2.11 hereof without the consent of all
of the Banks.
Section 8.02. No Implied Waivers; Cumulative Remedies; Writing
Required. No delay or failure of the Agent, any Bank or holder of any Note in
exercising any right, power or remedy hereunder or under any Loan Document shall
affect or operate as a waiver thereof; nor shall any single or partial exercise
thereof or any abandonment or discontinuance of steps to enforce such a right,
power or remedy preclude any further exercise thereof or of any other right,
power or remedy. The rights and remedies hereunder and under the other Loan
Documents of the Agent, any Bank, and holders of the Notes are cumulative and
not exclusive of any rights or remedies (including, without limitation, the
right of specific performance) which they or any of them would otherwise have.
Any waiver, permit, consent or approval of any kind or character on the part of
the Agent, any Bank or the holder of any Note of any breach or default under
this Agreement, any other Loan Document or any Note or any such waiver of any
provision or condition hereof or thereof must be in writing and shall be
effective only to the extent in such writing specifically set forth.
Section 8.03. Reimbursement of Expenses; Taxes. Borrower
agrees upon demand to pay or cause to be paid or to reimburse the Agent and save
the Agent harmless against liability for the payment of all reasonable
out-of-pocket expenses, including without limitation reasonable fees and
reasonable expenses of Xxxx Xxxxx Xxxx & XxXxxx LLP, special counsel for the
Agent and the Banks, and all other reasonable fees and expenses (including
counsel fees and the costs and expenses incurred by the Agent's asset-based
lending division or credit recovery group) incurred by the Agent (a)arising in
connection with the development, preparation, execution, performance,
administration and interpretation of this Agreement, all of the other Loan
Documents, and other instruments and documents to be delivered hereunder,
(b)relating to any amendments, waivers or consents pursuant to the provisions
hereof or thereof, (c)arising in connection with the enforcement of this
Agreement, or the other Loan Documents, collection of the Notes, or the proof
and allowability of any claim arising under this Agreement or the other Loan
Documents, whether in any bankruptcy or receivership proceeding or otherwise,
and (d)arising in connection with any litigation or preparation for litigation
related to the collection of amounts owed under this Agreement, or the other
Loan Documents. Borrower agrees upon demand to pay or cause to be paid or to
reimburse each Bank and save each Bank harmless against liability for the
payment of all reasonable out-of-pocket expenses (including fees and expenses of
their respective counsel) incurred by such Bank in connection with the
collection of the Notes or the proof and allowability of any claim arising under
this Agreement or the other Loan Documents, whether in any bankruptcy or
receivership proceeding or otherwise. The Borrower agrees to pay and to
indemnify and save the Banks harmless from any and all liability for any stamp
or other taxes, fees or similar impositions which may be payable in connection
with this Agreement, the Notes or the other Loan Documents, or the performance
of any transactions contemplated hereby or thereby.
Section 8.04. Indemnity. Borrower agrees to indemnify each of
the Agent and the Banks, their directors, officers and employees and each legal
entity, if any, who controls the Agent and each of the Banks and to hold the
Agent and each of the Banks harmless from and against any and all claims,
damages, liabilities and expenses (including, without limitation, all reasonable
fees of counsel with whom the Agent and each Bank may consult and all expenses
of litigation or preparation thereon which any of the Agent or the Banks may
incur or which may be asserted by a third party against the Agent or any of the
Banks in connection with or arising out of the matters referred to herein or in
the other Loan Documents. The indemnity agreement contained in this Section 8.04
shall survive the termination of this Agreement. Promptly and upon receipt by
any indemnified party hereunder of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against Borrower hereunder, notify the Borrower in writing of the commencement
thereof. Borrower may participate at its expense in the defense of any such
action or claim.
Section 8.05. Holidays. Whenever any payment or action to be
made or taken hereunder shall be stated to be due on a day which is not a
Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.
Section 8.06. Notices. All notices and other communications
given to or made upon any party hereto in connection with this Agreement shall,
except as otherwise expressly herein provided, be in writing (including telexed,
telecopied or telegraphic communication) and mailed, telexed, telecopied,
telegraphed or delivered to the respective parties, as follows:
Borrower:
X.X. Xxxxxx Company
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Telex: (000) 000-0000
Answerback: Xxxxxx Hqs
The Agent:
Mellon Bank, N.A.
One Mellon Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Telex: 812-367
Answerback: Xxx Bnk PGH
With a copy to:
Mellon Bank, N. A.
Loan Administration
Three Mellon Bank Center
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Agented Credits
The Banks:
Their respective names and
addresses set forth in
Section 2.01 hereof
or in accordance with any subsequent written direction from any party to the
others. All such notices and other communications shall, except as otherwise
expressly herein provided, be effective when deposited in the mail, postage
prepaid; in the case of telex or telecopier, when received; or in the case of
telegraph, when delivered to the telegraph company, charges prepaid.
Section 8.07. Survival. All representations, warranties,
covenants and agreements of Borrower contained herein or in any other Loan
Document or made in writing in connection herewith shall survive the execution
and delivery hereof and thereof and the making of Loans hereunder and the
issuance of Letters of Credit hereunder, and shall continue in full force and
effect so long as Borrower may borrow hereunder and until payment in full of the
Debt.
Section 8.08. Governing Law. This Agreement and the other Loan
Documents, and the rights and obligations of the parties hereto and thereto,
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania, excluding its rules relating to the conflict
of laws.
Section 8.09. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Agent, the Banks, Borrower and
their respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations hereunder or any interest herein. Any
Bank may from time to time sell, assign or grant one or more participations in
all or any part of its Commitment or any Loan made by it or which may be made by
it, or of its right, title and interest therein or thereto or in or to this
Agreement (collectively, "Interests"), to another lending office, bank,
financial institution, or other entity ("Transferees"), provided, (a)that no
Transferee shall be entitled to receive any greater payment under Sections
2.05(d) and 2.08 than the Bank making such transfer would have been entitled to
receive with respect to the rights transferred; (b)that any Transferee (unless
otherwise provided in the instrument of transfer) may exercise any and all
rights of banker's lien, set-off and counterclaim with respect to its Interest
as fully as if such Transferee were the holder of a Loan in the amount of its
Interest; and (c)that, unless
(i) Borrower consents in writing to the absolute assignment to
a Transferee by a Bank hereunder, which consent shall not be
unreasonably withheld,
(ii) the transferring Lender shall have paid to the Agent the
then standard fee in connection with the registration of such
transfer, and
(iii) such Transferee shall have executed and delivered to
Borrower and the Agent an agreement satisfactory in form and
substance to counsel for the Agent by which such Transferee
agrees to become a party hereto and to be bound by all of the
terms, conditions and provisions hereof,
any agreement pursuant to which any Bank may grant a participation in its rights
with respect to any particular Loan or Loans shall provide that, with respect to
such Loan or Loans, insofar as Borrower is concerned, such Bank shall retain the
sole right and responsibility to exercise (or refrain from exercising) the
rights of such Bank and enforce the obligations of Borrower or any other person
relating to such Loan or Loans including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
and the right to take action to have the Notes declared due and payable pursuant
to Section 6.02 hereof; but the foregoing provision shall not restrict the right
of any Bank to agree with any Transferee concerning the circumstances under
which such Bank will exercise or refrain from exercising any rights so retained,
including without limitation an agreement that such Bank will not, without the
participant's prior written consent, exercise any such rights which would
(i)reduce the principal amount of or the rate of interest on any Note, or
(ii)extend the time for payment of principal or interest on any Note; and
provided further, that, unless Borrower otherwise consents in writing, which
consent shall not be unreasonably withheld, no such grant of a participation
shall be deemed to relieve any Bank of its obligation to lend under this
Agreement or constitute a waiver of any rights of Borrower or the Agent
hereunder against any Bank. The Banks may furnish any information concerning the
Borrower in the possession of the Agent or the Banks from time to time to
assignees and participants, including prospective assignees or participants.
Each Bank represents to Borrower that it will acquire the Notes in connection
with the making of loans in the ordinary course of its normal commercial banking
business. Except to the extent otherwise required by its context, the word
"Bank" where used in this Agreement shall mean and include the holder of any
Note originally issued to such Bank, and the holder of such Note shall be bound
by and have the benefits of this Agreement the same as if such holder had been a
signatory hereto. Nothing in this Section 8.09 shall limit or impair any Bank's
rights under Section 2.09 hereof.
Section 8.10. Severability. The provisions of this Agreement
and of the other Loan Documents are severable, and if any clause or provision of
this Agreement or of any Loan Document shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such clause or 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
of such clause or provision in any other jurisdiction or the remaining
provisions hereof and of the other Loan Documents in any jurisdiction.
Section 8.11. Nature of Liabilities. Any and all obligations
and liabilities in respect of this Agreement (including, without limitation, the
Notes and the other Loan Documents) on the part of Borrower and its Subsidiaries
shall be joint and several. Any and all obligations and liabilities in respect
of this Agreement (including, without limitation, the Notes and the other Loan
Documents) on the part of one or more of the Agent and the Banks shall be
several and not joint.
Section 8.12. Marshalling; Payments Set Aside. Neither the
Agent nor any of the Banks shall be under any obligation to marshal any assets
in favor of Borrower or any other person or against or in payment of any or all
of the Debt. To the extent that Borrower makes a payment or payments to the
Agent or any Bank or the Agent or any of the Banks exercises its rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to either Borrower, a
trustee, receiver or any other person under any Law, including without
limitation any bankruptcy Law, state or federal Law, common Law or equitable
cause, then to the extent of any such restoration, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
Section 8.13. Prior Understandings. This Agreement
supersedes all prior understandings and
agreements, whether written or oral, among the parties hereto relating to the
transactions provided for herein.
Section 8.14. Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
Section 8.15. Section Headings. The underlined section
headings herein are for convenience of
reference only and shall not in any way affect the interpretation or
construction hereof.
Section 8.16. Waiver Of Right To Trial By Jury. BORROWER
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OR ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (1)ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT ATTACHED HERETO, REFERRED TO HEREIN OR DELIVERED IN CONNECTION
HEREWITH, OR (2)IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER DOCUMENT OR
INSTRUMENT ATTACHED HERETO, REFERRED TO HEREIN OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND BORROWER HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF BORROWER HERETO TO THE WAIVER OF ITS RIGHT TO TRIAL
BY JURY.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and year
first above written.
Attest: X. X. XXXXXX COMPANY
/s/ X. X. Xxxxx By: /s/ Xxxxx X. Xxxxx
Title: VP, Treasurer Title: Sr.VP Finance Admin,
CFO
[CORPORATE SEAL]
MELLON BANK, N A.
By: /s/ Xxxx X. Xxxxxxxx
Title: AVP
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx XxXxxxxxx
Title: Corporate Banking
Officer
FIRST UNION NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
Title: Vice President
