NU HORIZONS ELECTRONICS CORP.
(the "Borrower")
AND
MELLON BANK, N.A.
("Mellon" as "Administrative Agent" and as a "Lender")
EUROPEAN AMERICAN BANK
("EAB" and a "Lender")
HSBC BANK USA
("HSBC" and a "Lender")
FLEET BANK, N.A.
("Fleet" and a "Lender")
AND
THE CHASE MANHATTAN BANK
("Chase" and a "Lender")
LOAN AGREEMENT
DATED AS OF JULY 12, 2000
TABLE OF CONTENTS
-----------------
SECTION 1. DEFINITIONS............................................................................. -1-
1.1 Defined Terms................................................................................ -1-
1.2 Accounting Terms............................................................................. -9-
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS AND SWING LOANS........................ -9-
2.1 Revolving Credit Commitments................................................................. -9-
2.2 Revolving Credit Loans....................................................................... -10-
2.2.1 Swing Loans.................................................................................. -10-
2.3 Notes........................................................................................ -12-
2.4 Interest..................................................................................... -12-
2.5 Procedure for Revolving Credit Borrowing..................................................... -13-
2.6 Conversion and Renewals...................................................................... -13-
2.7 Suspension of LIBOR Rate Loans............................................................... -14-
2.8 Applicable Margin; Periods, Etc.............................................................. -15-
2.9 Commitment Fee............................................................................... -15-
2.10 Additional Compensation in Certain Circumstances............................................. -16-
2.11 Termination or Reduction of Commitment....................................................... -18-
2.12 Prepayment................................................................................... -18-
2.13 Payments..................................................................................... -18-
2.14 Pro Rata Treatment........................................................................... -19-
2.15 Sharing of Setoffs........................................................................... -20-
2.16 Use of Proceeds.............................................................................. -00-
-x-
0.00 Xxxxxxxx of Letters of Credit.................................................................. -21-
2.18 Actions of Administrative Agent................................................................ -21-
2.19 Indemnity as to Letters of Credit.............................................................. -22-
2.20 Letter of Credit Fees.......................................................................... -22-
2.21 Acceptance Drafts.............................................................................. -22-
2.22 Payment in Respect of Letters of Credit and Acceptances; Reimbursement......................... -24-
2.23 Ineligibility of Acceptance Drafts............................................................. -27-
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................................... -27-
3.1 Financial Condition............................................................................ -27-
3.2 No Change...................................................................................... -28-
3.3 Corporate Existence; Compliance with Law; Subsidiaries......................................... -28-
3.4 Corporate Power; Authorization; Enforceable Obligations........................................ -28-
3.5 Legal Bar...................................................................................... -29-
3.6 No Material Litigation......................................................................... -29-
3.7 No Default..................................................................................... -29-
3.8 No Burdensome Restrictions..................................................................... -29-
3.9 Federal Regulations............................................................................ -29-
3.10 Environmental Regulation....................................................................... -30-
3.11 Title to Properties............................................................................ -30-
3.12 Taxes.......................................................................................... -30-
3.13 ERISA.......................................................................................... -31-
3.14 Operation of Business........................................................................ -31-
-ii-
SECTION 4. CONDITIONS PRECEDENT.................................................................... -31-
4.1 Conditions to Initial Revolving Credit Loan.................................................. -31-
SECTION 5. AFFIRMATIVE COVENANTS................................................................... -34-
5.1 Information.................................................................................. -34-
5.2 Corporate Existence; Continuance of Business................................................. -36-
5.3 Payment of Obligations....................................................................... -37-
5.4 Insurance.................................................................................... -37-
5.5 Payment of Indebtedness and Performance of Obligations....................................... -37-
5.6 Condition of Property........................................................................ -37-
5.7 Observance of Legal Requirements............................................................. -37-
5.8 Books and Records............................................................................ -37-
5.9 Inspection................................................................................... -37-
5.10 Compliance with Environmental Laws; Indemnity................................................ -38-
5.11 Administrative Agent's Fee................................................................... -38-
SECTION 6. FINANCIAL COVENANTS..................................................................... -38-
6.1 Quick Ratio.................................................................................. -38-
6.2 Leverage Ratio............................................................................... -39-
6.3 Tangible Net Worth........................................................................... -39-
6.4 Liabilities to Tangible Net Worth............................................................ -39-
SECTION 7. NEGATIVE COVENANTS...................................................................... -39-
7.1 Indebtedness for Borrowed Money.............................................................. -40-
7.2 Liens........................................................................................ -40-
7.3 Loans and Investments........................................................................ -40-
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7.4 Fundamental Changes.......................................................................... -41-
7.5 Contingent Liabilities....................................................................... -41-
7.6 Sales of Receivables; Sale - Leasebacks...................................................... -41-
7.7 Lease Payments............................................................................... -41-
7.8 Dividends.................................................................................... -41-
7.9 Supply and Purchase Contracts................................................................ -42-
7.10 Nature of Business........................................................................... -42-
7.11 Stock of Subsidiaries........................................................................ -42-
7.12 Liabilities of Subsidiaries.................................................................. -42-
7.13 Transactions with Affiliates................................................................. -42-
7.14 ERISA........................................................................................ -43-
7.15 Change of Management......................................................................... -43-
SECTION 8. EVENTS OF DEFAULT....................................................................... -43-
SECTION 9. ADMINISTRATIVE AGENT.................................................................... -46-
SECTION 10. MISCELLANEOUS.......................................................................... -49-
10.1 Notices...................................................................................... -49-
10.2 Survival of Agreement........................................................................ -50-
10.3 Successors and Assigns: Participations....................................................... -51-
10.4 Expenses: Indemnity.......................................................................... -54-
10.5 Applicable Law............................................................................... -54-
10.6 Right of Setoff.............................................................................. -55-
10.7 Payments on Business Days.................................................................... -55-
-iv-
10.8 Waivers; Amendments.......................................................................... -55-
10.9 Severability................................................................................. -56-
10.10 Entire Agreement; Waiver of Jury Trial, Etc.................................................. -56-
10.11 Confidentiality.............................................................................. -57-
10.12 Submission to Jurisdiction................................................................... -57-
10.13 Further Assurances........................................................................... -58-
10.14. Counterparts................................................................................. -58-
10.15. Headings..................................................................................... -58-
SCHEDULE I
Revolving Credit Commitments (Section 2.1)................................................... -62-
SCHEDULE I
Liens (Section 7.2).......................................................................... -63-
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LOAN AGREEMENT dated as of July 12, 2000, by and among NU HORIZONS
ELECTRONICS CORP., a Delaware corporation, having its principal executive office
at 00 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx (the "Borrower"), MELLON BANK, N.A., a
national banking association having an office at 000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Mellon"), EUROPEAN AMERICAN BANK, a New York
Lender, having an office at 000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("EAB"), HSBC BANK USA, a New York Bank, having an office at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("HSBC"), FLEET BANK, N.A., a national
banking association, having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx
Xxxx 00000 ("Fleet") and THE CHASE MANHATTAN BANK, a New York bank, having an
office at 000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("Chase") (Mellon,
EAB, HSBC, Fleet and Chase, collectively, the "Lenders") and MELLON BANK, N.A.,
as Administrative Agent for the Lenders (the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Lenders lend to the Borrower,
from time to time, during the term of this Agreement, various sums of money as
revolving credit loans and swing loans, and
WHEREAS, the Lenders are willing to extend such credit and make such loans
upon the terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth and for other good and valuable consideration, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS
-----------
1.1 Defined Terms. As used herein, the following terms shall have the
-------------
following meanings:
"Acceptance Drafts" shall have the meaning set forth in Section 2.21
-----------------
hereof.
"Acceptance Draft Exposure" shall mean at any time the sum of (a) the
-------------------------
aggregate face amount of Acceptance Drafts outstanding and (b) the aggregate
amount of all payments in respect of Acceptance Drafts for which the
Administrative Agent or the
Lenders shall not have been reimbursed as provided in Section 2.22 hereof.
"Business Day" shall mean a day other than a Saturday, Sunday or other
------------
day on which commercial Lenders in New York, New York or Philadelphia,
Pennsylvania, are required or permitted by law to close.
"CERCLA" shall mean the Comprehensive Environmental Response,
------
Compensation and Liability Act of 1980 (or any successor statute) and the rules
and regulations thereunder, all as from time to time in effect.
"CERCLIS" shall mean the Comprehensive Environmental Response
-------
Compensation Liability Information System List.
"Commitment Period" shall mean the period from and including the date
-----------------
hereof to, but not including, the Termination Date or such earlier date as the
Revolving Credit Commitments shall terminate as provided herein.
"Contractual Obligations" shall mean as to any Person, any provision
-----------------------
of any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default" shall mean any of the events specified in Section 8 hereof,
-------
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied or given, as the case may be.
"Dollars" and "$" shall mean dollars in lawful currency of the United
-------
States of America.
"Environmental Laws" shall mean all applicable federal, state or local
------------------
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, and all rules and regulations promulgated pursuant thereto, as the same
may from time to time be supplemented or amended.
"ERISA Affiliate" shall mean any trade or business (whether or not
---------------
incorporated) which together with the Borrower or its
Subsidiaries would be treated as a single employer under Section 4001 of ERISA.
"Event of Default" shall mean any of the events specified in Section 8
----------------
hereof, provided that any requirement for the giving of notice, the lapse of
time, or both, of any other condition, has been satisfied.
"Funded Debt" means, on a consolidated basis with respect to the
-----------
Borrower and the Guarantors, without duplication, (i) indebtedness for borrowed
money, (ii) obligations to pay the deferred purchase price of property or
services (other than trade payables arising in the ordinary course of business
which are not overdue), (iii) obligations as lessee under leases which shall
have been or should be, in accordance with GAAP, recorded as capital leases,
(iv) obligations evidenced by bonds, debentures, notes or equivalent instruments
and (v) reimbursement obligations in respect of drawings made under letters of
credit and acceptance drafts.
"GAAP" shall mean generally accepted accounting principles applied in
----
a manner consistent with that employed in the preparation of the Borrower's
certified annual consolidated financial statements for the fiscal year ending
February 28, 1999.
"Governmental Authority" shall mean any nation or government, any
----------------------
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by any of the
foregoing.
"Guarantee" shall mean a Guarantee on the Administrative Agent's
---------
standard form executed by a Guarantor (collectively, "Guarantees").
"Guarantors" shall mean NIC Components Corp., Nu Horizons
----------
International Corp., Nu Visions Manufacturing, Inc, NIC Eurotech Limited, Nu
Horizons Eurotech Limited, NIC Components Asia Pte., Ltd. and Titan Logistics
Corp. and each other Subsidiary of the Borrower or of a Guarantor whether now
existing or hereafter formed or acquired.
"Hazardous Materials" shall mean: (a) any "hazardous substance" as
-------------------
defined by CERCLA; (b) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act; (c) any
-3-
petroleum product; or (d) any pollutant or contaminant or hazardous, dangerous
or toxic chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended or hereafter amended.
"Interest Period" shall mean with respect to any LIBOR Rate Loan, the
---------------
period commencing on the date such loan is made and ending, as the Borrower may
select, pursuant to Section 2.5 hereof on the numerically corresponding day in
the first, second, third, sixth, ninth or twelfth calendar month thereafter,
except that each such Interest Period that commences on the last Business Day of
a calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month; provided that: (a) no Interest
Period may extend beyond the Termination Date; and (b) if an Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended to the next Business Day unless such Business Day would fall in the
next calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day.
"Involuntary Rate" shall mean at any time a rate per annum equal to
two (2%) percent in excess of the Prime Rate.
"Liabilities to Tangible Net Worth Ratio" shall mean with respect to
---------------------------------------
the Borrower and its Subsidiaries on a consolidated basis the ratio of total
senior liabilities to the sum of Tangible Net Worth plus long term portion of
Subordinated Indebtedness.
"Letter of Credit" or "Letters of Credit" shall mean letters of credit
---------------------------------------
issued by the Administrative Agent pursuant to Section 2.17 hereof for the
account of the Borrower.
"Letter of Credit Exposure" shall mean at any time the sum of (a) the
-------------------------
aggregate undrawn amount of all outstanding Letters of Credit and (b) the
aggregate amount of all drawings under Letters of Credit for which the
Administrative Agent or the Lenders shall not have been reimbursed as provided
in Section 2.22 hereof.
"Leverage Ratio" shall mean with respect to the Borrower and its
--------------
Subsidiaries on a consolidated basis the ratio of Funded Debt (including
Subordinated Debt) to EBITDA (earnings before
-4-
income, taxes, depreciation and amortization) on a rolling four quarters basis.
"LIBOR Rate" shall mean for any day for each proposed or existing
----------
Interest Period the rate per annum determined by the Administrative Agent by
dividing (the resulting quotient to be rounded upward to the nearest 1/100 of
1%) (A) the rate of interest (which shall be the same for each day of such
Interest Period) determined in good faith by the Administrative Agent in
accordance with its usual procedures (which determination shall be conclusive)
to be the average of the rates per annum for deposits in Dollars offered to
major money center Lenders in the London interbank market at approximately 11:00
o'clock a.m., London time, two London Business Days prior to the first day of
such Interest Period for delivery on the first day of such Interest Period in
amounts comparable to such LIBOR Rate Loan and having maturities comparable to
such Interest Period by (B) a number equal to 1.00 minus the LIBOR Rate Reserve
Percentage.
"LIBOR Rate Loan" shall mean any Revolving Credit Loan when and to the
---------------
extent that the interest rate therefor is determined by reference to the LIBOR
Rate.
"LIBOR Rate Reserve Percentage" shall mean for any day the maximum
-----------------------------
effective percentage (expressed as a decimal fraction, rounded upward to the
nearest 1/100 of 1%), as determined in good faith by the Administrative Agent
(which determination shall be conclusive), 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) with
respect to eurocurrency funding (currently referred to as "Eurocurrency
liabilities") of a member Lender in such System. The LIBOR Rate shall be
adjusted automatically as of the effective date of each change in the LIBOR Rate
Reserve Percentage.
"Lien" shall mean any mortgage, pledge, security interest,
----
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction pursuant to any of the types of security interests referred
to herein).
-5-
"Loan" or "Loans" shall mean, collectively, the Swing Loans and the
---- -----
Revolving Credit Loans.
"Loan Documents" shall mean, collectively, this Agreement, the
--------------
Revolving Credit Notes, Swing Loan Note, documents executed in connection with a
Letter of Credit or an Acceptance Draft, the Guarantees, and any other documents
executed by the Borrower or the Guarantors in connection herewith.
"London Business Day" shall mean a day for dealing in deposits in
-------------------
Dollars by and among Lenders in the London interbank market which is also a
Business Day.
"Margin" means the number of basis points per annum as determined by
------
reference to the grid set forth below. For purposes of such calculation the
Leverage Ratio and Liabilities to Tangible Net Worth Ratio shall be as reflected
in the financial statements delivered pursuant to Section 5.1 hereof, provided,
however, if the Borrower fails to provide the relevant financial statements by
the beginning of the corresponding Margin periods set forth in Section 2.8
hereof, the Margin shall be deemed to be 140 basis points per annum until the
delivery of the relevant financial statements:
Liabilities to Tangible Net Worth Ratio
---------------------------------------
Equal to or greater Equal to or greater
than .55 but less than .85 but less Equal to or greater
Leverage Ratio Less than .55 than .85 than 1.15 than 1.15
=========================================================================================================
equal to or greater 100.0 112.5 125.0 140.0
than 2.50
---------------------------------------------------------------------------------------------------------
equal to or greater 87.5 100.0 112.5 125.0
than 1.85 but less
than 2.50
---------------------------------------------------------------------------------------------------------
less than 1.85 75.0 87.5 100.0 112.5
=========================================================================================================
"Multiemployer Plan" shall mean any Plan described in Section
------------------
4001(a)(3) of ERISA.
"Note" or "Notes" shall mean, collectively, the Revolving Credit Notes
---- -----
and the Swing Loan Notes.
-6-
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
----
"Permitted Acquisition" shall mean an acquisition by the Borrower or
---------------------
any Subsidiary by merger, consolidation or by purchase of a voting majority of
the stock of another Person or the purchase of all or substantially all of the
assets of another Person (or of a division or other operating component of
another Person) (an "Acquisition") if all of the following conditions are met:
(i) the cash purchase price for such Acquisition inclusive of any
liabilities incurred or assumed in connection therewith does not exceed ten
(10%) percent of the Borrower's consolidated Tangible Net Worth as reflected
either in the most recent audited fiscal financial statements delivered pursuant
to Section 5.1(1) or the most recent management prepared quarterly financial
statements delivered pursuant to Section 5.1(2), whichever is less;
(ii) The Administrative Agent and the Lenders shall have received at
least three (3) years of historical financial statements of such Person (or, if
such Person has been in business for less than three (3) years, financial
statements for such lesser number of years) and a set of projections setting
forth in reasonable detail (with those stated assumptions set forth below) the
pro forma effect of the Acquisition and showing compliance by the Borrower with
all covenants set forth in this Agreement for the next succeeding three (3)
years. The projections to be delivered hereunder shall include and specify the
assumptions used to prepare such projections regarding growth of sales, margins
on sales and cost savings resulting from the Acquisition;
(iii) The Administrative Agent and the Lenders shall have received a
certificate signed by the chief financial officer of the Borrower to the effect
that (and including calculations indicating that) on a pro forma basis after
giving effect to the Acquisition: (a) all representations and warranties
contained in the Loan Documents will remain true and correct except those, if
any, made as of a specific time which shall have been true and correct when
made, (b) the Borrower will remain in compliance with all covenants contained in
the Loan Documents, and (c) no Default or Event of Default has occurred and is
continuing or will occur as a result of the consummation of the Acquisition; and
(iv) The acquisition, in the case of a corporation being acquired,
has been (a) approved by the board of directors
-7-
of such corporation which is the subject of such acquisition, (b) recommended
for approval by such board to the shareholders of such corporation and
subsequently approved by such shareholders as required under applicable law or
by-laws or the certificate of incorporation of such corporation or (c) otherwise
agreed by all shareholders of such corporation.
"Person" shall mean any individual, corporation, partnership, joint
------
venture, trust, unincorporated organization or any other juridical entity, or a
government or state or any agency or political subdivision thereof.
"Plan" shall mean any plan of a type described in Section 4021(a) of
----
ERISA in respect of which the Borrower or any of its Subsidiaries is an
"employer" as defined in Section 3(5) of ERISA.
"Prime Rate" shall mean and refer to the per annum interest rate
----------
announced from time to time by the Administrative Agent as its Prime Rate. The
Prime Rate may be greater or less than other interest rates charged by the
Administrative Agent and is not dependent upon the interest rate which the
Administrative Agent may charge any particular class of borrower.
"Prime Rate Loan" shall mean any Revolving Credit Loan or Swing Loan
---------------
when and to the extent that the interest rate therefor is determined by
reference to the Prime Rate.
"Prior Agreement" shall have the meaning set forth in Section 2.16
---------------
hereof.
"Reportable Event" shall mean any of the events set forth in Section
----------------
4043(b) of ERISA or the regulations thereunder.
"Required Banks" shall mean at any time Lenders having at least sixty-
--------------
six and two-thirds (66 2/3%) percent of the aggregate amount of the Revolving
Credit Commitments or, if the Revolving Credit Commitments are no longer in
effect, Lenders holding at least sixty-six and two-thirds (66 2/3%) of the
aggregate outstanding principal amount of the sum of the Notes, the Letter of
Credit Exposure and the Acceptance Draft Exposure; provided, however, that such
calculation shall be made without including the Revolving Credit Commitments and
pro rata portion of Acceptance Draft Exposure or Letter of Credit Exposure of
any Lender or principal amount of Revolving Credit Notes or Swing Loan Note held
by such Lender or participation therein which Lender is in default with respect
to any of its obligations to the Administrative Agent, the Borrower or any
Lender.
-8-
"Requirements of Law" shall mean as to any Person, the certificate of
-------------------
incorporation and by-laws or other organizational or governing documents of such
Person, and any material law, treaty, rule or regulation, or any determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
---------------------------
the obligation of such Lender to make Revolving Credit Loans to the Borrower
during the Commitment Period pursuant to the terms hereof as such Commitment is
described in Section 2.1 hereof.
"Revolving Credit Loan" shall mean a loan made pursuant to the terms
---------------------
of Section 2.2 hereof.
"Revolving Credit Note" or "Revolving Credit Notes" shall mean the
--------------------- ----------------------
Revolving Credit Notes referred to in Section 2.3 hereof in the form of Exhibit
"A" hereto.
"Subordinated Indebtedness" shall mean indebtedness of the Borrower
-------------------------
subordinated in right of payment to the Loans pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to the Administrative Agent and the Required Lenders.
"Subsidiary" shall mean as to any Person, a corporation of which
----------
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person.
"Swing Bank" shall mean Mellon in its capacity as lender of Swing
----------
Loans.
"Swing Loan Note" shall mean the promissory note evidencing the Swing
---------------
Loans payable to the order of the Swing Bank.
"Swing Loans" shall mean any Loans made to the Borrower by the Swing
-----------
Bank, in its sole discretion, from time to time in accordance with Section 2.2.1
hereof.
-9-
"Tangible Net Worth" shall mean, at any date, the excess of total
------------------
assets over total liabilities, total assets and total liabilities each to be
determined in accordance with GAAP consistently applied, excluding, however,
from the determination of total assets all assets which would be classified as
intangible assets under GAAP, including, without limitation, goodwill, patents,
trademarks, trade names, copyrights and franchises.
"Termination Date" shall mean July 12, 2004 or, if such date is not a
----------------
Business Day, the Business Day next succeeding such date.
"Total Revolving Credit Commitment" shall mean the sum of the Lenders'
---------------------------------
Revolving Credit Commitments, as the same may be reduced from time to time in
accordance with Section 2.11 hereof.
1.2 Accounting Terms. As used herein and in any certificate or other
----------------
documents made or delivered pursuant hereto, accounting terms not specifically
defined herein shall have the respective meanings given to them under GAAP.
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS AND SWING LOANS
----------------------------------------------------------------
2.1 Revolving Credit Commitments. Subject to the terms and conditions and
----------------------------
relying upon the representations and warranties herein set forth, each Lender,
severally and not jointly, agrees to make Revolving Credit Loans to the
Borrower, at any time and from time to time from the date hereof to the
Termination Date, or until the earlier termination of its Revolving Credit
Commitment in accordance with the terms hereof, in an aggregate principal amount
at any time outstanding not to exceed the amount of such Lender's Revolving
Credit Commitment set forth opposite its name in Schedule I hereto, as such
Revolving Credit Commitment may be reduced from time to time in accordance with
the provisions of this Agreement. Notwithstanding the foregoing, the sum of (i)
the aggregate principal amount of Revolving Credit Loans outstanding at any time
to the Borrower, (ii) the Letter of Credit Exposure and (iii) the Acceptance
Draft Exposure shall not exceed the Total Revolving Credit Commitment. The
Revolving Credit Commitment of each Lender shall automatically and permanently
terminate on the Termination Date.
Within the foregoing limits, the Borrower may borrow, repay (or, subject to
the provisions of Section 2.10 hereof, prepay) and reborrow, on and after the
date hereof and prior to the
-10-
Termination Date, subject to the terms, provisions and limitations set forth
herein.
2.2 Revolving Credit Loans. (a) The Revolving Credit Loans made by a
----------------------
Lender on any date shall be in a minimum amount of $500,000 and in integral
multiples of $100,000 in excess thereof in the case of a LIBOR Rate Loan or in a
minimum amount of $250,000 and in integral multiples of $100,000 in the case of
a Prime Rate Loan.
(b) Revolving Credit Loans shall be made ratably by the Lenders in
accordance with their respective Revolving Credit Commitments; provided,
however, that the failure of any Lender to make any Revolving Credit Loan shall
not in itself relieve any other Lender of its obligation to lend hereunder.
(c) Each Revolving Credit Loan shall be either a Prime Rate Loan or
a LIBOR Rate Loan as the Borrower may request pursuant to Section 2.5 hereof.
Loans of more than one type and Interest Period may be outstanding at the same
time.
(d) Each Lender shall make its Revolving Credit Loans on the
proposed dates thereof by paying the amount required to the Administrative Agent
in Philadelphia, Pennsylvania in immediately available funds not later than
12:00 noon, Philadelphia time, and the Administrative Agent shall as soon as
practicable, but in no event later than 3:00 p.m., Philadelphia time, credit the
amounts so received to the general deposit account of the Borrower with the
Administrative Agent in immediately available funds or, if Revolving Credit
Loans are not to be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so received to the
respective Lenders.
2.2.1 Swing Loans. (a) Subject to the terms and conditions set forth
-----------
herein, the Swing Bank agrees to make Swing Loans to the Borrower, in the Swing
Bank's sole discretion, from time to time during the Commitment Period, in an
aggregate principal amount at any time outstanding that will not result in the
aggregate principal amount of outstanding Swing Loans exceeding $3,000,000.00.
Within the foregoing limit and subject to the Swing Bank's discretion and the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow the Swing Loans. Each Swing Loan shall be made as a Prime Rate Loan.
(b) To request a Swing Loan, the Borrower shall notify the Swing
Bank (which shall promptly notify the Administrative Agent) of such request by
telephone (confirmed by telecopy), not later than 1:00 p.m., Philadelphia time,
on the day of a proposed
-11-
Swing Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) of the requested Swing Loan and
the amount of the requested Swing Loan. The Swing Bank shall make each Swing
Loan available to the Borrower, in its discretion, by means of a credit to the
general deposit account of the Borrower with the Administrative Agent by 3:00
p.m., Philadelphia time, on the requested date of such Swing Loan.
(c) The Swing Bank may by written notice given to the Administrative
Agent not later than 12:00 noon, Philadelphia Time, on any Business Day require
the Lenders to acquire participations on such Business Day in all or a portion
of the Swing Loans outstanding, together with interest accrued thereon. Such
notice shall specify the aggregate amount of Swing Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's pro
rata share of such Swing Loan or Loans, together with interest accrued thereon,
which pro rata share shall be based upon the proportion that such Lender's
Revolving Credit Commitment bears to the Total Revolving Credit Commitment. Each
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the Swing
Bank, such Lender's pro rata share of such Swing Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in Swing
Loans pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or Event of Default or reduction or termination of the
Revolving Credit Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Lender shall
comply with its obligation under this paragraph in the same manner as provided
in Section 2.2(d) with respect to Revolving Credit Loans made by such Lender and
the Administrative Agent shall promptly pay to the Swing Bank the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swing Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swing Loan shall be made
to the Administrative Agent and not to the Swing Bank. Any amounts received by
the Swing Bank from the Borrower (or other party on behalf of the applicable
Borrower) in respect of a Swing Loan after receipt by the Swing Bank of the
proceeds of a sale of participations therein shall be promptly remitted to the
Administrative Agent; any such amounts received by the Administrative Agent
shall be promptly remitted by the Administrative Agent to the Lender that shall
have made their payments pursuant to this paragraph and to the Swing Bank, as
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their interests may appear. The purchase of participations in a Swing Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.
(d) The Swing Loans made by the Swing Bank on any date shall be in a
minimum amount of $250,000.00 and in integral multiples of $100,000.00.
2.3 Notes. (a) The Revolving Credit Loans made by the Lenders pursuant to
-----
Section 2.2 hereof shall be evidenced by promissory notes of the Borrower
substantially in the form of Exhibit "A" hereto with appropriate insertions
(individually, a "Revolving Credit Note" and, collectively, the "Revolving
Credit Notes"), payable to the order of each Lender and representing the
obligations of the Borrower to pay to each Lender on the Termination Date the
lesser of (y) the amount of each Lender's Revolving Credit Commitment or (z) the
aggregate unpaid principal amount of all Revolving Credit Loans made by such
Lender, with interest thereon as hereinafter prescribed in Section 2.4 hereof.
(b) The Swing Loans made by the Swing Bank pursuant to Section 2.2.1
hereof shall be evidenced by a promissory note of the Borrower payable to the
order of the Swing Bank and representing the obligations of the Borrower to pay
to the Swing Bank on the Termination Date the lesser of (y) $3,000,000.00 or (z)
the aggregate unpaid principal amount of all Swing Loans made by the Swing Loan
Bank, with interest thereon as hereafter prescribed in Section 2.4 hereof.
(c) The date and amount of each Loan, the basis for calculating
interest, the Interest Period applicable thereto and each payment of principal
with respect thereto shall be endorsed by the Lenders on the schedule annexed to
and constituting a part of the Notes. The aggregate unpaid amount of Loans set
forth on such schedule shall be presumed to be the principal amount owing and
unpaid thereon. The failure of a Lender to make such endorsement on such
schedule shall not prejudice such Lender in any way, nor affect its rights
hereunder with respect to any Revolving Credit Loan. The Notes shall be dated
the date of this Agreement and be stated to mature on the Termination Date.
2.4 Interest. Interest on each Revolving Credit Loan shall be at a per
--------
annum rate to be elected by the Borrower, in accordance with Section 2.5 hereof,
and shall be one of the following:
(a) a fluctuating rate equal to the Prime Rate, which interest rate
shall change when and as the Prime Rate changes; or
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(b) subject to availability, the LIBOR Rate for Interest Periods
selected by the Borrower plus the applicable Margin.
The Administrative Agent shall determine each interest rate applicable to the
Revolving Credit Loans and shall promptly advise the Borrower and the Lenders of
the interest rate so determined. Each Swing Loan shall be Prime Rate Loan.
Interest on each Prime Rate Loan, except Swing Loans, shall be payable monthly
in arrears to the Administrative Agent for the pro rata benefit of the Lenders
on the first Business Day of each month, commencing on the first such day to
occur after the pertinent loan is made and upon payment in full thereof.
Interest on Swing Loans shall be payable on such dates as set forth above to the
Swing Bank. Interest on each LIBOR Rate Loan shall be payable to the
Administrative Agent for the pro rata benefit of the Lenders in arrears (i) in
the case of Revolving Credit Loans with Interest Periods of three months or
less, at the end of each applicable Interest Period and (ii) in the case of
Revolving Credit Loans with Interest Periods of more than three months, at the
end of each calendar quarter and at the end of the Interest Period. Whenever
the unpaid principal balance of any Loan shall become due and payable (whether
at the stated maturity thereof, by acceleration or otherwise) interest shall
thereafter be payable on demand to the Administrative Agent for the pro rata
benefit of the Lenders at the Involuntary Rate; provided, however, that no
interest payable hereunder shall be in excess of the rate permitted by
applicable law. Interest on each Loan shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed.
2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow
----------------------------------------
under the Revolving Credit Commitments during the Commitment Period on any
Business Day by giving the Administrative Agent irrevocable notice of a request
for a Revolving Credit Loan hereunder setting forth the amount of the Revolving
Credit Loan requested, the date thereof, whether it is to be a LIBOR Rate Loan
or a Prime Rate Loan and, if it is to be a LIBOR Rate Loan, the duration of the
Interest Period applicable thereto. Requests for LIBOR Rate Loans shall be
received by the Administrative Agent not later than 11:00 a.m. (Philadelphia
time) three (3) Business Days prior to the first day of the Interest Period for
each such Revolving Credit Loan. Requests for Prime Rate Loans may be made up
to 1:00 p.m. (Philadelphia time) on the Business Day prior to the Business Day
each such Revolving Credit Loan is to be made. Any request for a Revolving
Credit Loan may be written or oral, but if oral, it shall be confirmed in
writing sent by the Borrower to the Administrative Agent within two (2) Business
Days thereafter. The Administrative Agent shall
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promptly advise (but in any event, by 1:00 p.m. Philadelphia time, two (2)
Business Days prior to a LIBOR Rate Loan or by 10:00 a.m. on the same Business
Day in the case of a Prime Rate Loan) the Lenders of any notice given pursuant
to this Section 2.5 and of each Lender's portion of the requested borrowing.
2.6 Conversion and Renewals. The Borrower may elect from time to time to
-----------------------
convert all or a part of one type of Revolving Credit Loan into another type of
Revolving Credit Loan or to renew all or part of a Revolving Credit Loan by
giving the Administrative Agent notice at least one (1) Business Day before the
conversion into a Prime Rate Loan and at least three (3) Business Days before
the conversion into or renewal of a LIBOR Rate Loan, specifying: (1) the
renewal or conversion date; (2) the amount of the Revolving Credit Loan to be
converted or renewed; (3) in the case of conversions, the type of Revolving
Credit Loan to be converted into; and (4) in the case of renewals of or a
conversion into LIBOR Rate Loans, the duration of the Interest Period applicable
thereto; provided that (a) the minimum principal amount of each Revolving Credit
Loan outstanding after a renewal or conversion to a LIBOR Rate Loan shall be
$500,000.00 or to a Prime Rate Loan shall be $250,000.00; and (b) LIBOR Rate
Loans can be converted only on the last day of the Interest Period of such Loan.
All notices given under this Section 2.6 shall be irrevocable and shall be given
not later than 11:00 a.m. (Philadelphia time) on the day which is not less than
the number of Business Days specified above for such notice. Any request for a
conversion or a renewal under this Section 2.6 may be written or oral, but if
oral, it shall be confirmed in writing sent by the Borrower to the
Administrative Agent within two (2) Business Days thereafter. If the Borrower
shall fail to give the Administrative Agent the notice as specified above for
the renewal or conversion of a LIBOR Rate Loan prior to the end of the Interest
Period with respect thereto, such LIBOR Rate Loan shall automatically be
converted into a Prime Rate Loan on the last day of the Interest Period for such
Revolving Credit Loan. The Administrative Agent shall promptly advise (but in
any event, by 2:00 p.m. Philadelphia time, two (2) Business Days prior to a
LIBOR Rate Loan or by 11:00 a.m. on the same Business Day in the case of a Prime
Rate Loan) the Lenders of any notice given pursuant to this Section 2.6 and of
each Lender's portion of the requested conversion or renewal.
2.7 Suspension of LIBOR Rate Loans.
------------------------------
(a) Disaster. Notwithstanding anything contained in this Agreement to
--------
the contrary, if the Administrative Agent determines that:
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(i) it is unable for any reason to quote or determine rates
based upon a LIBOR Rate, or
(ii) the LIBOR Rate does not accurately reflect the cost to a
Lender of making or maintaining a LIBOR Rate Loan then the Administrative Agent
shall give the Borrower prompt notice thereof, and so long as such condition
shall remain in effect the right of the Borrower to select a LIBOR Rate Loan or
to convert a Prime Rate Loan into a LIBOR Rate Loan shall be suspended. The
Borrower, in such event, shall, on the last day of a then current Interest
Period either prepay such loan together with accrued interest thereon or convert
such loan into a Prime Rate Loan.
(b) Illegality. Notwithstanding any other provisions herein, if any
----------
Requirements of Law, regulation, order or decree or any change therein or in the
interpretation or application thereof shall make it unlawful for a Lender to
make or maintain LIBOR Rate Loans as contemplated by this Agreement, the
Commitment hereunder to make LIBOR Rate Loans shall forthwith be canceled with
respect to such Lender upon notice to the Administrative Agent and the Borrower
and Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall,
at the option of the Borrower, be prepaid in full together with all interest
accrued and unpaid to the date of any such prepayment together with any amounts
required by Section 2.10 hereof, or converted into a Prime Rate Loan.
2.8 Applicable Margin; Periods, Etc. The applicable Margin shall be reset
-------------------------------
four times each fiscal year for the relevant periods set forth below, based upon
the Leverage Ratio, as reflected at the close of the statement period in the
Borrower's consolidated financial statements indicated in the table below, as
follows:
Financial Margin Period of
Statements Each Fiscal Year
---------- ----------------
1st Quarter August 1 - October 31
2nd Quarter November 1 - January 31
3rd Quarter February 1 - June 15
Annual (Fiscal Year End) June 16 - July 31
Notwithstanding the foregoing, the applicable Margin for the period from
closing through October 31, 2000, shall be 112.5 basis points per annum.
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2.9 Commitment Fee. As additional compensation for the Revolving Credit
--------------
Commitment, the Borrower agrees to pay the Administrative Agent for the pro rata
benefit of the Lenders a commitment fee for the Commitment Period based on the
average daily unused portion of the Total Revolving Credit Commitments and the
applicable Leverage Ratio and Liabilities to Tangible Net Worth Ratio as
reflected in the financial statements delivered pursuant to Section 5.1 hereof
in the percentage per annum as determined by reference to the grid set forth
below:
Liabilities to Tangible Net Worth Ratio
---------------------------------------
Equal to or greater Equal to or greater Equal to or
than .55 but less than .85 but less greater
Leverage Ratio Less than .55 than .85 than 1.15 than 1.15
=================================================================================================================
equal to or greater .125 .15 .15 .25
than 2.50
-----------------------------------------------------------------------------------------------------------------
equal to or greater .10 .125 .15 .15
than 1.85 but less
than 2.50
-----------------------------------------------------------------------------------------------------------------
less than 1.85 .10 .10 .125 .15
=================================================================================================================
Any fee payable under this Section 2.9 which is not paid when due shall
bear interest at the Involuntary Rate until paid, payable on demand. Such fee
shall be computed on the basis of a 360 day year for the actual days elapsed and
shall be payable monthly on the first day of each month during the Commitment
Period and on the Termination Date. The "unused portion of the Total Revolving
Credit Commitments" means, at any time, the Total Revolving Credit Commitments
less the sum of (a) the unpaid principal balance of all Revolving Credit Loans,
(b) Letter of Credit Exposure and (c) Acceptance Draft Exposure. Upon
termination or reduction of the Revolving Credit Commitments, the Borrower will
pay to the Administrative Agent, for the pro rata account of the Lenders,
accrued unused fees on the portion of the Revolving Credit Commitment terminated
or reduced to the date of termination or reduction.
2.10 Additional Compensation in Certain Circumstances.
------------------------------------------------
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
-----------------------------------------------------------------
Capital Adequacy Requirements, Expenses, Etc. If any law or guideline or
---------------------------------------------
interpretation or application thereof by any Governmental Authority charged with
the interpretation or administration thereof or compliance with any request or
directive of any
-17-
Governmental Authority (whether or not having the force of law) now existing or
hereafter adopted:
(i) subjects the Administrative Agent or a Lender to any tax or
changes the basis of taxation with respect to this Agreement, the Notes, the
Loans or payments by the Borrower of principal, interest, commitment fee or
other amounts due from the Borrower hereunder or under the Notes (except for
taxes on the overall net income of the Administrative Agent or a Lender imposed
by the jurisdiction in which the Administrative Agent or such Lender's principal
office is located),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend credit
extended by, assets (funded or contingent) of, deposits with or for the account
of, or other acquisition of funds by, the Administrative Agent or a Lender (or
participation therein) (other than requirements expressly included herein in the
determination of the LIBOR Rate hereunder),
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or credits or
commitments to extend credit extended by, the Administrative Agent or a Lender
(or participations therein) or (B) otherwise applicable to the obligations of
the Administrative Agent or a Lender under this Agreement, or
(iv) imposes upon the Administrative Agent or a Lender any other
condition or expense with respect to this Agreement, the Notes or its making,
maintenance or funding any part of the Loans (or participations therein), and
the result of any of the foregoing is to increase the cost to, reduce the income
receivable by, or impose any expense (including loss of margin) upon the
Administrative Agent or a Lender with respect to this Agreement, the Notes or
the making, maintenance or funding of any part of the Loans (or, in the case of
any capital adequacy or similar requirement, to have the effect of reducing the
rate of return on the Administrative Agent's or a Lender's capital, taking into
consideration the Administrative Agent's and such Lender's policies with respect
to capital adequacy) by an amount which the Administrative Agent or a Lender
deems to be material, the Administrative Agent or Lender shall from time to time
notify the Borrower of the amount determined in good faith (using any averaging
and attribution methods) by the Administrative Agent or Lender (which
determination shall be conclusive) to be necessary to compensate the
Administrative Agent or Lender for such increase, reduction or imposition. Such
amount shall be due and
-18-
payable by the Borrower to the Administrative Agent or Lender ten (10) ten
Business Days after such notice is given. A certificate by the Administrative
Agent or Lender as to the amount due and payable under this Section 2.10(a) from
time to time and the method of calculating such amount shall be conclusive
absent manifest error.
All references to "Lender" shall be deemed to include any participant
in such Lender's Revolving Credit Commitment.
(b) Indemnity. In addition to the compensation required by subsection
---------
(a) of this Section 2.10, the Borrower shall indemnify the Administrative Agent
and a Lender against any loss or expense (including loss of margin) which the
Administrative Agent or Lender has sustained or incurred as a consequence of any
(i) payment, prepayment or conversion of any part of any LIBOR Rate
Loan on a day other than the last day of the applicable Interest 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 the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any notice stated herein to
be irrevocable (the Administrative Agent having in its sole discretion the
options (A) to give effect to such attempted revocation and obtain indemnity
under this Section 2.10(b) or (B) to treat such attempted revocation as having
no force or effect, as if never made), or
(iii) default by the Borrower in the performance or observance of any
covenant or condition contained in this Agreement or the Notes, including
without limitation any failure of the Borrower to pay when due (by acceleration
or otherwise) any principal, interest, commitment fee or any other amount due
hereunder or under a Note.
If the Administrative Agent or Lender sustains or incurs any such loss or
expense it shall from time to time notify the Borrower of the amount determined
in good faith by the Administrative Agent or Lender (which determination shall
be conclusive) to be necessary to indemnify the Administrative Agent or Lender
for such loss or expense. Such amount shall be due and payable by the Borrower
to the Administrative Agent or Lender ten (10) Business Days after such notice
is given.
All references to "Lender" shall be deemed to include any participant
in such Lender's Revolving Credit Commitment.
-19-
The indemnities set forth herein shall survive payment in full of all
LIBOR Rate Loans and all other Revolving Credit Loans made pursuant to this
Agreement.
2.11 Termination or Reduction of Commitment. Subject to the indemnity
--------------------------------------
agreement with respect to LIBOR Rate Loans set forth in Section 2.10(b) hereof,
the Borrower shall have the right, upon not less than three (3) Business Days'
irrevocable notice to the Administrative Agent, to terminate the Total Revolving
Credit Commitment or, from time to time, to reduce the amount of the Total
Revolving Credit Commitment, provided that (a) any such reduction (i) shall be
in the minimum amount of $1,000,000 or a multiple thereof, (ii) shall reduce
permanently the amount of the Total Revolving Credit Commitment then in effect,
and (iii) shall be accompanied by prepayment of the Revolving Credit Loans
outstanding, together with accrued interest on the amount so prepaid to the
dates of each such prepayment, to the extent, if any, that the Revolving Credit
Loans then outstanding exceed the amount of the Total Revolving Credit
Commitment as then reduced, and (b) any such termination of the Total Revolving
Credit Commitment shall be accompanied by prepayment in full of the Revolving
Credit Loans outstanding, together with accrued interest thereon to the date of
prepayment, and the payment of any unpaid commitment fee then accrued hereunder.
2.12 Prepayment. Subject to the indemnity agreement with respect to
----------
LIBOR Rate Loans set forth in Section 2.10(b) hereof, the Borrower may prepay
any Loan in whole or in part without premium or penalty together with interest
accrued on the amount prepaid to the date of prepayment. Prepayments of Loans
may be reborrowed on a revolving basis as aforesaid.
2.13 Payments. (a) Except as set forth below with respect to Swing Loans,
--------
all payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without setoff or counterclaim and
shall be made to the Lender on the date of payment at the office of the
Administrative Agent set forth in Section 10.1 hereof or at such other place as
the Administrative Agent may from time to time designate in writing on or before
11:00 a.m. (Philadelphia time). All such payments with respect to Swing Loans
shall be to the Swing Bank. In each case in lawful money of the United States
of America and in immediately available funds. If any payment hereunder (other
than payments on LIBOR Rate Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. If any payment on a LIBOR
-20-
Rate Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month in which event such payment shall be made on the immediately
preceding Business Day.
(b) The Borrower hereby authorizes the Administrative Agent to
charge any of its accounts maintained at the Administrative Agent on the date
any payment is due hereunder or under a Note.
2.14 Pro Rata Treatment. (a) Except for any payment, reimbursement or
------------------
other indemnity to any Lender or other indemnified person under Section 2.7(b),
2.10, 2.19 or 10.4 hereof, or under Section 2.4 and 2.13 with respect to Swing
Loans, each borrowing, each payment or prepayment of principal of the Revolving
Credit Notes, each payment of interest on the Revolving Credit Notes, each
payment of any fee or other amount payable hereunder and each reduction of the
Total Revolving Credit Commitment shall be made pro rata among the Lenders in
the proportions that their Revolving Credit Commitments bear to the Total
Revolving Credit Commitment.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to the time the Lender is required to fund any
proposed borrowing that such Lender will not make the amount that would
constitute its pro rata share of the borrowing on such date available to the
Administrative Agent, the Administrative Agent may (assuming that the
Administrative Agent has furnished such Lender with notice of the proposed
borrowing as required under Section 2.5 hereof) assume that such Lender has made
such amount available to the Administrative Agent on such date, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is made available by such
Lender to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the daily average Federal funds rate during such period as quoted
by the Administrative Agent, times (ii) the amount of such Lender's pro rata
share of such borrowing, times (iii) a fraction the numerator of which is the
number of days that elapse from and including such borrowing date to the date on
which such Lender's pro rata share of such borrowing shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Lender's
-21-
pro rata share of such borrowing is not in fact made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to the relevant
Revolving Credit Loans hereunder, on demand, from the Borrower.
(c) Notwithstanding the foregoing provisions of this Section 2.14, in
the event that a Lender fails to make any amount that would constitute its pro
rata share of a borrowing available to the Administrative Agent, the
Administrative Agent shall so notify the other Lender(s) whereupon such
Lender(s) shall be required to make such amount available to the Administrative
Agent on a pro rata basis between (or among) the Lenders in the proportions that
their Revolving Credit Commitments bear to the Total Revolving Credit
Commitment, in an aggregate amount not to exceed the amount of such Lender's
Revolving Credit Commitment as set forth on Schedule A attached hereto.
2.15 Sharing of Setoffs. Each Lender agrees that if it shall, through the
------------------
exercise of a right of banker's lien, setoff or counterclaim against the
Borrower or a Guarantor, including, but not limited to, a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, obtain
payment (voluntary or involuntary) in respect of a Revolving Credit Note held by
it or participation in a Swing Loan Note as a result of which the unpaid
principal portion of the Revolving Credit Notes held by it or participation in a
Swing Loan Note shall be proportionately less than the unpaid principal portion
of the Revolving Credit Notes or participation in a Swing Loan Note held by any
other Lender, it shall be deemed to have simultaneously purchased from such
other Lender a participation in the Revolving Credit Notes or Swing Loan Note
held by such other Lender with the purchase price payable in cash upon demand by
such other Lender, so that the aggregate unpaid principal amount of the
Revolving Credit Notes and participations in Revolving Credit Notes and Swing
Loan Note held by it shall be in the same proportion to the aggregate unpaid
principal amount of all Revolving Credit Notes and Swing Loan Note then
outstanding as the principal amount of the Revolving Credit Notes and Swing Loan
Note held by it prior to such exercise of banker's lien, setoff or counterclaim
was to the principal amount of all Revolving Credit Notes and Swing Loan Note
outstanding prior to such exercise of banker's lien, setoff or counterclaim;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section 2.15 and such other Lender shall thereafter
receive or recover
-22-
from or respecting the Borrower or any Guarantor any amount in respect of a
Revolving Credit Note or Swing Loan Note proportionally greater than that
received by the first Lender, such purchase or purchases or adjustments shall be
repurchased and rescinded to the extent of such receipt or recovery and the
purchase price or prices paid or adjustments made shall be repaid or restored,
as applicable, without interest; provided, that, if such disproportionate amount
received or recovered by such other Lender exceeds the amount necessary to
restore the Lenders respective pro rata shares, then this section shall apply to
such excess. The Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Note deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender as fully as if such Lender held a Note in the amount of such
participation.
2.16 Use of Proceeds. The Borrower will utilize the proceeds of the
---------------
initial Revolving Credit Loans to repay any amounts owing to Mellon, EAB and
HSBC under the revolving credit agreement among Mellon, as Administrative Agent
and a Lender, EAB, HSBC and the Borrower dated October 28, 1999 (the "Prior
Agreement"). Any remaining proceeds of the initial borrowing and of any
subsequent Loans may be used by the Borrower for working capital purposes,
capital expenditures and to fund the purchase price of Permitted Acquisitions
provided no portion of the proceeds of any Loan shall be used by the Borrower in
any manner which might cause the borrowing or the application of such proceeds
to violate Regulation G, Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System.
2.17 Issuance of Letters of Credit. Upon the request of the Borrower, and
-----------------------------
subject to the conditions set forth herein and such other conditions to the
opening of Letters of Credit as the Administrative Agent requires of its
customers generally, the Administrative Agent shall from time to time issue
documentary or standby letters of credit (each, a "Letter of Credit") for the
account of the Borrower. The issuance of each Letter of Credit shall be made on
at least one (1) Business Day's prior written notice from the Borrower to the
Administrative Agent which written notice shall be an application for a Letter
of Credit on the Administrative Agent's customary form. The expiration date of
any Letter of Credit shall not be later than one (1) year from the date of
issuance thereof nor, in any event, later than the Termination Date. The
Letters of Credit shall be issued in respect of any transactions occurring in
the Borrower's ordinary course of business.
-23-
2.18 Actions of Administrative Agent. Any Letter of Credit may, in the
-------------------------------
discretion of the Administrative Agent or its correspondents, be interpreted by
them (to the extent not inconsistent with such Letter of Credit) in accordance
with the Uniform Customs and Practice for Documentary Credits of the
International Chamber of Commerce, as adopted or amended from time to time, or
any other rules, regulations and customs prevailing at the place where any
Letter of Credit is available or the drafts are drawn or negotiated. The
Administrative Agent and its correspondents may in good faith accept and act
upon the name, signature, or act of any party purporting to be the executor,
administrator, receiver, trustee in bankruptcy, or other legal representative of
any party designated in any Letter of Credit in the place of the name,
signature, or act of such party.
2.19 Indemnity as to Letters of Credit. The Borrower hereby agrees to
---------------------------------
indemnify and hold harmless the Administrative Agent and the Lenders from and
against any and all claims, damages, losses, liabilities, costs or expenses
whatsoever which the Administrative Agent or the Lenders may incur or suffer by
reason of or in connection with the execution and delivery or assignment of, or
payment under, any Letter of Credit, except only if and to the extent that any
such claim, damage, loss, liability, cost or expense shall be caused by the
willful misconduct or gross negligence of the Administrative Agent or any Lender
performing its obligations respecting such Letter of Credit under this
Agreement. Without limiting the foregoing, the Borrower further agrees to
indemnify and hold harmless the Administrative Agent, its officers and
directors, each person who controls the Administrative Agent within the meaning
of Section 15 of the Securities Act of 1933 or any applicable state securities
law and their respective successors and assigns from and against any and all
claims, damages, losses, liabilities, costs or expenses, joint or several, to
which they or any of them may become subject under any federal or state
securities law, rule or regulation, at common law or otherwise, insofar as such
claims, damages, losses, liabilities, costs or expenses arise out of or are
based upon the execution and delivery by the Administrative Agent of any Letters
of Credit or the execution and delivery of any other document in connection
therewith (but not including any claims, damages, losses, liabilities, costs or
expenses arising from the gross negligence or willful misconduct of the
Administrative Agent). The Borrower upon demand by the Administrative Agent at
any time, shall reimburse the Administrative Agent for any reasonable legal or
other expenses incurred in connection with investigating or defending against
any of the foregoing. The indemnities contained herein shall survive the
expiration or termination of the Letters of Credit and this Agreement.
-24-
2.20 Letter of Credit Fees. The Borrower agrees to pay to the
---------------------
Administrative Agent its standard draw fees and commissions in effect from time
to time. The full amount of any commission in excess of $500.00 shall be shared
with the Lenders on a pro rata basis in accordance with the provisions of
Section 2.14 hereof.
2.21 Acceptance Drafts. (a) Upon the terms and conditions hereof, the
-----------------
Borrower may, from time to time from the date hereof until the Termination Date,
request the Administrative Agent to accept drafts in the form of Exhibit B (each
an "Acceptance Draft" and, collectively, the "Acceptance Drafts"), at the
Borrower's election.
(b) The Borrower shall give the Administrative Agent telephonic
notice (immediately confirmed in writing) of its request that the Administrative
Agent accept such Acceptance Draft no later than 1:00 p.m. (Philadelphia time)
on the same day of such request (the "Acceptance Date"). Such notice shall
contain the aggregate face amount (which shall be in minimum aggregate principal
amounts of $1,000,000 and in integral multiples of $100,000 in excess thereof)
and maturity date of such Acceptance Draft, which maturity date shall not be
later than the earlier of (a) 30, 60, 90 or 120 days after the Acceptance Date
of such Acceptance Draft, as the Borrower shall designate, and (b) the
Termination Date. Such notices also shall describe the underlying goods and
indicate their origin and destination points or provide other evidence of the
underlying transaction in form and substance as may be acceptable to the
Administrative Agent to permit it to accurately complete the appropriate
eligibility legend (i.e., "eligibility certificate") on the face of the
Acceptance Draft. The Borrower shall promptly confirm such telephonic notices by
telecopy and mailing an original signed notice. Each draft shall mature on a
Business Day, which shall be at least thirty (30) days after the Acceptance
Date. No Acceptance Draft shall be dated or accepted more than thirty (30) days
before or more than thirty (30) days after the date of the shipment of goods to
which it relates. The Borrower hereby irrevocably authorizes the Administrative
Agent to complete its Acceptance Draft in accordance with the instructions given
pursuant to this Section 2.21. Any pre-signed drafts held by the Administrative
Agent for completion shall not be affected by the departure of the signer as an
authorized signatory of the Borrower, which drafts shall nevertheless remain
valid and binding upon the Borrower for all purposes as if the signer's
authority had continued in effect. (Such completion and presentment, however,
shall not obligate the Administrative Agent to accept any such Acceptance
Draft.)
-25-
(c) Upon receipt of such notices from the Borrower, the Administrative
Agent shall promptly notify each Lender of (i) its pro rata (based on its
Revolving Credit Commitment) share of such Acceptance Draft, (ii) the maturity
date of such Acceptance Draft and (iii) the discount rate and commission
applicable to such Acceptance Draft. The Administrative Agent may decline to
create any such Acceptance Draft if the Administrative Agent is not then
providing such financing to its middle market customers with credit standings
similar to the Borrower's.
(d) The Administrative Agent in its discretion at any time or from
time to time may sell, rediscount or otherwise dispose of any Acceptance Draft
without any notice or credit to or consent from the Borrower or any other
Lender.
(e) Each Acceptance Draft shall relate to one or more specific
transactions involving the importation or exportation of goods or the domestic
shipment of goods within the United States. The goods relating to each
Acceptance Draft shall have a c.i.f. value equaling or exceeding the amount of
the Acceptance Draft, shall be of good and merchantable quality, shall be fully
insured in accordance with prudent industry practice and shall not be the
subject of any security interest granted by the Borrower or any Subsidiary. No
other source shall have financed the transaction underlying the Acceptance
Draft. The Borrower shall have procured all import, export and other licenses
essential to the underlying transaction and shall have complied with all
applicable laws pertaining to the underlying goods and transaction. Each
Acceptance Draft shall qualify (upon acceptance) in all respects with the
requirements for eligibility for discount of the Federal Reserve Lenders of the
United States. With regard to each Acceptance Draft presented, the Borrower
represents and warrants to the Administrative Agent and the Lenders that, as of
the date of presentment, the Acceptance Draft and underlying goods and
transaction conform to the requirements of this subsection, and the Borrower
covenants and agrees that they will continue to conform to those requirements
for so long as the Acceptance Draft is outstanding.
2.22 Payment in Respect of Letters of Credit and Acceptances;
--------------------------------------------------------
Reimbursement. Upon the issuance of any Letter of Credit, the Administrative
-------------
Agent shall notify each Lender of the principal amount, the number, and the
expiration date thereof and the amount of such Lender's participation therein.
By the issuance of a Letter of Credit hereunder and without further action on
the part of the Administrative Agent or the Lenders, each Lender hereby accepts
from the Administrative Agent a participation (which participation shall be
nonrecourse to the Administrative Agent)
-26-
in such Letter of Credit equal to such Lender's pro rata (based on its Revolving
Credit Commitment) share of such Letter of Credit, effective upon the issuance
of such Letter of Credit. The Administrative Agent shall notify each Lender of
the presentment to the Administrative Agent of any draft for acceptance
hereunder, which notice shall include the amount of such draft and the maturity
date thereof. Upon the acceptance of any Acceptance Draft, the Administrative
Agent shall: (i) notify each Lender of the net proceeds thereof and the amount
of such Lenders's participation therein (acquired pursuant to the terms hereof)
and (ii) credit the net proceeds thereof to the Borrower's account maintained
with the Administrative Agent for such purpose. Such net proceeds shall be in an
amount equal to the face amount of such Acceptance Draft less the applicable
discount and commission. The funds, net of such discounts and commissions, so
credited to the Borrower's account shall be immediately available to the
Borrower, and the Administrative Agent shall promptly notify the Borrower as to
the amount of the net funds so credited. By acceptance of an Acceptance Draft
and without further action on the part of the Administrative Agent or the
Lenders, each Lender hereby accepts from the Administrative Agent a
participation (which participation shall be nonrecourse to the Administrative
Agent) in such Acceptance Draft equal to such Lender's pro rata (based on its
Revolving Credit Commitment) share of such Acceptance Draft, effective upon the
issuance of such Acceptance Draft. Each Lender hereby absolutely and
unconditionally assumes, as primary obligor and not as a surety, and agrees to
pay and discharge, and to indemnify and hold the Administrative Agent harmless
from liability in respect of, such Lender's pro rata share of the amount of any
drawing under a Letter of Credit and payment of any Acceptance Draft. Each
Lender acknowledges and agrees that its obligation to acquire participation in
each Letter of Credit issued by and each Acceptance Draft accepted by the
Administrative Agent and its obligation to make the payments specified herein,
and the right of the Administrative Agent to receive the same, in the manner
specified herein, are absolute and unconditional and shall not be affected by
any circumstance whatsoever, including, without limitation, the occurrence and
continuance of a Default or an Event of Default hereunder, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. The Administrative Agent shall review, on behalf of the Lenders,
each draft presented under a Letter of Credit and shall notify each Lender of
any such presentment. Promptly after it shall have ascertained that any draft
presented under such Letter of Credit appears on its face to be in substantial
conformity with the terms and conditions of the Letter of Credit, the
Administrative Agent shall give telephonic or facsimile notice to the Lenders
and the Borrower of the receipt and amount
-27-
of such draft and the date on which payment thereon will be made. The Borrower
shall reimburse the Administrative Agent for the amount specified in such notice
by no later than 11:00 a.m. (Philadelphia time) on the date such payment is
scheduled to be made. If the Borrower has not so discharged such reimbursement
obligations and the Administrative Agent is unable to recover the required
amount by debiting the Borrower's account (as hereinafter provided), the
Administrative Agent shall give each Lender notice of any amount that remains
unreimbursed, and each Lender shall promptly, but in any event within two hours
of the receipt of such notice, pay the amounts required to the Administrative
Agent in immediately available funds, and the Administrative Agent, not later
than 3:00 p.m. (Philadelphia time) on such day, shall make the appropriate
payment to the beneficiary. If the Lenders shall pay any draft presented under a
Letter of Credit or make any such payment upon the maturity of an Acceptance
Draft, then the Administrative Agent, on behalf of the Lenders, shall charge the
general deposit account of the Borrower with the Administrative Agent for the
amount thereof, together with the Administrative Agent's customary overdraft or
similar fee in the event the funds available in such account shall not be
sufficient to reimburse the Lenders for such payment. If the Lenders have not
been reimbursed with respect to such drawing as provided above, the Borrower
shall pay to, the Administrative Agent, for the account of the Lenders, the
amount of the drawing together with interest on such amount at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the Involuntary Rate payable on demand. The obligations of the
Borrower under this Section 2.22 to reimburse the Lenders and the Administrative
Agent for all drawings under Letters of Credit and payments made in respect of
Acceptance Drafts shall be absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms, irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit or
Acceptance Draft;
(b) the existence of any claim, setoff, defense or other right which
the Borrower or any other person may at any time have against the beneficiary
under the Letter of Credit or the Acceptance Draft, the Administrative Agent or
any Lender (other than the defense of payment in accordance with the terms of
this Agreement or a defense not otherwise waived hereunder based on the gross
negligence or willful misconduct of the Administrative Agent or any Lender) or
any other person in connection with this Agreement or any other transaction;
-28-
(c) any draft or other document presented under any Letter of Credit
or Acceptance Draft proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(d) payment by the Administrative Agent or any Lender under any Letter
of Credit against presentation of a draft or other document which does not
comply with the terms of such Letter of Credit;
(e) the existence, character, quantity, quality, condition, packing,
value or delivery of any goods or other property relating to any Letter of
Credit or Acceptance Draft;
(f) the time, place, manner or order in which shipment is made;
(g) the provisions of any insurance policy or any act or omission of
any insurer, shipper, warehouseman, carrier, correspondent or other person;
(h) any other circumstance or event whatsoever, whether or not similar
to any of the foregoing.
Neither the Administrative Agent nor a Lender shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or Acceptance Draft or any payment or failure to make
payment thereunder (irrespective of any of the circumstances referred to above),
or any error, omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to any Letter of
Credit or Acceptance Draft (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the Administrative Agent or a Lender,
provided that the foregoing shall not be construed to excuse the Administrative
Agent or a Lender from liability to the Borrower to the extent of damages
suffered by the Borrower that are caused by the Administrative Agent's or a
Lender's gross negligence or willful misconduct. It is understood that in making
any payment under any Letter of Credit or Acceptance Draft (x) the
Administrative Agent's and any Lender's exclusive reliance on the documents
presented to it under such Letter of Credit or Acceptance Draft as to any and
all matters set forth therein, including, without limitation, good faith
reliance on the amount of any draft presented under such Letter of Credit or
Acceptance Draft, whether or not the amount due to the beneficiary equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit or Acceptance Draft proves to be insufficient in any respect,
if such document on its face appears to be in order, and whether or not any
other statement or any other document presented
-29-
pursuant to such Letter of Credit or Acceptance Draft proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (y) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit or Acceptance Draft with the
terms thereof shall, in each case, not be deemed willful misconduct or gross
negligence of the Administrative Agent or any Lender.
2.23 Ineligibility of Acceptance Drafts. In the event that any Acceptance
----------------------------------
Draft accepted pursuant to this Agreement does not, for reasons beyond the
control of the Administrative Agent, comply at the time of its acceptance with
applicable regulations of the Board governing bankers' acceptances and would not
be eligible under such regulations for discount with a Federal Reserve lender or
if for any other reason any Acceptance Draft is deemed by the Administrative
Agent not eligible for discount, the Borrower will, upon receipt of written
notice from the Administrative Agent, forthwith pay to the Administrative Agent
any additional cost or costs, as determined by the Administrative Agent,
incurred by the Administrative Agent (including, without limitation, any costs
resulting from a higher discount rate upon disposition of such Acceptance Draft
by the Administrative Agent, any funding costs resulting from a higher discount
rate upon disposition of such Acceptance Draft by the Administrative Agent,
reserve requirements or additional premium liability to the Federal Deposit
insurance Corporation) in connection with such Acceptance Draft on account of
such noncompliance or ineligibility.
SECTION 3. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and to issue Letters of Credit and to
create Acceptance Drafts herein provided for, the Borrower hereby covenants,
represents and warrants to the Administrative Agent and the Lenders that:
3.1 Financial Condition. The consolidated balance sheet and consolidated
-------------------
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries as at February 29, 2000 audited by Xxxxx Xxxxxx & Company, LLC,
CPAs and the interim consolidated balance sheet and consolidated related
statements of income, retained earnings and cash flows as of May 31, 2000 have
heretofore been furnished to the Lenders, and fairly present the financial
condition of the Borrower and its Subsidiaries as at
-30-
such dates, and for the fiscal year and fiscal quarter, respectively, then
ended. Such annual financial statements have been prepared in accordance with
GAAP and such interim financial statements have been prepared on a basis
consistent with the annual financial statements, subject to the year end
adjustments. Neither the Borrower nor its Subsidiaries has any material
contingent obligations, contingent liabilities or liability for taxes, long-term
lease or unusual forward or long-term commitment, which are not reflected in the
foregoing statements or in the notes thereto.
3.2 No Change. Since February 29, 2000 there has been no material adverse
---------
change in the business, operations, assets or financial or other condition of
the Borrower or its Subsidiaries.
3.3 Corporate Existence; Compliance with Law; Subsidiaries. The Borrower
------------------------------------------------------
and each of its Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority and the legal right to own and operate its
properties, and to conduct the business in which it is currently engaged, (iii)
does not own or operate properties or conduct business which requires
qualification as a foreign corporation in any jurisdiction in which it is not so
qualified, and (iv) is in compliance with all Requirements of Law; except to the
extent that the failure to so qualify as a foreign corporation as required by
clause (iii) of this Section 3.3 or to comply with all Requirements of Law as
required by clause (iv) of this Section 3.3 would not, in the aggregate, have a
material adverse effect on the business, operations, property or financial or
other condition of the Borrower and its Subsidiaries taken as a whole, and would
not materially adversely affect the ability of the Borrower or a Subsidiary to
perform its obligations under this Agreement and the Notes.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
Borrower and each of its Subsidiaries has the corporate power and authority and
the legal right to execute, deliver and perform its obligations under the Loan
Documents and to borrow hereunder. The Borrower has taken all necessary
corporate action to authorize the borrowings hereunder on the terms and
conditions of this Agreement and the Borrower and each of its Subsidiaries has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents. No consent or authorization of, filing with,
or other act by or in respect of any other Person (including stockholders and
creditors of the Borrower or its Subsidiaries) or any Governmental Authority, is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of
-31-
the Loan Documents. Each of the Loan Documents has been duly executed and
delivered on behalf of the Borrower or its Subsidiaries as applicable, and each
of the Loan Documents constitutes a legal, valid and binding obligation of the
Borrower or its Subsidiaries as applicable enforceable against the Borrower or
its Subsidiaries as applicable, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
3.5 Legal Bar. The execution, delivery and performance of each of the
---------
Loan Documents and the borrowings hereunder and the use of the proceeds thereof,
will not violate any of the Requirements of Law or Contractual Obligations of
the Borrower or its Subsidiaries, and will not result in, or require the
creation or imposition of any Lien on any of its respective properties or
revenues pursuant to any Requirements of Law or Contractual Obligations except
those in favor of the Lenders as provided herein.
3.6 No Material Litigation. No litigation, investigation or proceeding
----------------------
of or before any arbitrator or Governmental Authority is pending by or against
the Borrower or any Subsidiary or any of its respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which if adversely determined, would have
a material adverse effect on the business, operations, property or financial or
other condition of the Borrower and its Subsidiaries taken as a whole.
3.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
----------
default under or with respect to any Contractual Obligations in any respect
which would be materially adverse to the business, operations, property or
financial or other condition of the Borrower and its Subsidiaries taken as whole
or which would materially and adversely affect the ability of the Borrower or
its Subsidiaries to perform its respective obligations under any of the Loan
Documents. No Default or Event of Default has occurred and is continuing.
3.8 No Burdensome Restrictions. No Contractual Obligations of the
--------------------------
Borrower or its Subsidiaries and no Requirements of Law materially adversely
affect, or insofar as the Borrower or its Subsidiaries may reasonably foresee
may so affect, the business, operations, property or financial or other
condition of the Borrower and its Subsidiaries taken as a whole.
-32-
3.9 Federal Regulations. Neither the Borrower nor its Subsidiaries is
-------------------
engaged nor will it engage, principally or as one of its important activities,
in the business of extending credit for the purpose of "purchasing" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the proceeds
of any Loans hereunder will be used for "purchasing" or "carrying" "margin
stock" as so defined or for any purpose which violates, or which would be
inconsistent with the provisions of the regulations of such Board of Governors.
3.10 Environmental Regulation. (a) The Borrower has no knowledge of
------------------------
receipt of any past, pending or threatened:
(i) claims, complaints, notices or requests for information with
respect to any alleged violation of any Environmental Law that, singly or in the
aggregate, have resulted in, or may reasonably be expected to result in, any
material adverse change in the financial or business conditions of the Borrower
and its Subsidiaries taken as a whole; or
(ii) complaints, notices or inquiries to the Borrower or any
Subsidiary regarding potential liability under any Environmental Law that,
singly or in the aggregate, have resulted in, or may reasonably be expected to
result in, any material adverse change in the financial or business conditions
of the Borrower and its Subsidiaries taken as a whole;
(b) No property now or previously owned or leased by the Borrower or
any Subsidiary is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS list or on any similar state list of sites
requiring investigation or clean-up; and
(c) Neither the Borrower nor any Subsidiary has directly transported
or directly arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS list or on any similar state list or which is
the subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrower for any
remedial work, damage to natural resources or personal injury, including claims
under CERCLA.
3.11 Title to Properties. The Borrower and its Subsidiaries have valid
-------------------
leases of or good and marketable title to its respective properties and assets,
including the properties and assets
-33-
reflected in the balance sheets described in Section 3.1. Such properties and
assets are not subject to any Lien, except as reflected in such balance sheets
and except to the extent otherwise permitted by Section 7.2 hereof.
3.12 Taxes. The Borrower and its Subsidiaries have filed all Federal,
-----
state and other tax returns which to the knowledge of the Borrower and its
Subsidiaries is required to be filed and have paid all taxes shown as due and
payable on said returns or on any assessments made against them or any of its
respective properties except such taxes, if any, as are being contested in good
faith and by proper proceedings and as to which adequate reserves have been
maintained.
3.13 ERISA. Based upon ERISA and the regulations and published
-----
interpretations thereunder, the Borrower, its Subsidiaries and each ERISA
Affiliate is in compliance in all material respects with all applicable
provisions, if any, of ERISA. Neither a Reportable Event nor a Prohibited
Transaction has occurred and is continuing with respect to any Plan; no notice
of intent to terminate a Plan has been filed nor has any Plan been terminated;
no circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer a Plan, nor has the PBGC instituted such proceedings; the
Borrower, its Subsidiaries and each ERISA Affiliate has met its minimum funding
requirements under ERISA with respect to all of its Plans and the present fair
market value of all Plan assets exceeds the present value of all vested benefits
under each Plan, as determined on the most recent valuation date of the Plan in
accordance with the provisions of ERISA and the regulations thereunder for
calculating the potential liability of the Borrower, its Subsidiaries and each
ERISA Affiliate to the PBGC or the Plan under Title IV of ERISA, and neither the
Borrower, its Subsidiaries nor an ERISA Affiliate has incurred any liability to
the PBGC under ERISA.
3.14 Operation of Business. The Borrower and its Subsidiaries possess all
---------------------
licenses, permits, franchises, patents, copyrights, trademarks, and trade names,
or rights thereto, necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted, and
neither the Borrower nor any Subsidiary is in material violation of any valid
rights of others with respect to any of the foregoing except where the failure
to obtain licenses or permits does not individually or in the aggregate
materially and adversely impair
-34-
the ability of a Borrower or any of its Subsidiaries to operate its business or
perform its obligations under a Loan Document.
SECTION 4. CONDITIONS PRECEDENT
--------------------
4.1 Conditions to Initial Revolving Credit Loan. The obligation of the
-------------------------------------------
Lenders to make the initial Revolving Credit Loans to the Borrower hereunder is
subject to the satisfaction of the following conditions precedent:
(a) Revolving Credit Notes. Each Lender shall have received a
----------------------
Revolving Credit Note conforming to the requirements hereof and duly executed by
the Borrower.
(b) Legal Opinion. The Administrative Agent and each Lender shall
-------------
have received a favorable opinion of counsel to the Borrower and the Guarantors
satisfactory in form and substance to the Administrative Agent and the Lenders
and covering such matters incident to the transactions contemplated by this
Agreement as the Administrative Agent and the Lenders shall reasonably require.
(c) Guarantees. Each Lender shall have received the Guarantees of
----------
each Guarantor duly executed by each Guarantor.
(d) Certified Copies and Other Documents. The Lenders shall have
------------------------------------
received such certificates and other documents relating to the Borrower and the
Guarantors with respect to the matters herein contemplated as the Lender may
request, including but not limited to:
(i) certificates of good standing from the Secretary of State
of New York if incorporated under the laws of the State of New York or doing
business in New York and, if incorporated in a jurisdiction other than New York,
from the Secretary of State or applicable Governmental Authority of such
jurisdiction of incorporation and from the Secretary of State or applicable
Governmental Authority of each jurisdiction in which an office is maintained;
(ii) certificates of incorporation and all amendments thereto
certified by the applicable Secretary of State or applicable Governmental
Authority;
(iii) certificates of the Secretary of the Borrower dated the
date of this Agreement certifying, (x) true and correct copies of the by-laws of
the Borrower as in effect on the date of adoption of the resolutions referred to
in (y) of
-35-
this subsection (iii), (y) true and correct copies of resolutions adopted by the
board of directors of the Borrower (1) authorizing the borrowings from the
Lender hereunder, the execution, delivery and performance by the Borrower of
each of the Loan Documents to which it is a party and the performance by the
Borrower of its obligations under each of the Loan Documents to which it is a
party, (2) approving forms in substantially execution form of each of the Loan
Documents to which it is a party, and (3) authorizing officers of the Borrower
to execute and deliver each of the Loan Documents to which it is a party, and
(z) the incumbency and specimen signatures of the officers of the Borrower
executing any documents delivered to the Administrative Agent or a Lender by the
Borrower in connection herewith;
(iv) certificates of the Secretary of each Guarantor dated the
date of this Agreement certifying, (w) true and correct copies of the by-laws of
each Guarantor as in effect on the date of adoption of the resolutions referred
to in (x) of this subsection (iii), (x) true and correct copies of resolutions
adopted by the board of directors of each Guarantor authorizing (1) the
execution, delivery and performance by each Guarantor of each of the Loan
Documents to which it is a party and the performance by each Guarantor of its
obligations under each of the Loan Documents to which it is a party, (2)
approving forms in substantially execution form of each of the Loan Documents to
which it is a party, and (3) authorizing officers of each Guarantor to execute
and deliver each of the Loan Documents to which it is a party, (y) true and
correct copies of resolutions adopted by the shareholders of each Guarantor
authorizing the execution and delivery of the Loan Documents to which it is a
party and (z) the incumbency and specimen signatures of the officers of each
Guarantor executing any documents delivered to the Administrative Agent or a
Lender by each Guarantor in connection herewith.
(e) Fees. The Administrative Agent shall have received evidence
----
of payment of the Administrative Agent's per annum fee pursuant to a side letter
between the Administrative Agent and the Borrower and the Administrative Agent's
attorneys fees and disbursements.
(f) Termination of the Prior Agreement. The Lenders shall have
----------------------------------
received evidence of payment of any sums due under and the termination of the
Prior Agreement.
(g) Dissolution of Nu Horizons/Merit Electronics Corp. The
-------------------------------------------------
Lenders shall have received evidence of the dissolution of Nu Horizons/Merit
Electronics Corp.
-36-
(h) Additional Matters. All other documents and legal matters in
------------------
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative Agent and its counsel.
4.2 Conditions to All Loans, Etc. The obligation of the Lenders to
----------------------------
make any Loan (including the initial Revolving Credit Loan), issue any Letter of
Credit or accept any Acceptance Draft to be made by it hereunder is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Borrower herein or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection herewith, shall be correct on and as of the borrowing
date for such Loan as if made on and as of such date except to the extent that
such representation is stated to be made as of a date certain.
(b) No Default or Event of Default. No Default or Event of
------------------------------
Default shall have occurred and be continuing on the date a Loan is to be made
or after giving effect to the Loan to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower hereunder as of the date of each
such borrowing that the conditions in clauses (a) and (b) of this Section have
been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
---------------------
The Borrower hereby agrees that so long as the Revolving Credit Commitments
remain in effect, a Note, any Letter of Credit or any Acceptance Draft remains
or remain outstanding and unpaid, or any other amount is owing to the
Administrative Agent or a Lender hereunder, the Borrower will and will cause
each of its Subsidiaries to:
5.1 Information. Furnish to the Lenders or cause to be furnished to
-----------
the Lenders:
(1) As soon as available, but not more than one hundred (100)
days after the close of each fiscal year, the financial statements of the
Borrower and its Subsidiaries including the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries with related consolidated
and consolidating statements of income, retained earnings and cash
-37-
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all prepared in accordance with GAAP
consistently applied and audited by a firm of independent certified public
accountants acceptable to the Required Lenders. Such financial statements shall
be accompanied by a certificate of the chief financial officer of the Borrower
demonstrating compliance with the financial covenants contained in Section 6 of
this Agreement and to the effect that, having read this Agreement and the Loan
Documents and based upon an examination which in the opinion of such officer was
sufficient to enable such officer to make an informed statement, nothing came to
such officer's attention which would cause such officer to believe that an Event
of Default or Default had occurred hereunder or thereunder, and, if so, stating
the facts with respect thereto and whether the same has been cured prior to the
date of such certificate, and, if not, what action is proposed to be taken with
respect thereto.
(2) As soon as possible, but not more than fifty (50) days after the
close of the first three (3) fiscal quarters of each year, the financial
statements of the Borrower and its Subsidiaries including its consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries with related
consolidated and consolidating statements of income, retained earnings and cash
flows as of the last day of and for such quarter and for the period of the
fiscal year ended as of the close of the particular quarter, all such quarterly
statements to be in reasonable detail, all prepared on a basis consistent with
the annual financial statements, subject to year end adjustments and certified
by the chief financial officer of the Borrower. Such financial statements shall
be accompanied by a certificate signed by the chief financial officer of such
Borrower as specified in paragraph (1) above.
(3) Prompt written notice if: (i) any obligation (other than an
obligation under this Agreement) of the Borrower or any of its Subsidiaries for
borrowed money or for the deferred purchase price of any property is declared or
shall become due and payable prior to its stated maturity, (ii) the holder of
any note (other than a Note), or other evidence of indebtedness, certificate or
security evidencing any such obligation, has the right to declare such
obligation due and payable prior to its stated maturity, or (iii) to the
knowledge of any officer of the Borrower or any of its Subsidiaries there shall
occur an Event of Default or a Default.
(4) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other order naming the Borrower or any of its
Subsidiaries a party to any proceeding before any governmental body which if
adversely determined would
-38-
have a material adverse effect on the business, financial condition or
operations of the Borrower and its Subsidiaries taken as a whole, and include
with such notice a copy of such citation, summons, subpoena, order to show cause
or other order, (ii) any lapse or other termination of a license, permit or
other authorization issued to the Borrower or any of its Subsidiaries by any
Governmental Authority or Person, which lapse or other termination would have a
material adverse effect on the property, business, profits or conditions
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole,
(iii) any refusal by any Governmental Authority or Person to renew or extend
such license, permit or other authorization, and (iv) any suit between the
Borrower or any of its Subsidiaries and any Governmental Authority or Person or
formal demand made upon the Borrower or any of its Subsidiaries by any
Governmental Authority or Person which if adversely determined would have a
material adverse effect on the property, business, profits or conditions
(financial or otherwise) of a Borrower and its Subsidiaries taken as a whole.
(5) Prompt written notice in the event that: (i) a Borrower or an
ERISA Affiliate shall fail to make any payment when due and payable under any
Plan or (ii) the Borrower or an ERISA Affiliate shall receive notice from the
Internal Revenue Service or the Department of Labor that it shall have failed to
meet the minimum funding requirements of any Plan, and include therewith a copy
of such notice.
(6) Copies of any request for a waiver of the funding standards or
any extension of the amortization periods required by Sections 303 and 304 of
ERISA, or Section 402 of the Code, promptly after any such request is submitted
to the Department of Labor or the Internal Revenue Service, as the case may be.
(7) Promptly after a Reportable Event occurs which may result in a
termination of a Plan, or the Borrower or an ERISA Affiliate receives notice
that the PBGC has instituted or intends to institute proceedings under Section
4042 of ERISA to terminate a Plan, a copy of any notice of such Reportable Event
which is filed with the PBGC, or any notice delivered by the PBGC evidencing its
institution of such proceedings or its intent to institute such proceedings, or
any notice to the PBGC that a Plan is to be terminated, as the case may be.
(8) Promptly upon becoming aware of the occurrence of any Prohibited
Transaction in connection with any Plan, a written notice specifying the nature
thereof, what action the Borrower or an ERISA Affiliate is taking or proposes to
take with respect
-39-
thereto, and, when known, any action taken by the Internal Revenue Service with
respect thereto.
(9) Promptly after the filing thereof, copies of each annual report
required to be filed pursuant to Section 103 of ERISA and copies of any other
reports required to be filed with respect to any Plan.
(10) Within ten (10) days after the filing thereof, copies of all
periodic reports which any Borrower or any of its Subsidiaries may now or
hereafter be required to file with or deliver to any securities exchange or to
the Securities and Exchange Commission, or any other Governmental Authority
succeeding to the functions thereof.
(11) Promptly upon request therefor, such other information and
reports relating to the financial condition and operations of the Borrower or
any of its Subsidiaries as the Administrative Agent or a Lender at any time or
from time to time may reasonably request.
5.2 Corporate Existence; Continuance of Business. Preserve and maintain
--------------------------------------------
its corporate existence and its rights, privileges and franchises, continue to
engage in substantially the same line of business in which it was engaged on the
date hereof and its right to conduct business in all states in which the nature
of its business requires qualification to do business; provided, however, that
the Borrower may add a line of business to the extent such addition is the
result of a Permitted Acquisition and provided further, however, that nothing
herein shall prevent the dissolution or termination of the existence, rights,
privileges or franchises of a Subsidiary if the Board of Directors of the
Borrower shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower and its Subsidiaries taken as a
whole. In the event of dispute between the Borrower or any of its Subsidiaries
and the Administrative Agent as to when qualification is necessary, the decision
of the Administrative Agent in its reasonable judgment shall control.
5.3 Payment of Obligations. Pay and discharge all taxes, assessments and
----------------------
governmental charges or levies imposed upon it or upon its income and profits,
or upon any property belonging to it, prior to the date upon which penalties
attach thereto except where contested in good faith and by proper proceedings if
appropriate reserves are maintained with respect thereto.
5.4 Insurance. Maintain insurance, at all times throughout the term of
---------
this Agreement, on its property with responsible
-40-
insurance carriers licensed or authorized to do business in the State of New
York and each state in which the Borrower or any of its Subsidiaries conducts
business against such risks, loss, damage and liability (including liability to
third parties) and in such amounts as is customarily maintained by similar
businesses, including, without limitation, public liability and workers'
compensation insurance, and file with the Administrative Agent within ten (10)
Business Days after request therefor a certificate of such insurance then in
effect on Xxxxx form or other similar form acceptable to the Administrative
Agent.
5.5 Payment of Indebtedness and Performance of Obligations. Pay and
------------------------------------------------------
discharge promptly all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, would have a material adverse effect on the
operations, business or financial or other condition of the Borrower and its
Subsidiaries taken as a whole except where contested in good faith and by proper
proceedings if appropriate reserves are maintained with respect thereto.
5.6 Condition of Property. At all times, maintain, protect and keep in
---------------------
good repair, working order and condition, normal wear and tear excepted, all
property of the Borrower and its Subsidiaries necessary and useful in the
judgment of the Borrower and its Subsidiaries in connection with the proper
conduct of the business of the Borrower and its Subsidiaries.
5.7 Observance of Legal Requirements. Observe and comply in all respects
--------------------------------
with all material laws (including but not limited to ERISA), ordinances, orders,
judgments, rules, regulations, certifications, franchises, permits, licenses,
directions and requirements of all governmental bodies which now or at any time
thereafter may be applicable to the Borrower or any of its Subsidiaries.
5.8 Books and Records. Keep proper books of record and account.
-----------------
5.9 Inspection. At any reasonable times and from time to time, upon
----------
reasonable notice permit the Administrative Agent and the Lenders, through
officers or employees or authorized representatives to visit and inspect any of
the properties of the Borrower or any of its Subsidiaries, and to examine the
minute books, books of account, reports and other records of the Borrower and
its Subsidiaries and make copies thereof or extracts therefrom, and discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries with its
principal officers or with such Borrower's independent accountants.
-41-
5.10 Compliance with Environmental Laws; Indemnity. (a) Use and operate
---------------------------------------------
all of its facilities and properties in material compliance with all
Environmental Laws, 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 Materials
in material compliance with all applicable Environmental Laws;
(b) Immediately notify the Administrative Agent and the Lenders, and
provide copies upon receipt, of all written claims, complaints, notices or
inquires relating to the condition of its facilities and properties relating to,
or compliance with, Environmental Laws, and promptly cure and have dismissed
with prejudice to the satisfaction of the Administrative Agent and the Lender
any actions and proceedings relating to compliance with Environmental Laws;
(c) Provide such information and certifications which the
Administrative Agent or a Lender may reasonably request from time to time to
evidence compliance with this Section 5.10; and
(d) Indemnify the Administrative Agent and the Lenders for, and hold
the Administrative Agent and the Lenders harmless from all liability, cost and
expenses (including reasonable attorney's fees) incurred by, or imposed upon, or
sought to be imposed upon the Lender arising out of the breach by the Borrower
of any of the covenants set forth in this Section 5.10. The provisions of this
paragraph shall survive payment in full of the Revolving Credit Loans.
5.11 Administrative Agent's Fee. The Borrower agrees to pay a fee to the
--------------------------
Administrative Agent in accordance with the terms of a side letter between the
Borrower and the Administrative Agent.
SECTION 6. FINANCIAL COVENANTS
-------------------
The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, a Note, any Letter of Credit or any Acceptance
Draft remains or remain outstanding and unpaid, or any other amount is owing to
the Administrative Agent or a Lender hereunder, the Borrower and its
Subsidiaries, on a consolidated basis, will comply with the following financial
covenants:
6.1 Quick Ratio. Maintain at all times a Quick Ratio of at least .80:1.
-----------
-42-
As used herein, Quick Ratio shall mean a ratio of (1) the sum of (a)
cash on hand or on deposit in Lenders, (b) readily marketable securities issued
by the United States of America and (c) accounts receivable not more than ninety
(90) days past due to (2) total current liabilities. For purposes of
calculating compliance with this covenant, amounts outstanding under the Loans
shall be included as a current liability.
6.2 Leverage Ratio. Maintain at all times during the periods indicated, a
--------------
Leverage Ratio on a rolling four quarters basis not to exceed 3.00:1 from
closing through 5/31/01 and 2.75:1 from 6/1/01 and at all times thereafter.
6.3 Tangible Net Worth. Maintain Tangible Net Worth (including
------------------
Subordinated Debt) at all times during the periods indicated of at least:
- $72,500,000 from closing to 2/27/01
- 2/28/01 to 2/27/02 - $72,500,000 plus 75% of fiscal year 2001 net
income ("'01 Base")
- 2/28/02 to 2/27/03 - '01 Base plus 75% of fiscal year 2002 net
income ("'02 Base")
- 2/28/03 to 2/27/04 - '02 Base plus 75% of fiscal year 2003 net
income ("'03 Base")
- 2/28/04 to 2/27/05 - '03 Base plus 75% of fiscal year 2004 net
income
In addition, 75% of the net proceeds received by the Borrower or its
Subsidiaries from any equity offering, will be added to the applicable base
Tangible Net Worth amount required as set forth above for the next fiscal year
and in each fiscal year thereafter. Net losses, if any, will not be deducted
from the applicable base.
6.4 Liabilities to Tangible Net Worth. Maintain at all times a Liabilities
---------------------------------
to Tangible Net Worth Ratio not to exceed 1.25:1.
Except as specifically otherwise provided, all financial covenants
shall be calculated in accordance with GAAP consistently applied.
SECTION 7. NEGATIVE COVENANTS
------------------
The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, a Note, any Letter of Credit or any Acceptance
Draft remains or remain outstanding and unpaid, or any other amount is owing to
a Lender hereunder, the Borrower will not, nor will it permit any Subsidiary to:
-43-
7.1 Indebtedness for Borrowed Money. Incur, or permit to exist, any
-------------------------------
indebtedness for borrowed money except (i) indebtedness incurred pursuant to
borrowings hereunder, (ii) purchase money indebtedness secured by Liens
described in Section 7.2(iv) hereof which has an annual debt service requirement
of not more than $8,000,000.00 in the aggregate less the amount expended by the
Borrower for operating leases pursuant to Section 7.7 hereof, (iii) indebtedness
existing on the date hereof and reflected in the financial statements referred
to in Section 3.1 hereof and extensions, renewals and refinancings thereof
(without increase in principal amount) other than amounts owing under the Prior
Agreement which shall be repaid in full and terminated prior to or on the date
hereof, (iv) indebtedness incurred in the ordinary course of business exclusive
of that incurred in the borrowing of money, (v) the Subordinated Indebtedness,
(vi) indebtedness owing to Mellon in a principal amount not to exceed
$8,000,000.00 pursuant to that certain loan agreement dated October 10, 1997
between Mellon and the Company (as such agreement may be amended from time to
time, the "ESOP Loan Agreement") and (vii) other indebtedness which shall not
exceed in the aggregate, for the Borrower and all Subsidiaries, at any time
outstanding, the sum of $500,000.
7.2 Liens. Create, assume or permit to exist, any Lien on any of its
-----
property or assets now owned or hereafter acquired except (i) Liens in favor of
the Administrative Agent for the benefit of the Lenders; (ii) other Liens
incidental to the conduct of its business or the ownership of its property and
assets which were not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not materially impair the use
thereof in the operation of its business; (iii) Liens for taxes or other
governmental charges which are not delinquent or which are being contested in
good faith and for which a reserve shall have been established in accordance
with GAAP; (iv) purchase money Liens on fixed assets granted to secure either
the unpaid balance of the purchase price thereof or a Loan made to finance the
purchase of such assets, all to the extent permitted under Section 7.1(ii)
hereof; and (v) Liens existing on the date hereof and disclosed in writing to
the Lenders as indicated on Schedule I hereto.
7.3 Loans and Investments. Lend or advance money, credit or property to
---------------------
or invest in (by capital contribution, loan, purchase or otherwise) any firm,
corporation, or other Person except (i) investments in United States Government
obligations, certificates of deposit of any banking institution with combined
capital and
-44-
surplus of at least $200,000,000 and commercial paper of the highest credit
rating given by Xxxxx'x Investors Service, Inc. or Standard and Poors
Corporation, (ii) the Borrower may make loans provided that the aggregate
thereof at any time outstanding and owing by any one Person shall not exceed
$100,000, (iii) investments in stocks, securities and assets of other
corporations in connection with any transaction not otherwise qualifying as a
Permitted Acquisition, the result of which will constitute an investment by the
Borrower in a new Subsidiary or a merger in which the Borrower is the surviving
corporation; provided, however, that the aggregate of such investments shall not
exceed $1,000,000, and provided, further, that the Borrower shall cause any new
Subsidiary which is so acquired to guarantee payment to the Lenders of all of
the Borrower's obligations arising hereunder, (iv) Permitted Acquisitions and
(v) the ESOP Loans as defined in and in accordance with the ESOP Loan Agreement.
7.4 Fundamental Changes. Wind up, liquidate, or dissolve itself,
-------------------
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transaction or a series
of transactions) all or substantially all of its assets, (whether now owned or
hereafter acquired other than sales of inventory and obsolete equipment in the
ordinary course of business) to any Person, or acquire all or substantially all
of the assets or the business of any Person except: the Borrower or a wholly
owned Subsidiary may merge into or consolidate with a wholly owned Subsidiary,
provided in each case that immediately after giving effect thereto, the
surviving entity is obligated under this Agreement and no event shall occur and
be continuing which constitutes a Default or an Event of Default.
7.5 Contingent Liabilities. Assume, endorse, be or become liable for or
----------------------
guarantee the obligations of any Person if, as a result thereof, the aggregate
of such contingent liabilities with respect to any one Person would exceed
$100,000 excluding, however, (a) the endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, and (b) guarantees
given by the Borrower for obligations of its Subsidiaries and guarantees given
by Subsidiaries for the obligations of the Borrower.
7.6 Sales of Receivables; Sale - Leasebacks. Sell, discount or otherwise
---------------------------------------
dispose of notes, accounts receivable or other obligations owing to the
Borrower, with or without recourse, except for the purpose of collection in the
ordinary course of
-45-
business; or sell any asset pursuant to an arrangement to thereafter lease such
asset from the purchaser thereof.
7.7 Lease Payments. Expend in the aggregate for the Borrower and all
--------------
Subsidiaries in excess of $8,000,000 in any fiscal year for the lease, rental or
hire of real or personal property provided the limitation shall exclude leases
that have been or should be capitalized in accordance with GAAP.
7.8 Dividends. Declare or pay any dividends on its capital stock (other
---------
than dividends payable solely in shares of its own common stock), or purchase,
redeem, retire or otherwise acquire any of its capital stock at any time
outstanding, except that (i) the Borrower may, in any fiscal year, purchase
shares of its own common stock in an amount not to exceed 10% of the issued and
outstanding shares of such stock, excluding any shares purchased by an employee
stock ownership plan formed by the Borrower, (ii) any Subsidiary wholly-owned by
the Borrower may declare and pay dividends to, and purchase, redeem, retire and
otherwise acquire its capital stock from, the Borrower so long as such
Subsidiary remains a wholly-owned Subsidiary of the Borrower and (iii) the
Borrower may declare and pay cash dividends for each fiscal year solely out of
25% of fiscal consolidated net income.
7.9 Supply and Purchase Contracts. Enter into or be a party to any
-----------------------------
contract for the purchase of materials, supplies or other property if such
contract requires that payment for such materials, supplies or other property be
made whether or not delivery of such materials, supplies or other property is
ever made or tendered.
7.10 Nature of Business. Materially alter the nature of a Borrower's or a
------------------
Subsidiary's business.
7.11 Stock of Subsidiaries. Sell or otherwise dispose of any Subsidiary
---------------------
(except in connection with a merger or consolidation of a Subsidiary into the
Borrower or another Subsidiary or with the dissolution of a Subsidiary) or
permit a Subsidiary to issue any additional shares of its capital stock except
pro rata to its stockholders.
7.12 Liabilities of Subsidiaries. Notwithstanding any prior provision
---------------------------
hereof which may indicate the contrary, permit a Subsidiary to have any
liabilities except liabilities incurred in the ordinary course of business but
not in connection with the borrowing of money, except for any guarantee of the
obligations of the Borrower hereunder.
-46-
7.13 Transactions with Affiliates. Except for existing employment
----------------------------
agreements and any stock options or warrants or except in the ordinary course of
and pursuant to the reasonable requirements of the Borrower's or any of its
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than would obtain in a comparable arms' length
transaction with a Person not an Affiliate, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate. "Affiliate" shall mean a
Person (1) which directly or indirectly controls, or is controlled by, or is
under common control with the Borrower or any of its Subsidiaries, (2) which
directly or indirectly beneficially owns or holds five (5%) percent or more of
any class of voting stock of the Borrower or any of its Subsidiaries, or (3)
five (5%) percent or more of the voting stock of which is directly or indirectly
beneficially owned or held by the Borrower or any of its Subsidiaries. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
7.14 ERISA. (a) Terminate any Plan so as to result in any material
-----
liability of the Borrower to the PBGC, (b) engage in or permit any Person to
engage in any Prohibited Transaction involving any Plan which would subject the
Borrower or any of its Subsidiaries to any material tax, penalty or other
liability, (c) incur or suffer to exist any material "accumulated funding
deficiency" (as defined in Section 202 of ERISA), whether or not waived,
involving any Plan, or (d) allow or suffer to exist any event or condition,
which presents a material risk of incurring a material liability of the Borrower
to the PBGC by reason of termination of any Plan.
7.15 Change of Management. Permit Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx and
--------------------
Xxxxxx Xxxxxx at any time not to be active on a substantially full time basis in
the affairs of the Borrower by maintaining the positions of President/Chief
Operating Officer, Vice President/Secretary and Chairman of the Board,
respectively, or their equivalents, provided that the failure of any one or two
of such individuals to comply with this Section 7.15 shall not be deemed a
violation of this Section 7.15.
SECTION 8. EVENTS OF DEFAULT
-----------------
Upon the occurrence of any of the following events (each an "Event of
Default"):
-47-
(a) The Borrower shall fail to pay within five (5) days of the due
date thereof any interest under or principal of Note; any other amount payable
hereunder including, without limitation, amounts necessary to reimburse the
Administrative Agent for a draw under a Letter of Credit or payment of an
Acceptance Draft or the Borrower shall default under any other agreement,
instrument or obligation made with or in favor of or owing to the Administrative
Agent or a Lender (including any applicable grace period or notice requirement);
provided, however, that the five-day grace period provided in this paragraph for
payment of interest and principal under the Notes and for reimbursement
obligations with respect to Letters of Credit and Acceptance Drafts shall not
affect the obligation of the Borrower to pay interest for such period at the
rate in effect prior to maturity with respect to payments due under the Notes
and at the rates provided in Section 2.22 with respect to Letters of Credit and
Acceptance Drafts; or
(b) Any representation or warranty made or deemed made by the
Borrower herein or which is contained in any certificate, document or financial
or other statement furnished at any time under or in connection with this
Agreement shall prove to have been false in any material respect on or as of the
date made or deemed made; or
(c) The Borrower shall default in the observance or performance of
any of its agreements set forth in Sections 5.11, 6 or 7 hereof; or
(d) The Borrower shall default in the observance or performance of
any other agreement contained in this Agreement and such default shall continue
unremedied for a period of ten (10) days after written notice thereof is given
to the Borrower by the Administrative Agent; or
(e) With respect to any indebtedness for borrowed money, which
indebtedness is in an outstanding principal amount in excess of One Hundred
Thousand and 00/100 ($100,000.00) Dollars (other than the Notes), the Borrower
or any Subsidiary shall (i) default in any payment of any such indebtedness
beyond the grace period, if any, provided in the instrument or agreement under
which such indebtedness was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto or any event shall occur or condition exist, in each case the
effect of which default or other event or condition is to entitle the holder or
holders of such indebtedness (or a trustee or
-48-
Administrative Agent on behalf of such holder or holders) to cause such
indebtedness to become due prior to its stated maturity; or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or a Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of sixty (60) days; or (iii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall have not been vacated,
discharged, or stayed or bonded pending appeal within twenty (20) days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) of this
Section 8(f); or (v) the Borrower or any of its Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) Any of the following events occur or exist with respect to the
Borrower or an ERISA Affiliate: (1) any Prohibited Transaction involving any
Plan, (2) any Reportable Event shall occur with respect to any Plan, (3) a
notice of intent to terminate any Plan shall be filed or the termination of any
Plan, (4) any event or circumstance exists which might constitute grounds
entitling the PBGC to institute proceedings for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the PBGC
of any such proceedings, or (5) the complete or partial withdrawal from any
Multiemployer Plan, and in each case above, such event or condition, together
with all other events or conditions listed
-49-
above, if any, would reasonably be expected to subject the Borrower or any
Subsidiary of the Borrower to any tax, penalty, or other liability to a Plan,
the PBGC or otherwise (or a combination thereof) which in the aggregate exceed
or may exceed One Hundred Thousand and 00/100 ($100,000.00) Dollars; or
(h) The rendition by any court of a final judgment or judgments
against the Borrower or any of its Subsidiaries which shall not be
satisfactorily stayed, discharged, vacated or set aside within sixty (60) days
of the making thereof; or the attachment of any property of the Borrower or any
of its Subsidiaries which has not been released or provided for to the
reasonable satisfaction of the Administrative Agent within sixty (60) days after
the making thereof, which judgment or attachment is for an amount of $100,000 or
more; or
(i) A Loan Document shall cease to be in full force and effect, shall
be declared null and void, a default shall occur thereunder or any party thereto
shall assert that it has no further obligation to a Lender or the Administrative
Agent thereunder (unless such party has been discharged from its obligation
under such Loan Document by a Lender or the Administrative Agent in writing); or
(j) Any representation or warranty made or deemed herein or in any
Loan Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement
shall prove to have been false in any material respect on or as of the date made
or deemed made,
then, in any such event, any or all of the following actions shall be taken: (i)
the Administrative Agent with the written consent of the Required Lenders may,
and upon the written request of the Required Lenders shall by notice of default
to the Borrower, declare the Revolving Credit Commitments to be terminated
forthwith, whereupon the Revolving Credit Commitments and all obligations of the
Lenders to make Loans, issue Letters of Credit or create Acceptance Drafts,
shall immediately terminate; (ii) the Administrative Agent with the written
consent of the Lenders may, and upon the written request of the Lenders shall,
by notice of default to the Borrower, declare the entire amounts due under the
Notes (with accrued interest thereon) and all other amounts owing under this
Agreement to be immediately due and payable; provided, however, that upon the
happening of an event specified in subsection (f) of this Section 8, the
obligation of the Lenders to make further Loans and the Administrative Agent to
issue Letters of Credit and create Acceptance Drafts shall terminate and the
Notes shall be
-50-
immediately due and payable without declaration or other notice to the Borrower.
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived.
SECTION 9. ADMINISTRATIVE AGENT
--------------------
In order to expedite the transactions contemplated by this Agreement,
Mellon Bank, N.A. is hereby appointed to act as Administrative Agent on behalf
of the Lenders. Each of the Lenders and each subsequent holder of any Note or
issuer of any Letter of Credit, irrevocably authorizes the Administrative Agent
to take such action on its behalf and to exercise such powers hereunder and
under the Loan Documents as are specifically delegated to or required of the
Administrative Agent by the terms hereof and the terms thereof together with
such powers as are reasonably incidental thereto. Neither the Administrative
Agent nor any of its directors, officers, employees or Administrative Agents
shall be liable as such for any action taken or omitted to be taken by it or
them hereunder or under any of the Loan Documents or in connection herewith or
therewith (a) at the request or with the approval of the Lenders (or, if
otherwise specifically required hereunder or thereunder, the consent of the
Lenders) or (b) in the absence of its or their own gross negligence or willful
misconduct.
The Administrative Agent is hereby expressly authorized on behalf of the
Lenders, without hereby limiting any implied authority, (a) to receive on behalf
of each of the Lenders any payment of principal of or interest on the Notes
outstanding hereunder and all other amounts accrued hereunder paid to the
Administrative Agent, and promptly to distribute to each Lender its proper share
of all payments so received, (b) to distribute to each Lender copies of all
notices, agreements and other material as provided for in this Agreement or in
the other Loan Documents as received by such Administrative Agent and (c) to
take all actions with respect to this Agreement and the other Loan Documents as
are specifically delegated to the Administrative Agent.
In the event that (a) the Borrower fails to pay when due the principal of
or interest on any Note, any amount payable under any Letter of Credit or
Acceptance Draft, or any fee payable hereunder or (b) the Administrative Agent
receives written notice of the occurrence of a Default or an Event of Default,
the Administrative Agent within a reasonable time shall give written notice
thereof to the Lenders; and shall take such action with respect to such Event of
Default or other condition or event as it shall be directed to take by the
Lenders; provided, however,
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that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may take such action or refrain from taking
such action hereunder or under any other Loan Documents with respect to a
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
The Administrative Agent shall not be responsible in any manner to any of
the Lenders for the effectiveness, enforceability, perfection, value,
genuineness, validity or due execution of this Agreement, the Notes or any of
the other Loan Documents or any other agreements or certificates, requests,
financial statements, notices or opinions of counsel or for any recitals,
statements, warranties or representations contained herein or in any such
instrument or be under any obligation to ascertain or inquire as to the
performance or observance of any of the terms, provisions, covenants,
conditions, agreements or obligations of this Agreement or any of the other Loan
Documents or any other agreements on a part of the Borrower and, without
limiting the generality of the foregoing, the Administrative Agent shall, in the
absence of knowledge to the contrary, be entitled to accept in good faith any
certificate furnished pursuant to this Agreement or any of the other Loan
Documents as conclusive evidence of the facts stated therein and shall be
entitled to rely in good faith on any note, notice, consent, certificate,
affidavit, letter, telegram, teletype message, statement, order or other
document which it believes in good faith to be genuine and correct and to have
been signed or sent by the proper person or persons. It is understood and
agreed that the Administrative Agent may exercise its rights and powers under
other agreements and instruments to which it is or may be a party, and engage in
other transactions with the Borrower, as though it were not Administrative Agent
of the Lenders hereunder.
The Administrative Agent shall promptly give notice to the Lenders of the
receipt or sending of any notice, schedule, report, projection, financial
statement or other document or information pursuant to this Agreement or any of
the other Loan Documents and shall promptly forward a copy thereof to each
Lender.
Neither the Administrative Agent nor any of its directors, officers,
employees or Administrative Agents shall have any responsibility to the Borrower
on account of the failure or delay in performance or breach by any Lender other
than the Administrative Agent of any of its obligations hereunder or to any
Lender on account of the failure of or delay in performance
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or breach by any other Lender or the Borrower of any of their respective
obligations hereunder or in connection herewith.
The Administrative Agent may consult with legal counsel selected by it in
connection with matters arising under this Agreement or any of the other Loan
Documents and any action taken or suffered in good faith by it in accordance
with the opinion of such counsel shall be full justification and protection to
it. The Administrative Agent may exercise any of its powers and rights and
perform any duty under this Agreement or any of the other Loan Documents through
Administrative Agents or attorneys.
The Administrative Agent and the Borrower may deem and treat the payee or
most recent assignee pursuant to Section 10.3 hereof, as applicable, of any Note
as the holder thereof until written notice of transfer shall have been delivered
as provided in Section 10.3 hereof by such payee to the Administrative Agent and
the Borrower.
With respect to the Loans made hereunder, the Notes issued to it and any
other extension of credit applicable to it, the Administrative Agent in its
individual capacity and not as an Administrative Agent shall have the same
rights, powers and duties hereunder and under any other Agreement executed in
connection herewith as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the Administrative Agent and its
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or other affiliate thereof as if it were not
the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent in the amount
of such Lender's pro rata share (based on its Revolving Credit Commitment
hereunder) of any reasonable out-of-pocket expenses incurred for the benefit of
the Lenders by the Administrative Agent, including reasonable fees and
disbursements of counsel to the Administrative Agent and compensation of
Administrative Agents and employees paid for services rendered on behalf of the
Lenders, not reimbursed by the Borrower pursuant to Section 10.4 hereof and (ii)
to indemnify and hold harmless the Administrative Agent and any of its
directors, officers, employees or Administrative Agents, on demand, in the
amount of its pro rata share (based on its Revolving Credit Commitment
hereunder), 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 it in its capacity as the Administrative Agent or any of them
in any way relating to or arising out of this Agreement or
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any of the other Loan Documents or any action taken or omitted by it or any of
them under this Agreement or any of the other Loan Documents, to the extent not
reimbursed by the Borrower pursuant to Section 10.4 hereof; provided, however,
that no Lender shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent or any of its directors,
officers, employees or Administrative Agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and any other Loan Document to which such
Lender is a party. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related agreement or any
document furnished hereunder.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Lenders
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by such Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a Lender with an office (or an affiliate
with an office) in the New York metropolitan area having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Lender, such successor shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
each of the other Loan Documents. After any Administrative Agent's resignation
hereunder, the provisions of this Article shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
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The Lenders hereby acknowledge that the Administrative Agent shall be under
no duty to take any discretionary action permitted to be taken by the
Administrative Agent pursuant to the provisions of this Agreement or any of the
other Loan Documents unless it shall be requested in writing to do so by the
Required Lenders.
SECTION 10. MISCELLANEOUS
-------------
10.1 Notices. Notices, consents and other communications provided for
-------
herein shall be in writing and shall be delivered or mailed (or in the case of
telex or facsimile communication, delivered by telex, telecopier or other
telecommunications equipment, with receipt confirmed) addressed,
(a) if to the Borrower, any Guarantor or any of their respective
subsidiaries at Nu Horizons Electronics Corp., 00 Xxxxxx Xxxx, Xxxxxxxx, Xxx
Xxxx 00000, Attn.: Xx. Xxxx Xxxxxxx, Vice President/Finance with a copy to Blau,
Kramer, Wactlar & Xxxxxxxxx, P.C., 000 Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxx Xxxx 00000, Attn: Xxxxx Xxxxxxxxx, Esq.
(b) if to the Administrative Agent or Swing Bank, Mellon Bank, N.A.,
000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attn.: Xx. Xxxxx Xxxxx,
Vice President, with a copy to Mellon Bank, N.A., 165 EAB Plaza, Xxxx Xxxxx -0xx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attn.: Xx. Xxxxxxx X. Xxxxxxxx, Vice
President; and
(c) if to EAB, at European American Bank, 000 Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000, Attn.: Xxxx Xxxxxxx, Vice President; and
(d) if to HSBC, at HSBC Bank USA, 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx,
Xxx Xxxx 00000, Attn: Xxxxxx Dionion, Vice President; and
(e) if to Fleet, at Fleet Bank, N.A., 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, Attn: Xxxxxxxxxxx Xxxxxxxxxx, Vice President; and
(f) if to Chase, at The Chase Manhattan Bank, The Chase Manhattan
Bank, 000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attn: Xx. Xxxxxxx
XxXxxx, Xx., Vice President.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if hand delivered or three (3) Business Days after being sent by
registered or certified mail, postage prepaid, return receipt requested, if by
mail, or upon receipt during normal business hours on any
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Business Day (or otherwise the next Business Day) if by any telex, facsimile or
other telecommunications equipment, in each case addressed to such party as
provided in this section 10.1 or in accordance with the latest unrevoked
direction from such party.
10.2 Survival of Agreement. All covenants, agreements, representations
---------------------
and warranties made by the Borrower or any of its Subsidiaries herein and in the
certificates or other instruments prepared or delivered in connection with this
Agreement or any other Loan Document, shall be considered to have been relied
upon by the Lenders and shall survive the making by the Lenders of the Revolving
Credit Loans and the execution and delivery to the Lenders of the Notes and
occurrence of any other extension of credit and shall continue in full force and
effect as long as the principal of or any accrued interest on the Notes or any
other fee or amount payable under the Notes or this Agreement or any other Loan
Document is outstanding and unpaid and so long as any Lenders' Revolving Credit
Commitment has not been terminated.
10.3 Successors and Assigns: Participations. (a) Whenever in this
--------------------------------------
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf the Borrower, any Guarantor, any ERISA
Affiliate, any Subsidiary of any thereof, the Administrative Agent or the
Lenders, that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns. Without limiting the
generality of the foregoing, the Borrower specifically confirms that the
Administrative Agent and each Lender may at any time and from time to time
assign or pledge or otherwise grant a security interest in any Loan or any Note
or Acceptance Draft (or any part thereof) to any Federal Reserve Bank. The
Borrower may not assign or transfer any of its rights or obligations hereunder
without the written consent of all the Lenders.
(b) Each Lender, without the consent of the Borrower, may sell
participations to one or more Lenders or other entities in all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Revolving Credit Commitment) and the Loans owing to it
and undrawn Letters of Credit and Acceptance Drafts and the Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Lenders
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or other entities buying participations shall be entitled to the cost protection
provisions contained in Sections 2.10 (except to the extent that application of
such Section 2.10 to such Lenders and entities would cause the Borrower to make
duplicate payments thereunder) and Section 2.7 hereof, and (iv) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.
(c) Each Lender may assign by novation as of the date of assignment,
to any one or more Lenders or other entities with the consent of the Borrower
(which consent shall be given in its sole discretion unless the Administrative
Agent waives its additional fee for the assignment to such Lender or Lenders in
which case consent will not be unreasonably withheld) and the Administrative
Agent (which consent will not be unreasonably withheld) (except that in the case
of an assignment by a Lender to one of its Affiliates or to another Lender no
such consent of the Administrative Agent shall be required), all or a portion of
its interests, rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its Revolving
Credit Commitment and the same portion of the Loans and undrawn Letters of
Credit and Acceptance Drafts at the time owing to it and the Notes held by it),
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, which shall include the same percentage interest in the
Loans, Letters of Credit, Acceptance Drafts and Notes, (ii) the amount of the
Revolving Credit Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
be in a minimum principal amount of $3,000,000 Revolving Credit Commitment of
such Lender and (iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register (as defined below), an assignment and acceptance in form and substance
acceptable to the Administrative Agent (an "Assignment and Acceptance"),
together with any Note subject to such assignment and a processing and
recordation fee of $2,500.00 payable by the assigning Lender. Upon such
execution, delivery, acceptance and recording and after receipt of the written
consent of the Administrative Agent, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (x) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and under the other Loan
Documents and (y)
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the Lender which is assignor thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
and the other Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
and thereto).
(d) By executing and delivering an Assignment and Acceptance, the
Lender which is assignor thereunder and the assignee thereunder confirm to, and
agree with, each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereunder free and clear of any adverse claim,
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, perfection, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (ii) such Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower, any Guarantor or any Subsidiary of any thereof or the
performance or observance by the Borrower, any Guarantor or any Subsidiary of
any thereof of any of their respective obligations under this Agreement or any
of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, and the other Loan Documents, together with copies of
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, such Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the
Administrative Agent to take such action as the Administrative Agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(e) The Administrative Agent shall maintain at its address referred
to in Section 10.1 hereof a copy of each Assignment and Acceptance delivered to
it and a register for the
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recordation of the names and addresses of the Lenders and the Revolving Credit
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time (the "Register"). The entries in the Register shall be conclusive, in
the absence of manifest error or written notice to the contrary delivered in
accordance with this Agreement, and the Borrower, the Administrative Agent and
the Lenders may treat each person whose name is so recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee together with any Note subject to such
assignment and the written consent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Borrower. Within five (5) Business Days after receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for each surrendered Note or Notes a new Note
to the order of such assignee in an amount equal to the Revolving Credit
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained any Revolving Credit Commitment hereunder, a new
Note to the order of the assigning Lender in an amount equal to the Revolving
Credit Commitment retained by it hereunder. Such new Note shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A hereto.
(g) Notwithstanding any other provision herein, any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 10.03, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower in connection
with this Agreement; provided, however, that prior to any such disclosure, each
such assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any confidential information relating to the
Borrower received from such Lender.
(h) Nothing in this Section shall limit or restrict the ability of
any Lender to sell, rediscount or otherwise dispose of any Acceptance Draft.
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(i) The annual Administrative Agent's fee shall be payable in
accordance with the provisions of Section 5.11 hereof.
10.4 Expenses: Indemnity. (a) The Borrower agrees to pay all reasonable
-------------------
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation of this Agreement, the Notes and the other Loan Documents or
with any amendments, modifications or waivers of the provisions hereof or
thereof or incurred by the Administrative Agent or any of the Lenders in
connection with the enforcement, adjudication or protection of its rights in
connection with this Agreement or any of the other Loan Documents or with the
Loans made or the Notes or Letters of Credit or Acceptance Drafts issued
hereunder or the use of proceeds therefrom, or in connection with any pending or
threatened action, proceeding, or investigation relating to the foregoing,
including but not limited to the reasonable fees and disbursements of counsel
for the Administrative Agent and, in connection with such enforcement or
protection, the reasonable fees and disbursements of counsel for the Lenders.
The Borrower further indemnifies the Lenders from and agrees to hold them
harmless against any documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes.
(b) The provisions of this Section 10.4 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or the Notes, or any investigation made by or on
behalf of the Administrative Agent or any Lender. All amounts due under this
Section 10.04 shall be payable on written demand therefor.
10.5 Applicable Law. THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN
--------------
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.6 Right of Setoff. If an Event of Default shall have occurred and be
---------------
continuing, upon the request of the Lenders each Lender shall and is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower or
any Guarantor against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the Notes held by such Lender,
irrespective of whether or not
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such Lender shall have made any demand under this Agreement or the Notes and
although such obligations may be unmatured. Each Lender agrees to notify
promptly the Administrative Agent and the Borrower and any applicable Guarantor
after any such setoff and application made by such Lender, but the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which may be
available to such Lender.
10.7 Payments on Business Days. Should the principal of or interest on
-------------------------
the Notes or any fee or other amount payable hereunder become due and payable on
other than a Business Day, payment in respect thereof may be made on the next
succeeding Business Day (except as otherwise specified in the definition of
"Interest Period"), and such extension of time shall in such case be included in
computing interest, if any, in connection with such payment.
10.8 Waivers; Amendments. (a) No failure or delay of any Lender in
-------------------
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Lender hereunder are cumulative and not
exclusive of any rights or remedies which they may otherwise have. No waiver of
any provision of this Agreement or the Notes nor consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
authorized as provided in paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on the Borrower in any case shall entitle it to
any other or further notice or demand in similar or other circumstances. Each
holder of any of the Notes shall be bound by any amendment, modification, waiver
or consent authorized as provided herein, whether or not such Note shall have
been marked to indicate such amendment, modification, waiver or consent.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
--------
such agreement shall (i) increase the Revolving Credit Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or
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reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any Revolving
Credit Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.13 or 2.14 in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, or (vi) release any
Guarantee without the written consent of each Lender; provided further that no
----------------
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or the Swing Bank hereunder without the prior written
consent of the Administrative Agent or the Swing Bank, as the case may be.
10.9 Severability. In the event any one or more of the provisions
------------
contained in this Agreement or in the Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
10.10 Entire Agreement; Waiver of Jury Trial, Etc. (a) This Agreement,
-------------------------------------------
the Notes and the other Loan Documents constitute the entire contract between
the parties hereto relative to the subject matter hereof. Any previous
agreement among the parties hereto with respect to the transactions contemplated
hereby is superseded by this Agreement, the Notes and the other Loan Documents.
Except as expressly provided in this Agreement, the Notes or the other Loan
Documents, nothing in this Agreement, the Notes or in the other Loan Documents
is intended to confer upon any party, other than the parties hereto, any rights,
remedies, obligations or liabilities under or by reason of this Agreement, the
Notes or the other Loan Documents.
(b) THE BORROWER HEREBY EXPRESSLY WAIVES ANY AND EVERY RIGHT TO A
TRIAL BY JURY IN ANY ACTION ON OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE
ENFORCEMENT OF ANY OR ALL OF THE SAME. THE BORROWER HEREBY
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EXPRESSLY WAIVES ANY RIGHT TO INTERPOSE A COUNTERCLAIM IN ANY ACTION OR
PROCEEDING ON OR RELATED TO THIS AGREEMENT EXCEPT FOR MANDATORY COUNTERCLAIMS.
(c) Each party hereto (i) certifies that no representative,
Administrative Agent or attorney of any Lender has represented, expressly or
otherwise, that such Lender would not, in the event of litigation, seek to
enforce the foregoing waivers and (ii) acknowledges that it has been induced to
enter into this Agreement, the Notes or the other Loan Documents, as applicable,
by, among other things, the mutual waivers and certifications herein.
10.11 Confidentiality. The Administrative Agent and the Lenders agree to
---------------
keep confidential (and to cause their respective officers, directors, employees,
Administrative Agents and representatives to keep confidential) all information,
materials and documents furnished to the Administrative Agent or any Lender (the
"Information"). Notwithstanding the foregoing, the Administrative Agent and
each Lender shall be permitted to disclose Information (i) to such of its
officers, directors, employees, Administrative Agents, attorneys and
representatives as need to know such Information in connection with its
participation in any of the Transactions or the administration of this Agreement
or the other Loan Documents; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
governmental agency or authority; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this Agreement,
(B) becomes available to the Administrative Agent or such Lender on a non-
confidential basis from a source other than the Borrower, any Guarantor or any
of their respective subsidiaries or (C) was available to the Administrative
Agent or such Lender on a non-confidential basis prior to its disclosure to the
Administrative Agent or such Lender by the Borrower, any Guarantor or any of
their respective subsidiaries; (iv) to the extent the Borrower, any Guarantor or
any of their respective subsidiaries shall have consented to such disclosure in
writing; (v) in connection with the sale of any collateral pursuant to the
provisions of any of the other Loan Documents; or (vi) pursuant to subsection
10.3(g) hereof.
10.12 Submission to Jurisdiction. (a) Any legal action or proceeding with
--------------------------
respect to this Agreement or the Notes or any other Loan Document may be brought
in the courts of the State of New York or of the United States of America for
the Southern District of New York, and, by execution and delivery of this
Agreement, the Borrower and each of the Guarantors hereby accept for themselves
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and in respect of their property, generally and unconditionally, the
jurisdiction of the aforesaid courts.
(b) The Borrower and each of the Guarantors hereby irrevocably
waive, in connection with any such action or proceeding, any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which they may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(c) The Borrower and each of the Guarantors hereby irrevocably
consent to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each such person, as the case may be, at its
address set forth in Section 10.1 hereof.
(d) Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower or any
Guarantor in any other jurisdiction.
10.13 Further Assurances. The Borrower agrees at any time and from time
------------------
to time at its expense, upon request of the Lender, to promptly execute,
deliver, or obtain or cause to be executed, delivered or obtained any and all
further instruments and documents and to take or cause to be taken all such
other action as the Lender may reasonably deem desirable in obtaining the full
benefits of the Loan Documents.
10.14. Counterparts. This Agreement each of the other Loan Documents may
------------
be executed in counterparts of the entire document, or of signature pages to the
document, each of which shall constitute an original but all of which when taken
together shall constitute but one contract, and shall become effective when
copies which, when taken together, bear the signatures of each of the parties
hereto or thereto shall be delivered to the Administrative Agent and the
Borrower.
10.15. Headings. Article and Section headings and the Table of Contents
--------
used herein are for convenience of reference only and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
Borrower:
---------
NU HORIZONS ELECTRONICS CORP.
By:__________________________
Xxxx Xxxxxxx
Vice President/Finance
Administrative Agent:
---------------------
MELLON BANK, N.A., as Administrative Agent
By:___________________________
Xxxxx X. Xxxxxx
First Vice President
Lenders:
--------
MELLON BANK, N.A.
By:___________________________
Xxxxx X. Xxxxxx
First Vice President
EUROPEAN AMERICAN BANK
By:___________________________
Xxxx Xxxxxxx
Vice President
HSBC BANK USA
By:___________________________
Xxxxxx X. Xxxxxxxxx
Vice President
FLEET BANK, N.A.
By:___________________________
Xxxxxxxxxxx Xxxxxxxxxx
Vice President
THE CHASE MANHATTAN BANK
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By:___________________________
Xxxxxxx XxXxxx, Xx.
Vice President
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Xxxxx xx Xxx Xxxx, Xxxxxx xx Xxxxxx, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXX XXXXXXX, personally known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual or the person upon behalf of which the individual acted, executed the
instrument.
Notary Public
State of New Jersey, County of Edison, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXXX X. XXXXXX, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
State of New York, County of Nassau, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXX XXXXXXX, personally known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his capacity, and that by his signature on the instrument, the
individual or the person upon behalf of which the individual acted, executed the
instrument.
Notary Public
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Xxxxx xx Xxx Xxxx, Xxxxxx xx Xxxxxx, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXXXX X. XXXXXXXXX, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
State of New York, County of Nassau, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXXXXXXXXX XXXXXXXXXX, personally known to me
or proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
State of New York, County of Nassau, ss:
On the ____ day of ___________, in the year 2000, before me the
undersigned, personally appeared XXXXXXX XXXXXX, XX., personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual or the person upon behalf of which the individual acted, executed
the instrument.
Notary Public
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SCHEDULE I
----------
Revolving Credit Commitments (Section 2.1)
------------------------------------------
Percentage of Total
Revolving Credit Revolving Credit
Bank Commitment Commitment
---- ---------- ----------
Mellon Bank, N.A. $28,000,000 35.0%
European American Bank $17,500,000 21.875%
HSBC Bank USA $14,500,000 18.125%
Fleet Bank, N.A. $10,000,000 12.5%
The Chase Manhattan Bank $10,000,000 12.5%
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SCHEDULE I
----------
Liens (Section 7.2)
-------------------
NU HORIZONS ELECTRONICS CORP. UCC FILINGS
-----------------------------------------
Jurisdiction Secured Party Filing Number Filing Date Description of Collateral
------------ ------------- ------------- ----------- -------------------------
Secretary of State, NY Metlife Capital Corporation 237730 11/21/94 computer equipment
Metlife Capital Corporation 253875 (Amendment 12/14/94 computer equipment
to 237730)
Hewlett-Packard Company 174330 08/13/98 computer equipment (lease)
Finance & Remarketing Division
Suffolk County, NY Hewlett-Packard Company 98-14703 08/13/98 computer equipment (lease)
Finance & Remarketing Division
Dallas County, TX Petula Associates 3549 04/22/97 inventory, personal property
Secretary of State, MA Hewlett-Packard Company 571158 08/13/98 computer equipment (lease)
Finance & Remarketing Division
Secretary of State, CA Intergrated Circuit Systems, Inc. 9524360152 08/30/95 inventory
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