Exhibit Number 10.6
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$23,000,000 REVOLVING CREDIT FACILITY
$12,000,000 TERM LOAN
CREDIT AGREEMENT
by and among
ELGIN NATIONAL INDUSTRIES, INC.,
THE GUARANTORS,
THE BANKS PARTY HERETO,
PNC BANK, NATIONAL ASSOCIATION, As Agent,
and
PNC CAPITAL MARKETS, INC., As Arranger
Dated as of September 24, 1993
Amended and Restated as of January 18, 2001
TABLE OF CONTENTS
Section Page
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1. CERTAIN DEFINITIONS ............................................... 1
1.1 Certain Definitions ........................................ 1
1.2 Construction ............................................... 22
1.3 Accounting Principles ...................................... 22
2. REVOLVING CREDIT FACILITY ......................................... 23
2.1 Revolving Credit Commitments ............................... 23
2.2 Nature of Banks' Obligations With Respect to Revolving Credit
Loans ..................................................... 23
2.3 Commitment Fees ............................................ 23
2.4 Revolving Credit Facility Fee .............................. 23
2.5 Revolving Credit Loan Requests ............................. 24
2.6 Making Revolving Credit Loans .............................. 24
2.7 Revolving Credit Notes ..................................... 24
2.8 Use of Proceeds ............................................ 25
2.9 Letter of Credit Subfacility ............................... 25
3. TERM LOANS ........................................................ 25
3.1 Term Loan Commitments ...................................... 25
3.2 Nature of Banks' Obligations With Respect to Term Loans .... 25
3.3 [Intentionally Omitted.] ................................... 25
3.4 Term Loan Notes ............................................ 25
3.5 Use of Proceeds ............................................ 26
4. INTEREST RATES .................................................... 26
4.1 Interest Rate Options ...................................... 26
4.1.1 Revolving Credit Interest Rate Options ............. 26
4.1.2 Term Loan Interest Rate Options .................... 26
4.1.3 Rate Quotations .................................... 27
4.2 Interest Periods ........................................... 27
4.2.1 Amount of Borrowing Tranche ........................ 27
4.2.2 Renewals ........................................... 27
4.3 Interest After Default ..................................... 27
4.3.1 Letter of Credit Fees, Interest Rate ............... 27
4.3.2 Other Obligations .................................. 27
4.3.3 Acknowledgment ..................................... 28
4.4 Euro-Rate Unascertainable; Illegality ...................... 28
4.4.1 Euro-Rate Unascertainable .......................... 28
4.4.2 Illegality ......................................... 28
4.5 Selection of Interest Rate Options ......................... 28
5. PAYMENTS .......................................................... 29
5.1 Payments ................................................... 29
5.2 Pro Rata Treatment of Banks ................................ 29
5.3 Interest Payment Dates ..................................... 29
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TABLE OF CONTENTS
Section Page
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5.4 Voluntary Prepayments ...................................... 30
5.4.1 Right to Prepay .................................... 30
5.5 Mandatory Prepayments ...................................... 31
5.5.1 Excess Cash Flow ................................... 31
5.5.2 Sale of Assets ..................................... 31
5.5.3 Equity and Debt Proceeds ........................... 31
5.5.4 Borrowing Base Exceeded ............................ 31
5.5.5 Application Among Interest Rate Options ............ 32
5.6 Additional Compensation in Certain Circumstances ........... 32
5.6.1 Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc. ..................................... 32
5.6.2 Indemnity .......................................... 33
5.7 Receipt and Application of Payment ......................... 33
5.8 Collections; Agent's Right to Notify Account Debtors ....... 34
6. REPRESENTATIONS AND WARRANTIES .................................... 34
6.1 Representations and Warranties ............................. 34
6.1.1 Organization and Qualification ..................... 34
6.1.2 Capitalization and Ownership ....................... 35
6.1.3 Subsidiaries ....................................... 35
6.1.4 Power and Authority ................................ 35
6.1.5 Validity and Binding Effect ........................ 35
6.1.6 No Conflict ........................................ 36
6.1.7 Litigation ......................................... 36
6.1.8 Title to Properties ................................ 36
6.1.9 Financial Statements ............................... 36
6.1.10 Use of Proceeds; Margin Stock; Section 20
Subsidiaries ...................................... 37
6.1.11 Full Disclosure .................................... 38
6.1.12 Taxes .............................................. 38
6.1.13 Consents and Approvals ............................. 38
6.1.14 No Event of Default; Compliance With Instruments ... 38
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc. .... 39
6.1.16 Security Interests ................................. 39
6.1.17 Mortgage Liens ..................................... 39
6.1.18 Status of the Pledged Collateral ................... 39
6.1.19 Insurance .......................................... 40
6.1.20 Compliance With Laws ............................... 40
6.1.21 Material Contracts; Burdensome Restrictions ........ 40
6.1.22 Investment Companies; Regulated Entities ........... 40
6.1.23 Plans and Benefit Arrangements ..................... 41
6.1.24 Employment Matters ................................. 42
6.1.25 Environmental Matters .............................. 42
6.1.26 Senior Debt Status ................................. 43
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TABLE OF CONTENTS
Section Page
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7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT ........... 43
7.1 First Loans and Letters of Credit .......................... 44
7.1.1 Officer's Certificate .............................. 44
7.1.2 Secretary's Certificate ............................ 44
7.1.3 Delivery of Loan Documents ......................... 44
7.1.4 Opinion of Counsel ................................. 45
7.1.5 Legal Details ...................................... 45
7.1.6 Payment of Fees .................................... 45
7.1.7 Environmental Audit ................................ 45
7.1.8 Existing Credit Agreement .......................... 45
7.1.9 Consents ........................................... 46
7.1.10 Officer's Certificate Regarding MACs ............... 46
7.1.11 No Violation of Laws ............................... 46
7.1.12 No Actions or Proceedings .......................... 46
7.1.13 Insurance Policies; Certificates of Insurance;
Endorsements ...................................... 46
7.1.14 Title Insurance .................................... 46
7.1.15 Filing Receipts .................................... 47
7.1.16 [Intentionally Omitted] ............................ 47
7.1.17 Consummation of Acquisitions ....................... 47
7.1.18 Borrowing Base Certificate ......................... 47
7.1.19 Financial Covenants Certificate .................... 47
7.1.20 Solvency Certificate ............................... 47
7.2 Each Additional Loan or Letter of Credit ................... 48
8. COVENANTS ......................................................... 48
8.1 Affirmative Covenants ...................................... 48
8.1.1 Preservation of Existence, Etc. .................... 48
8.1.2 Payment of Liabilities, Including Taxes, Etc. ...... 48
8.1.3 Maintenance of Insurance ........................... 49
8.1.4 Maintenance of Properties and Leases ............... 49
8.1.5 Maintenance of Patents, Trademarks, Etc. ........... 49
8.1.6 Visitation Rights .................................. 49
8.1.7 Keeping of Records and Books of Account ............ 50
8.1.8 Plans and Benefit Arrangements ..................... 50
8.1.9 Compliance With Laws ............................... 50
8.1.10 Use of Proceeds .................................... 50
8.1.11 Further Assurances ................................. 50
8.1.12 Subordination of Intercompany Loans ................ 51
8.2 Negative Covenants ......................................... 51
8.2.1 Indebtedness ....................................... 51
8.2.2 Liens .............................................. 52
8.2.3 Guaranties ......................................... 53
8.2.4 Loans and Investments .............................. 54
8.2.5 Dividends, Redemptions and Related Distributions ... 55
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TABLE OF CONTENTS
Section Page
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8.2.6 Liquidations, Mergers, Consolidations,
Acquisitions ...................................... 56
8.2.7 Dispositions of Assets or Subsidiaries ............. 56
8.2.8 Affiliate Transactions ............................. 57
8.2.9 Subsidiaries, Partnerships and Joint Ventures ...... 57
8.2.10 Continuation of or Change in Business .............. 58
8.2.11 Plans and Benefit Arrangements ..................... 58
8.2.12 Fiscal Year ........................................ 59
8.2.13 Issuance of Stock .................................. 59
8.2.14 Changes in Organizational Documents ................ 59
8.2.15 Capital Expenditures and Leases .................... 59
8.2.16 Minimum Fixed Charge Coverage Ratio ................ 59
8.2.17 Maximum Leverage Ratio ............................. 60
8.2.18 Minimum Interest Coverage Ratio .................... 60
8.2.19 Matters Regarding 11% Notes ........................ 61
8.2.20 Excluded Subsidiaries .............................. 61
8.3 Reporting Requirements ..................................... 61
9. DEFAULT ........................................................... 62
9.1 Events of Default .......................................... 62
9.1.1 Payments Under Loan Documents ...................... 62
9.1.2 Breach of Warranty ................................. 62
9.1.3 Breach of Negative Covenants or Visitation Rights .. 62
9.1.4 Breach of Other Covenants .......................... 62
9.1.5 Defaults in Other Agreements or Indebtedness ....... 62
9.1.6 Final Judgments or Orders .......................... 63
9.1.7 Loan Document Unenforceable ........................ 63
9.1.8 Uninsured Losses; Proceedings Against Assets ....... 63
9.1.9 Notice of Lien or Assessment ....................... 63
9.1.10 Insolvency ......................................... 63
9.1.11 Events Relating to Plans and Benefit Arrangements .. 63
9.1.12 Cessation of Business .............................. 64
9.1.13 Change of Control .................................. 64
9.1.14 Involuntary Proceedings ............................ 64
9.1.15 Voluntary Proceedings .............................. 64
9.2 Consequences of Event of Default ........................... 65
9.2.1 Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings .......... 65
9.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings ....................................... 65
9.2.3 Set-off ............................................ 65
9.2.4 Suits, Actions, Proceedings ........................ 66
9.2.5 Application of Proceeds ............................ 66
9.2.6 Other Rights and Remedies .......................... 67
9.3 Notice of Sale ............................................. 67
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TABLE OF CONTENTS
Section Page
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10. THE AGENT ......................................................... 67
11. MISCELLANEOUS ..................................................... 67
11.1 Modifications, Amendments or Waivers ....................... 67
11.1.1 Increase of Commitment; Extension or Expiration
Date .............................................. 67
11.1.2 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms of
Payment ........................................... 67
11.1.3 Release of Collateral or Guarantor ................. 68
11.1.4 Miscellaneous ...................................... 68
11.2 No Implied Waivers; Cumulative Remedies; Writing Required .. 68
11.3 Reimbursement and Indemnification of Banks by the Borrower;
Taxes ..................................................... 68
11.4 Holidays ................................................... 69
11.5 Funding by Branch, Subsidiary or Affiliate ................. 70
11.5.1 Notional Funding ................................... 70
11.5.2 Actual Funding ..................................... 70
11.6 Notices .................................................... 70
11.7 Severability ............................................... 71
11.8 Governing Law .............................................. 71
11.9 Prior Understanding ........................................ 71
11.10 Duration; Survival ......................................... 72
11.11 Successors and Assigns ..................................... 72
11.12 Confidentiality ............................................ 73
11.12.1 General ............................................ 73
11.12.2 Sharing Information With Affiliates of the Banks ... 73
11.13 Counterparts ............................................... 74
11.14 Agent's or Bank's Consent .................................. 74
11.15 Exceptions ................................................. 74
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL ..................... 74
11.17 Tax Withholding Clause ..................................... 75
11.18 Joinder of Guarantors ...................................... 75
11.19 Release of Certain Collateral in Certain Circumstances ..... 76
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(A) - PRICING GRID
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2 - CAPITALIZATION
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC
SCHEDULE 6.1.18 - PARTNERSHIP AGREEMENTS; LLC AGREEMENTS
SCHEDULE 6.1.19 - INSURANCE POLICIES
SCHEDULE 6.1.23 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 8.2.1 - PERMITTED INDEBTEDNESS
SCHEDULE 8.2.2 - PERMITTED LIENS
SCHEDULE 8.2.4 - PERMITTED LOANS; INVESTMENTS IN FOREIGN
SUBSIDIARIES
SCHEDULE 8.2.7 - DISPOSITION OF CERTAIN DESIGNATED ASSETS
SCHEDULE 8.2.9 - JOINT VENTURES
EXHIBITS
EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(B) - BORROWING BASE CERTIFICATE
EXHIBIT 1.1(C) - COLLATERAL ASSIGNMENT
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(I)(1) - INDEMNITY
EXHIBIT 1.1(I)(2) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(M) - MORTGAGE
EXHIBIT 1.1(P)(2) - PLEDGE AGREEMENT
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S) - SECURITY AGREEMENT
EXHIBIT 1.1(T) - TERM NOTE
EXHIBIT 2.5 - LOAN REQUEST
EXHIBIT 2.9 - LETTERS OF CREDIT
EXHIBIT 7.1.4 - OPINION OF COUNSEL
EXHIBIT 8.3 - REPORTING REQUIREMENTS
EXHIBIT 8.3.3 - QUARTERLY COMPLIANCE CERTIFICATE
EXHIBIT 10 - AGENT PROVISIONS
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of September 24, 1993, as amended
and restated hereby as of January 18, 2001, and is made by and among ELGIN
NATIONAL INDUSTRIES, INC., a Delaware corporation (the "Borrower"), each of the
GUARANTORS (as hereinafter defined), the BANKS (as hereinafter defined), and PNC
BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks under this
Agreement (hereinafter referred to in such capacity as the "Agent").
WITNESSETH:
WHEREAS, Borrower, is a party to a Credit Agreement, dated as of
September 24, 1993, as amended and restated as of November 5, 1997 (as
heretofore amended or modified, the "Existing Credit Agreement") with Bank of
America, N.A., as agent (the "Existing Agent"), and certain banks (the "Existing
Banks"), pursuant to which the Existing Agent has issued certain letters of
credit (the "Existing Letters of Credit") and the Existing Banks have made
certain loans (the "Existing Loans"); and
WHEREAS, the parties desire that (i) the Existing Banks assign to the
Banks the indebtedness constituting the Existing Loans and the Agent replace the
Existing Agent; (ii) letters of credit issued by the Agent be substituted for
the Existing Letters of Credit; (iii) the indebtedness constituting the Existing
Loans and the Existing Credit Agreement be amended and restated in their
entirety as set forth in this Agreement; and (iv) all liens and security
interests currently securing indebtedness and obligations under the Existing
Credit Agreement continue as security for the obligations of the Borrower under
this Agreement; and
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
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1.1 Certain Definitions
-------------------
In addition to words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general
intangible, chattel paper, instrument or document representing any right to
payment for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or document,
which is now owned or hereafter acquired by the Borrower or a direct or indirect
wholly-owned Subsidiary of the Borrower which is a Guarantor. All Accounts,
whether Qualified Accounts or not, shall be subject to the Banks' Prior Security
Interest.
Account Debtor shall mean any Person who is or who may become
obligated to any Loan Party under, with respect to, or on account of, an
Account.
Actual EBITDA for any period of determination, for any Person,
shall mean (i) the sum of net income, depreciation, amortization, other
nonrecurring non-cash charges to net income, interest expense and income tax
expense minus (ii) nonrecurring non-cash credits to net income including,
without limitation pension income, in each case of such Person and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.
Acquisition Agreement shall mean that certain stock purchase
agreement dated as of January 18, 2001, among Borrower, Xxxxxx Xxxx and Xxxxxx
Xxxxxx relating to the acquisition by the Borrower of the capital stock of
Xxxxxx-Xxxxxx.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
Agent shall mean PNC Bank, National Association, and its
successors and assigns.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Annual Consolidated EBITDA means Consolidated EBITDA
calculated as of the end of each fiscal quarter for the four quarters then
ended. For purposes of determining Annual Consolidated EBITDA as of the fiscal
quarters ending December 31, 2000, March 31, 2001 and June 30, 2001, Annual
Consolidated EBITDA shall be deemed to be the following:
(A) for the fiscal quarter ended December 31, 2000, Annual
Consolidated EBITDA shall be Consolidated EBITDA as of December 31, 2000 for the
four quarters then ended, plus $3,180,000, plus Actual EBITDA of Precision for
the fiscal quarter ending December 31, 2000, plus Actual EBITDA of Xxxxxx for
the fiscal quarter ended December 31, 2000;
(B) for the fiscal quarter ended March 31, 2001, Annual
Consolidated EBITDA shall be Consolidated EBITDA as of March 31, 2001 for the
four quarters then ended, plus $2,120,000, plus Actual EBITDA of Precision for
the fiscal quarter ending December 31, 2000, plus Actual EBITDA of Xxxxxx for
the fiscal quarter ended December 31, 2000;
(C) for the fiscal quarter ended June 30, 2001, Annual
Consolidated EBITDA shall be Consolidated EBITDA as of June 30, 2001 for the
four quarters then ended, plus $1,060,000, plus Actual EBITDA of Precision for
the fiscal quarter ending December 31, 2000, plus Actual EBITDA of Xxxxxx for
the fiscal quarter ended December 31, 2000; and
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(D) for the fiscal quarter ended September 30, 2001 and for each
fiscal quarter thereafter Annual Consolidated EBITDA shall be Consolidated
EBITDA calculated as of the end of each such fiscal quarter for the four fiscal
quarters then ended.
Applicable Margin shall mean, as applicable:
(A) the percentage margin to be added to Base Rate under the Base
Rate Option for the applicable type of Loan at the indicated ratio of
Consolidated Total Debt to Annual Consolidated EBITDA in the pricing grid on
Schedule 1.1(A) below the "Base Rate Margin" headings; or
(B) the percentage margin to be added to Euro-Rate under the
Euro-Rate Option for the applicable type of Loan at the indicated ratio of
Consolidated Total Debt to Annual Consolidated EBITDA in the pricing grid on
Schedule 1.1(A) below the "Euro-Rate Margin" headings.
Any change in the Applicable Margin shall be based upon the financial
statements and compliance certificates provided pursuant to paragraphs 2, 3 and
4 of Exhibit 8.3 and shall become effective on the date such financial
statements are due in accordance with Exhibit 8.3.
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of Exhibit 1.1(A).
Authorized Officer shall mean those individuals holding the
office of President, Vice President, Chief Executive Officer, Chief Financial
Officer or Controller of a Loan Party and designated by written notice to the
Agent from the Borrower as authorized to execute notices, reports and other
documents on behalf of the Loan Parties required under the Loan Documents. A
Loan Party may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
one half percent (1/2%) per annum.
Base Rate Option shall mean either the Revolving Credit Base Rate
Option or the Term Loan Base Rate Option.
Benefit Arrangement shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
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Borrower shall mean Elgin National Industries, Inc., a
corporation organized and existing under the laws of the State of Delaware.
Borrowing Base shall mean at any time the sum of (i) 85% of
Qualified Accounts, plus (ii) 75% of Qualified Construction Accounts (without
duplication of any Accounts included in item (i), plus (iii) 65% of Qualified
Inventory (determined at the lower of cost or market), but in no event shall (a)
the inventory portion exceed $12,000,000, or (b) more than 30% of the total
Borrowing Base be attributable to Qualified Construction Accounts.
Borrowing Base Certificate shall mean each Borrowing Base
Certificate to be delivered by the Borrower to the Agent pursuant to Section
7.1.18 and Paragraph 1 of Exhibit 8.3, in substantially the form attached hereto
as Exhibit 1.1(B), with the blanks appropriately completed, as amended,
supplemented or otherwise modified from time to time.
Borrowing Date shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrower and which have the same Euro-Rate Interest Period shall constitute
one Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies
shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania.
Change of Control shall mean (i) the death of at least two of the
Principals or (ii) one or more of the Principals shall fail to beneficially own
collectively an aggregate of two-thirds (2/3) of the issued and outstanding
voting stock of the Borrower with full rights to vote such shares.
Closing Date shall mean the Business Day on which the first Loan
shall be made, which shall be January 18, 2001, or if all the conditions
specified in Section 7 have not been satisfied or waived by such date, not later
than January 31, 2001, as designated by the Borrower by at least one Business
Days' advance notice to the Agent at its Principal Office, or such other date as
the parties agree. The closing shall take place on the Closing Date at such time
and place as the Borrower and the Agent agree.
Closing Fee shall have the meaning assigned so such term in
Section 2.4.
Collateral shall mean the Pledged Collateral, the UCC Collateral,
and the Real Property. It is expressly agreed that Collateral shall exclude any
security interest in or lien on any key man life insurance policies for the
benefit of any Loan Party on any owner or officer of any Loan Party.
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Collateral Assignment shall mean the Collateral Assignment of
Contract Rights in the form of Exhibit 1.1(C).
Commercial Letter of Credit shall mean any Letter of Credit which
is a commercial letter of credit issued in respect of the purchase of goods or
services by one or more of the Loan Parties in the ordinary course of their
business.
Commitment shall mean as to any Bank the aggregate of its
Revolving Credit Commitment and Term Loan Commitment, and Commitments shall mean
the aggregate of the Revolving Credit Commitments and Term Loan Commitments of
all of the Banks.
Consolidated EBITDA for any period of determination shall mean
(i) the sum of net income, depreciation, amortization, other nonrecurring
non-cash charges to net income, interest expense and income tax expense minus
(ii) nonrecurring non-cash credits to net income including, without limitation
pension income, in each case of the Borrower and its Subsidiaries for such
period determined and consolidated in accordance with GAAP.
Consolidated Net Worth shall mean as of any date of determination
total stockholders' equity of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP.
Consolidated Total Debt shall mean as of any date of
determination: (a) the sum of all Indebtedness of the Borrower and its
Subsidiaries for borrowed money (other than indebtedness among the Loan
Parties), Indebtedness with respect to capitalized leases, contingent
liabilities relating to letters of credit, and guaranties, the sum of the
forgoing to be calculated without duplication among the Loan Parties, reduced by
(b) the amount of cash of the Loan Parties.
Contamination shall mean the presence of Regulated Substances in,
on, under or emanating to or from the Property, which pursuant to Environmental
Laws requires notification or reporting to an Official Body, or which pursuant
to Environmental Laws requires the investigation, cleanup, removal or
remediation of such Regulated Substances or which otherwise constitutes a
violation of Environmental Laws.
Construction Accounts shall mean Accounts of Account Debtors
arising from engineering and construction services which are performed by and
owed to a Loan Party which is included in the Engineering and Construction
Group.
Copyrights shall mean any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
Dollar Equivalent shall mean with respect to a Letter of Credit
the amount in Dollars (i) which is stated to be paid in Dollars under the Letter
of Credit, and (ii) which is
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equivalent to the amount paid or to be paid in a currency other than Dollars
under the Letter of Credit computed at the Agent's then current selling rate of
exchange, as reasonably determined by Agent, for payment by teletransmission or
otherwise to the place of payment in the currency in which payment is to be made
under the Letter of Credit, plus any costs, premiums, and expenses arising from
all currency conversions incurred by Agent in connection therewith.
Domestic Subsidiary shall mean a Subsidiary which is created or
organized under the laws of one of the United States of America or its
territories; and "United States" means the United States of America (including
the states and the District of Columbia).
11% Notes shall mean the indebtedness of the Borrower issued
pursuant to the Note Indenture.
Engineering and Construction Group shall mean Xxxxxxx & Xxxxxxxx
Company and Xxxxx Associates, Inc, each a Delaware corporation, and their
Subsidiaries and any other Subsidiary of the Borrower reported on in the same
business segment.
Environmental Complaint shall mean any written complaint setting
forth a cause of action for personal injury or property damage, natural resource
damage, contribution or indemnity for response costs, civil penalties, criminal
penalties or declaratory or equitable relief arising under any Environmental Law
or order, notice of violation, citation, subpoena, request for information or
other written notice of any type issued by an Official Body pursuant to any
Environmental Law.
Environmental Laws shall mean all federal, state, local and
foreign Laws pertaining or relating to (i) pollution or pollution control; (ii)
protection of human health or environment; (iii) employee safety in the
workplace; (iv) the management, generation, processing, treatment, recycling,
transport or disposal of Regulated Substances; (v) the presence of
Contamination; (vi) the protection of endangered or threatened species; and
(vii) the protection of Environmentally Sensitive Areas.
Environmentally Sensitive Area shall mean (i) any wetland as
defined by applicable Environmental Laws; (ii) any area designated as a coastal
zone pursuant to applicable Laws, including Environmental Laws; (iii) any area
of historic or archeological significance as defined by applicable Laws,
including Environmental Laws; (iv) habitats of endangered species or threatened
species as designated by applicable Laws, including Environmental Laws; or (v)
a floodplain or other flood hazard area as defined pursuant to any applicable
Laws.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control and all other entities which, together
with the Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
- 6 -
Euro-Rate shall mean, with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Euro-Rate
Interest Period, the interest rate per annum determined by the Agent by dividing
(the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of
1% per annum)(i) the rate of interest determined by the Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank offered rates for U.S. Dollars
quoted by the British Bankers' Association ("BBA") as set forth on Dow Xxxxx
Markets Service (formerly known as Telerate) (or appropriate successor or, if
the British Bankers' Association or its successor ceases to provide such quotes,
a comparable replacement determined by the Agent) display page 3750 (or such
other display page on the Dow Xxxxx Markets Service system as may replace
display page 3750) two (2) Business Days prior to the first day of such
Euro-Rate Interest Period for an amount comparable to such Borrowing Tranche and
having a borrowing date and a maturity comparable to such Euro-Rate Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.
The Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates quoted by BBA as
Euro-Rate = shown on Dow Xxxxx Markets Service display page 3750 or
appropriate successor
----------------------------------------------------------
1.00 - Euro Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Interest Period shall mean the period of one (1), two
(2), three (3) or six (6) months selected by the Borrower commencing on the date
of disbursement of a Loan to which the Euro-Rate Option applies and each
successive period selected by the Borrower thereafter; provided, that if a
Euro-Rate Interest Period would end on a day which is not a Business Day, it
shall end on the next succeeding Business Day, unless such day falls in the
succeeding calendar month in which case the Euro-Rate Interest Period shall end
on the next preceding Business Day. In no event shall any Euro-Rate Interest
Period end on a day after the Expiration Date.
Euro-Rate Option shall mean either the Revolving Credit Euro-Rate
Option or the Term Loan Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum effective
percentage 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 supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities"). The Euro-Rate shall be adjusted with respect to any
Borrowing Tranches to which the Euro-Rate Option applies that are outstanding on
the effective date of any change in the Euro-Rate Reserve Percentage as of such
effective date. The Agent shall give prompt notice to the Borrower of any such
adjustment, which determination shall be conclusive absent manifest error.
- 7 -
Event of Default shall mean any of the events described in
Section 9.1 and referred to therein as an "Event of Default."
Excess Cash Flow shall be computed as of the close of each fiscal
year by taking the difference between (a) Consolidated EBITDA for such fiscal
year and (b) Fixed Charges for such fiscal year, provided however, that in the
event the computation for any fiscal year of the difference between the amounts
of (a) and (b) equals or is less than $200,000, then for such fiscal year, the
"Excess Cash Flow" shall be deemed to be $0 and no Mandatory Prepayment of
Excess Cash Flow shall be payable for such fiscal year under Section 5.5.1.
Excluded Subsidiaries shall mean collectively Xxxxxxxx Products,
Inc., Centrifugal & Mechanical Industries, Inc., and Ohio Rod Products Company,
each a Subsidiary of the Borrower and each a Delaware corporation.
Existing Credit Agreement shall have the meaning assigned to that
term in the recitals hereto.
Expiration Date shall mean, with respect to the Revolving Credit
Commitments, January 18, 2005.
Federal Funds Effective Rate for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
Fixed Charge Coverage Ratio shall mean the ratio of Annual
Consolidated EBITDA to Fixed Charges (with Fixed Charges calculated as of the
end of each fiscal quarter for the four fiscal quarters then ended). For
purposes of calculating the Fixed Charges portion of the Fixed Charge Coverage
Ratio for the fiscal quarters ending on June 30, 2001 and September 30, 2001 (in
each case, for the four fiscal quarters then ended), the following assumptions
shall be made:
(A) scheduled principal installments on Indebtedness shall be
deemed to be $3,000,000 for each such twelve (12) month period;
(B) capital expenditures and payments under capitalized leases
shall be deemed to be the following:
(i) for the fiscal quarter ending on June 30, 2001, the
actual amount of such capital expenditures and payments under such capitalized
leases for the fiscal quarters ending March 31, 2001 and June 30, 2001 plus
$1,750,000; and
- 8 -
(ii) for the fiscal quarter ending on September 30, 2001,
the actual amount of such capital expenditures and payments under such
capitalized leases for the fiscal quarters ending March 31, 2001, June 30, 2001
and September 30, 2001 plus $875,000;
(C) interest expense shall be deemed to be the following:
(i) for the fiscal quarter ending on June 30, 2001, the
actual amount of such interest expense as of June 30, 2001 for the two (2)
fiscal quarters then ending times two (2); and
(ii) for the fiscal quarter ending on September 30, 2001,
the actual amount of such interest expense as of September 30, 2001 for the
three (3) fiscal quarters then ending times four-thirds (4/3);
(D) the Fixed Charges portion of the Fixed Charge Coverage Ratio
for the fiscal quarter ended December 31, 2001 and for each fiscal quarter
thereafter shall mean Fixed Charges calculated as of the end of each such fiscal
quarter for the four quarters then ended.
Fixed Charges shall mean for any period of determination the sum
of interest expense, cash income taxes, scheduled principal installments on
Indebtedness (as adjusted for prepayments), capital expenditures and payments
under capitalized leases, in each case of the Borrower and its Subsidiaries for
such period determined and consolidated in accordance with GAAP.
Foreign Subsidiary shall mean a Subsidiary which is not created
or organized under the laws of the United States of America or its territories
(with "United States" meaning the United States of America (including the states
and the District of Columbia)), and Foreign Subsidiaries shall mean collectively
all such Persons.
GAAP shall mean generally accepted accounting principles as are
in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
Guarantor shall mean each of the parties to this Agreement which
is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 11.18.
Guarantor Joinder shall mean a joinder by a Person as a Guarantor
under this Agreement, the Guaranty Agreement and the other Loan Documents in the
form of Exhibit 1.1(G)(1).
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
- 9 -
Guaranty Agreement shall mean the Guaranty and Suretyship
Agreement in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors to the Agent for the benefit of the Banks.
Indebtedness shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than thirty (30) days past due), or (v) any Guaranty of Indebtedness for
borrowed money.
Indemnity shall mean the Indemnity Agreement in the form of
Exhibit 1.1(I)(1) among the Agent and the Loan Parties relating to possible
environmental liabilities associated with any of the Property.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
Initial Adjustment Date shall mean the date which is the six
month anniversary of the Closing Date.
Insolvency Proceeding shall mean, with respect to any Person, (a)
a case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (b) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors; undertaken
under any Law.
Intellectual Property shall mean:
(i) Copyrights, Trademarks, Patents and Mask Works;
(ii) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
- 10 -
(iii) Any and all design rights which may be available to the
Borrower or any Subsidiary of the Borrower now or hereafter existing, created,
acquired or held;
(iv) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligations, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(v) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks or Mask Works, and all license fees and royalties arising
from such use to the extent permitted by such license or rights;
(vi) All amendments, renewals and extensions of any of the
Copyrights, Trademarks, Patents or Mask Works; and
(vii) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
Intercompany Subordination Agreement shall mean a Subordination
Agreement among the Loan Parties in the form attached hereto as Exhibit
1.1(I)(2).
Interest Coverage Ratio shall mean the ratio of Annual
Consolidated EBITDA to consolidated interest expense of the Borrower and its
Subsidiaries calculated as of the end of each fiscal quarter for the four
quarters then ending. For purposes of calculating the consolidated interest
expense for the fiscal quarters ended on March 31, 2001, June 30, 2001 and
September 30, 2001 (in each case, for the four fiscal quarters then ended),
interest expense shall be calculated as follows:
(i) for the fiscal quarter ending on March 31, 2001, the
actual amount of such interest expense as of March 31, 2001 for the fiscal
quarter then ended times four (4);
(ii) for the fiscal quarter ending on June 30, 2001, the
actual amount of such interest expense as of June 30, 2001 for the two (2)
fiscal quarters then ended times two (2); and
(iii) for the fiscal quarter ending on September 30, 2001,
the actual amount of such interest expense as of September 30, 2001 for the
three fiscal quarters then ended times four-thirds (4/3); and
(iv) interest expense for the fiscal quarter ended December
31, 2001 and for each fiscal quarter thereafter shall mean interest expense
calculated as of the end of each such fiscal quarter for the four fiscal
quarters then ended.
Interest Rate Option shall mean any Euro-Rate Option or Base Rate
Option.
- 11 -
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Inventory shall mean any and all goods, merchandise and other
personal property, including, without limitation, goods in transit, wheresoever
located and whether now owned or hereafter acquired by the Borrower or any
direct or indirect wholly-owned Subsidiary of the Borrower which is a Guarantor
which are or may at any time be held as raw materials, finished goods,
work-in-process, supplies or materials used or consumed in such Loan Party's
business or held for sale or lease, including, without limitation, (a) all such
property the sale or other disposition of which has given rise to Accounts and
which has been returned to or repossessed or stopped in transit by such Loan
Party, and (b) all packing, shipping and advertising materials relating to all
or any such property. Inventory shall also include all Accounts for which the
Borrower or the Guarantor which has sold the goods or rendered the services or
both has not yet submitted an invoice to the Account Debtor. All Inventory,
whether Qualified Inventory or not, shall be subject to the Banks' Prior
Security Interest.
Key Man Life Insurance Policies shall mean collectively any life
insurance policies on the life of any Principal, for the benefit of the
Borrower, to the extent permitted by the Note Indenture.
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, consent decree, bond, judgment, authorization, lien or
award of any Official Body.
Xxxxxx shall mean the business acquired by the Borrower on
pursuant to the Acquisition Agreement.
Xxxxxx-Xxxxxx shall mean Xxxxxx-Xxxxxx Fasteners, Inc., a
Tennessee corporation.
Letter of Credit shall have the meaning set forth in Exhibit 2.9.
Letter of Credit Borrowing shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under the terms of Exhibit 2.9.
Letters of Credit Outstanding shall mean at any time the sum of
the Dollar Equivalent of the (i) the aggregate undrawn face amount of
outstanding Letters of Credit and (ii) the aggregate amount of all unpaid and
outstanding Reimbursement Obligations.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether
- 12 -
voluntarily or involuntarily given, including any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security and any filed financing statement or other
notice of any of the foregoing (whether or not a lien or other encumbrance is
created or exists at the time of the filing).
Loan Documents shall mean this Agreement, the Agent's Letter, the
Collateral Assignment, the Guaranty Agreement, the Indemnity, the Intercompany
Subordination Agreement, the Mortgage, the Notes, the Pledge Agreement, the
Security Agreement, and any other instruments, certificates or documents
delivered or contemplated to be delivered hereunder or thereunder or in
connection herewith or therewith, as the same may be supplemented or amended
from time to time in accordance herewith or therewith, and Loan Document shall
mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the Guarantors.
Loans shall mean collectively and Loan shall mean separately all
Revolving Credit Loans and the Term Loans or any Revolving Credit Loan or Term
Loan.
Mask Works shall mean all mask work or similar rights available
for the protection of semiconductor chips, now owned or hereafter acquired.
Material Adverse Change shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
or results of operations of the Loan Parties taken as a whole, (c) impairs
materially or could reasonably be expected to impair materially the ability of
the Loan Parties taken as a whole to duly and punctually pay or perform its
Indebtedness, or (d) impairs materially or could reasonably be expected to
impair materially the ability of the Agent or any of the Banks, to the extent
permitted, to enforce their legal remedies pursuant to this Agreement or any
other Loan Document.
Month, with respect to an Euro-Rate Interest Period under the
Euro-Rate Option, shall mean the interval between the days in consecutive
calendar months numerically corresponding to the first day of such Euro-Rate
Interest Period. If any Euro-Rate Interest Period begins on a day of a calendar
month for which there is no numerically corresponding day in the month in which
such Interest Period is to end, the final month of such Euro-Rate Interest
Period shall be deemed to end on the last Business Day of such final month.
Mortgages shall mean collectively, and Mortgage shall mean
separately, the mortgages and deeds of trust in substantially the form of
Exhibit 1.1(M) with respect to the Real Property executed and delivered by the
Loan Parties to the Agent for the benefit of the Banks.
Multiemployer Plan shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make
- 13 -
contributions or, within the preceding five Plan years, has made or had an
obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Note Indenture shall mean that certain Indenture dated as of
November 5, 1997, among the Borrower, certain of its Subsidiaries, and Norwest
Bank Minnesota, National Association, a Trustee, pursuant to which the Borrower
issued $85,000,000 of notes due 2007.
Notes shall mean the Revolving Credit Notes and the Term Notes.
Obligations shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit, the Agent's Letter or any other Loan Document.
Official Body shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Participation Advance shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Exhibit 2.9.
Partnership Interests shall have the meaning given to such term
in Section 6.1.3.
Patents shall mean all patents, patent applications and like
protections, including without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Person shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
- 14 -
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
Pledge Agreement shall mean the Pledge Agreement in substantially
the form of Exhibit 1.1(P)(2) executed and delivered by the Loan Parties to the
Agent for the benefit of the Banks.
Pledged Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Pledge Agreement or the
Collateral Assignment.
PNC Bank shall mean PNC Bank, National Association, its
successors and assigns.
Potential Default shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Banks,
or any combination of the foregoing, would constitute an Event of Default.
Precision shall mean Precision Screw & Bolt, Inc., an Ohio
corporation.
Principal Office shall mean the main banking office of the Agent
in Pittsburgh, Pennsylvania.
Principals shall mean Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxx and Xxxxx
X. Xxxxxx.
Prior Security Interest shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the UCC Collateral and the Pledged Collateral.
Prohibited Transaction shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
Property shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.
Purchase Money Security Interest shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
Qualified Accounts shall mean:
-15-
Accounts of the Borrower and the other Loan Parties (each an "Account Holder")
as of the date of the applicable Borrowing Base Certificate as reflected on the
Borrower's consolidated balance sheet. Accounts means, on any date of
determination, the aggregate unpaid portion of the obligations denominated in
United States Dollars as stated on the respective invoices issued to a customer
of an Account Holder with respect to inventory sold and shipped or services
performed in the ordinary course of business, net of any credits, rebates or
offsets owed by such Account Holder or to the respective customer and net of any
commissions payable by such Account Holder to third parties. Qualified Accounts
shall not include (without duplication of deductions):
(a) Accounts which remain unpaid for more than either sixty days past the
due date or ninety days after the date of invoice, or Accounts owing
from an Account Debtor which has 50% or more of such Accounts owing
either sixty days past the due date or ninety days after the date of
invoice;
(b) Accounts which by their terms (whether as contract retainage or
otherwise) are not payable within 90 days of the date of the
applicable Borrowing Base Certificate;
(c) Accounts due from a customer whose principal place of business is
located outside of the United States, except for such Accounts that
are backed by a letter of credit (provided that such letter of credit
was issued or confirmed by a bank that is organized under the laws of
the United States of America or a State thereof and has capital and
surplus in excess of $100,000,000);
(d) Accounts with respect to which the customer is the United States of
America or any department, agency, or instrumentality thereof except
for those Accounts for which the Account Holder has complied with the
Federal Assignment of Claims Act (Ref. 31 U.S.C. Section 3727);
(e) Accounts with respect to which the customer is an Affiliate of any
Account Holder or a director, officer, agent, stockholder, or
employee of any Account Holder or any of their Affiliates;
(f) Accounts with respect to which there is any unresolved dispute with
the respective customer but only to the extent of such dispute;
(g) Accounts with respect to which Agent does not have a valid, first
priority and fully perfected security interest and Accounts subject
to any Lien except those in favor of Agent; including Accounts
evidenced by an instrument (as defined in Article 9 of the UCC) not
in the possession of Agent and Accounts where the Account
documentation forbids or makes unenforceable the security interest
granted by the applicable Account Holder;
(h) Accounts with respect to which the customer is the subject of any
bankruptcy or other insolvency proceeding;
- 16 -
(i) Accounts due from a customer to the extent that such Accounts exceed
in the aggregate 20% of the aggregate of all Accounts at said date;
(j) Accounts with respect to which the customer's obligation to pay is
conditional or subject to a repurchase obligation or right to return,
including xxxx and hold sales, guarantied sales, sale or return
transactions, sales on approval or consignment sales;
(k) Accounts with respect to which the customer is located in New Jersey,
or any other state denying creditors access to its courts in the
absence of a Notice of Business Activities Report or other similar
filing unless the Account Holder is qualified as a foreign
corporation authorized to do business in such state or has filed a
Notice of Business Activities Report or other similar filing and such
filing is currently effective;
(l) Accounts which arise out of a project which has been bonded by a
bonding company or other surety;
(m) Accounts which the Required Banks in their sole and absolute
discretion exercised in good faith, following five (5) days prior
written notice by the Agent to the Borrower, determine do not meet
the criteria for eligibility in the commercial finance industry; and
(n) Accounts which are Construction Accounts.
Qualified Construction Accounts shall mean Accounts which meet
all the criteria set forth in the definition of "Qualified Accounts" other than
the requirement set forth in item (n) of such definition.
Qualified Inventory shall mean:
Inventory of the Borrower and the other Loan Parties other than work-in-process
as of the date of the applicable Borrowing Base Certificate as reflected by
Borrower's consolidated balance sheet. Inventory means all of the "inventory"
(as such term is defined in the UCC) of the Borrower and its Subsidiary
Guarantors consisting of merchandise, raw materials and finished goods intended
for sale. Qualified Inventory shall not include (without duplication of
deductions):
(a) Inventory with respect to which Agent does not have a valid, first
priority and fully perfected security interest and Inventory subject
to any Lien except those in favor of Agent;
(b) Inventory which is not located at, or in transit to, any of the
locations identified as locations of Inventory pursuant to Schedule A
to the Security Agreement or at a location where services are being
provided;
(c) Inventory located at any leased locations set forth on Schedule A for
which the Loan Parties have not provided a Landlord's waiver or other
appropriate waiver in favor of the Agent for the benefit of the
Banks;
- 17 -
(d) Inventory which is obsolete or is not of good and merchantable
quality;
(e) Inventory which does not meet all material standards imposed by any
official having regulatory authority over such item of Inventory, its
use or its sale;
(f) Inventory in the possession or control of a bailee, warehouseman,
processor or other Person other than the Loan Parties unless the
Agent is in possession of an executed lien waiver delivered by such
bailee, warehouseman, processor or other Person in form and content
satisfactory to the Agent;
(g) Inventory which was in any material respect produced in violation of
the Fair Labor Standards Act and subject to the so-called "hot goods"
provision contained in Title 29 U.S.C. (S.) 2159(a)(1);
(h) Inventory which the Required Banks in their sole and absolute
discretion exercised in good faith, following five (5) days prior
written notice by the Agent to the Borrower, determine do not meet
the criteria for eligibility in the commercial finance industry; and
(i) Inventory which is held for sale at a "close-out" or otherwise
offered generally at a discount as part of a discontinued line.
Ratable Share shall mean the proportion that a Bank's Commitment
bears to the Commitments of all of the Banks.
Real Property shall mean the real estate owned by the Loan
Parties indicated on Schedule 6.1.8 and located at the locations set forth on
Schedule 6.1.8, which Property shall be encumbered by the Mortgages.
Regulated Substances shall mean, without limitation, any
substance, material or waste, regardless of its form or nature, defined as a
"hazardous substance," "hazardous waste," "toxic substance," "extremely
hazardous substance," "toxic chemical," "toxic waste," "solid waste,"
"industrial waste," "residual waste," "municipal waste," "special handling
waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical
waste," "regulated substance," "pollutant," or "contaminant" pursuant to
Environmental Laws or any other substance, material or waste, regardless of its
form or nature, which otherwise is regulated by Environmental Laws, including
but not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S.S) 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C.(S.S) 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C.(S.S.) 1801 et seq., the Toxic Substances Control
Act, 15 U.S.C.(S.S.) 2601 et seq., the Federal Water Pollution Control Act, 33
U.S.C.(S.S.) 1251 et seq., the Federal Safe Drinking Water Act, 42 U.S.C.(S.S.)
300f-300j, the Federal Air Pollution Control Act, 42 U.S.C. 7401 et seq., the
Oil Pollution Act, 33 U.S.C. (S.S.) 2701 et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C.(S.S.) 136 to 136y, the Occupational
Safety and Health Act, 29 U.S.C. (S.S.) 651 et seq., each as amended, or any
equivalent state or local Law, and any amendments thereto.
- 18 -
Regulation U shall mean Regulation U, T, or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.
Reportable Event shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean
(i) if there are no Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, Banks whose Commitments aggregate at
least 51% of the Commitments of all of the Banks, but to the extent there are
two or less Banks, Required Banks shall mean all the Banks, or
(ii) if there are Loans, Reimbursement Obligations, or
Letter of Credit Borrowings outstanding, any Bank or group of Banks if the sum
of the Loans, Reimbursement Obligations and Letter of Credit Borrowings of such
Banks then outstanding aggregates at least 51 % of the total principal amount of
all of the Loans, Reimbursement Obligations and Letter of Credit Borrowings then
outstanding, but to the extent there are two or less Banks, Required Banks shall
mean all the Banks. Reimbursement Obligations and Letter of Credit Borrowings
shall be deemed, for purposes of this definition, to be in favor of the Agent
and not a participating Bank if such Bank has not made its Participation Advance
in respect thereof and shall be deemed to be in favor of such Bank to the extent
of its Participation Advance if it has made its Participation Advance in respect
thereof.
Required Environmental Permits shall mean all permits, licenses,
bonds, approvals or authorizations required under Environmental Laws for the
Loan Parties to conduct their respective operations, maintain the Property or
equipment thereon or construct and maintain any improvement.
Required Environmental Reports shall mean all notices, reports,
forms or other filings which pursuant to Environmental Laws must be submitted to
an Official Body or which otherwise must be maintained by the Loan Parties.
Revolving Credit Availability shall mean, as of any date of
determination, the difference between Revolving Credit Commitments, and the
Revolving Facility Usage.
Revolving Credit Base Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1((i)).
Revolving Credit Commitment shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on Schedule 1.1(B) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
Revolving Credit Commitments shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
- 19 -
Revolving Credit Euro-Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1((ii)).
Revolving Credit Loans shall mean collectively and Revolving
Credit Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Borrower pursuant to
Section 2.1 or Paragraph 3(b) of Exhibit 2.9.
Revolving Credit Notes shall mean collectively and Revolving
Credit Note shall mean separately all the Revolving Credit Notes of the Borrower
in the form of Exhibit 1.1(R) evidencing the Revolving Credit Loans together
with all amendments, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letters of Credit Outstanding.
Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement in
substantially the form of Exhibit 1.1(S) executed and delivered by each of the
Loan Parties to the Agent for the benefit of the Banks.
Standard & Poor's shall mean Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or otherwise,
which finance the working capital and business needs of the Loan Parties
incurred in the ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
member or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person's Subsidiaries.
- 20 -
Subsidiary Shares shall have the meaning assigned to that term in
Section 6.1.3.
Term Loan shall have the meaning given to such term in Section
3.1; Term Loans shall mean collectively all of the Term Loans.
Term Loan Base Rate Option shall mean the option of the Borrower
to have Term Loans bear interest at the rate and under the terms and conditions
set forth in Section 4.1.2((i)).
Term Loan Commitment shall mean, as to any Bank at any time, the
amount initially set forth opposite its name on Schedule 1.1(B) in the column
labeled "Amount of Commitment for Term Loans," and thereafter on Schedule I to
the most recent Assignment and Assumption Agreement, and Term Loan Commitments
shall mean the aggregate Term Loan Commitments of all of the Banks.
Term Loan Euro-Rate Option shall mean the option of the Borrower
to have Term Loans bear interest at the rate and under the terms and conditions
set forth in Section 4.1.2((ii)).
Term Notes shall mean collectively and Term Note shall mean
separately all of the Term Notes of the Borrower in the form of Exhibit 1.1(T)
evidencing the Term Loans together with all amendments, extensions, renewals,
replacements, refinancings or refunds thereof in whole or in part.
Trademarks shall mean any trademark and servicemark rights,
whether registered or not, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of the
Borrower and its Subsidiaries with and symbolized by such trademark.
Transferor Bank shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Security Agreement.
In addition to the foregoing definitions, the following
capitalized terms have the meanings given to them in the referenced sections:
Agent's Letter, Exhibit 10; Annual Statements, 6.1.9(i); Commitment Fee, 2.3;
Financial Projections, 6.1.9(ii); Governmental Acts, Exhibit 2.9; Historical
Statements, 6.1.9(i); Interim Statements, 6.1.9(i); 2.9.1; Letter of Credit,
Exhibit 2.9; Letter of Credit Fee, Exhibit 2.9; LLC Interests, 6.1.3; Loan
Request, 2.5; Mandatory Prepayment Date, 5.5.1; Mandatory Prepayment of Excess
Cash Flow, 5.5.1; Notices, 11.6; Partnership Interests, 6.1.3; Permitted Liens,
8.2.2; Reimbursement Obligation, Exhibit 2.9; Shares, 6.1.2; Subsidiary Shares,
6.1.3; and Uniform Commercial Code, 6.1.16.
- 21 -
1.2 Construction.
------------
Unless the context of this Agreement otherwise clearly requires, the following
rules of construction shall apply to this Agreement and each of the other Loan
Documents: (a) references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation"; (b) references to "determination" of or by the Agent or the
Banks shall be deemed to include good-faith estimates by the Agent or the Banks
(in the case of quantitative determinations) and good-faith beliefs by the Agent
or the Banks (in the case of qualitative determinations) and such determination
shall be conclusive absent manifest error; (c) whenever the Agent or the Banks
are granted the right herein to act in its or their sole discretion or to grant
or withhold consent such right shall be exercised in good faith; (d) the words
"hereof," "herein," "hereunder," "hereto" and similar terms in this Agreement or
any other Loan Document refer to this Agreement or such other Loan Document as a
whole and not to any particular provision of this Agreement or such other Loan
Document; (e) the section and other headings contained in this Agreement or such
other Loan Document and the Table of Contents, preceding this Agreement or such
other Loan Document are for reference purposes only and shall not control or
affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect; (f) article, section, subsection, clause,
schedule and exhibit references are to this Agreement or other Loan Document, as
the case may be, unless otherwise specified; (g) reference to any Person
includes such Person's successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement or such other Loan
Document, as the case may be, and reference to a Person in a particular capacity
excludes such Person in any other capacity; (h) reference to any agreement
(including this Agreement and any other Loan Document together with the
schedules and exhibits hereto or thereto), document or instrument means such
agreement, document or instrument as amended, modified, replaced, substituted
for, superseded or restated; (i) relative to the determination of any period of
time, "from" means "from and including," "to" means "to but excluding," and
"through" means "through and including"; and (j) references to "shall" and
"will" are intended to have the same meaning.
1.3 Accounting Principles.
---------------------
Except for the preparation of the monthly financial statements required pursuant
to item 1 of Exhibit 8.3 (which shall be prepared in accordance with the
requirements of such item 1 of Exhibit 8.3) except for the preparation of the
annual budget required pursuant to item 7 of Exhibit 8.3 (which shall be
prepared in accordance with Borrower's customary procedures, consistent with
past practice) and except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP; provided, however, that all accounting
terms used in Section 8.2 [Negative Covenants] (and all defined terms used in
the definition of any accounting term used in Section 8.2 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in Section 6.1.9((i)) [Historical Statements].
- 22 -
2. REVOLVING CREDIT FACILITY
-------------------------
2.1 Revolving Credit Commitments.
----------------------------
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date provided that after giving
effect to such Loan (i) the aggregate amount of Revolving Credit Loans from such
Bank shall not exceed such Bank's Revolving Credit Commitment minus such Bank's
Ratable Share of the Letters of Credit Outstanding, and (ii) the Revolving
Facility Usage shall not exceed the Borrowing Base. Within such limits of time
and amount and subject to the other provisions of this Agreement, the Borrower
may borrow, repay and reborrow pursuant to this Section 2.1.
2.2 Nature of Banks' Obligations With Respect to Revolving Credit Loans.
-------------------------------------------------------------------
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests]
in accordance with its Ratable Share. The aggregate of each Bank's Revolving
Credit Loans outstanding hereunder to the Borrower at any time shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the Letter of
Credit Outstandings. The obligations of each Bank hereunder are several. The
failure of any Bank to perform its obligations hereunder shall not affect the
Obligations of the Borrower to any other party nor shall any other party be
liable for the failure of such Bank to perform its obligations hereunder. The
Banks shall have no obligation to make Revolving Credit Loans hereunder on or
after the Expiration Date.
2.3 Commitment Fees.
---------------
Accruing from the date hereof until the Expiration Date, the Borrower
agrees to pay to the Agent for the account of each Bank, as consideration for
such Bank's Revolving Credit Commitment hereunder, a nonrefundable commitment
fee (the "Commitment Fee") equal to (a) during the period from the Closing Date
to the Initial Adjustment Date, a fee in the amount of 3/8% per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) on the average daily difference between the amount of (i) such Bank's
Revolving Credit Commitment as the same may be constituted from time to time and
the (ii) the sum of such Bank's Revolving Credit Loans outstanding plus its
Ratable Share of Letters of Credit Outstanding, and (b) from and after the
Initial Adjustment Date, a fee per annum equal to the percentage set forth on
the pricing grid at Schedule 1.1(A) based upon the ratio of the Borrower's
Consolidated Total Debt to Annual Consolidated EBITDA, calculated as set forth
in (a) above. All Commitment Fees shall be payable in arrears on the first
Business Day of each January, April, July and October after the date hereof and
on the Expiration Date or upon acceleration of the Notes.
2.4 Revolving Credit Facility Fee.
-----------------------------
The Borrower agrees to pay to the Agent the Closing Fees required
under the terms of the Agent's Letter, payable on the Closing Date.
- 23 -
2.5 Revolving Credit Loan Requests.
------------------------------
Except as otherwise provided herein, the Borrower may from time to
time prior to the Expiration Date request the Banks to make Revolving Credit
Loans, or renew or convert the Interest Rate Option applicable to existing
Revolving Credit Loans or Term Loans pursuant to Section 4.2, by delivering to
the Agent, not later than 11:00 a.m., Pittsburgh time, (i) three (3) Business
Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Euro-Rate Option applies or the conversion
to or the renewal of the Euro-Rate Option for any Loans; and (ii) the same date
as either the proposed Borrowing Date with respect to the making of a Revolving
Credit Loan to which the Base Rate Option applies or the last day of the
preceding Euro-Rate Interest Period with respect to the conversion to the Base
Rate Option for any Loan, of a duly completed request therefor substantially in
the form of Exhibit 2.5 or a request by telephone immediately confirmed in
writing by letter, facsimile or telex in such form (each, a "Loan Request"), it
being understood that the Agent may rely on the authority of any individual
making such a telephonic request without the necessity of receipt of such
written confirmation. Each Loan Request shall be irrevocable and shall specify
(i) the proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, which shall be in integral multiples of
$100,000 and not less than $500,000 for each Borrowing Tranche to which the
Euro-Rate Option applies and not less than the lesser of $50,000 or the maximum
amount available for Borrowing Tranches to which the Base Rate Option applies;
(iii) whether the Euro-Rate Option or Base Rate Option shall apply to the
proposed Loans comprising the applicable Borrowing Tranche; and (iv) in the case
of a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Euro-Rate Interest Period for the Loans comprising such Borrowing Tranche.
2.6 Making Revolving Credit Loans.
-----------------------------
The Agent shall, promptly after receipt by it of a Loan Request
pursuant to Section 2.5 [Revolving Credit Loan Requests], notify the Banks of
its receipt of such Loan Request specifying: (i) the proposed Borrowing Date and
the time and method of disbursement of the Revolving Credit Loans requested
thereby; (ii) the amount and type of each such Revolving Credit Loan and the
applicable Euro-Rate Interest Period (if any); and (iii) the apportionment among
the Banks of such Revolving Credit Loans as determined by the Agent in
accordance with Section 2.2 [Nature of Banks' Obligations]. Each Bank shall
remit the principal amount of each Revolving Credit Loan to the Agent such that
the Agent is able to, and the Agent shall, to the extent the Banks have made
funds available to it for such purpose and subject to Section 7.2 [Each
Additional Loan], fund such Revolving Credit Loans to the Borrower in U.S.
Dollars and immediately available funds at the Principal Office prior to
2:00 p.m., Pittsburgh time, on the applicable Borrowing Date, provided that if
any Bank fails to remit such funds to the Agent in a timely manner, the Agent
may elect in its sole discretion to fund with its own funds the Revolving Credit
Loans of such Bank on such Borrowing Date, and such Bank shall be subject to the
repayment obligation in Paragraph 16 of Exhibit 10.
2.7 Revolving Credit Notes.
----------------------
The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by each Bank, together with
interest thereon, shall be
- 24 -
evidenced by a Revolving Credit Note dated the Closing Date payable to the order
of such Bank in a face amount equal to the Revolving Credit Commitment of such
Bank.
2.8 Use of Proceeds.
---------------
The proceeds of the Revolving Credit Loans shall not be used for any
purpose other than the refinancing of the Existing Loans, the acquisition of the
capital stock of Xxxxxx-Xxxxxx, for working capital and general corporate
purposes of the Loan Parties and in accordance with Section 8.1.10 [Use of
Proceeds].
2.9 Letter of Credit Subfacility.
----------------------------
The Letters of Credit, in the aggregate amount not to exceed the
Letter of Credit Sublimit, shall be described and governed by the provisions of
Exhibit 2.9.
3. TERM LOANS
----------
3.1 Term Loan Commitments.
---------------------
Subject to the terms and conditions hereof, and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make a term loan (the "Term Loan") to the Borrower on the Closing Date in such
principal amount as the Borrower shall request up to, but not exceeding such
Bank's Term Loan Commitment.
3.2 Nature of Banks' Obligations With Respect to Term Loans.
-------------------------------------------------------
The obligations of each Bank to make Term Loans to the Borrower shall
be in the proportion that such Bank's Term Loan Commitment bears to the Term
Loan Commitments of all Banks to the Borrower, but each Bank's Term Loan to the
Borrower shall never exceed its Term Loan Commitment. The failure of any Bank to
make a Term Loan shall not relieve any other Bank of its obligations to make a
Term Loan nor shall it impose any additional liability on any other Bank
hereunder. The Banks shall have no obligation to make Term Loans hereunder after
the Closing Date. The Term Loan Commitments are not revolving credit
commitments, and the Borrower shall not have the right to borrow, repay and
reborrow under Section 3.1 [Term Loan Commitments].
3.3 [Intentionally Omitted.]
----------------------
3.4 Term Loan Notes.
---------------
The Obligation of the Borrower to repay the unpaid principal amount of
the Term Loans made to it by each Bank, together with interest thereon, shall be
evidenced by a Term Note dated the Closing Date payable to the order of each
Bank in a face amount equal to the Term Loan of such Bank. The principal amount
as provided therein of the Term Notes shall be payable in sixteen equal
quarterly installments, each in the amount of $750,000, payable commencing on
April 1, 2001 and on the first day of each July, October, January and April of
the years 2001, 2002, 2003 and 2004, with a final payment of all outstanding
principal and interest accrued thereon on January 18, 2005.
- 25 -
3.5 Use of Proceeds.
---------------
The proceeds of the Term Loan shall be used for the refinancing of the
Indebtedness outstanding under the Existing Credit Agreement and the acquisition
of the capital stock of Xxxxxx-Xxxxxx.
4. INTEREST RATES
--------------
4.1 Interest Rate Options.
---------------------
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrower may select
different Interest Rate Options and different Euro-Rate Interest Periods to
apply simultaneously to the Loans comprising different Borrowing Tranches and
may convert to or renew one or more Interest Rate Options with respect to all or
any portion of the Loans comprising any Borrowing Tranche, provided that there
shall not be at any one time outstanding more than eight (8) Borrowing Tranches
in the aggregate among all of the Loans. If at any time the designated rate
applicable to any Loan made by any Bank exceeds such Bank's highest lawful rate,
the rate of interest on such Bank's Loan shall be limited to such Bank's highest
lawful rate.
4.1.1 Revolving Credit Interest Rate Options.
--------------------------------------
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Revolving Credit Loans:
(i) Revolving Credit Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate; or
(ii) Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin.
4.1.2 Term Loan Interest Rate Options.
-------------------------------
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Term Loans:
(i) Term Loan Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate; or
- 26 -
(ii) Term Loan Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin.
4.1.3 Rate Quotations.
---------------
The Borrower may call the Agent on or before the date on which a
Loan Request is to be delivered to receive an indication of the rates then in
effect, but it is acknowledged that such projection shall not be binding on the
Agent or the Banks nor affect the rate of interest which thereafter is actually
in effect when the election is made.
4.2 Interest Periods.
----------------
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option, the Borrower shall notify the Agent thereof at least three (3)
Business Days prior to the effective date of such Euro-Rate Option by delivering
a Loan Request. The notice shall specify the Euro-Rate Interest Period during
which such Interest Rate Option shall apply. The following provisions shall
apply to any selection of, renewal of, or conversion to a Euro-Rate Option:
4.2.1 Amount of Borrowing Tranche.
---------------------------
each Borrowing Tranche of Euro-Rate Loans shall be in integral
multiples of $100,000 and not less than $500,000;
4.2.2 Renewals.
--------
in the case of the renewal of a Euro-Rate Option at the end of an
Euro-Rate Interest Period, the first day of the new Euro-Rate Interest Period
shall be the last day of the preceding Euro-Rate Interest Period, without
duplication in payment of interest for such day.
4.3 Interest After Default.
----------------------
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
4.3.1 Letter of Credit Fees, Interest Rate.
------------------------------------
the Letter of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Exhibit 2.9 or Section 4.1 [Interest Rate
Options], respectively, shall be increased by two percent (2%) per annum; and
4.3.2 Other Obligations.
-----------------
each other Obligation hereunder if not paid when due shall bear
interest at a rate per annum equal to the sum of the rate of interest applicable
under the Revolving Credit Base Rate Option plus an additional two percent (2%)
per annum from the time such Obligation becomes due and payable and until it is
paid in full.
- 27 -
4.3.3 Acknowledgment.
--------------
The Borrower acknowledges that the increase in rates referred to
in this Section 4.3 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional compensation for such risk;
and all such interest shall be payable by Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable; Illegality.
-------------------------------------
4.4.1 Euro-Rate Unascertainable.
-------------------------
If any Bank determines (which determination shall be final and
conclusive) that, by reason of circumstances affecting the interbank eurodollar
market generally, deposits in dollars (in the applicable amounts) are not being
offered to banks in the interbank eurodollar market for the selected term, or
adequate means do not exist for ascertaining the Euro-Rate, then such Bank shall
give notice thereof to the Agent, and the Agent shall give notice thereof to the
Borrower and the other Banks. Thereafter, until the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such suspension no longer
exist, (a) the availability of the Euro-Rate Option shall be suspended, and (b)
the interest rate for all Borrowing Tranches then bearing interest under the
Euro-Rate Option shall be converted at the expiration of the then current
Euro-Rate Interest Periods to the Base Rate Option.
4.4.2 Illegality.
----------
If, after the date of this Agreement, any Bank shall determine
(which determination shall be final and conclusive) that any enactment,
promulgation or adoption of or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by a
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank with any
guideline, request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make it unlawful or
impossible for such Bank to make or maintain or fund loans under the Euro-Rate
Option, such Bank shall notify the Borrower and the other Banks. Upon receipt of
such notice, until such Bank notifies the Borrower and the other Banks that the
circumstances giving rise to such determination no longer apply, (a) the
availability of the Euro-Rate Option shall be suspended, and (b) the interest
rate on all Borrowing Tranches then bearing interest under the Euro-Rate Option
shall be converted to the Base Rate Option either (i) on the last day of the
then current Euro-Rate Interest Periods if such Bank may lawfully continue to
maintain Loans under the Euro-Rate Option to such day, or (ii) immediately if
such Bank may not lawfully continue to maintain Loans under the Euro-Rate
Option.
4.5 Selection of Interest Rate Options.
----------------------------------
If the Borrower fails to select a new Euro-Rate Interest Period to
apply to any Borrowing Tranche of Loans under the Euro-Rate Option at the
expiration of an existing Euro-Rate Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 4.2, the Borrower shall be
deemed to have converted such Borrowing Tranche to the
- 28 -
Revolving Credit Base Rate Option or Term Loan Base Rate Option, as applicable,
commencing upon the last day of the existing Euro-Rate Interest Period.
5. PAYMENTS
--------
5.1 Payments.
--------
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Facility Fees, Letter of Credit Fees, Agent's Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the Banks with
respect to the Loans in U.S. Dollars and in immediately available funds, and the
Agent shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by 11:00 a.m.,
Pittsburgh time, by the Agent with respect to the Loans and such payments are
not distributed to the Banks on the same day received by the Agent, the Agent
shall pay the Banks the Federal Funds Effective Rate with respect to the amount
of such payments for each day held by the Agent and not distributed to the
Banks. The Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Banks.
---------------------------
Each borrowing shall be allocated to each Bank according to its
Ratable Share, and each selection of, conversion to or renewal of any Interest
Rate Option and each payment or prepayment by the Borrower with respect to
principal, interest, Commitment Fees, Facility Fees, Letter of Credit Fees, or
other fees (except for the Agent's Fee) or amounts due from the Borrower
hereunder to the Banks with respect to the Loans, shall (except as provided in
Section 4.4 [Euro-Rate Unascertainable; Illegality], or Section 5.6 [Additional
Compensation in Certain Circumstances]) be made in proportion to the applicable
Loans outstanding from each Bank and, if no such Loans are then outstanding, in
proportion to the Ratable Share of each Bank.
5.3 Interest Payment Dates.
----------------------
Interest on Loans to which the Base Rate Option applies shall be due
and payable in arrears on the first Business Day of each January, April, July
and October after the date hereof and on the Expiration Date or upon
acceleration of the Notes. Interest on Loans to which the Euro-Rate Option
applies shall be due and payable on the last day of each Euro-Rate Interest
Period for those Loans and, if such Euro-Rate Interest Period is longer than
three (3) Months, also on the 90th day of such Euro-Rate Interest Period.
Interest on mandatory prepayments of principal under Section 5.5 [Mandatory
Prepayments] shall be due on the date such mandatory prepayment is due. Interest
on the principal amount of each Loan or other monetary Obligation
- 29 -
shall be due and payable on demand after such principal amount or other monetary
Obligation becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
5.4 Voluntary Prepayments.
---------------------
5.4.1 Right to Prepay.
---------------
The Borrower shall have the right at its option from time to time
to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.6 [Additional Compensation in Certain Circumstances]):
(i) at any time with respect to any Loan to which the Base
Rate Option applies,
(ii) on the last day of the applicable Euro-Rate Interest
Period with respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any Bank pursuant
to Section 4.4 [Euro-Rate Unascertainable, Etc.] with respect to any Loan to
which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it
shall provide a prepayment notice to the Agent in the case of Loans to which the
Base Rate Option applies, by 11:00 a.m. of the date of prepayment of Loans and
in the case of Loans to which the Euro-Rate Option applies, by 1:00 p.m. at
least one (1) Business Day prior to the date of prepayment of Loans, in each
such case setting forth the following information:
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(y) a statement indicating the application of the prepayment
between the Revolving Credit Loans and Term Loans; and
(z) the total principal amount of such prepayment, which shall
not be less than $500,000, in the case of Loans to which the Euro-Rate
Option applies and $100,000, in the case of Loans to which the Base
Rate Option applies.
All prepayment notices shall be irrevocable. The principal amount
of the Loans for which a prepayment notice is given, together with interest on
such principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made. All Term Loan
prepayments permitted pursuant to this Section 5.4.1 shall be applied in the
order of maturity to the unpaid installments of principal of the Term Loans.
Except as provided in Section 4.4 [Euro-Rate Unascertainable; Illegality], if
the Borrower prepays a Loan but fails to specify the applicable Borrowing
Tranche which the Borrower is prepaying, the prepayment shall be applied (i)
first to Revolving Credit Loans and then to Term Loans; and (ii) after giving
effect to the allocations in clause (i) above and in the preceding sentence,
first to Loans to which the Base Rate Option applies, then to Loans to which the
Euro-Rate Option
- 30 -
applies. Any prepayment hereunder shall be subject to the Borrower's Obligation
to indemnify the Banks under Section 5.6.2 [Indemnity].
5.5 Mandatory Prepayments.
5.5.1 Excess Cash Flow.
----------------
Within five (5) Business Days of delivery of the Borrower's
annual financial statements pursuant to Schedule 8.3, but in any event no later
than April 15 of each year during the term hereof (each, a "Mandatory Prepayment
Date"), the Borrower shall make a mandatory prepayment of principal on the Term
Loans equal to 50% of Excess Cash Flow for the immediately preceding fiscal
year, subject to a credit for voluntary prepayments made pursuant to Section
5.4 [Voluntary Prepayments] during the immediately preceding fiscal year,
together with accrued interest on such principal amount (each, a "Mandatory
Prepayment of Excess Cash Flow"). Each Mandatory Prepayment of Excess Cash Flow
shall be applied to payment in full of the principal amount of the Term Loans by
application on a pro-rata basis to the unpaid installments of principal. To the
extent that a Mandatory Prepayment of Excess Cash Flow exceeds the outstanding
principal amount of the Term Loans, such prepayment shall be limited to the
amount necessary to prepay the Term Loans in full.
5.5.2 Sale of Assets.
--------------
Within five (5) Business Days of any sale, transfer or lease of
assets authorized by Section 8.2.7 (v), (vi) or (vii) [Disposition of Assets or
Subsidiaries], the Borrower shall make a mandatory prepayment of principal on
the Term Loans equal to the after-tax cash proceeds of such sale, transfer or
lease in excess of $100,000 (as estimated in good faith by the Borrower),
together with accrued interest on such principal amount. All prepayments
pursuant to this Section 5.5.2 shall be applied to payment in full of the
principal amount of the Term Loans by application on a pro-rata basis to the
unpaid installments of principal.
5.5.3 Equity and Debt Proceeds.
------------------------
Within five (5) Business Days of any the sale of any capital
stock of the Borrower or its Subsidiaries (other than to a Loan Party) and
immediately upon receipt of proceeds of any additional offerings of Indebtedness
other than as permitted under Section 8.2.1, the Borrower shall make a mandatory
prepayment of principal on the Term Loans equal to the proceeds of such equity
sale or debt offering in excess of $100,000, together with accrued interest on
such principal amount. All prepayments pursuant to this Section 5.5.3 shall be
applied to payment in full of the principal amount of the Term Loans by
application to the unpaid installments of principal in the inverse order of
scheduled maturities.
5.5.4 Borrowing Base Exceeded.
-----------------------
Within one (1) Business Day of any date that any Loan Party
obtains knowledge that the Revolving Facility Usage exceeds the Borrowing Base,
the Borrower shall make a mandatory prepayment of principal on the Revolving
Credit equal to or greater than the amount by which the Revolving Facility Usage
exceeds the Borrowing Base, together with accrued interest on such principal
amount.
- 31 -
5.5.5 Application Among Interest Rate Options.
---------------------------------------
All prepayments required pursuant to this Section 5.5 shall first
be applied among the Interest Rate Options to the principal amount of the Loans
subject to the Base Rate Option, then to Loans subject to a Euro-Rate Option. In
accordance with Section 5.6.2 [Indemnity], the Borrower shall indemnify the
Banks for any loss or expense, including loss of margin, incurred with respect
to any such prepayments applied against Loans subject to a Euro-Rate Option on
any day other than the last day of the applicable Euro-Rate Interest Period.
5.6 Additional Compensation in Certain Circumstances.
------------------------------------------------
5.6.1 Increased Costs or Reduced Return Resulting From Taxes,
-------------------------------------------------------
Reserves, Capital Adequacy Requirements, Expenses, Etc.
-------------------------------------------------------
If after the Closing Date any Law, guideline or interpretation or
any change in any Law, guideline or interpretation or application thereof by any
Official Body charged with the interpretation or administration thereof or
compliance with any request or directive (whether or not having the force of
Law) of any central bank or other Official Body:
(i) subjects any Bank 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 Fees, or other amounts due from the
Borrower hereunder or under the Notes (except for taxes on the overall net
income of such Bank),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the obligations of any Bank under this
Agreement,
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 any
Bank 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 any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrower and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrower to such Bank ten (10) Business Days after such notice is given.
- 32 -
5.6.2 Indemnity.
---------
In addition to the compensation required by Section 5.6.1
[Increased Costs, Etc.], the Borrower shall indemnify each Bank against all
liabilities, losses or expenses (including loss of margin, any loss or expense
incurred in liquidating or employing deposits from third parties and any loss or
expense incurred in connection with funds acquired by a Bank to fund or maintain
Loans subject to a Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any
(i) payment, prepayment, conversion or renewal of any Loan
to which a Euro-Rate Option applies on a day other than the last day of the
corresponding Euro-Rate Interest Period (whether or not such payment or
prepayment is mandatory, voluntary 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 Loan Requests under
Section 2.5 [Revolving Credit Loan Requests] or Section 4.2 or notice relating
to prepayments under Section 5.4 [Voluntary Prepayments], or
(iii) default by the Borrower in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or any other
amount due hereunder.
If any Bank 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 such
Bank (which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such Bank
ten (10) Business Days after such notice is given.
5.7 Receipt and Application of Payment.
----------------------------------
Following the occurrence of an Event of Default or otherwise in
accordance with the terms of the Agent's Letter, then upon request of the Agent,
the Loan Parties shall notify all Account Debtors to make all payments due from
them to the Loan Parties directly to a lockbox for collection pursuant to a
lockbox agreement in form satisfactory to the Agent (the "Cash Collateral
Account"). In the event the Loan Parties (or any of its Affiliates,
shareholders, directors, officers, employees, agents or those Person acting for
or in concert with the Borrower) shall receive any cash, checks, notes, drafts
or other similar items of payment relating to or constituting the Collateral (or
proceeds thereof) after such request by the Agent that all payments be remitted
to the lockbox for deposit in the Cash Collateral Account, no later than the
first Business Day following receipt thereof, the Loan Parties shall (i) deposit
or cause the same to be deposited, in kind, in the Cash Collateral Account
established by the Loan Parties with the Agent or such other depository as may
be designated in writing by the Agent (the "Depository"), from which account the
Agent alone shall have sole power of withdrawal, and with respect to which the
Depository shall waive any rights of set off, and (ii) forward to the Agent on a
daily basis, a
- 33 -
collection report in form and substance satisfactory to the Agent and, at the
Agent's request, copies of all such items and deposit slips related thereto. All
cash, notes, checks, drafts or similar items of payment by or for the account of
the Borrower shall be the sole and exclusive property of the Banks immediately
upon the earlier of the receipt of such items by the Agent or the Depository or
the receipt of such items by the Borrower; provided, however, that for the
purpose of computing interest hereunder such items shall be deemed to have been
collected and shall be applied by the Agent on account of the Loans one (1)
Business Day after receipt by the Agent (subject to correction for any items
subsequently dishonored for any reason whatsoever). Notwithstanding anything to
the contrary herein, all such items of payment shall, solely for purposes of
determining the occurrence of an Event of Default, be deemed received upon
actual receipt by the Agent, unless the same are subsequently dishonored for any
reason whatsoever. Upon the occurrence of an Event of Default, all funds in the
Cash Collateral Account, including all payments made by or on behalf of and all
credits due the Borrower, may be applied and reapplied in whole or in part to
any of the Loans to the extent and in the manner the Agent deems advisable which
is not inconsistent with the terms of this Agreement.
5.8 Collections; Agent's Right to Notify Account Debtors.
----------------------------------------------------
Following the occurrence of an Event of Default or otherwise in
accordance with the terms of the Agent's Letter, then upon request of the Agent,
the Loan Parties hereby authorize the Agent, now and at any time or times
hereafter at the discretion of the Agent, to (i) notify any or all Account
Debtors that the Accounts have been assigned to the Banks and that the Banks
have a security interest therein, and (ii) direct such Account Debtors to make
all payments due from them to the Borrower upon the Accounts directly to the
Agent or to a lockbox designated by the Agent. The Agent shall promptly furnish
the Borrower with a copy of any such notice sent. Any such notice, in the
Agent's sole discretion, may be sent on the Loan Parties' stationery, in which
event the Loan Parties shall co-sign such notice with the Agent. To the extent
that any Law or custom or any contract or agreement with any Account Debtor
requires notice to or the approval of the Account Debtor in order to perfect
such assignment of a security interest in Accounts, the Loan Parties agrees to
give such notice or obtain such approval.
6. REPRESENTATIONS AND WARRANTIES
------------------------------
6.1 Representations and Warranties.
------------------------------
The Loan Parties, jointly and severally, represent and warrant to the
Agent and each of the Banks as follows:
6.1.1 Organization and Qualification.
------------------------------
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule
- 34 -
6.1.1 and in all other jurisdictions where the property owned or leased by it or
the nature of the business transacted by it or both makes such licensing or
qualification necessary.
6.1.2 Capitalization and Ownership.
----------------------------
The authorized capital stock of the Borrower consists of 23,678
shares, of which 6,408 shares (referred to herein as the "Shares") are issued
and outstanding and are owned, as of the Closing Date, as indicated on Schedule
6.1.2. All of the Shares have been validly issued and are fully paid and
nonassessable. As of the Closing Date, there are no options, warrants or other
rights outstanding to purchase any such shares except as indicated on Schedule
6.1.2.
6.1.3 Subsidiaries.
------------
Schedule 6.1.3 states the name of each of the Borrower's
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
Shares") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "Partnership Interests") if it is a partnership and
its outstanding limited liability company interests, interests assigned to
managers thereof and the voting rights associated therewith (the "LLC
Interests") if it is a limited liability company. The Borrower and each
Subsidiary of the Borrower has good and valid title to all of the Subsidiary
Shares, Partnership Interests and LLC Interests it purports to own, free and
clear in each case of any Lien. All Subsidiary Shares, Partnership Interests and
LLC Interests have been validly issued, and all Subsidiary Shares are fully paid
and nonassessable. All capital contributions and other consideration required to
be made or paid in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated on Schedule 6.1.3.
6.1.4 Power and Authority.
-------------------
Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement and the other Loan Documents to which it is a
party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
6.1.5 Validity and Binding Effect.
---------------------------
This Agreement has been duly and validly executed and delivered
by each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have been duly
executed and delivered by such Loan Party on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes, or
will constitute, legal, valid and binding obligations of each Loan Party which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or
- 35 -
other similar laws affecting the enforceability of creditors' rights generally
or limiting the right of specific performance.
6.1.6 No Conflict.
-----------
Neither the execution and delivery of this Agreement or
the other Loan Documents by any Loan Party nor the consummation of the
transactions herein or therein contemplated or compliance with the terms and
provisions hereof or thereof by any of them will conflict with, constitute a
default under or result in any breach of (i) the terms and conditions of the
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents of any Loan Party or (ii) any Law or
any material agreement or instrument or order, writ, judgment, injunction or
decree to which any Loan Party or any of its Subsidiaries is a party or by which
it or any of its Subsidiaries is bound or to which it is subject, or result in
the creation or enforcement of any Lien, charge or encumbrance whatsoever upon
any property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
6.1.7 Litigation.
----------
There are no actions, suits, proceedings or
investigations pending or, to the knowledge of any Loan Party, threatened
against such Loan Party or any Subsidiary of such Loan Party at law or equity
before any Official Body which individually or in the aggregate may result in
any Material Adverse Change. None of the Loan Parties or any Subsidiaries of any
Loan Party is in violation of any order, writ, injunction or any decree of any
Official Body which may result in any Material Adverse Change.
6.1.8 Title to Properties.
-------------------
The real property owned or leased by the Borrower and
each Domestic Subsidiary of each Loan Party is described on Schedule 6.1.8. Each
Loan Party and each Subsidiary of each Loan Party has good and marketable title
to or valid leasehold interest in all properties, assets and other rights which
it purports to own or lease or which are reflected as owned or leased on its
books and records, free and clear of all Liens and encumbrances except Permitted
Liens, and subject to the terms and conditions of the applicable leases. All
leases of property are in full force and effect without the necessity for any
consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.
6.1.9 Financial Statements.
--------------------
(i) Historical Statements. The Borrower has delivered to the
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the three fiscal years ended December 31, 1999 (the "Annual
Statements"). In addition, the Borrower has delivered to the Agent copies of its
unaudited consolidated interim financial statements for the fiscal year to date
and as of the end of the fiscal quarter ended September 30, 2000 (the "Interim
Statements") (the Annual and Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were compiled from
the books and records maintained by the Borrower's management, are correct and
complete and fairly represent
- 36 -
the consolidated financial condition of the Borrower and its Subsidiaries as of
their dates and the results of operations for the fiscal periods then ended. The
Annual Statements have been prepared in accordance with GAAP consistently
applied.
(ii) Financial Projections. The Borrower has delivered to
the Agent financial projections of the Borrower and its Subsidiaries for the
2000 and 2001 fiscal year period derived from various assumptions of the
Borrower's management (the "Financial Projections"). The Financial Projections
represent a reasonable range of possible results in light of the history of the
business, present and foreseeable conditions and the intentions of the
Borrower's management. The Financial Projections accurately reflect the
liabilities of the Borrower and its Subsidiaries upon consummation of the
transactions contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. Neither the Borrower
nor any Subsidiary of the Borrower has any liabilities, contingent or otherwise,
or forward or long-term commitments that are not disclosed in the Historical
Statements or in the notes thereto, and except as disclosed therein there are no
unrealized or anticipated losses from any commitments of the Borrower or any
Subsidiary of the Borrower which may cause a Material Adverse Change. Since
December 31, 1999, no Material Adverse Change has occurred.
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
------------------------------------------------------
6.1.10.1 General.
-------
The Loan Parties intend to use the proceeds of the Loans in
accordance with Sections 2.8, 3.5 and 8.1.10.
6.1.10.2 Margin Stock.
------------
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Loan has been or will
be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or to refund Indebtedness originally incurred for such
purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. None of the Loan Parties or any Subsidiary of any
Loan Party holds or intends to hold margin stock in such amounts that more than
25% of the reasonable value of the assets of any Loan Party or Subsidiary of any
Loan Party are or will be represented by margin stock.
6.1.10.3 Section 20 Subsidiaries.
-----------------------
The Loan Parties do not intend to use and shall not use any
portion of the proceeds of the Loans, directly or indirectly, to purchase during
the underwriting period, or for thirty (30) days thereafter, Ineligible
Securities being underwritten by a Section 20 Subsidiary.
- 37 -
6.1.11 Full Disclosure.
---------------
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Agent or
any Bank in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
which materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.
6.1.12 Taxes.
-----
Each Loan Party and each Subsidiary of each Loan Party has filed
all tax returns and reports required by law to have been filed by it and has
paid all taxes and governmental charges thereby shown to be owing, except for
any such taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
generally accepted accounting principles shall have been set aside on its books.
There are no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of any Loan Party or Subsidiary of
any Loan Party for any period.
6.1.13 Consents and Approvals.
----------------------
Except for the filing of financing statements and the Mortgage in
the state and county filing offices, no consent, approval, exemption, order or
authorization of, or a registration or filing with, any Official Body or any
other Person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement and the other Loan
Documents by any Loan Party, except as listed on Schedule 6.1.13, all of which
shall have been obtained or made on or prior to the Closing Date except as
otherwise indicated on Schedule 6.1.13.
6.1.14 No Event of Default; Compliance With Instruments.
------------------------------------------------
No event has occurred and is continuing and no condition exists
or will exist after giving effect to the borrowings or other extensions of
credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
- 38 -
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
----------------------------------------------
Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known possible, alleged or actual conflict with the rights of others. All
material patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party and each Subsidiary of
each Loan Party are listed and described on Schedule 6.1.15.
6.1.16 Security Interests.
------------------
The Liens and security interests granted to the Agent for the
benefit of the Banks pursuant to the Collateral Assignment the Pledge Agreement
and the Security Agreement in the Collateral (other than the Real Property)
constitute and will continue to constitute Prior Security Interests under the
Uniform Commercial Code as in effect in each applicable jurisdiction (the
"Uniform Commercial Code") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or such Law.
Upon the filing of financing statements relating to said security interests in
each office and in each jurisdiction where required in order to perfect the
security interests described above, and taking possession of any stock
certificates or other certificates evidencing the Pledged Collateral, as
applicable, all such action as is necessary or advisable to establish such
rights of the Agent will have been taken, and there will be upon execution and
delivery of the Collateral Assignment, the Pledge Agreement and the Security
Agreement, such filings and such taking of possession, no necessity for any
further action in order to preserve, protect and continue such rights, except
the filing of continuation statements with respect to such financing statements
within six months prior to each five-year anniversary of the filing of such
financing statements. All filing fees and other expenses in connection with each
such action have been or will be paid by the Borrower.
6.1.17 Mortgage Liens.
--------------
The Liens granted to the Agent for the benefit of the Banks
pursuant to the Mortgage constitute a valid first priority Lien under applicable
law. All such action as will be necessary or advisable to establish such Lien
of the Agent and its priority as described in the preceding sentence will be
taken at or prior to the time required for such purpose, and there will be as of
the date of execution and delivery of the Mortgage no necessity for any further
action in order to protect, preserve and continue such Lien and such priority.
6.1.18 Status of the Pledged Collateral.
--------------------------------
All the shares of capital stock, Partnership Interests or LLC
Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreement or the Collateral Assignment are or will be upon issuance
validly issued and nonassessable and owned beneficially and of record by the
pledgor free and clear of any Lien or restriction on transfer, except as
otherwise provided by the Pledge Agreement or the Collateral Assignment and
except as the right of the Banks to dispose of the Shares, Partnership Interests
or LLC Interests may be limited by the Securities Act of 1933, as amended, and
the regulations promulgated by the
- 39 -
Securities and Exchange Commission thereunder and by applicable state securities
laws. There are no shareholder, partnership, limited liability company or other
agreements or understandings with respect to the shares of capital stock,
Partnership Interests or LLC Interests included in the Pledged Collateral except
for the partnership agreements and limited liability company agreements
described on Schedule 6.1.18. The Loan Parties have delivered true and correct
copies of such partnership agreements and limited liability company agreements
to the Agent.
6.1.19 Insurance.
---------
Schedule 6.1.19 lists, as of the Closing Date, all insurance
policies and other bonds to which any Loan Party or Subsidiary of any Loan Party
is a party, all of which are valid and in full force and effect. No notice has
been given or claim made and no grounds exist to cancel or avoid any of such
policies or bonds or to reduce the coverage provided thereby. Such policies and
bonds provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each Loan Party and each
Subsidiary of each Loan Party in accordance with prudent business practice in
the industry of the Loan Parties and their Subsidiaries.
6.1.20 Compliance With Laws.
--------------------
The Loan Parties and their Subsidiaries are in compliance in all
material respects with all applicable Laws (other than Environmental Laws which
are specifically addressed in Section 6.1.25 [Environmental Matters]) in all
jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
6.1.21 Material Contracts; Burdensome Restrictions.
-------------------------------------------
All material contracts of each Loan Party and each Subsidiary of
each Loan Party are valid, binding and enforceable upon such Loan Party or
Subsidiary and, to the Loan Parties' knowledge, each of the other parties
thereto in accordance with their respective terms. There is no default under
such material contracts of the Loan Parties and their Subsidiaries by any Loan
Party or any Subsidiary of any Loan Party, nor, to the Loan Parties' knowledge,
by parties thereto other than any Loan Party or any Subsidiary of any Loan
Party. None of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which could result in a Material Adverse
Change.
6.1.22 Investment Companies; Regulated Entities.
----------------------------------------
None of the Loan Parties or any Subsidiaries of any Loan Party is
an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other Federal
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.
- 40 -
6.1.23 Plans and Benefit Arrangements.
------------------------------
Except as set forth on Schedule 6.1.23:
(i) The Borrower and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Plans and Multiemployer Plans.
There has been no Prohibited Transaction with respect to any Benefit Arrangement
or any Plan or, to the best knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any material
liability of the Borrower or any other member of the ERISA Group. The Borrower
and all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Borrower and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the minimum
funding standards of ERISA, (ii) have not incurred any liability to the PBGC,
and (iii) have not had asserted against them any penalty for failure to fulfill
the minimum funding requirements of ERISA.
(ii) To the best of the Borrower's knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.
(iii) Neither the Borrower nor any other member of the ERISA
Group has instituted or intends to institute proceedings to terminate any Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan.
(vi) Neither the Borrower nor any other member of the ERISA
Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrower nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured,
the Borrower and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing Date. To the
extent that any Benefit Arrangement is funded other than with insurance, the
Borrower and all other members of the ERISA Group
- 41 -
have made when due all contributions required to be paid for all periods through
the Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer
Plans have been administered in accordance with their terms and applicable Law.
6.1.24 Employment Matters.
------------------
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change.
6.1.25 Environmental Matters.
---------------------
Except for matters which would not constitute a Material Adverse
Change:
(i) None of the Loan Parties or any Subsidiary has
received any Environmental Complaint and has no reason to believe that it might
receive an Environmental Complaint.
(ii) No activity of the Loan Parties or any Subsidiary at
the Property is being or has been conducted in violation of any Environmental
Law, and to the knowledge of Loan Parties, no activity of any prior owner or
operator of the Property was conducted in violation of any Environmental Laws.
(iii) There are no Regulated Substances present on, in,
under, or emanating from, or to Loan Parties' knowledge emanating to, the
Property or any portion thereof which result in Contamination.
(iv) Each Loan Party and each of the Loan Parties'
Subsidiaries has all Required Environmental Permits and all such Required
Environmental Permits are in full force and effect.
(v) Each Loan Party and each of the Loan Parties'
Subsidiaries has submitted all Required Environmental Reports which pursuant to
Environmental Laws it is required to submit to an Official Body, and Borrower
maintains all Required Environmental Reports which pursuant to Environmental
Laws it is required to maintain.
(vi) No structures, improvements, equipment, fixtures or
aboveground or underground storage tanks located on the Property contain or use,
except in compliance with Environmental Laws, Regulated Substances or otherwise
are operated or
- 42 -
maintained except in compliance with Environmental Laws. To the knowledge of
Loan Parties, no structures, improvements, equipment, fixtures or aboveground or
underground storage tanks of prior owners or operators of the Property contained
or used, except in compliance with Environmental Laws, Regulated Substances or
otherwise were operated or maintained by any such prior owner or operator except
in compliance with Environmental Laws.
(vii) To the knowledge of Loan Parties, no facility or site
to which Borrower, either directly or indirectly by a third party, has sent
Regulated Substances for storage, treatment, disposal or other management has
been or is being operated in violation of Environmental Laws or pursuant to
Environmental Laws is identified or proposed to be identified on any list of
contaminated properties or other properties which pursuant to Environmental Laws
are the subject of an investigation or remediation action by an Official Body.
(viii) No portion of the Property is identified or to the
Loan Parties' knowledge proposed to be identified on any list of contaminated
properties or other properties which pursuant to Environmental Laws are the
subject of an investigation or remediation action by an Official Body.
(ix) No portion of the Property constitutes an
Environmentally Sensitive Area.
(x) No lien or other encumbrance authorized by
Environmental Laws exists against the Property, and the Loan Parties have no
reason to believe that such a lien or encumbrance may be imposed.
6.1.26 Senior Debt Status.
------------------
The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Loan Party except Indebtedness of such Loan Party
to the extent secured by Permitted Liens. There is no Lien upon or with respect
to any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens. The obligations of the Borrower and the other Loan Parties
under this Agreement and the other Loan Documents do not conflict with or
violate the terms of the Note Indenture and any Loans hereafter made to the
Borrower, any Letters of Credit hereafter issued on behalf of the Loan Parties
and the guarantees of the Loans and all other Obligations under the Loan
Documents by the Guarantors all constitute "Permitted Debt" of the type
described in Section 4.09(a) of the Note Indenture. Further, this Agreement
constitutes the "Senior Credit Facility" as such term is defined in the Note
Indenture.
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
- 43 -
7.1 First Loans and Letters of Credit.
---------------------------------
On the Closing Date:
7.1.1 Officer's Certificate.
---------------------
The representations and warranties of each of the Loan Parties contained in
Section 6 and in each of the other Loan Documents shall be true and accurate on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein), and each of the Loan Parties shall have performed
and complied with all covenants and conditions hereof and thereof; no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist; and there shall be delivered to the Agent for the benefit of each Bank a
certificate of each of the Loan Parties, dated the Closing Date and signed by an
Authorized Officer of each of the Loan Parties, to each such effect.
7.1.2 Secretary's Certificate.
-----------------------
There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to:
(i) all action taken by each Loan Party in connection
with this Agreement and the other Loan Documents;
(ii) the names of the Authorized Officers authorized to
sign this Agreement and the other Loan Documents and the true signatures of such
officers and specifying the Authorized Officers authorized to act on behalf of
each Loan Party for purposes of this Agreement and the true signatures of such
officers, on which the Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business.
7.1.3 Delivery of Loan Documents.
--------------------------
The Collateral Assignment, Guaranty Agreement, Indemnity,
Mortgages, Notes, Pledge Agreement, Intercompany Subordination Agreement and
Security Agreement shall have been duly executed and delivered to the Agent for
the benefit of the Banks, together with all appropriate financing statements and
appropriate stock powers and certificates evidencing the Shares, the Partnership
Interests and the LLC Interests.
- 44 -
7.1.4 Opinion of Counsel.
------------------
There shall be delivered to the Agent for the benefit of each
Bank a written opinion of Xxxxx, Xxxxx & Xxxxx, counsel for the Loan Parties
(who may rely on the opinions of such other counsel as may be acceptable to the
Agent), dated the Closing Date and in form and substance satisfactory to the
Agent and its counsel:
(i) as to the matters set forth in Exhibit 7.1.4; and
(ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.
7.1.5 Legal Details.
-------------
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent and said
counsel, as the Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
---------------
The Borrower shall have paid or caused to be paid to the Agent
for itself and for the account of the Banks to the extent not previously paid
the Closing Fees, all other commitment and other fees accrued through the
Closing Date and the costs and expenses for which the Agent and the Banks are
entitled to be reimbursed.
7.1.7 Environmental Audit.
-------------------
The Loan Parties shall cause to be performed and completed an
environmental audit with respect to the Real Property by consultants
satisfactory to the Agent and shall provide all reports and results of such
audit in writing to the Agent. Such reports shall meet the Agent's minimum
requirements for phase I environmental assessments and any other requirements of
the Agent or the Banks. The environmental condition of the Loan Parties' and
their Subsidiaries' assets, as substantiated by such audit, shall be
satisfactory to the Agent in all respects.
7.1.8 Existing Credit Agreement.
-------------------------
The Existing Banks shall have assigned to the Banks the
indebtedness constituting the Existing Loans; a Letter of Credit shall be issued
by the Agent in substitution for each of the Existing Letters of Credit; and the
Existing Agent shall have delivered to the Agent UCC assignment forms covering
the UCC filings related to the Existing Credit Agreement. The Borrower
acknowledges that a portion of the initial Loan hereunder will be used as
consideration for the Existing Banks' assignment to the Banks of the Existing
Loans.
- 45 -
7.1.9 Consents.
--------
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 6.1.13 shall have been obtained.
7.1.10 Officer's Certificate Regarding MACs.
------------------------------------
Since December 31, 1999, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the management of any Loan Party or Subsidiary of any Loan Party; and there
shall have been delivered to the Agent for the benefit of each Bank a
certificate dated the Closing Date and signed by an Authorized Officer of each
Loan Party to each such effect.
7.1.11 No Violation of Laws.
--------------------
The making of the Loans and the issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party or any of the Banks.
7.1.12 No Actions or Proceedings.
-------------------------
No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.
7.1.13 Insurance Policies; Certificates of Insurance;
----------------------------------------------
Endorsements.
------------
The Loan Parties shall have delivered evidence acceptable to the
Agent that adequate insurance in compliance with 8.1.3 [Maintenance of
Insurance] is in full force and effect and that all premiums then due thereon
have been paid, together with a certificate of insurance of each Loan Party
evidencing coverage satisfactory to the Agent, with additional insured,
mortgagee and lender loss payable special endorsements attached thereto in form
and substance satisfactory to the Agent and its counsel naming the Agent as
additional insured, mortgagee and lender loss payee.
7.1.14 Title Insurance.
---------------
The Loan Parties shall deliver a title insurance policy or
policies or binder or binders in favor of the Agent for the benefit of the
Banks, in customary ALTA current mortgagee's form, and in amounts not less than
the appraised value of the Real Property or other value acceptable to the Agent
with premiums paid thereon, issued by one or more title insurance companies
acceptable to the Agent and insuring the Mortgage as a valid first priority Lien
upon the applicable Loan Parties' fee simple title to the Real Property and all
improvements and all appurtenances thereto (including such easements and
appurtenances as may be required by the Agent), free and clear of any and all
defects and encumbrances whatsoever, subject only to such
- 46 -
exceptions as may be approved in writing by the Agent, with endorsements thereto
as to such matters as the Agent may designate.
7.1.15 Filing Receipts.
---------------
The Agent shall have received (1) copies of all filing receipts
and acknowledgments issued by any governmental authority to evidence any
recordation or filing necessary to perfect the Lien of the Banks on the
Collateral or other satisfactory evidence of such recordation and filing and (2)
evidence in a form acceptable to the Agent that such Lien constitutes a Prior
Security Interest in favor of the Banks and, in the case of the Mortgage, a
valid and perfected first priority Lien.
7.1.16 [Intentionally Omitted]
-----------------------
7.1.17 Consummation of Acquisitions.
----------------------------
The transactions contemplated by the Acquisition Agreement and
all other documents related to the acquisition of the ownership interests of
Xxxxxx-Xxxxxx shall have been consummated in all respects in accordance with the
terms thereof (without the waiver or amendment of any condition unless consented
to by the Agent). Each of the parties thereto shall have complied in all
respects with all covenants set forth in such Acquisition Agreement (without the
waiver or amendment of any of the terms thereof unless consented to by the
Agent). The Loan Parties shall have delivered to the Agent copies of the
Acquisition Agreement and all other material documents related to the
acquisition of the ownership interests of Xxxxxx-Xxxxxx, which shall be
satisfactory to the Agent in form and content.
7.1.18 Borrowing Base Certificate.
--------------------------
The Borrower shall deliver a Borrowing Base Certificate prepared
as of September 30, 2000 in substantially the form of Exhibit 1.1(B), evidencing
Revolving Credit Availability, after giving effect to the Loans to be made on
the Closing Date and consummation of the transactions contemplated by the
Acquisition Agreement and refinancing of the Existing Loans, of at least
$9,000,000.
7.1.19 Financial Covenants Certificate.
-------------------------------
After giving effect to the consummation of the Acquisition
Agreement, (i) the Borrower shall have not less than $20,000,000 in Consolidated
EBITDA for the 12 months ended September 30, 2000, which covenant shall be
calculated on a pro forma basis acceptable to the Agent and evidenced by a
certificate of an Authorized Officer of the Borrower.
7.1.20 Solvency Certificate.
--------------------
An Authorized Officer of the Borrower shall have delivered a
certificate in form and substance satisfactory to the Agent as to the capital
adequacy and solvency of the Borrower and its Subsidiaries after giving effect
to the transactions contemplated hereby.
- 47 -
7.2 Each Additional Loan or Letter of Credit.
----------------------------------------
At the time of making any Loans or issuing any Letters of Credit other
than Loans made or Letters of Credit issued on the Closing Date and after giving
effect to the proposed extensions of credit: the representations and warranties
of the Loan Parties contained in Section Error! Reference source not found. and
in the other Loan Documents shall be true on and as of the date of such
additional Loan or Letter of Credit with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein) and the Loan Parties
shall have performed and complied with all covenants and conditions hereof; no
Event of Default or Potential Default shall have occurred and be continuing or
shall exist; the making of the Loans or issuance of such Letter of Credit shall
not contravene any Law applicable to any Loan Party or Subsidiary of any Loan
Party or any of the Banks; and the Borrower shall have delivered to the Agent a
duly executed and completed Loan Request or application for a Letter of Credit
as the case may be.
8. COVENANTS
---------
8.1 Affirmative Covenants.
---------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings, and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations under the
Loan Documents and termination of the Commitments, the Loan Parties shall comply
at all times with the following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain its legal existence as a corporation, limited partnership or
limited liability company and its license or qualification and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary, except as otherwise
expressly permitted in Section 8.2.6 [Liquidations, Mergers, Etc.].
8.1.2 Payment of Liabilities, Including Taxes, Etc.
--------------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made, but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which would adversely affect to a
material extent the financial condition of any Loan Party or Subsidiary of any
Loan Party or which would
- 48 -
affect the Collateral, provided that the Loan Parties and their Subsidiaries
will pay all such liabilities forthwith upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor.
8.1.3 Maintenance of Insurance.
------------------------
Each Loan Party will maintain or cause to be maintained, with
financially sound and reputable insurers, public liability and property damage
insurance with respect to its business and properties and the business and
properties of its Subsidiaries against loss or damage of the kinds customarily
carried or maintained by Persons of established reputation engaged in similar
businesses and in amounts acceptable to Agent and, as reasonably requested by
the Agent, will deliver evidence thereof to Agent. The Loan Parties shall cause,
pursuant to endorsements and assignments in form and substance reasonably
satisfactory to Agent, the Agent, for the benefit of Agent and Banks, to be
named as lender's loss payee in the case of casualty insurance, Agent, for the
benefit of Agent and Banks, to be named as additional insured in the case of all
liability insurance and Agent, for the benefit of Agent and Banks, to be named
as assignee in the case of all business interruption insurance; provided, that
notwithstanding the foregoing, in the absence of a Potential Default or an Event
of Default, the Loan Parties may receive and retain proceeds from such casualty
policies to the extent that such proceeds are less than or equal to $500,000.
Within forty-five (45) days of the Closing Date and thereafter as reasonably
requested by the Agent, the Loan Parties shall deliver to the Agent a certified
copy of their insurance policies evidencing the insurance required by the Loan
Documents.
8.1.4 Maintenance of Properties and Leases.
------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its business,
and from time to time, such Loan Party will make or cause to be made all
appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
---------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in full force and effect all patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
8.1.6 Visitation Rights.
-----------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, permit any of the officers or authorized employees or representatives of the
Agent or any of the Banks to visit and inspect any of its properties and to
examine and make excerpts from its books and records and discuss its business
affairs, finances and accounts with its officers, all in such detail and at such
times and as often as any of the Banks may reasonably request, provided that
each Bank shall provide the Borrower and the Agent with reasonable notice prior
to any visit or inspection. In the event any Bank desires to visit and inspect
any Loan Party, such Bank shall
- 49 -
make a reasonable effort to conduct such visit and inspection contemporaneously
with any visit and inspection to be performed by the Agent.
8.1.7 Keeping of Records and Books of Account.
---------------------------------------
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
------------------------------
The Borrower shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
8.1.9 Compliance With Laws.
--------------------
Each Loan Party shall, and shall cause each of its Subsidiaries
to, comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this Section
8.1.9 if any failure to comply with any Law would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.
8.1.10 Use of Proceeds.
---------------
The Loan Parties will use the Letters of Credit and the proceeds
of the Loans only (i) for financing the acquisition of the capital stock of
Xxxxxx-Xxxxxx pursuant to the Acquisition Agreement (ii) for general corporate
purposes and working capital of the Loan Parties, or (iii) to refinance the
Existing Loans. The Loan Parties shall not use the Letters of Credit and the
proceeds of the Loans for any purpose which contravenes any applicable Law or
any provision hereof.
8.1.11 Further Assurances.
------------------
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
- 50 -
8.1.12 Subordination of Intercompany Loans.
-----------------------------------
Each Loan Party shall cause any intercompany Indebtedness, loans
or advances owed by any Loan Party to any other Loan Party to be subordinated
pursuant to the terms of the Intercompany Subordination Agreement.
8.2 Negative Covenants.
------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations hereunder and
termination of the Commitments, the Loan Parties shall comply with the following
negative covenants:
8.2.1 Indebtedness.
------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Part A of
Schedule 8.2.1 (including any extensions or renewals thereof, provided there is
no increase in the amount thereof or other significant change in the terms
thereof unless otherwise specified on Part A of Schedule 8.2.1);
(iii) Indebtedness incurred by the Borrower with respect to
its 11% Notes in accordance with the terms of the Note Indenture.
(iv) Indebtedness secured by Purchase Money Security
Interests and capital leases not exceeding $1,000,000 in the aggregate at any
one time outstanding;
(v) Indebtedness of a Loan Party to another Loan Party
which is subordinated in accordance with the provisions of Section 8.1.12
[Subordination of Intercompany Loans];
(vi) Indebtedness of a Foreign Subsidiary to a Loan Party
permitted by Section 8.2.4(iv);
(vii) Indebtedness of the Loan Parties, in an aggregate
amount at any one time not to exceed $2,000,000, in respect of reimbursement
obligations (contingent or otherwise) under letters of credit issued on behalf
of one or more of the Loan Parties in a currency other than Dollars by an
issuing party other than the Agent pursuant to Section 2.9; and
(viii) Indebtedness of the Loan Parties, in an aggregate
amount at any one time not to exceed $623,889, in respect of reimbursement
obligations (contingent or otherwise) under that certain Reimbursement Agreement
by and between Borrower and Bank of America, N.A., dated as of January 18, 2001,
with respect to the letters of credit set forth on
- 51 -
Part B of Schedule 8.2.1 issued by Bank of America, N.A. on behalf of the Loan
Party specified on such Schedule.
8.2.2 Liens.
-----
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except as follows (the
"Permitted Liens"):
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens, security interests and mortgages in favor of
the Agent for the benefit of the Banks;
(vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases permitted in
Section 8.2.15 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;
(viii) Any Lien existing on the date of this Agreement and
described on Schedule 8.2.2, provided that the principal amount secured thereby
is not hereafter increased, and no additional assets become subject to such
Lien;
(ix) Purchase Money Security Interests, provided that the
aggregate amount of loans and deferred payments secured by such Purchase Money
Security
- 52 -
Interests shall not exceed $1,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 8.2.2);
(x) cash collateral accounts to secure Indebtedness
permitted under Section 8.2.1(vii), with the aggregate amount of cash of the
Loan Parties at any time securing such Indebtedness not to exceed the lesser of
(A) the actual aggregate amount, in Dollars, of the reimbursement obligations
secured thereby, or (B) $2,000,000; and
(xi) The following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (B) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry, and in either case they do not affect the
Collateral or, in the aggregate, materially impair the ability of any Loan Party
to perform its Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings
to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to,
real or personal property other than the Collateral, including any
attachment of personal or real property or other legal process prior
to adjudication of a dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens.
(4) Liens resulting from final judgments or orders described in
Section 9.1.6.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, enter into any
agreement, understanding or other arrangement which purports to restrict in any
manner the ability of any Loan Party to grant security interest or Liens to the
Agent for the benefit of the Agent and the Banks with respect to any asset or
assets constituting Intellectual Property of any Loan Party.
8.2.3 Guaranties.
----------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for (i)
Guaranties of Indebtedness of the Loan Parties under the Loan Documents in favor
of the Agent for the benefit of the Banks, and (ii) guaranties of Subsidiaries
of the Borrower of the Indebtedness and other obligations of the Borrower under
the 11% Notes in accordance with the terms of the Note Indenture.
- 53 -
8.2.4 Loans and Investments.
---------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time make or suffer to remain outstanding any loan
or advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, or agree, become or remain liable
to do any of the foregoing, except:
(i) trade credit extended on usual and customary terms in
the ordinary course of business;
(ii) advances to employees to meet expenses incurred by
such employees in the ordinary course of business as well as loans set forth on
Schedule 8.2.4 to executive employees of the Borrower;
(iii) loans, advances and investments in other Loan
Parties;
(iv) loans, advances and investments made in the ordinary
course of the Borrower's business, which in the aggregate do not exceed
$2,000,000 during the period commencing on the Closing Date through and
including the Expiration Date, in Foreign Subsidiaries of the Borrower, as well
as loans, advances and investments, existing as of the Closing Date, made in the
ordinary course of the Borrower's business in the Foreign Subsidiaries of the
Borrower set forth on Schedule 8.2.4;
(v) investments existing as of the Closing Date in
limited partnerships or in limited liability company interests, all as set forth
on Schedule 8.2.9;
(vi) loans, advances and investments made in the ordinary
course of the Borrower's business, which in the aggregate do not exceed
$1,000,000 during the period commencing on the Closing Date through and
including the Expiration Date, in limited partnerships or limited liability
companies;
(vii) the following permitted investments: (i) direct
obligations of the United States of America or any agency or instrumentality
thereof or obligations backed by the full faith and credit of the United States
of America maturing in twelve (12) months or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not lower than A-1, by
Standard & Poor's or P-1 by Xxxxx'x Investors Service, Inc. on the date of
acquisition; and (iii) demand deposits, time deposits or certificates of deposit
maturing within one year in commercial banks whose obligations are rated A-1, A
or the equivalent or better by Standard & Poor's on the date of acquisition;
(viii) loans to Principals made in accordance with clause
(iv) of Section 8.2.5; and
(ix) investments in the 11% Notes, purchased by the
Borrower in accordance with clause (v) of Section 8.2.5.
- 54 -
8.2.5 Dividends, Redemptions and Related Distributions.
------------------------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Domestic Subsidiaries to, make or pay, or agree to become or remain liable
to make or pay, any dividend or other distribution of any nature (whether in
cash, property, securities or otherwise) on account of or in respect of its
shares of capital stock, partnership interests or limited liability company
interests on account of the purchase, redemption, retirement or acquisition of
its shares of capital stock (or warrants, options or rights therefor),
securities, partnership interests or limited liability company interests,
except:
(i) payments of interest required to be paid in
accordance with the terms of the Note Indenture as in effect on the date hereof,
(ii) dividends or other distributions payable to another
Loan Party,
(iii) at any time following the repayment in full of the
Term Loans (together with all accrued interest and fees thereon), dividends or
distributions (whether in cash, property, or securities or otherwise) on account
of its shares of capital stock so long as, after giving effect thereto (x) no
Potential Default or Event of Default exists, (y) the Loan Parties are in
pro-forma compliance with Section 8.2.17 [Maximum Leverage Ratio] and at least
five (5) Business Days prior to making any such dividend or distribution, the
Borrower shall have delivered to the Agent, in form and substance satisfactory
to the Agent, a certificate of an Authorized Officer of the Borrower as to such
pro-forma compliance and setting forth in detail the calculation of such
pro-forma compliance, and (z) Revolving Credit Availability exceeds $7,000,000,
(iv) at any time following the repayment in full of the
Term Loans (together with all accrued interest and fees thereon), loans to
Principals so long as, after giving effect thereto (x) no Potential Default or
Event of Default exists, (y) the Loan Parties are in pro forma compliance with
Section 8.2.17 [Maximum Leverage Ratio] and at least five (5) Business Days
prior to making any such loan, the Borrower shall have delivered to the Agent,
in form and substance satisfactory to the Agent, a certificate of an Authorized
Officer of the Borrower as to such pro-forma compliance and setting forth in
detail the calculation of such pro-forma compliance, and (z) Revolving Credit
Availability exceeds $7,000,000,
(v) at any time following the repayment in full of the
Term Loans (together with all accrued interest and fees thereon), distributions
to purchase any of the 11% Notes so long as, after giving effect thereto (x) no
Potential Default or Event of Default exists, (y) the Loan Parties are in pro
forma compliance with Section 8.2.17 [Maximum Leverage Ratio] and at least five
(5) Business Days prior to making any such purchase, the Borrower shall have
delivered to the Agent, in form and substance satisfactory to the Agent, a
certificate of an Authorized Officer as to such pro-forma compliance and setting
forth in detail the calculation of such pro-forma compliance, and (z) Revolving
Credit Availability exceeds $7,000,000, and
(vi) dividends or distributions from the proceeds of any
of the Key Man Life Insurance Policies.
- 55 -
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to enter into or agree to enter into any agreement which
prohibits or restricts it from paying or agreeing to pay any dividend or other
distribution to another Loan Party.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
---------------------------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or otherwise
all or substantially all of the assets or capital stock of any other Person,
provided that (i) any Loan Party other than the Borrower may consolidate or
merge into another Loan Party which is wholly-owned by one or more of the other
Loan Parties, and (ii) any Excluded Subsidiary may dissolve, liquidate or
wind-up its affairs.
8.2.7 Dispositions of Assets or Subsidiaries.
--------------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer
or dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any wholly
owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the ordinary
course of business which are replaced by substitute assets acquired or leased
within the parameters of Section 8.2.15 [Capital Expenditures and Leases] within
six months after the initial sale, transfer of lease of assets in the ordinary
course of business, provided such substitute assets are subject to the Banks'
Prior Security Interest;
(v) any sale, transfer or lease of assets, so long as the
aggregate "fair value" (with "fair value" being the greater of the net book
value or fair market value of the asset sold, transferred or disposed of, as
reasonably determined by the Borrower as of the date of such sale, transfer or
lease) of all assets sold, transferred or leased does not exceed $500,000 in any
fiscal year of the Borrower and the after-tax proceeds (as reasonably estimated
by the Borrower) are applied as a mandatory prepayment of the Term Loans in
accordance with the provisions of Section 5.5.2 [Sale of Assets] above;
- 56 -
(vi) the sale of the assets described on Schedule 8.2.7 so
long as the after-tax proceeds (as reasonably estimated by the Borrower) are
applied as a mandatoryprepayment of the Term Loans in accordance with the
provisions of Section 5.5.2 [Sale of Assets] above; or
(vii) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (vi) above, which is
approved by the Required Banks so long as the after-tax proceeds (as reasonably
estimated by the Borrower) are applied as a mandatory prepayment of the Term
Loans in accordance with the provisions of Section 5.5.2 [Sale of Assets] above.
8.2.8 Affiliate Transactions.
----------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of any Loan Party or other Person) unless such transaction is not
otherwise prohibited by this Agreement, is entered into in the ordinary course
of business upon fair and reasonable arm's-length terms and conditions which are
fully disclosed to the Agent and is in accordance with all applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
---------------------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, own or create directly or indirectly any Subsidiaries other
than (i) any Domestic Subsidiary (other than the Excluded Subsidiaries) which
has joined this Agreement as Guarantor on the Closing Date; (ii) any Foreign
Subsidiary permitted by clause (iv) of Section 8.2.4, (iii) the Excluded
Subsidiaries, and (iv) any Domestic Subsidiary formed after the Closing Date
which joins this Agreement as a Guarantor pursuant to Section 11.18 [Joinder of
Guarantors], provided that each newly formed Domestic Subsidiary and the Loan
Parties, as applicable, shall grant and cause to be perfected first priority
Liens to the Agent for the benefit of the Banks in the assets held by, and stock
of or other ownership interests in, such Domestic Subsidiary. Each of the Loan
Parties shall not become or agree to (1) become a general partner in any general
or limited partnership, except that the Loan Parties may be general partners in
other Loan Parties, (2) become a limited partner in any limited partnership
(except that (a) the Loan Parties may be limited partners in other Loan Parties,
(b) except that the Loan Parties may be limited partners in those Persons which
are not Loan Parties but in which a Loan Party, as of the Closing Date has made
an investment, as set forth on Schedule 8.2.9 and (c) except that the Loan
Parties may be limited partners in Persons as permitted by clause (vi) of
Section 8.2.4), (3) become a member or manager of, or hold a limited liability
company interest in, a limited liability company, (except that (a) the Loan
Parties may be members or managers of, or hold limited liability company
interests in, other Loan Parties, (b) except that the Loan Parties may be
members or managers of or hold limited liability company interests in those
Persons which are not Loan Parties but in which a Loan Party, as of the Closing
Date has made an investment, as set forth on Schedule 8.2.9 and (c) except as
permitted by clause (vi) of Section 8.2.4), or (4) become a joint venturer or
hold a joint venture interest in any joint venture.
- 57 -
8.2.10 Continuation of or Change in Business.
-------------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, engage in any business other than the business,
substantially as conducted and operated by such Loan Party or Subsidiary during
the present fiscal year, and such Loan Party or Subsidiary shall not permit any
material change in such business.
8.2.11 Plans and Benefit Arrangements.
------------------------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of
ERISA and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan,
Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with
any other circumstances or set of circumstances resulting in liability under
ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial valuation
date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Plan, where any such withdrawal is likely
to result in a material liability of the Borrower or any member of the ERISA
Group;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination is likely to result in a material liability to the
Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
- 58 -
8.2.12 Fiscal Year.
-----------
The Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, change its fiscal year from the twelve-month period beginning
January 1 and ending December 31.
8.2.13 Issuance of Stock.
-----------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, issue any additional shares of its capital stock or any
options, warrants or other rights in respect thereof.
8.2.14 Changes in Organizational Documents.
-----------------------------------
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, amend in any material respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock), by-laws, certificate of limited partnership, partnership agreement,
certificate of formation, limited liability company agreement or other
organizational documents without providing at least twenty (20) calendar days'
prior written notice to the Agent and the Banks and, in the event such change
would be adverse to the Banks as determined by the Agent in its sole discretion,
obtaining the prior written consent of the Required Banks.
8.2.15 Capital Expenditures and Leases.
-------------------------------
Commencing with the fiscal year of January 1, 2001 ending
December 31, 2001, each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, make any payments exceeding $3,500,000 in the aggregate
in any fiscal year (plus any unused portion of such amount from the prior fiscal
year) on account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized lease,
or any payments exceeding $3,000,000 in the aggregate in any fiscal year on
account of the rental or lease of real or personal property of any other Person
which does not constitute a capitalized lease, and all such capital expenditures
and leases shall be made under usual and customary terms and in the ordinary
course of business.
8.2.16 Minimum Fixed Charge Coverage Ratio.
-----------------------------------
The Loan Parties shall not permit the Fixed Charge Coverage
Ratio, calculated as of the end of each fiscal quarter for the four fiscal
quarters then ended, to be less than the ratios set forth below for the periods
specified below:
Period Ratio
------ -----
--------------------------------------------------
June 30, 2001 through 1.00 to 1.00
September 30, 2001
--------------------------------------------------
October 1, 2001 through 1.05 to 1.00
September 30, 2002
--------------------------------------------------
- 59 -
---------------------------------------------------
October 1, 2002 through 1.10 to 1.00
September 30, 2003
---------------------------------------------------
October 1, 2003 and 1.15 to 1.00
thereafter
---------------------------------------------------
8.2.17 Maximum Leverage Ratio.
----------------------
The Loan Parties shall not permit the ratio of Consolidated Total
Debt of the Borrower and its Subsidiaries to Annual Consolidated EBITDA,
calculated as of the end of each fiscal quarter for the four fiscal quarters
then ended, to exceed the ratios set forth below for the periods specified
below:
Period Ratio
------ -----
---------------------------------------------------
Closing Date through 5.50 to 1.00
September 30, 2001
---------------------------------------------------
October 1, 2001 through 5.00 to 1.00
September 30, 2002
---------------------------------------------------
October 1, 2002 through 4.25 to 1.00
September 30, 2003
---------------------------------------------------
October 1, 2003 and 3.75 to 1.00
thereafter
---------------------------------------------------
8.2.18 Minimum Interest Coverage Ratio.
-------------------------------
The Loan Parties shall not permit the Interest Coverage Ratio,
calculated as of the end of each fiscal quarter for the four fiscal quarters
then ended, to be less than the ratios set forth below for the periods specified
below:
Period Ratio
------ -----
---------------------------------------------------
March 31, 2001 through 1.75 to 1.00
September 30, 2001
---------------------------------------------------
- 60 -
------------------------------------------------------
September 30, 2001
------------------------------------------------------
October 1, 2001 through 2.00 to 1.00
September 30, 2002
------------------------------------------------------
October 1, 2002 through 2.25 to 1.00
September 30, 2003
------------------------------------------------------
October 1, 2003 and 2.50 to 1.00
thereafter
------------------------------------------------------
8.2.19 Matters Regarding 11% Notes.
---------------------------
The Loan Parties shall not and shall not permit any of their
Subsidiaries to prepay, redeem, or defease the 11% Notes or make any payments to
the trustee under the Note Indenture or to any holders of any of the 11% Notes
in payment of the defeasance , prepayment or redemption of the 11% Notes,
including without limitation, any payments in respect of redemption or
defeasance of the 11% Notes under Sections 3.07, 3.08 and Article 8 of the Note
Indenture or any similar or related provision in the Note Indenture or any
supplement thereto. Nothing in this Section 8.2.19, however, shall prohibit the
purchase by the Borrower of the 11% Notes under clause (v) of Section 8.2.5.
8.2.20 Excluded Subsidiaries.
---------------------
Each of the Loan Parties, notwithstanding any provision of any
Loan Document to the contrary, shall not permit any of the Excluded Subsidiaries
to (i) own or lease any assets, engage in any business or conduct any
operations, (ii) to issue any capital stock, or (iii) directly or indirectly
receive or use or utilize any proceeds of any of the Loans. None of the Loan
Parties, nor any Subsidiary of the Loan Parties, shall make any investment in or
loan to any Excluded Subsidiary.
8.3 Reporting Requirements.
----------------------
The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations hereunder and
under the other Loan Documents and termination of the Commitments, the Loan
Parties will furnish or cause to be furnished to the Agent and each of the Banks
the financial reports and other information set forth on Exhibit 8.3.
- 61 -
9. DEFAULT
-------
9.1 Events of Default.
-----------------
An Event of Default shall mean the occurrence or existence of any one
or more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
-----------------------------
The Borrower shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing after such
principal amount becomes due in accordance with the terms of the Loan Documents
or shall fail to pay within three (3) days of the due date thereof any interest
on any Loan, Reimbursement Obligation or Letter of Credit Borrowing or any other
amount owing hereunder or under the other Loan Documents after such interest or
other amount becomes due in accordance with the terms hereof or thereof;
9.1.2 Breach of Warranty.
------------------
Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights.
-------------------------------------------------
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.1.6 [Visitation Rights] or
Section 8.2 [Negative Covenants];
9.1.4 Breach of Other Covenants.
-------------------------
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of ten
(10) Business Days after any officer of any Loan Party becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Agent in its sole discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
--------------------------------------------
A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension of credit
or any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $500,000 in the
aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether
waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
- 62 -
9.1.6 Final Judgments or Orders.
-------------------------
Any final judgments or orders for the payment of money in excess
of $500,000 in the aggregate shall be entered against any Loan Party by a court
having jurisdiction in the premises, which judgment is not discharged, vacated,
bonded or stayed pending appeal within a period of thirty (30) days from the
date of entry (excluding any portion thereof which is covered by insurance so
long as the insurer is reasonably likely to be able to pay and has accepted a
tender of defense and indemnification without reservation of rights);
9.1.7 Loan Document Unenforceable.
---------------------------
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
9.1.8 Uninsured Losses; Proceedings Against Assets.
--------------------------------------------
There shall occur any material uninsured damage to or loss, theft
or destruction of any of the Collateral in excess of $500,000 or the Collateral
or any other of the Loan Parties' or any of their Subsidiaries' assets are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not cured within thirty (30) days
thereafter;
9.1.9 Notice of Lien or Assessment.
----------------------------
A notice of Lien or assessment in excess of $500,000 which is not
a Permitted Lien is filed of record with respect to all or any part of any of
the Loan Parties' or any of their Subsidiaries' assets by the United States, or
any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, or any taxes or
debts owing at any time or times hereafter to any one of these becomes payable
and the same is not paid within thirty (30) days after the same becomes payable;
9.1.10 Insolvency.
----------
Any Loan Party or any Subsidiary of a Loan Party ceases to be
solvent or admits in writing its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
-------------------------------------------------
Any of the following occurs: (i) any Reportable Event, which the
Agent determines in good faith constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
- 63 -
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of the Borrower's liability is likely to exceed 10% of its
Consolidated Net Worth; (v) the Borrower or any member of the ERISA Group shall
fail to make any contributions when due to a Plan or a Multiemployer Plan; (vi)
the Borrower or any other member of the ERISA Group shall make any amendment to
a Plan with respect to which security is required under Section 307 of ERISA;
(vii) the Borrower or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the Borrower or any
other member of the ERISA Group shall withdraw (or shall be deemed under Section
4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any such
occurrence would be reasonably likely to materially and adversely affect the
total enterprise represented by the Borrower and the other members of the ERISA
Group;
9.1.12 Cessation of Business.
---------------------
Any Loan Party or Subsidiary of a Loan Party ceases to conduct
its business as contemplated, except as expressly permitted under Section 8.2.6
[Liquidations, Mergers, Etc.] or Section 8.2.7 or any Loan Party or Subsidiary
of a Loan Party is enjoined, restrained or in any way prevented by court order
from conducting all or any material part of its business and such injunction,
restraint or other preventive order is not dismissed within thirty (30) days
after the entry thereof;
9.1.13 Change of Control.
-----------------
Any Change of Control shall have occurred;
9.1.14 Involuntary Proceedings.
-----------------------
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Subsidiary of a Loan Party in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of any Loan
Party or Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of thirty (30)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
---------------------
Any Loan Party or Subsidiary of a Loan Party shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment or taking possession by a receiver, liquidator,
- 64 -
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.
9.2 Consequences of Event of Default.
--------------------------------
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
------------------------------------------------------
Reorganization Proceedings.
--------------------------
If an Event of Default specified under Sections 9.1.1 through
9.1.13 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks, shall (i) by
written notice to the Borrower, declare the unpaid principal amount of the Notes
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest-bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Banks, the Agent shall
return such cash collateral to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
----------------------------------------------------
If an Event of Default specified under Section 9.1.14
[Involuntary Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the
Banks shall be under no further obligations to make Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the Banks
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
9.2.3 Set-off.
-------
If an Event of Default shall occur and be continuing, any Bank to
whom any Obligation is owed by any Loan Party hereunder or under any other Loan
Document or any participant of such Bank which has agreed in writing to be bound
by the provisions of Exhibit 10 and any branch, Subsidiary or Affiliate of such
Bank or participant anywhere in the world shall have the right, in addition to
all other rights and remedies available to it, without notice to such Loan
Party, to set-off against and apply to the then unpaid balance of all the Loans
and all other Obligations of the Borrower and the other Loan Parties hereunder
or under any other Loan Document, any debt owing to, and any other funds held in
any manner for the account of, the Borrower or such other Loan Party by such
Bank or participant or by such branch, Subsidiary or
- 65 -
Affiliate, including all funds in all deposit accounts (whether time or demand,
general or special, provisionally credited or finally credited, or otherwise)
now or hereafter maintained by the Borrower or such other Loan Party for its own
account (but not including funds held in custodian or trust accounts) with such
Bank or participant or such branch, Subsidiary or Affiliate. Such right shall
exist whether or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to or funds
held for the account of the Borrower or such other Loan Party is or are matured
or unmatured and regardless of the existence or adequacy of any Collateral,
Guaranty or any other security, right or remedy available to any Bank or the
Agent; and
9.2.4 Suits, Actions, Proceedings.
---------------------------
If an Event of Default shall occur and be continuing, and whether
or not the Agent shall have accelerated the maturity of Loans pursuant to any of
the foregoing provisions of this Section 9.2, the Agent or any Bank, if owed any
amount with respect to the Loans, may proceed to protect and enforce its rights
by suit in equity, action at law and/or other appropriate proceeding, whether
for the specific performance of any covenant or agreement contained in this
Agreement or the other Loan Documents, including as permitted by applicable Law
the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Agent or such Bank;
and
9.2.5 Application of Proceeds.
-----------------------
From and after the date on which the Agent has taken any action
pursuant to this Section 9.2 and until all Obligations of the Loan Parties have
been paid in full, any and all proceeds received by the Agent from any sale or
other disposition of the Collateral, or any part thereof, or the exercise of any
other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the Collateral or collection of any Obligations of
any of the Loan Parties under any of the Loan Documents, including advances made
by the Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness then due
and unpaid of the Loan Parties to the Banks incurred under this Agreement or any
of the other Loan Documents, whether of principal, interest, fees, expenses or
otherwise, in such manner as the Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
- 66 -
9.2.6 Other Rights and Remedies.
-------------------------
In addition to all of the rights and remedies contained in this
Agreement or in any of the other Loan Documents (including the Mortgage), the
Agent shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable Law, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent permitted by Law.
The Agent may, and upon the request of the Required Banks shall, exercise all
post-default rights granted to the Agent and the Banks under the Loan Documents
or applicable Law.
9.3 Notice of Sale.
--------------
Any notice required to be given by the Agent of a sale, lease, or
other disposition of the Collateral or any other intended action by the Agent,
if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrower.
10. THE AGENT
---------
In addition to the other provisions set forth in this Agreement, the
Agent's rights and obligations are described in and governed by the provisions
of Exhibit 10.
11. MISCELLANEOUS
-------------
11.1 Modifications, Amendments or Waivers.
------------------------------------
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, without the written consent of all the Banks, no such
agreement, waiver or consent may be made which will:
11.1.1 Increase of Commitment; Extension or Expiration Date.
----------------------------------------------------
Increase the amount of the Revolving Credit Commitment or Term
Loan Commitment of any Bank hereunder or extend the Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal Interest
-----------------------------------------------------
or Fees; Modification of Terms of Payment.
-----------------------------------------
Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan (excluding the due date of any
mandatory prepayment of a Loan or any mandatory Commitment reduction in
connection with such a mandatory prepayment hereunder except for mandatory
reductions of the Commitments on the Expiration Date), the
- 67 -
Commitment Fee or any other fee payable to any Bank, or reduce the principal
amount of or the rate of interest borne by any Loan or reduce the Commitment Fee
or any other fee payable to any Bank, or otherwise affect the terms of payment
of the principal of or interest of any Loan, the Commitment Fee or any other fee
payable to any Bank;
11.1.3 Release of Collateral or Guarantor.
----------------------------------
Except for sales of assets permitted by Section 8.2.7
[Disposition of Assets or Subsidiaries and except for the release of the
Mortgages in accordance with Section 11.1.19], release any Collateral consisting
of capital stock or other ownership interests of any Loan Party or its
Subsidiary or substantially all of the assets of any Loan Party, any Guarantor
from its Obligations under the Guaranty Agreement or any other security for any
of the Loan Parties' Obligations; or
11.1.4 Miscellaneous
-------------
Amend Section 5.2 [Pro Rata Treatment of Banks], Paragraphs 6 or
13 of Exhibit 10 [Exculpatory Provisions, Etc.; Equalization of Banks] or this
Section 11.1, alter any provision regarding the pro rata treatment of the Banks,
change the definition of Required Banks, or change any requirement providing for
the Banks or the Required Banks to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as the
issuer of Letters of Credit shall be effective without the written consent of
the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
---------------------------------------------------------
No course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof, nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing. Further, it is expressly
agreed that any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any Schedule to this Agreement or other Loan
Document shall not be deemed to have been cured unless and until the Required
Banks, in their sole and absolute discretion, shall have accepted in writing
revisions to such Schedule.
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.
-----------------------------------------------------------------
The Borrower agrees unconditionally upon demand to pay or reimburse to
each Bank (other than the Agent, as to which the Borrower's Obligations are set
forth in Paragraph 5
- 68 -
of Exhibit 10 [Reimbursement of Agent By Borrower, Etc.]) and to save such Bank
harmless against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements (including fees and expenses of counsel
(including allocated costs of staff counsel) for each Bank except with respect
to (a) and (b) below), incurred by such Bank (a) for periods on and after the
occurrence of Event of Default in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) for periods on and after the occurrence of an Event of
Default relating to any amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this Agreement or
any other Loan Document, or collection of amounts due hereunder or thereunder or
the proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (d) in any workout or restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, or (ii) 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 such Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by such Bank hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrower was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or (C) if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. The Banks
will attempt to minimize the fees and expenses of legal counsel for the Banks
which are subject to reimbursement by the Borrower hereunder by considering the
usage of one law firm to represent the Banks and the Agent if appropriate under
the circumstances. The Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by the Agent or any Bank to be payable in connection
with this Agreement or any other Loan Document, and the Borrower agrees
unconditionally to save the Agent and the Banks harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions.
11.4 Holidays.
--------
Whenever payment of a Loan to be made or taken hereunder shall be due
on a day which is not a Business Day such payment shall be due on the next
Business Day and such extension of time shall be included in computing interest
and fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.2 [Interest Periods] with respect to Euro-Rate
Interest Periods under the Euro-Rate Option), and such extension of time shall
not be included in computing interest or fees, if any, in connection with such
payment or action.
- 69 -
11.5 Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
11.5.1 Notional Funding.
----------------
Each Bank shall have the right from time to time, without notice
to the Borrower, to deem any branch, Subsidiary or Affiliate (which for the
purposes of this Section 11.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect common
control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrower to
such other office), and as a result of such change, the Borrower would not be
under any greater financial obligation pursuant to Section 5.6 [Additional
Compensation in Certain Circumstances] than it would have been in the absence of
such change. Notional funding offices may be selected by each Bank without
regard to such Bank's actual methods of making, maintaining or funding the Loans
or any sources of funding actually used by or available to such Bank.
11.5.2 Actual Funding.
--------------
Each Bank shall have the right from time to time to make or
maintain any Loan by arranging for a branch, Subsidiary or Affiliate of such
Bank to make or maintain such Loan subject to the last sentence of this Section
11.5.2. If any Bank causes a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Loans to the same extent as if such Loans were made or
maintained by such Bank, but in no event shall any Bank's use of such a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans hereunder
cause such Bank or such branch, Subsidiary or Affiliate to incur any cost or
expenses payable by the Borrower hereunder or require the Borrower to pay any
other compensation to any Bank (including any expenses incurred or payable
pursuant to Section 5.6 [Additional Compensation in Certain Circumstances])
which would otherwise not be incurred.
11.6 Notices.
-------
Any notice, request, demand, direction or other communication (for
purposes of this Section 11.6 only, a "Notice") to be given to or made upon any
party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes by means of electronic transmission
(i.e., "e-mail") or facsimile transmission or by setting forth such Notice on a
site on the World Wide Web (a "Website Posting") if Notice of such Website
Posting (including the information necessary to access such site) has previously
been delivered to the applicable parties hereto by another means set forth in
this Section 11.6) in accordance with this Section 11.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on Schedule 1.1B hereof or in accordance with
any subsequent unrevoked Notice from any such party that is given in accordance
with this Section 11.6. Any Notice shall be effective:
(a) In the case of hand-delivery, when delivered;
- 70 -
(b) If given by mail, four days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;
(c) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Website Posting or an overnight courier delivery of a confirmatory Notice
(received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the applicable
party's facsimile machine's telephone number, if the party sending such Notice
receives confirmation of the delivery thereof from its own facsimile machine;
(e) In the case of electronic transmission, when actually received;
(f) In the case of a Website Posting, upon delivery of a Notice of such
posting (including the information necessary to access such site) by another
means set forth in this Section 11.6; and
(g) If given by any other means (including by overnight courier), when
actually received.
Any Bank giving a Notice to a Loan Party shall concurrently send a copy thereof
to the Agent, and the Agent shall promptly notify the other Banks of its receipt
of such Notice.
11.7 Severability.
------------
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
11.8 Governing Law.
-------------
Each Letter of Credit, Section 2.9 [Letter of Credit Subfacility] and
Exhibit 2.9 shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be revised or amended from time to time, and to the extent not
inconsistent therewith, the internal laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws principles and the balance of this
Agreement shall be deemed to be a contract under the Laws of the Commonwealth of
Pennsylvania and for all purposes shall be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to its conflict of laws principles.
11.9 Prior Understanding.
-------------------
This Agreement and the other Loan Documents supersede all prior
understandings and agreements (excluding the Agent's Letter, as described in
Exhibit 10), whether written or oral, between the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements and commitments.
- 71 -
11.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Banks, the
making of Loans, issuance of Letters of Credit, or payment in full of the Loans.
All covenants and agreements of the Loan Parties contained in Sections 8.1
[Affirmative Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting
Requirements] and Exhibit 8.3 herein shall continue in full force and effect
from and after the date hereof so long as the Borrower may borrow or request
Letters of Credit hereunder and until termination of the Commitments and payment
in full of the Loans and expiration or termination of all Letters of
Credit. All covenants and agreements of the Borrower contained herein relating
to the payment of principal, interest, premiums, additional compensation or
expenses and indemnification, including those set forth in the Notes, Section 5
[Payments], Paragraphs 5 and 7 of Exhibit 10 [Reimbursement of Agent by
Borrower, Etc.; Reimbursement of Agent by Banks, Etc.] and 11.3 [Reimbursement
of Banks by Borrower; Etc.], shall survive payment in full of the Loans,
expiration or termination of the Letters of Credit and termination of the
Commitments.
11.11 Successors and Assigns.
----------------------
(i) This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign or
transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Commitments and the Loans made by it to one or more banks
or other entities, subject to the consent of the Borrower and the Agent with
respect to any assignee, such consent not to be unreasonably withheld, provided
that (1) no consent of the Borrower shall be required (A) if an Event of Default
exists and is continuing, or (B) in the case of an assignment by a Bank to an
Affiliate of such Bank, and (2) any assignment by a Bank to a Person other than
an Affiliate of such Bank may not be made in amounts less than the lesser of
$1,000,000 or the amount of the assigning Bank's Commitment. In the case of an
assignment, upon receipt by the Agent of the Assignment and Assumption
Agreement, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it had been a signatory Bank hereunder, the Commitments shall be
adjusted accordingly, and upon surrender of any Note subject to such assignment,
the Borrower shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Revolving Credit Commitment or Term Loan assumed by
it and a new Revolving Credit Note or Term Note to the assigning Bank in an
amount equal to the Revolving Credit Commitment or Term Loan retained by it
hereunder. Any Bank which assigns any or all of its Commitment or Loans to a
Person other than an Affiliate of such Bank shall pay to the Agent a service fee
in the amount of $3,500 for each assignment. In the case of a participation, the
participant shall only have the rights specified in Section 9.2.3 [Set-off] (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Sections 11.1.1 [Increase of
Commitment, Etc.], 11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of
Collateral or Guarantor]), all of such Bank's obligations under this Agreement
or any other Loan Document
- 72 -
shall remain unchanged, and all amounts payable by any Loan Party hereunder or
thereunder shall be determined as if such Bank had not sold such participation.
(ii) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrower and the Agent the form of certificate described in Section 11.17
[Tax Withholding Clause] relating to federal income tax withholding. Each Bank
may furnish any publicly available information concerning any Loan Party or its
Subsidiaries and any other information concerning any Loan Party or its
Subsidiaries in the possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants), provided that
such assignees and participants agree to be bound by the provisions of Section
11.12 [Confidentiality].
(iii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrower or the Agent. No such pledge or grant of a security interest
shall release the Transferor Bank of its obligations hereunder or under any
other Loan Document.
11.12 Confidentiality.
---------------
11.12.1 General.
-------
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information the
Borrower specifically designates as confidential), except as provided below, and
to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and the
Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the confidentiality,
(ii) provided they agree to the confidentiality provisions hereof, to assignees
and participants as contemplated by Section 11.11, (iii) to the extent requested
by any bank regulatory authority or, with notice to the Borrower, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available other than
as a result of a breach of this Agreement or becomes available from a source not
known to be subject to confidentiality restrictions, or (v) if the Borrower
shall have consented to such disclosure.
11.12.2 Sharing Information With Affiliates of the Banks.
------------------------------------------------
Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrower or one or more of its Affiliates (in connection with this Agreement
or otherwise) by any Bank or by one or more Subsidiaries or Affiliates of such
Bank and each of the Loan Parties hereby authorizes each Bank to share any
information delivered to such Bank by such Loan Party and its Subsidiaries
- 73 -
pursuant to this Agreement, or in connection with the decision of such Bank to
enter into this Agreement, to any such Subsidiary or Affiliate of such Bank, it
being understood that any such Subsidiary or Affiliate of any Bank receiving
such information shall be bound by the provisions of Section 11.12.1 as if it
were a Bank hereunder. Such authorization shall survive the repayment of the
Loans and other Obligations and the termination of the Commitments.
11.13 Counterparts.
------------
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
11.14 Agent's or Bank's Consent.
-------------------------
Whenever the Agent's or any Bank's consent is required to be obtained
under this Agreement or any of the other Loan Documents as a condition to any
action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
11.15 Exceptions.
----------
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
--------------------------------------
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
- 74 -
11.17 Tax Withholding Clause.
----------------------
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrower hereunder for the account of such
Bank; (B) each assignee or participant shall deliver such form or certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Agent in its sole discretion shall permit such
assignee or participant to deliver such form or certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower and the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, either certifying
that such Bank, assignee or participant is entitled to receive payments under
this Agreement and the other Loan Documents without deduction or withholding of
any United States federal income taxes or is subject to such tax at a reduced
rate under an applicable tax treaty or stating that no such exemption or reduced
rate is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
11.18 Joinder of Guarantors.
---------------------
Each Domestic Subsidiary of the Borrower (other than the Excluded
Subsidiaries) shall join this Agreement as a Guarantor, shall execute and
deliver to the Agent (i) a Guarantor Joinder in substantially the form attached
hereto as Exhibit 1.1(G)(1) pursuant to which it shall join as a Guarantor each
of the documents to which the Guarantors are parties; (ii) documents in the
forms described in Section 7.1 [First Loans] modified as appropriate to relate
to such Subsidiary; (iii) documents necessary to grant and perfect Prior
Security Interests to the Agent for the benefit of the Banks in all Collateral
held by such Subsidiary and (iv) documents necessary to grant and perfect Prior
Security Interests to the Agent for the benefit of the Banks in all of the
issued and outstanding equity interests of each Domestic Subsidiary of the
Borrower (other than the Excluded Subsidiaries). The Loan Parties shall deliver
such Guarantor Joinder and related documents to the Agent within five (5)
Business Days after the date of the filing of such Subsidiary's articles of
incorporation if the Subsidiary is a corporation, the date of the filing of its
- 75 -
certificate of limited partnership if it is a limited partnership or the date of
its organization if it is an entity other than a limited partnership or
corporation.
11.19 Release of Certain Collateral in Certain Circumstances.
------------------------------------------------------
(a) Upon Sale or Disposition of Collateral. Upon any sale, transfer,
or disposition of Collateral which is expressly permitted pursuant to Section
8.2.7 [Disposition of Assets or Subsidiaries], and upon ten (10) Business Days'
(or such lesser time period agreed to by Agent in its sole discretion) prior
written request by the Borrower (which request must be accompanied by true and
correct copies of (i) all documents of transfer or disposition, including any
contract of sale, and (ii) all requested release instruments), Agent shall (and
is hereby irrevocably authorized by the Banks to) execute such documents as may
be necessary to evidence the release of liens granted to Agent for the benefit
of Banks pursuant hereto in such Collateral or to release the Guaranty executed
by such Subsidiary which has been so sold, transferred or disposed of.
(b) Upon Repayment of Term Loans. Upon the repayment in full of all
Term Loans, together with all accrued interest and fees thereon and delivery by
the Borrower of written request to the Agent to release the Mortgages, the Agent
shall (and is hereby irrevocably authorized by the Banks to) execute such
documents as may be necessary to release the Mortgages provided, however, that
the Mortgages shall be released no earlier than 121 days following such
repayment of the Term Loans, together with all interest and fees thereon.
(c) General Provisions. The actions of Agent under this Section 11.19
are subject to the following: (i) no such release of Liens or Guaranties shall
be granted if any Event of Default or Potential Default has occurred and is
continuing, including, without limitation, the failure to make certain mandatory
prepayments in accordance with Section 5.5.2 in conjunction with the sale or
transfer of such Collateral; (ii) Agent shall not be required to execute any
such document on terms which, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty; and (iii) such release shall
not in any manner discharge, affect, or impair the Obligation or Liens upon all
interests retained by the Loan Parties.
[SIGNATURE PAGES FOLLOW]
- 76 -
[SIGNATURE PAGE 1 OF 4 TO AMENDED AND RESTATED CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
[BORROWER]
ELGIN NATIONAL INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx (SEAL)
------------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------------
Title: Vice Pres.
---------------------------------------
[GUARANTORS]
EACH GUARANTOR LISTED ON
SCHEDULE 1 HERETO
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------------------
Title: Vice President (SEAL)
---------------------------------------
of each Guarantor listed on Schedule 1
[SIGNATURE PAGE 2 OF 4 TO AMENDED AND RESTATED CREDIT AGREEMENT]
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Title: Senior Vice President
------------------------------------
[SIGNATURE PAGE 3 OF 4 TO AMENDED AND RESTATED CREDIT AGREEMENT]
BANK OF SCOTLAND
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Title: Xxxxxx Xxxxxx Vice President
-----------------------------------
[SIGNATURE PAGE 4 OF 4 TO AMENDED AND RESTATED CREDIT AGREEMENT]
NATIONAL CITY BANK
By: /s/ Xxxxxxx X Xxxxx
--------------------------------------
Title: Vice President
-----------------------------------
Schedule 1
----------
XXXXXX CONSTRUCTION COMPANY
CENTRIFUGAL SERVICES, INC.
CLINCH RIVER CORPORATION
ENI INTERNATIONAL, LTD
ELGIN INTERNATIONAL, LTD
XXXXXX-XXXXXX FASTENERS, INC.
MINING CONTROLS, INC.
XXXXXX SCREEN AND MANUFACTURING INC.
PRECISION SCREW & BOLT, INC.
XXXXXXX & XXXXXXXX COMPANY
XXXXXXX & XXXXXXXX INTERNATIONAL, LTD
XXXXX ASSOCIATES, INC.
XXXXX INTERNATIONAL, LTD
XXXXX MACHINE COMPANY
XXXXXXXX-XXXXXXXX CONSTRUCTION COMPANY, INC.
TRANSERVICE, INC.
VANCO INTERNATIONAL, INC.
SCHEDULE 1.1(A) - PRICING GRID
Revolving Revolving
Credit Loan Credit Loan Term Loan Term Loan
Ratio of Consolidated Total Debt Base Rate Euro-Rate Base Rate Euro-Rate Commitment
to Annual Consolidated EBITDA Margin Margin Margin Margin Fee
----------------------------- ------ ------ ------ ------ ---
-----------------------------------------------------------------------------------------------------------------------------------
Level 1 - Equal to or greater than 4.25 to 1.0 1.50% 3.00% 1.75% 3.25% .375%
-----------------------------------------------------------------------------------------------------------------------------------
Level 2 - Less than 4.25 to 1.0 but equal to or 1.00% 2.50% 1.25% 2.75% .325%
greater than 3.75 to 1.0
-----------------------------------------------------------------------------------------------------------------------------------
Level 3 - Less than 3.75 to 1.0 but equal to or .50% 2.00% .75% 2.25% .300%
greater than 3.25 to 1.0
-----------------------------------------------------------------------------------------------------------------------------------
Level 4 - Less than 3.25 to 1.0 0% 1.50% .25% 1.75% .250%
-----------------------------------------------------------------------------------------------------------------------------------
* The ratio of Consolidated Total Debt to Annual Consolidated EBITDA
shall be calculated in accordance with Section 9.2.16.
** Pricing shall be set at Level 1 (equal to or greater than 4.25 to
1.0) -- Euro-Rate plus 300 basis points for the Revolving Credit Loans
and Euro-Rate plus 325 basis points for the Term Loan for the period
commencing on the Closing Date through and including the date of
delivery of the Borrower's financial statements and related compliance
certificate for the quarter ended June 30, 2001 and shall be adjusted
thereafter as provided in the definition of "Applicable Margin" based
upon the certificates of the Borrower delivered to the Agent and the
Banks in accordance with paragraph 3 of Exhibit 8.3.
*** For the period after repayment of the Term Loan (together with all
accrued interest and fees thereon), notwithstanding anything to the
contrary, pricing shall be set at Level 4.
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 1 of 2
Part 1 - Commitments of Banks and Addresses for Notices to Banks
Amount of
Commitment Amount of
for Revolving Commitment for Ratable
Bank Credit Loans Term Loans Commitment Share
---- ---------------- -------------- ---------- -------
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 $8,214,285.71 $4,285,714.29 $12,500,000.00 35.7142857%
xxxxx.xxxxxx@xxxxxxx.xxx
Bank of Scotland
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 $8,214,285.71 $4,285,714.29 $12,500,000.00 35.7142857%
xxxxxxx_xxxxx@xxxxxxxxxxxxxx.xxx
National City Bank
Xxx Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 $6,571,428.58 $3,428,571.42 $10,000,000.00 28.5714286%
xxxxxxx.xxxxx@xxxxxxxx-xxxx.xxx
Total $23,000,000 $12,000,000 $35,000,000 100%
====
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 2 of 2
Part 2 - Addresses for Notices to Borrower and Guarantors:
AGENT
Name: PNC Bank, National Association
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxx.xxxxxx@xxxxxxx.xxx
BORROWER:
Elgin National Industries, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxxx@xxx.xxx
GUARANTORS:
c/o Elgin National Industries, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
xxxxxx@xxx.xxx
EXHIBIT 2.9
LETTER OF CREDIT PROVISIONS
1. Issuance of Letters of Credit; Adjustment for Currency Flucuations.
------------------------------------------------------------------
(a) Borrower may request the issuance of a letter of credit (each
a "Letter of Credit") on behalf of itself or another Loan Party by delivering to
the Agent a completed application and agreement for letters of credit in such
form as the Agent may specify from time to time by no later than 10:00 a.m.,
Pittsburgh time, at least five (5) Business Days, or such shorter period as may
be agreed to by the Agent, in advance of the proposed date of issuance. Each
Letter of Credit shall be either a Standby Letter of Credit or a Commercial
Letter of Credit and shall be denominated in Dollars or, if a different currency
is requested by Borrower, a currency satisfactory to Agent. Subject to the terms
and conditions hereof and in reliance on the agreements of the other Banks set
forth in this Exhibit 2.9, the Agent will issue a Letter of Credit provided that
each Letter of Credit shall in no event expire later than ten (10) Business Days
prior to the Expiration Date and providing that in no event shall (i) the
Letters of Credit Outstanding exceed, at any one time, $10,000,000 or (ii) the
Revolving Facility Usage exceed, at any one time, the Revolving Credit
Commitments.
(b) If at any time, and solely as a result of currency
fluctuations relating to one or more Letters of Credit denominated in a currency
other than Dollars, the Letters of Credit Outstanding exceed $10,500,000, then
Borrower shall deposit in a non-interest-bearing account with the Agent, as cash
collateral for its Obligations under the Loan Documents, an amount such that the
Letters of Credit Outstanding plus the amount so deposited does not exceed
$10,000,000. Borrower hereby pledges to the Agent and the Banks, and grants to
the Agent and the Banks a security interest in all such cash, deposit and
account, and the proceeds thereof, as security for such Obligations. Upon such
time as the Letters of Credit Outstanding no longer exceed $10,000,000 and
provided there exists no Potential Default or Event of Default, the Agent shall
return the cash collateral which was provided in connection with this Clause (b)
to the Borrower.
(c) If at any time, and solely as a result of currency
fluctuations relating to one or more Letters of Credit denominated in a currency
other than Dollars, the Revolving Facility Usage exceeds 105% of the lesser of
the Revolving Credit Commitments or the Borrowing Base, then Borrower shall
prepay a principal amount of the Revolving Credit Loans in such an amount that
the Revolving Facility Usage after giving effect to the amount paid does not
exceed the lesser of the Revolving Credit Commitments or the Borrowing Base.
2. Letter of Credit Fees.
---------------------
The Borrower shall pay (i) to the Agent for the ratable account of the
Banks a fee (the "Letter of Credit Fee") equal to the Applicable Margin for the
Revolving Credit Euro-Rate Option per annum, and (ii) to the Agent for its own
account a fronting fee equal to one fourth of one percent (1/4%) per annum
(computed on the basis of a year of 360 days and actual days
elapsed), which fees shall be computed on the daily average Letters of Credit
Outstanding and shall be payable quarterly in arrears commencing with the first
Business Day of each April, July, October and January following issuance of each
Letter of Credit and on the Expiration Date. The Borrower shall also pay to the
Agent for the Agent's sole account the Agent's then in effect customary fees and
administrative expenses payable with respect to the Letters of Credit as the
Agent may generally charge or incur from time to time in connection with the
issuance, maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit.
3. Disbursements, Reimbursement.
----------------------------
(a) Immediately upon the Issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Agent a participation in such Letter of Credit and each
drawing thereunder in an amount equal to such Bank's Ratable Share of the
maximum amount available to be drawn under such Letter of Credit and the amount
of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Agent will promptly notify
the Borrower. Provided that it shall have received such notice, the Borrower
shall reimburse (such obligation to reimburse the Agent shall sometimes be
referred to as a "Reimbursement Obligation") the Agent prior to 12:00 noon,
Pittsburgh time on each date that an amount is paid by the Agent under any
Letter of Credit (each such date, an "Drawing Date") in an amount equal to the
Dollar Equivalent of the amount so paid by the Agent. In the event the Borrower
fails to reimburse the Agent for the full amount of any drawing under any Letter
of Credit by 12:00 noon, Pittsburgh time, on the Drawing Date, the Agent will
promptly notify each Bank thereof, and the Borrower shall be deemed to have
requested that Revolving Credit Loans, in the Dollar Equivalent of the amount
paid by the Agent under the Letter of Credit, be made by the Banks under the
Base Rate Option to be disbursed on the Drawing Date under such Letter of
Credit, subject to the amount of the unutilized portion of the Revolving Credit
Commitment and subject to the conditions set forth in Section 7.2
[Each Additional Loan] other than any notice requirements. Any notice given by
the Agent pursuant to this Paragraph 3 may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Bank shall upon any notice pursuant to Paragraph 3(b) of
this Exhibit 2.9 make available to the Agent an amount in immediately available
funds equal to its Ratable Share of the Dollar Equivalent of the amount of the
drawing, whereupon the participating Banks shall (subject to Paragraph 2(d) of
this Exhibit 2.9) each be deemed to have made a Revolving Credit Loan under the
Base Rate Option to the Borrower in that amount. If any Bank so notified fails
to make available to the Agent for the account of the Agent the amount of such
Bank's Ratable Share of such amount by no later than 2:00 p.m., Pittsburgh time
on the Drawing Date, then interest shall accrue on such Bank's obligation to
make such payment, from
the Drawing Date to the date on which such Bank makes such payment (i) at a rate
per annum equal to the Federal Funds Effective Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Loans under the Revolving Credit Base Rate Option on and after the
fourth day following the Drawing Date. The Agent will promptly give notice of
the occurrence of the Drawing Date, but failure of the Agent to give any such
notice on the Drawing Date or in sufficient time to enable any Bank to effect
such payment on such date shall not relieve such Bank from its obligation under
this Paragraph 3(c).
(d) With respect to any unreimbursed drawing that is not
converted into Revolving Credit Loans under the Base Rate Option to the Borrower
in whole or in part as contemplated by Paragraph 3(b) of this Exhibit 2.9,
because of the Borrower's failure to satisfy the conditions set forth in Section
7.2 [Each Additional Loan] other than any notice requirements or for any other
reason, the Borrower shall be deemed to have incurred from the Agent a Letter of
Credit Borrowing in the Dollar Equivalent of the amount of such drawing. Such
Letter of Credit Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the rate per annum applicable to the
Revolving Credit Loans under the Base Rate Option. Each Bank's payment to the
Agent pursuant to Paragraph 3(c) shall be deemed to be a payment in respect of
its participation in such Letter of Credit Borrowing and shall constitute a
Participation Advance from such Bank in satisfaction of its participation
obligation under this Paragraph 3.
4. Repayment of Participation Advances.
-----------------------------------
(a) Upon (and only upon) receipt by the Agent for its account of
immediately available funds from the Borrower (i) in reimbursement of the Dollar
Equivalent of any payment made by the Agent under the Letter of Credit with
respect to which any Bank has made a Participation Advance to the Agent, or (ii)
in payment of interest on such a payment made by the Agent under such a Letter
of Credit, the Agent will pay to each Bank, in the same funds as those received
by the Agent, the amount of such Bank's Ratable Share of such funds, except the
Agent shall retain the amount of the Ratable Share of such funds of any Bank
that did not make a Participation Advance in respect of such payment by Agent.
(b) If the Agent is required at any time to return to any Loan
Party, or to a trustee, receiver, liquidator, custodian, or any official in any
Insolvency Proceeding, any portion of the payments made by any Loan Party to the
Agent pursuant to Paragraph 4(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank shall, on demand of the
Agent, forthwith return to the Agent the amount of its Ratable Share of any
amounts so returned by the Agent plus interest thereon from the date such demand
is made to the date such amounts are returned by such Bank to the Agent, at a
rate per annum equal to the Federal Funds Effective Rate in effect from time to
time.
5. Documentation.
-------------
Each Loan Party agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from the such Loan Party's own. In the event of
a conflict between such application or agreement and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the Agent shall not be liable for any
error, negligence and/or mistakes, whether of omission or commission, in
following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.
6. Determinations to Honor Drawing Requests.
----------------------------------------
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Agent shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.
7. Nature of Participation and Reimbursement Obligations.
-----------------------------------------------------
Each Bank's obligation in accordance with this Agreement to make the
Revolving Credit Loans or Participation Advances, as contemplated by Paragraph 3
of this Exhibit 2.9, as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrower to reimburse the Agent upon a draw under a Letter of
Credit, shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Exhibit 2.9 under all
circumstances, including without limitation, the following circumstances: (i)
any set-off, counterclaim, recoupment, defense or other right which such Bank
may have against the Agent, the Borrower or any other Person for any reason
whatsoever; the failure of any Loan Party or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions set forth in
Section 2.1 [Revolving Credit Commitments], 2.5 [Revolving Credit Loan
Requests], 2.6 [Making Revolving Credit Loans] or 7.2 [Each Additional Loan] or
as otherwise set forth in this Agreement for the making of a Revolving Credit
Loan, it being acknowledged that such conditions are not required for the making
of a Letter of Credit Borrowing and the obligation of the Banks to make
Participation Advances under Paragraph 3 of this Exhibit 2.9; (ii) any lack of
validity or enforceability of any Letter of Credit; the existence of any claim,
set-off, defense or other right which any Loan Party or any Bank may have at any
time against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), the Agent or any Bank or
any other Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction; and (iii) any draft, demand,
certificate or other document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect even if the Agent has been
notified thereof.
8. Indemnity.
---------
In addition to amounts payable as provided in Paragraph 5 of Exhibit
10 [Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
9. Liability for Acts and Omissions.
--------------------------------
As between any Loan Party and the Agent, such Loan Party assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Agent shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate,fraudulent or forged (even
if the Agent shall have been notified thereof); (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) the failure of the beneficiary of any such Letter of Credit,
or any other party to which such Letter of Credit may be transferred, to comply
fully with any conditions required in order to draw upon such Letter of Credit
or any other claim of any Loan Party against any beneficiary of such Letter of
Credit, or any such transferee, or any dispute between or among any Loan Party
and any beneficiary of any Letter of Credit or any such transferee; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Agent, including any Governmental Acts,
and none of the above shall affect or impair, or prevent the vesting of, any of
the Agent's rights or powers hereunder. Nothing in the preceding sentence shall
relieve the Agent from liability for the Agent's gross negligence or willful
misconduct in connection with actions or omissions described in such clauses (i)
through (viii) of such sentence.
EXHIBIT 8.3
REPORTING REQUIREMENTS
1. Monthly Financial Statements.
----------------------------
As soon as available and in any event within forty-five (45) calendar
days after the end of each calendar month, the Borrower's financial statements,
consisting of a consolidated and consolidating balance sheet as of the end of
such month and related consolidated and consolidating statements of income, and
consolidated cash flows for the month then ended and the fiscal year through
that date, all in reasonable detail and certified (subject to normal year-end
adjustments) by an Authorized Officer of the Borrower as presenting fairly the
financial condition and results of operations of the Borrower on a consolidated
basis and setting forth in comparative form the respective financial statements
for the corresponding date and period in the previous fiscal year.
As soon as available and in any event within thirty-one (31) calendar
days after the end of each calendar month, a Borrowing Base Certificate as of
the last day of the immediately preceding month in the form of Exhibit 1.1(B)
hereto, appropriately completed, executed and delivered by an Authorized Officer
of the Borrower.
2. Annual Financial Statements.
---------------------------
As soon as available and in any event within one hundred twenty
(120) days after the end of each fiscal year of the Borrower, financial
statements of the Borrower consisting of a consolidated balance sheet as of the
end of such fiscal year, and related consolidated statements of income,
stockholders' equity and cash flows for the fiscal year then ended, prepared in
accordance with GAAP, and all in reasonable detail and setting forth in
comparative form the financial statements as of the end of and for the preceding
fiscal year, and certified by independent certified public accountants of
nationally recognized standing satisfactory to the Agent. The certificate or
report of accountants shall be free of qualifications (other than any
consistency qualification that may result from a change in the method used to
prepare the financial statements as to which such accountants concur) and shall
not indicate the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of any Loan Party under any of the Loan Documents.
The Loan Parties shall deliver with such financial statements and certification
by their accountants a letter of such accountants to the Agent and the Banks
substantially (i) to the effect that, based upon their ordinary and customary
examination of the affairs of the Borrower, performed in connection with the
preparation of such consolidated financial statements, and in accordance with
generally accepted auditing standards, they are not aware of the existence of
any condition or event which constitutes an Event of Default or Potential
Default or, if they are aware of such condition or event, stating the nature
thereof and confirming the Borrower's calculations with respect to the
certificate to be delivered pursuant to paragraph 4 of this Exhibit 8.3 with
respect to such financial statements and (ii) to the effect that the Banks are
intended to rely upon such accountant's certification of the annual financial
statements and that such accountants authorize the Loan Parties to deliver such
reports and certificate to the Banks on such accountants' behalf.
3. Certificate of the Borrower.
---------------------------
Concurrently with the financial statements of the Borrower furnished
to the Agent and to the Banks pursuant to paragraph 2 of this Exhibit 8.3 and
within 60 calendar days after the end of the first three fiscal quarters in each
fiscal year, a certificate of the Borrower signed by an Authorized Officer of
the Borrower, in the form of Exhibit 8.3.3, to the effect that, except as
described pursuant to paragraph 5 of this Exhibit 8.3, (i) the representations
and warranties of the Borrower contained in Section 6 and in the other Loan
Documents are true on and as of the date of such certificate with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate solely
to an earlier date or time) and the Loan Parties have performed and complied
with all covenants and conditions hereof, (ii) no Event of Default or Potential
Default exists and is continuing on the date of such certificate and (iii)
containing calculations in sufficient detail to demonstrate compliance as of the
date of such financial statements with all financial covenants contained in
Section 8.2 [Negative Covenants]. The Borrower shall also provide
concurrently with the certificate described above a written summary discussing
the consolidated financial results for the year-to-date period of the fiscal
year then ended and comparing the results to the prior year and to the annual
budget delivered to the Agent and the Banks pursuant to paragraph 8(a) of this
Exhibit 8.3. The certificate delivered with the annual financial statements
pursuant to paragraph 3 shall include a determination in reasonable detail of
the Excess Cash Flow and the amount of the Mandatory Prepayment of Excess Cash
Flow applicable to such fiscal year.
4. Notice of Default.
-----------------
Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
an Authorized Officer of such Loan Party setting forth the details of such Event
of Default or Potential Default and the action which the such Loan Party
proposes to take with respect thereto.
5. Notice of Litigation.
--------------------
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other Person
against any Loan Party or Subsidiary of any Loan Party which relate to the
Collateral, involve a claim or series of claims in excess of $500,000 or which
if adversely determined would constitute a Material Adverse Change.
6. Certain Events.
--------------
Written notice to the Agent:
(a) at least ten (10) calendar days prior thereto, with respect
to any proposed sale or transfer of assets pursuant to Section 8.2.7(iv) or
(vii),
(b) within the time limits set forth in Section 8.2.14 [Changes
in Organizational Documents], any amendment to the organizational documents of
any Loan Party;
(c) at least twenty (20) calendar days prior thereto, with
respect to any change in any Loan Party's locations from the locations set forth
in Schedule A to the Security Agreement;
(d) at least ten (10) calendar days prior thereto, notice of the
acquisition of any real property by the Borrower or any other Loan Party;
(e) at least ten (10) calendar days prior thereto, notice of the
acquisition of any material Intellectual Property by the Borrower or any other
Loan Party; and
(f) of each of the following matters with respect to the Note
Indenture:
(i) immediately upon the occurrence of a "Default" or an
"Event of Default", as such terms are defined in the Note Indenture,
(ii) immediately upon a "Change of Control," as such term is
defined in the Note Indenture,
(iii) immediately upon receipt of a "notice of acceleration"
from either the trustee for or the holders of the 11% Notes or the occurrence of
the acceleration of the 11% Notes, in either case, pursuant to Section 5.02 of
the Note Indenture or any similar or related provision in the Note Indenture or
any supplement thereto,
(iv) simultaneous with the sending thereof, all material
notices required to be sent to the trustee or holders of the 11% Notes under the
Note Indenture,
(v) simultaneous with the receipt thereof, all material
notices received from the trustee under the Note Indenture, and
(vi) at least (5) Business Days prior to the effectiveness
thereof, a copy of all waivers or consents under and amendments or modifications
to the Note Indenture.
7. Budgets, Forecasts, Other Reports and Information.
-------------------------------------------------
Promptly upon their becoming available to the Borrower:
(a) the annual budget of the Borrower, to be supplied not later
than seventy-five (75) days after the commencement of its fiscal year,
(b) any reports including management letters submitted to the
Borrower by independent accountants in connection with any annual, interim or
special audit,
(c) regular or periodic reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses, filed by the Borrower with the
Securities and Exchange Commission,
(d) a copy of any material order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any Official Body, and
(e) such other reports and information as any of the Banks may
from time to time reasonably request. The Borrower shall also notify the Banks
promptly of the enactment or adoption of any Law which may result in a Material
Adverse Change.
8. Notices Regarding Plans and Benefit Arrangements; Certain Events.
----------------------------------------------------------------
Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(a) any Reportable Event with respect to the Borrower or any
other member of the ERISA Group (regardless of whether the obligation to report
said Reportable Event to the PBGC has been waived),
(b) any Prohibited Transaction which could subject the Borrower
or any other member of the ERISA Group to a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue
Code in connection with any Plan, any Benefit Arrangement or any trust created
thereunder,
(c) any assertion of material withdrawal liability with respect
to any Multiemployer Plan,
(d) any partial or complete withdrawal from a Multiemployer Plan
by the Borrower or any other member of the ERISA Group under Title IV of ERISA
(or assertion thereof), where such withdrawal is likely to result in material
withdrawal liability,
(e) any cessation of operations (by the Borrower or any other
member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(f) withdrawal by the Borrower or any other member of the ERISA
Group from a Multiple Employer Plan,
(g) a failure by the Borrower or any other member of the ERISA
Group to make a payment to a Plan required to avoid imposition of a Lien under
Section 302(f) of ERISA,
(h) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(i) any change in the actuarial assumptions or funding methods
used for any Plan, where the effect of such change is to materially increase or
materially reduce the unfunded benefit liability or obligation to make periodic
contributions.
9. Notices of Involuntary Termination and Annual Reports
-----------------------------------------------------
Promptly after receipt thereof, copies of (a) all notices received by
the Borrower or any other member of the ERISA Group of the PBGC's intent to
terminate any Plan administered or maintained by the Borrower or any member of
the ERISA Group, or to have a trustee appointed to administer any such Plan; and
(b) at the request of the Agent or any Bank
each annual report (IRS Form 5500 series) and all accompanying schedules, the
most recent actuarial reports, the most recent financial information concerning
the financial status of each Plan administered or maintained by the Borrower or
any other member of the ERISA Group, and schedules showing the amounts
contributed to each such Plan by or on behalf of the Borrower or any other
member of the ERISA Group in which any of their personnel participate or from
which such personnel may derive a benefit, and each Schedule B (Actuarial
Information) to the annual report filed by the Borrower or any other member of
the ERISA Group with the Internal Revenue Service with respect to each such
Plan.
10. Notice of Voluntary Termination
-------------------------------
Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.
EXHIBIT 10
AGENT PROVISIONS
1. Appointment.
-----------
Each Bank hereby irrevocably designates, appoints and authorizes PNC
Bank to act as Agent for such Bank under this Agreement and to execute and
deliver or accept on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to act as the Agent
on behalf of the Banks to the extent provided in this Agreement.
2. Delegation of Duties.
--------------------
The Agent may perform any of its duties hereunder by or through agents
or employees (provided such delegation does not constitute a relinquishment of
its duties as Agent) and, subject to Paragraphs 5 and 6 of this Exhibit 10,
shall be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
3. Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. Each
Bank expressly acknowledges (i) that the Agent has not made any representations
or warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of any of the Loan Parties, shall be deemed to constitute
any representation or warranty by the Agent to any Bank; (ii) that it has made
and will continue to make, without reliance upon the Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Loans hereunder; and (iii)
except as expressly provided herein, that the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter.
4. Actions in Discretion of Agent; Instructions From the Banks.
-----------------------------------------------------------
The Agent agrees, upon the written request of the Required Banks, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Paragraph 6
of this Exhibit 10. Subject to the provisions of Paragraph 6, no Bank shall have
any right of action whatsoever against the Agent as a result of the Agent acting
or refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
5. Reimbursement and Indemnification of Agent by the Borrower.
----------------------------------------------------------
The Borrower unconditionally agrees to pay or reimburse the Agent and
hold the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel (including the allocated costs of staff counsel), appraisers and
environmental consultants, incurred by the Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that the Borrower shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Agent's gross negligence or willful misconduct, or if the Borrower was not given
notice of the subject claim and the opportunity to participate in the defense
thereof, at its expense (except that the Borrower shall remain liable to the
extent such failure to give notice does not result in a loss to the Borrower),
or if the same results from a compromise or settlement agreement entered into
without the consent of the Borrower, which shall not be unreasonably withheld.
In addition, the Borrower agrees to reimburse and pay all reasonable
out-of-pocket expenses of the Agent's regular employees and
agents engaged periodically to perform audits of the Loan Parties' books,
records and business properties.
6. Exculpatory Provisions; Limitation of Liability.
-----------------------------------------------
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (b) be responsible in any manner to any of the
Banks for the effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the financial
condition of the Loan Parties, or the existence or possible existence of any
Event of Default or Potential Default. No claim may be made by any of the Loan
Parties, any Bank, the Agent or any of their respective Subsidiaries against the
Agent, any Bank or any of their respective directors, officers, employees,
agents, attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and each
of the Loan Parties, (for itself and on behalf of each of its Subsidiaries), the
Agent and each Bank hereby waive, releases and agree never to xxx upon any claim
for any such damages, whether such claim now exists or hereafter arises and
whether or not it is now known or suspected to exist in its favor. Each Bank
agrees that, except for notices, reports and other documents expressly required
to be furnished to the Banks by the Agent hereunder or given to the Agent for
the account of or with copies for the Banks, the Agent and each of its
directors, officers, employees, agents, attorneys or Affiliates shall not have
any duty or responsibility to provide any Bank with an credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Loan Parties which may come
into the possession of the Agent or any of its directors, officers, employees,
agents, attorneys or Affiliates.
7. Reimbursement and Indemnification of Agent by Banks.
---------------------------------------------------
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrower and without limiting the Obligation of the
Borrower to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including attorneys' fees and disbursements
(including the allocated costs of staff counsel), and costs of appraisers and
environmental consultants, of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent
hereunder or thereunder, provided that no Bank shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the Agent's gross negligence or willful misconduct, or (b) if such Bank was not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that such Bank shall remain liable to
the extent such failure to give notice does not result in a loss to the Bank),
or (c) if the same results from a compromise and settlement agreement entered
into without the consent of such Bank, which shall not be unreasonably withheld.
In addition, each Bank agrees promptly upon demand to reimburse the Agent (to
the extent not reimbursed by the Borrower and without limiting the Obligation of
the Borrower to do so) in proportion to its Ratable Share for all amounts due
and payable by the Borrower to the Agent in connection with the Agent's periodic
audit of the Loan Parties' books, records and business properties.
8. Reliance by Agent.
-----------------
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
9. Notice of Default.
-----------------
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
10. Notices.
-------
The Agent shall promptly send to each Bank a copy of all notices
received from the Borrower pursuant to the provisions of this Agreement or the
other Loan Documents promptly upon receipt thereof. The Agent shall promptly
notify the Borrower and the other Banks of each change in the Base Rate and the
effective date thereof.
11. Banks in Their Individual Capacities.
------------------------------------
With respect to its Revolving Credit Commitment, the Revolving Credit
Loans, the Term Loan Commitment and the Term Loan made by it and any other
rights and powers given to it as a Bank hereunder or under any of the other Loan
Documents, the Agent shall have the same rights and powers hereunder as any
other Bank and may exercise the same as though it were not the Agent, and the
term "Banks" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. PNC Bank and its Affiliates and each of the Banks and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, accept deposits from, discount drafts for, act
as trustee under indentures of, and generally engage
in any kind of banking or trust business with, the Loan Parties and their
Affiliates, in the case of the Agent, as though it were not acting as Agent
hereunder and in the case of each Bank, as though such Bank were not a Bank
hereunder. The Banks acknowledge that, pursuant to such activities, the Agent or
its Affiliates may (i) receive information regarding the Loan Parties (including
information that may be subject to confidentiality obligations in favor of the
Loan Parties) and acknowledge that the Agent shall be under no obligation to
provide such information to them, and (ii) accept fees and other consideration
from the Loan Parties for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
12. Holders of Notes.
----------------
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13. Equalization of Banks.
---------------------
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Section 4.4.2, 5.4.2 or 5.6. The Banks or any such holder
receiving any such amount shall purchase for cash from each of the other Banks
an interest in such Bank's Loans in such amount as shall result in a ratable
participation by the Banks and each such holder in the aggregate unpaid amount
under the Notes, provided that if all or any portion of such excess amount is
thereafter recovered from the Bank or the holder making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by law
(including court order) to be paid by the Bank or the holder making such
purchase.
14. Successor Agent.
---------------
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank, the
Agent's Loans and its Commitment shall be considered in determining whether the
Required Banks have requested such resignation), in either case of (i) or (ii)
by giving not less than thirty (30) days' prior written notice to the Borrower.
If the Agent shall resign under this Agreement, then either (a) the Required
Banks shall appoint from among the Banks a successor agent for the Banks,
subject to the consent of the Borrower, such consent not to be unreasonably
withheld, or (b) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Agent's notice to the
Banks of its resignation, then the Agent shall appoint, with the consent of the
Borrower, such consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint and the
Borrower consents to the appointment of a successor agent. Upon its appointment
pursuant to either clause (a) or (b) above, such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent, effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions of
this Exhibit 10 shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
15. Agent's Fee.
-----------
The Borrower shall pay to the Agent a nonrefundable fee (the "Agent's
Fee") under the terms of a letter (the "Agent's Letter") between the Borrower
and Agent, as amended from time to time.
16. Availability of Funds.
---------------------
The Agent may assume that each Bank has made or will make the proceeds
of a Loan available to the Agent unless the Agent shall have been notified by
such Bank on or before the later of (1) the close of Business on the Business
Day preceding the Borrowing Date with respect to such Loan or two (2) hours
before the time on which the Agent actually funds the proceeds of such Loan to
the Borrower (whether using its own funds pursuant to this Paragraph 16 or using
proceeds deposited with the Agent by the Banks and whether such funding occurs
before or after the time on which Banks are required to deposit the proceeds of
such Loan with the Agent). The Agent may, in reliance upon such assumption (but
shall not be required to), make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such amount on demand from
such Bank (or, if such Bank fails to pay such amount forthwith upon such demand
from the Borrower) together with interest thereon, in respect of each day during
the period commencing on the date such amount was made available to the Borrower
and ending on the date the Agent recovers such amount, at a rate per annum equal
to (i) the Federal Funds Effective Rate during the first three (3) days after
such interest shall begin to accrue and (ii) the applicable interest rate in
respect of such Loan after the end of such three-day period.
17. Calculations.
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In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Bank
whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrower and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
18. Beneficiaries.
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Except as expressly provided herein, the provisions of this Exhibit 10
are solely for the benefit of the Agent and the Banks, and the Loan Parties
shall not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
of the Loan Parties.
