Exhibit 10.8
REVOLVING CREDIT AGREEMENT
AMONG
BANK OF AMERICA, N.A., AS AGENT AND A LENDER
CERTAIN LENDERS
SL INDUSTRIES, INC., AS PARENT BORROWER
AND
CEDAR CORPORATION
CONDOR D.C. POWER SUPPLIES, INC.
CONDOR HOLDINGS, INC.
RFL ELECTRONICS, INC.
SL AUBURN, INC.
SL DELAWARE, INC.
SL DELAWARE HOLDINGS, INC.
SL SURFACE TECHNOLOGIES, INC.
SL MONTEVIDEO TECHNOLOGY, INC.
SLW HOLDINGS, INC.
TEAL ELECTRONICS CORPORATION
WABER POWER LTD.
COLLECTIVELY, AS SUBSIDIARY BORROWERS
DATED
AUGUST 3, 2005
TABLE OF CONTENTS
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ARTICLE 1 THE REVOLVING LOAN FACILITY.................................... 2
Section 1.01 Commitment to Lend...................................... 2
Section 1.02 Manner of Borrowing..................................... 2
Section 1.03 Disbursements........................................... 2
Section 1.04 Letters of Credit and Letter of Credit Fees............. 3
ARTICLE 2 PAYMENTS AND PREPAYMENTS....................................... 5
Section 2.01 Reductions In Commitment................................ 5
Section 2.02 Optional Prepayments of Loans........................... 5
Section 2.03 Repayment of Loans In Connection with Reductions of
Commitment.............................................. 6
ARTICLE 3 INTEREST AND FEES.............................................. 6
Section 3.01 Interest................................................ 6
Section 3.02 Election of Interest Rate............................... 7
Section 3.03 Interest Upon Default................................... 7
Section 3.04 Fees.................................................... 8
Section 3.05 Computation of Interest and Related Fees................ 8
ARTICLE 4 GENERAL MATTERS CONCERNING LOANS............................... 8
Section 4.01 Manner of Tendering Payments by Borrowers............... 8
Section 4.02 The Notes............................................... 9
Section 4.03 Loan Account............................................ 10
Section 4.04 Additional Provisions Concerning Certain Loans.......... 10
Section 4.05 Taxes................................................... 12
Section 4.06 Lenders' Obligations Several............................ 14
Section 4.07 Permitted Assumptions by Agent as to Lender Payments.... 14
ARTICLE 5 CONDITIONS PRECEDENT........................................... 14
Section 5.01 Conditions Precedent to Initial Loan.................... 14
5.01.1 Loan Documents.............................................. 14
5.01.2 UCC Collateral Documents.................................... 15
5.01.3 Real Estate Collateral Documents............................ 15
5.01.4 Financial Documents......................................... 15
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TABLE OF CONTENTS
(CONTINUED)
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5.01.5 Consents, Certificates and Opinions......................... 16
5.01.6 Third Party Agreements...................................... 16
5.01.7 Merger Documents............................................ 17
Section 5.02 Payment of Fees and Costs.............................. 17
Section 5.03 Conditions Precedent to Each Loan...................... 17
Section 5.04 Method of Satisfying Certain Conditions................ 18
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BORROWERS.................... 18
Section 6.01 Organization and Qualification.......................... 18
Section 6.02 Capitalization and Ownership of Subsidiary Borrowers.... 18
Section 6.03 Authorization and Execution............................. 18
Section 6.04 Enforceability; Consents................................ 19
Section 6.05 Security Interests in Collateral........................ 19
Section 6.06 Real Property of Borrowers.............................. 19
Section 6.07 Absence of Conflict with other Agreements, Etc.......... 19
Section 6.08 Business................................................ 20
Section 6.09 Condition of Assets..................................... 20
Section 6.10 Use of Proceeds......................................... 20
Section 6.11 Litigation.............................................. 20
Section 6.12 Indebtedness............................................ 20
Section 6.13 Financial Statements.................................... 20
Section 6.14 Fiscal Year............................................. 21
Section 6.15 Title to Assets......................................... 21
Section 6.16 Patents, Trademarks, Licenses and Franchises............ 21
Section 6.17 Compliance with Law..................................... 21
Section 6.18 Compliance with ERISA................................... 22
Section 6.19 Compliance with Regulations U and X..................... 23
Section 6.20 Investment Company Act.................................. 23
Section 6.21 Public Utility Holding Company Act...................... 23
Section 6.22 Absence of Default...................................... 23
Section 6.23 Agreements with Affiliates and Management Agreements.... 23
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TABLE OF CONTENTS
(CONTINUED)
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Section 6.24 No Burdensome Agreements; Material Agreements........... 23
Section 6.25 Solvency................................................ 24
Section 6.26 Taxes................................................... 24
Section 6.27 Environmental Compliance................................ 24
Section 6.28 Labor Disputes and Acts of God.......................... 25
ARTICLE 7 FINANCIAL COVENANTS............................................ 25
Section 7.01 Financial Covenants..................................... 25
Section 7.02 Calculations............................................ 26
ARTICLE 8 COVENANTS CONCERNING REPORTING REQUIREMENTS.................... 26
Section 8.01 Financial Statements.................................... 26
Section 8.02 Officer's Compliance Certificates....................... 27
Section 8.03 Auditors' Reports....................................... 28
Section 8.04 Notice of Default....................................... 28
Section 8.05 Notice Concerning Representations and Warranties........ 28
Section 8.06 Notice of Litigation.................................... 28
Section 8.07 SEC Disclosure.......................................... 28
Section 8.08 Conditions Affecting Collateral......................... 28
Section 8.09 ERISA Notices........................................... 29
Section 8.10 Miscellaneous........................................... 29
Section 8.11 Authorization of Third Parties to Deliver Information... 29
ARTICLE 9 BUSINESS COVENANTS............................................. 30
Section 9.01 Indebtedness............................................ 30
Section 9.02 Liens................................................... 30
Section 9.03 Investments and Acquisitions............................ 32
Section 9.04 Restricted Payments..................................... 34
Section 9.05 Affiliate Transactions.................................. 34
Section 9.06 Disposition of Assets................................... 35
Section 9.07 Liquidation or Merger................................... 35
Section 9.08 Change in Organizational Documents...................... 35
Section 9.09 Issuance of Equity...................................... 36
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Section 9.10 Environmental Violations................................ 36
Section 9.11 Preservation of Existence, Etc.......................... 36
Section 9.12 Permitted Businesses.................................... 36
Section 9.13 Compliance with Law..................................... 36
Section 9.14 Payment of Taxes and Claims............................. 37
Section 9.15 Tax Consolidation....................................... 37
Section 9.16 Maintenance of Properties............................... 37
Section 9.17 Insurance............................................... 37
Section 9.18 Compliance with ERISA................................... 38
Section 9.19 Maintenance of Records; Fiscal Year..................... 39
Section 9.20 Inspections and Field Examinations...................... 39
Section 9.21 Exchange of Notes....................................... 40
Section 9.22 Compliance with Federal Reserve Regulations............. 40
Section 9.23 Limitations on Certain Restrictive Provisions........... 40
Section 9.24 Corporate Separateness.................................. 40
Section 9.25 Deposit Accounts........................................ 41
Section 9.26 Collateral; Lockbox..................................... 41
Section 9.27 Joinder of Subsidiaries................................. 41
Section 9.28 Further Assurances...................................... 43
ARTICLE 10 DEFAULT....................................................... 43
Section 10.01 Events of Default....................................... 43
Section 10.02 Remedies................................................ 45
Section 10.03 Cash Collateral......................................... 46
ARTICLE 11 DEFINITIONS................................................... 46
Section 11.01 Defined Terms........................................... 46
Section 11.02 Accounting Terms........................................ 65
Section 11.03 Other Definitional Provisions........................... 66
ARTICLE 12 AGENT......................................................... 66
Section 12.01 Authority............................................... 66
Section 12.02 Expenses................................................ 66
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TABLE OF CONTENTS
(CONTINUED)
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Section 12.03 Action by Agent......................................... 66
Section 12.04 Exculpatory Provisions.................................. 67
Section 12.05 Investigation by Lenders................................ 67
Section 12.06 Notice of Events of Default............................. 67
Section 12.07 Resignation; Termination................................ 68
Section 12.08 Sharing................................................. 68
Section 12.09 Other Relationships..................................... 68
ARTICLE 13 MISCELLANEOUS................................................. 68
Section 13.01 Notices................................................. 68
Section 13.02 Duration; Survival...................................... 69
Section 13.03 Borrower Representative................................. 69
Section 13.04 No Implied Waiver; Rights Cumulative.................... 69
Section 13.05 Entire Agreement and Amendments......................... 70
Section 13.06 Successors and Assigns.................................. 70
Section 13.07 Descriptive Headings.................................... 72
Section 13.08 Governing Law........................................... 72
Section 13.09 Payments Due on Non-Business Days....................... 72
Section 13.10 Counterparts............................................ 72
Section 13.11 Maximum Lawful Interest Rate............................ 73
Section 13.12 Set-off of Bank Accounts................................ 73
Section 13.13 Severability............................................ 74
Section 13.14 Payment and Reimbursement of Costs and Expenses;
Indemnification......................................... 74
Section 13.15 Consent to Jurisdiction................................. 75
Section 13.16 Termination............................................. 75
Section 13.17 Waiver of Right to Jury Trial........................... 75
Section 13.18 Confidentiality......................................... 76
Section 13.19 USA Patriot Act......................................... 76
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EXHIBITS
EXHIBIT A Form of Revolving Loan Note
EXHIBIT B Form of Request for Advance
EXHIBIT C Form of Notice of Conversion
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Assignment and Acceptance Agreement
EXHIBIT F Form of Joinder Agreement
SCHEDULES
Schedule A Commitments
Schedule 6.01 Jurisdictions Where each Borrower and Each of Foreign Subsidiary
is Incorporated/Organized and Qualified
Schedule 6.02 Capital Stock of (or Other Equity or Ownership Interests in) the
Borrowers and Foreign Subsidiaries
Schedule 6.05 Filing Locations for Financing Statements and Mortgages
Schedule 6.06 Real Property Owned or Leased by Borrowers and Subsidiaries
Schedule 6.11 Litigation
Schedule 6.12 Indebtedness of Borrowers and Subsidiaries
Schedule 6.16 List of Patents, Trademarks and Other Intangible Rights
Schedule 6.18 ERISA Disclosure
Schedule 6.23 Agreements With Affiliates
Schedule 6.24 Material Agreements
Schedule 9.01 Existing Indebtedness
Schedule 9.02 Existing Liens
Schedule 9.03 XYZ Acquisition
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REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT (this "Agreement") made as of August 3, 2005, by
and among SL INDUSTRIES, INC., a New Jersey corporation ("Parent Borrower"),
CEDAR CORPORATION, a Nevada corporation, CONDOR D.C. POWER SUPPLIES, INC., a
California corporation, CONDOR HOLDINGS, INC., a Delaware corporation, RFL
ELECTRONICS, INC., a Delaware corporation, SL AUBURN, INC., a New York
corporation, SL DELAWARE, INC., a Delaware corporation, SL DELAWARE HOLDINGS,
INC., a Delaware corporation, SL SURFACE TECHNOLOGIES, INC., a New Jersey
corporation, SL MONTEVIDEO TECHNOLOGY, INC., a Minnesota corporation, SLW
HOLDINGS, INC., a New Jersey corporation, TEAL ELECTRONICS CORPORATION, a
California corporation, WABER POWER LTD., a Connecticut corporation (each a
"Subsidiary Borrower", and collectively, "Subsidiary Borrowers", and together
with Parent Borrower, each a "Borrower" and collectively, the "Borrowers"), BANK
OF AMERICA, N.A. ("Bank"), individually, as Administrative Agent, Issuer and a
Lender, and the OTHER FINANCIAL INSTITUTIONS listed on the signature pages to
this agreement. Bank, the financial institutions listed on the signature pages
to this Agreement and any other financial institutions which may become parties
to this Agreement from time to time, are sometimes collectively referred to as
the "Lenders" and individually as a "Lender". Bank, when acting in its capacity
as agent for the Lenders and Issuer, or any successor or assign that assumes
that position pursuant to the terms of this Agreement, is hereinafter sometimes
referred to as the "Agent".
RECITALS:
WHEREAS, Borrowers desire that the Lenders extend a revolving loan facility
(with a standby and commercial letter of credit sublimit), to provide funds to
pay off and terminate that certain Loan and Security Agreement dated effective
January 6, 2003 among LaSalle Business Credit LLC, Standard Federal National
Association, Parent Borrower and SL Delaware, Inc. as borrowers, and certain
subsidiary guarantors party thereto (the "Prior Facility"), and to provide
credit for the possible acquisition of XYZ, Inc., working capital purposes and
general business purposes of the Borrowers; and
WHEREAS, the Borrowers desire to borrow, and the Lenders are willing to
extend credit from time to time on a revolving credit basis until the Revolving
Credit Termination Date (as defined below), an aggregate principal amount not to
exceed Thirty Million Dollars ($30,000,000) outstanding at any time. The loans
and credit are to be secured by the assets of the Parent Borrower and the assets
and stock of the Subsidiary Borrowers. Certain terms used herein are defined in
Article 13 below.
NOW THEREFORE, the Borrowers, jointly and severally, and Agent and the
Lenders, severally but not jointly, intending to be legally bound, agree as
follows:
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ARTICLE 1
THE REVOLVING LOAN FACILITY
Section 1.01 COMMITMENT TO LEND. The Lenders severally agree, upon the
terms and conditions set forth below, from time to time until the Revolving
Credit Termination Date, to make Revolving Credit Loans to the Borrowers in such
amounts as the Borrowers may request, subject to the limitation that: (a) at no
time shall Revolving Credit Outstandings exceed the amount of the Commitment;
and (b) the amount and percentage of the Commitment which each Lender is
obligated to lend shall not exceed at any time the amount or percentages set
forth opposite the name of such Lender on SCHEDULE A hereto (as supplemented and
amended by giving effect to the assignment contemplated in this Agreement). The
amount of any single Base Rate Loan shall be fifty thousand dollars ($50,000) or
an integral multiple of ten thousand dollars ($10,000) in excess thereof, and
the amount of any single LIBOR Loan shall be one hundred thousand dollars
($100,000) or an integral multiple of ten thousand dollars ($10,000) in excess
thereof. Within such limitations and subject to the terms and conditions set
forth below, the Borrowers may borrow, prepay and reborrow, from time to time,
on a revolving basis. The Lenders shall have no obligation to make any Revolving
Credit Loans at any time that a Default exists.
Section 1.02 MANNER OF BORROWING.
(a) To request a Revolving Credit Loan, the Borrowers shall,
prior to 12:00 noon on the desired date of a Base Rate Loan or at least two (2)
Business Days prior to the desired date for a LIBOR Loan, (a) deliver to the
Agent a Request for Advance or (b) give the Agent telephonic notice of the
information specified in a Request for Advance followed immediately by delivery
of such a Request for Advance, provided, however, that the Borrowers' failure to
confirm any telephonic notice with a Request for Advance shall not invalidate
any notice so given if acted upon by the Agent. Any notice given to the Agent
pursuant to this Section shall be given prior to 11:00 a.m. (Philadelphia time)
on the requisite Business Day and shall be irrevocable once given.
(b) The Agent in turn shall give prompt written or telephonic
(promptly confirmed in writing) notice to each Lender of its pro rata share of
the borrowing, the interest rate option selected and the scheduled date of the
funding. After receipt of such notice, each Lender shall make such arrangements
as are necessary to assure that its share of the funding shall be immediately
available (in Dollars) to the Agent no later than 1:30 p.m. (Philadelphia, PA
time), on the date on which the funding is to occur.
Section 1.03 DISBURSEMENTS. Prior to 2:00 p.m. (Philadelphia time) on the
date of a Revolving Credit Loan, the Agent shall, subject to the satisfaction of
the conditions set forth in Article 7 below, disburse the funds to the Borrowers
(a) by wire transfer pursuant to the Borrowers' instructions, or (b) in the
absence of such instructions, by crediting the account of the Parent Borrower
maintained with the Agent.
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Section 1.04 ETTERS OF CREDIT AND LETTER OF CREDIT FEES.
(a) Letter of Credit. On the terms and subject to the conditions
set forth herein, Issuer will prior to the Revolving Credit Termination Date
issue standby or documentary Letters of Credit so long as:
(i) Issuer shall have received a Notice of LC Credit Event
at least two (2) Business Days before the relevant date of issuance; and
(ii) After giving effect to such issuance (A) the aggregate
Letter of Credit Liabilities under all Letters of Credit do not exceed
$5,000,000 and (B) the Revolving Credit Outstandings do not exceed the amount of
the Commitment.
(b) Letter of Credit Fee. Borrowers shall pay to the Agent for
the account of the Lenders a letter of credit fee with respect to the Letter of
Credit Liabilities for each Letter of Credit, computed for each day from the
date of issuance of such Letter of Credit to the date that is the last day a
drawing is available under such Letter of Credit, at a rate per annum equal to
the Applicable Margin then applicable to LIBOR Loans. Such fee shall be payable
in arrears on the first Business Day of each fiscal quarter prior to the
Revolving Credit Termination Date and on such date. In addition, the Issuer
shall receive a fronting fee equal to 0.125% of the face amount of each
outstanding Letter of Credit ("Fronting Fee"), payable upon issuance. The
Borrowers shall also pay to the Issuer all of the Issuer's standard fees and
charges for the opening, amendment, modification, presentation or cancellation
of a Letter of Credit and otherwise in respect of a Letter of Credit and shall
execute all of the Issuer's standard agreements in connection with the issuance
of the Letter of Credit.
(c) Reimbursement Obligations of Borrowers. If Issuer shall make
a payment pursuant to a Letter of Credit, the Borrowers shall promptly reimburse
Issuer, following notice from Issuer to Borrowers of the amount of such payment,
for the amount of such payment and, to the extent that so doing would not cause
the Revolving Credit Outstandings to exceed the amount of the Commitment, and
there is no outstanding Default, Borrowers shall be deemed to have requested a
Revolving Credit Loan, the proceeds of which will be used to satisfy such
Reimbursement Obligations. To the extent that such Reimbursement Obligations are
not so satisfied the Borrowers shall pay interest, on demand, on all amounts so
paid by Issuer for each day until Borrowers reimburse Issuer therefor at a rate
per annum equal to the sum of two percent (2%) plus the interest rate applicable
to Revolving Credit Loans (which are Prime Rate Loans) for such day. The
obligations of the Borrowers to the Issuer, the Agent and the Lenders in respect
of Letters of Credit shall be guaranteed pursuant to the Loan Documents and
shall be secured by the Collateral.
(d) Objections Absolute. The obligations of Borrowers under this
Section 1.04 shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including the following:
(i) any lack of validity or enforceability of, or any
amendment or waiver of or any consent to departure from, any Letter of Credit or
any related document;
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(ii) the existence of any claim, set-off, defense or other
right which Borrowers may have at any time against the beneficiary of any Letter
of Credit, the Issuer, the Agent or any Lender (including any claim for improper
payment), or any other Person, whether in connection with any Loan Document or
any unrelated transaction, provided, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(iii) any statement or any 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 whatsoever; or
(iv) to the extent permitted under applicable law, any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
(e) Deposit Obligations of Borrowers. In the event any Letters of
Credit are outstanding at the time that Borrowers prepay, or are required to
repay, the Obligations or the Commitment is terminated, Borrowers shall (i)
deposit with Issuer either cash or an irrevocable letter of credit in form and
substance satisfactory to Issuer from a bank satisfactory to Issuer, in either
case, in an amount equal to one hundred and two percent (102%) of the aggregate
outstanding Letter of Credit Liability, to be available to Issuer to reimburse
payments of drafts drawn under such Letters of Credit and pay any fees and
expenses related thereto, and (ii) prepay the fee payable under Section 1.04(b)
with respect to such Letters of Credit for the full remaining terms of such
Letters of Credit. Upon termination of any such Letter of Credit, the unearned
portion of such prepaid fee attributable to such Letter of Credit shall be
refunded to Borrowers, together with the deposit described in the preceding
clause (i) to the extent not previously applied by Issuer in the manner
described herein.
(f) Participation by Lenders.
(i) Effective immediately upon the issuance of each Letter
of Credit and without further action on the part of the Issuer, the Issuer shall
be deemed to have granted to each Lender, and each Lender shall be deemed to
have irrevocably purchased and received from the Issuer, without recourse or
warranty, an undivided interest and participation in such Letter of Credit to
the extent of each Lender's percentage of the Revolving Credit Limit. Further,
each Lender acknowledges and agrees that it shall be absolutely liable, to the
extent of its percentage of the Revolving Credit Limit, to fund on demand or
reimburse the Issuer on demand for the amount of each draft paid by the Issuer
under each Letter of Credit to the extent that such amount is not immediately
reimbursed by the Borrowers.
(ii) In furtherance of the provisions of the preceding
paragraph (a), the Issuer shall notify the Agent promptly upon receipt of notice
of an intended draw under a Letter of Credit. The Agent shall give written,
telecopied or telegraphic notice to each of the other Lenders of its pro rata
share of such draw and the scheduled date thereof. After receipt of such notice,
and whether or not an Event of Default or Default then exists, each Lender shall
make available to the Agent such Lender's share of such draw in immediately
available (in Dollars) to the Agent no later than noon (Philadelphia, PA time),
on the date specified in the Agent's notice. The failure of the Issuer or the
Agent to give timely notice pursuant to this
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Subsection 1.04(f) shall not affect the right of the Issuer to reimbursement
from the Lenders. Any amount paid by Agent and Lenders pursuant to a draw made
under a Letter of Credit shall constitute a Revolving Credit Loan and shall be
repaid pursuant to the provisions respecting Revolving Credit Loans, provided
that if an Event of Default or Default exists at the time of a draw, the
Borrowers shall immediately reimburse the amount of such draw to the Agent for
the benefit of the Lenders.
(g) Standard of Conduct. The Issuer shall be entitled to
administer each Letter of Credit in the ordinary course of business and in
accordance with its usual practices, modified from time to time as it deems
appropriate under the circumstances, and shall be entitled to use its discretion
in taking or refraining from taking any action in connection herewith as if it
were the sole party involved. Any action taken or omitted to be taken by the
Issuer under or in connection with any Letter of Credit shall not create for the
Issuer any resulting liability to any other Lender. The Issuer shall be entitled
to rely, and shall be fully protected in relying upon, any Letter of Credit,
draft, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document believed by it to be genuine and correct and believed by it to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Issuer and the Agent.
ARTICLE 2
PAYMENTS AND PREPAYMENTS
Section 2.01 REDUCTIONS IN COMMITMENT. The Borrowers may, at any time and
from time to time upon one (1) Business Day's prior irrevocable written notice
to the Agent, reduce (on a pro rata basis among the Lenders) or terminate the
Commitment without premium or penalty, provided, however, that each partial
reduction shall be in an amount equal to One Million Dollars ($1,000,000) or an
integral multiple of One Hundred Thousand Dollars ($100,000) in excess thereof
and provided further, that the Commitment shall not be reduced or terminated at
any time that would require the prepayment of a LIBOR Loan on a day other than
the last day of the relevant Interest Period, unless the reduction notice is
accompanied by the breakage payments referred to in Section 4.04 (Additional
Provisions Concerning Certain Loans) below. Once so reduced, the Commitment
shall not be increased and once so terminated, the Commitment shall not be
reinstated.
Section 2.02 OPTIONAL PREPAYMENTS OF LOANS.
(a) Subject to the provisions of paragraph (c) below, the
Borrowers may, at any time and from time to time, without penalty, prepay any or
all Base Rate Loans.
(b) Subject to the provisions of paragraph (c) below, the
Borrowers may, at any time and from time to time, prepay any or all LIBOR Loans
upon giving three (3) Business Days irrevocable notice to the Agent, but if any
such payment shall be made on a day other than the last day of the applicable
Interest Period, such payment shall be accompanied by
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the breakage payments referred to in Section 4.04 (Additional Provisions
Concerning Certain Loans) below.
(c) The foregoing prepayment rights are subject to the following:
(i) any prepayment of less than all the outstanding Loans shall be in an amount
equal to Fifty Thousand Dollars ($50,000) or an integral multiple of ten
thousand dollars ($10,000) in excess thereof, (ii) no prepayment may be made in
an amount that would cause the amount of any outstanding LIBOR Loan to be less
than One Hundred Thousand Dollars ($100,000); and (iii) any prepayment in full
of all outstanding Loans shall be accompanied by the payment of all Obligations
accrued or payable as of the date of such prepayment.
Section 2.03 REPAYMENT OF LOANS IN CONNECTION WITH REDUCTIONS OF
COMMITMENT. On or before the effective date of any reduction in the Commitment
(whether scheduled, mandatory, voluntary or otherwise), the Borrowers shall
repay such of the outstanding Loans, together with accrued interest thereon,
and/or pay to the Agent for the benefit of the Lenders as cash collateral an
amount equal to all Letter of Credit Liabilities, so as to reduce the Revolving
Credit Outstandings to the Revolving Credit Limit, giving effect to the amount
of the Commitment as so reduced, provided, however, any prepayment of a LIBOR
Loan on a day that is not the last day of the relevant Interest Period shall be
accompanied by the amounts provided for in Section 4.04 (Additional Provisions
Concerning Certain Loans) below.
ARTICLE 3
INTEREST AND FEES
Section 3.01 INTEREST. Subject to the provisions of Sections 3.02 (Election
of Interest Rate) and 4.04 (Additional Provisions Concerning Certain Loans)
below and to the conditions set forth in this Section, the Loans shall bear
interest at the Borrowers' option, as follows:
(a) Base Rate Loans. The interest rate on each Base Rate Loan
shall equal the sum of the Base Rate plus the Applicable Margin for Base Rate
Loans, as in effect from time to time. Changes in the rate of interest resulting
from changes in the Base Rate shall take place immediately without notice or
demand of any kind. Interest on Base Rate Loans is payable in arrears on the
first day of each month and on the maturity of such Loans, whether by
acceleration or otherwise.
(b) LIBOR Loans. During any period that a Loan is a LIBOR Loan,
Borrowers shall pay interest on such Loan at a rate equal to the LIBOR Rate for
the applicable Interest Period plus the Applicable Margin for LIBOR Loans, as in
effect from time to time. Interest on LIBOR Loans shall be payable in arrears on
the last day of the applicable Interest Period relating to such Loan, provided
that if the Interest Period is longer than 30 days, interest shall be payable 30
days after the relevant Loan is made and on each 30-day anniversary thereof, if
applicable, and on the last day of the Interest Period. All payments are due on
or prior to the Revolving Credit Termination Date.
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Section 3.02 ELECTION OF INTEREST RATE. Subject to the provisions of
Section 4.04 (Additional Provisions Concerning Certain Loans) below, the
Borrowers may elect the interest rate applicable to each Revolving Credit Loan
as follows:
(a) Rate in Absence of Election. Unless otherwise elected by the
Borrowers, each Revolving Credit Loan shall bear interest at the Base Rate plus
the Applicable Margin.
(b) Election of LIBOR Loans. The Borrowers may elect to request
an advance hereunder as a LIBOR Loan by so specifying the amount and the desired
Interest Period on the Request for Advance delivered pursuant to Section 1.02
(Manner of Borrowing) above.
(c) Conversion to Different Type of Loan. All or any part of the
principal amount of Revolving Credit Loans of any Type may, on any Business Day,
be converted into any other Type or Types of Revolving Credit Loans, except that
(i) a LIBOR Loan may be converted only on the last day of the applicable
Interest Period therefor and (ii) a Base Rate Loan may be converted into a LIBOR
Loan only on a Business Day for LIBOR Loans.
(d) Notice of Election to Convert. The Borrowers shall give the
Agent notice (which shall be irrevocable) of each conversion of a Base Rate Loan
into a LIBOR Loan or each conversion of a LIBOR Loan at the end of the relevant
Interest Period into another LIBOR Loan, no later than 11:00 a.m. (Philadelphia
time) three (3) Business Days prior to the requested date of such conversion.
Each notice of conversion shall be (i) in writing in substantially the form of
Exhibit C attached hereto or (ii) by telephone specifying the information set
forth in Exhibit C attached hereto, followed immediately by delivery of such
notice, provided, however, that the Borrowers' failure to confirm any telephonic
notice in writing shall not invalidate any telephonic notice if acted upon by
the Agent.
(e) Presumption In Absence of Election to Convert. Base Rate
Loans shall continue as Base Rate Loans unless and until such Revolving Credit
Loans are converted into Revolving Credit Loans of another Type pursuant to the
preceding paragraph (d). LIBOR Loans of any Type shall continue as Revolving
Credit Loans of such Type until the end of the then current Interest Period
therefor, at which time they shall be automatically converted into Base Rate
Loans unless the Borrowers shall have given the Agent notice in accordance with
the preceding paragraph (d).
(f) Limitations on Election of LIBOR Loans. The Borrowers may not
elect to borrow, continue or convert a Revolving Credit Loan to a LIBOR Loan if
such election would (i) require the Agent to administer concurrently more than
six (6) Types of Revolving Credit Loans or (ii) require the Borrowers to make
any scheduled or required payment of principal prior to the last day to the
Interest Period or Interest Periods selected as a result of a reduction of the
Available Commitment, a mandatory repayment or otherwise hereunder.
Section 3.03 INTEREST UPON DEFAULT. Anything in this Agreement to the
contrary notwithstanding, upon the occurrence of an Event of Default (whether or
not the Lenders have accelerated payment of the Notes), or after maturity or
judgment has been rendered on the Notes,
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the Borrowers' right to select interest rate options shall cease and the unpaid
principal of the Loans shall, at the option of the Agent, bear interest at the
Base Rate plus the Applicable Margin plus two percent (2%) (the "Default Rate").
Such interest shall be payable on the earlier of (i) demand or (ii) the next
Payment Date. Interest at the Default Rate shall continue to accrue (both before
and after judgment) until the earlier of (i) the waiver or cure of the
applicable Event of Default or (ii) the payment in full of the Obligations.
Furthermore, at the election of Agent or Majority Lenders during any period in
which any Event of Default is continuing (x) as the Interest Periods for LIBOR
Loans then in effect expire, such Loans shall be converted into Base Rate Loans
and (y) the LIBOR election shall not be available to Borrowers.
Section 3.04 FEES.
(a) Commitment Fee. The Borrowers shall pay to the Agent for the
account of the Lenders a commitment fee, such fee to be payable in arrears on
every third Payment Date and on the Revolving Credit Termination Date and equal
to the product of the Commitment Fee Margin times the average daily unused
portion of the Commitment during the period commencing on the date following the
preceding commitment fee payment date (or, if none, on the date hereof) and
ending on such commitment fee payment date.
(b) Other Fees. The Borrowers shall pay the Agent, the Issuer
and/or the Lenders such other fees as the Borrowers have otherwise agreed to pay
in writing.
(c) Letter of Credit and Fronting Fees. The Borrowers shall pay
to the Agent for the account of the Issuer and/or the Lenders, as applicable,
such letter of credit fees as are described in Section 1.04.
Section 3.05 COMPUTATION OF INTEREST AND RELATED FEES. All interest and
fees under each Loan Document shall be calculated on the basis of a 360-day year
for the actual number of days elapsed. The date of funding of a Base Rate Loan
and the first day of an Interest Period with respect to a LIBOR Loan shall be
included in the calculation of interest. The date of payment of a Base Rate Loan
and the last day of an Interest Period with respect to a LIBOR Loan shall be
excluded from the calculation of interest. If a Loan is repaid on the same day
that it is made, one (1) day's interest shall be charged.
ARTICLE 4
GENERAL MATTERS CONCERNING LOANS
Section 4.01 MANNER OF TENDERING PAYMENTS BY BORROWERS.
(a) Time of Payments. Each payment (including any prepayment) by
the Borrowers on account of the principal of, or interest on, the Loans,
commitment fees and any other amount owed to the Agent on behalf of the Lenders
under any Loan Document shall be made not later than 1:00 p.m. (Philadelphia
time) on the date specified for payment under such Loan Document in lawful money
of the United States of America in immediately available funds. Any payment
received after 1:00 p.m. (Philadelphia time) shall be deemed received on the
next Business Day. If any payment hereunder becomes due and payable on a day
other than
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a Business Day, such payment shall be extended to the next succeeding Business
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(b) Location of Payments. All payments shall be made by the
Borrowers to the Agent at Bank of America, N.A., P.O. Box 660576, Dallas, TX
75266-0576 or such other place as the Agent may from time to time specify in
writing, except that all payments with respect to Letters of Credit shall be
made by the Borrowers to such other place as the Agent and, respectively, the
Issuer, may from time to time specify in writing. Any such payment shall be made
in United States dollars in immediately available funds, without counterclaim or
setoff and free and clear of, and without any deduction or withholding for, any
taxes or other payments.
(c) Agent and Lenders Authorized to Take Action for Borrowers. If
any payment is not made when due, the Borrowers authorize the Agent and any
Lender to (i) deduct the amount of such payment from any deposit account
maintained by any Borrower, and/or (ii) whether or not there is then any unused
Commitment, cause the aforesaid payments to be made by drawing under the loan
facility provided under this Agreement, any such Loan being subject to interest
at the Default Rate; provided, however, that notwithstanding the making by the
Agent and any Lender of any of the aforesaid payments as set forth in this
sentence, the failure of the Borrowers to make any of the aforesaid payments
when due shall constitute a Default or Event of Default, as the case may be,
and, provided, further, the failure of the Agent and any Lender to take any of
the aforesaid action shall not affect any of its rights hereunder or under any
other Loan Document or under law.
(d) No Set-Off. The Borrowers agree to pay principal, interest,
fees, expenses, indemnities, reimbursements and all other amounts due under any
Loan Document, without set-off or counterclaim or any deduction whatsoever.
(e) Presumptions. Except as expressly set forth to the contrary
in this Agreement or by the Borrowers with respect to any payment, all payments
shall be applied first to the payment of all fees, expenses and other amounts
due to the Agent or the Lenders (excluding principal and interest), then to
accrued interest, and the balance on account of outstanding principal of Base
Rate Loans and then to principal of LIBOR Loans (and among such LIBOR Loans,
first to those with the earliest expiring Interest Periods); provided, however,
that after an Event of Default which is continuing, payments will be applied to
the Obligations of Borrowers as Agent determines in its sole discretion.
(f) Disbursements from Agent to Lenders. The Agent shall promptly
remit to each Lender its pro rata share of payments received pursuant to Section
4.01 in immediately available funds, except that all reimbursement payments in
respect of losses, out-of-pocket expenses, funding losses or like matters shall
be retained by the Agent or remitted to the Lenders according to their
respective appropriate entitlement to such reimbursement.
Section 4.02 THE NOTES. The aggregate principal amount of each Lender's
share of the Commitment and Loans shall be evidenced by a note to be issued by
the Borrowers to each Lender in substantially the form attached hereto as
EXHIBIT A (with appropriate completion of the name of the applicable Lender).
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Section 4.03 LOAN ACCOUNT. The Agent may open and maintain on its books in
the name of the Borrowers a loan account with respect to the Loans and interest
thereon. If the Agent opens such an account, it shall debit such loan account
for the principal amount of each Loan made by it and accrued interest thereon,
and, subject to Section 1.03 (Disbursements) above, shall credit such loan
account for each payment on account of principal or interest. The records of the
Agent with respect to the loan account maintained by it shall be prima facie
evidence of the Loans and accrued interest thereon, but the failure of the Agent
to make any such notations or any error or mistake in such notations shall not
affect the Borrowers' repayment obligations with respect to such Loans.
Section 4.04 ADDITIONAL PROVISIONS CONCERNING CERTAIN LOANS.
(a) Mandatory Suspension and Conversion of LIBOR Loans. The
Lenders' obligation to make, continue or convert into LIBOR Loans of any Type
shall be suspended, all Lenders' outstanding Loans of such Type shall be
converted into Base Rate Loans on the last day of their applicable Interest
Periods (or, if earlier, in the case of clause (iii) below, on the last day the
Lenders may lawfully continue to maintain Loans of such Type or, in the case of
clause (iv) below, on the day determined by the Agent to be the last Business
Day before the effective date of the applicable restriction) into, and all
pending requests for the making or continuation of or conversion into Loans of
such Type by the Agent shall be deemed requests for Base Rate Loans, if:
(i) on or prior to the determination of an interest rate for
a LIBOR Loan for any Interest Period, the Agent reasonably determines that for
any reason appropriate information is not available to it for purposes of
determining the LIBOR Rate for such Interest Period;
(ii) on or prior to the first day of any Interest Period for
a LIBOR Loan of such Type, any of the Lenders reasonably determines that the
LIBOR Rate as determined by such Lender for such Interest Period would not
accurately reflect the cost to such Lender of making, continuing or converting
into a LIBOR Loan of such Type for such Interest Period;
(iii) at any time any of the Lenders determines that any
Regulatory Change makes it unlawful or impracticable for such Lender or its
applicable lending office to make, continue or convert into a LIBOR Loan of such
Type, or to comply with its obligations hereunder in respect thereof; or
(iv) any of the Lenders determines that, by reason of any
Regulatory Change, such Lender or its applicable lending office is restricted,
directly or indirectly, in the amount that it may hold of (A) a category of
liabilities that includes deposits by reference to which, or on the basis of
which, the interest rate applicable to LIBOR Loans of such Type is directly or
indirectly determined or (B) the category of assets that includes LIBOR Loans of
such Type.
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(b) Regulatory Changes. If in the determination of any of the
Lenders:
(i) any Regulatory Change shall directly or indirectly (A)
reduce the amount of any sum received or receivable by such Lender with respect
to the Revolving Credit Facility, (B) impose a cost on such Lender or any
Affiliate of such Lender that is attributable to the making available or
maintaining of, or such Lender's commitment to make available, the Revolving
Credit Facility, (C) require such Lender or any Affiliate of such Lender to make
any payment on, or calculated by reference to, the gross amount of any amount
received by such Lender under any Loan Document or (D) reduce, or have the
effect of reducing, the rate of return on any capital of such Lender or any
Affiliate of such Lender that such Lender or such Affiliate is required to
maintain on account of the Revolving Credit Facility, or such Lender's
Commitment and
(ii) such reduction, increased cost or payment shall not be
fully compensated for by an adjustment in the applicable rates of interest
payable under the Loan Documents;
then the Borrowers shall pay to such Lender such additional amounts as such
Lender reasonably determines will, together with any adjustment in the
applicable rates of interest payable hereunder, fully compensate it for such
reduction, increased cost or payment. Such additional amounts shall be payable,
in the case of those applicable to prior periods, within 15 Business Days after
request by such Lender for such payment and, in the case of those applicable to
future periods, on the date specified, or determined in accordance with a method
specified, by such Lender. Such Lender will promptly notify the Agent and the
Borrowers of any determination made by it referred to in clauses (i) and (ii)
above and provide to Agent and Borrowers a reasonably detailed calculation of
all amounts required to be paid by the Borrowers, but the failure to give such
notice shall not affect such Lender's right to such compensation.
(c) Capital Requirements. If, in the determination of any Lender,
such Lender or any Affiliate of such Lender is required, as a result of a
Regulatory Change, to maintain capital on account of the Revolving Credit
Facility or such Lender's Commitment, then, upon request by such Lender, the
Borrowers shall from time to time thereafter pay to such Lender such additional
amounts as such Lender reasonably determines will fully compensate it for any
reduction in the rate of return on the capital that such Lender or such
Affiliate is so required to maintain on account of the Revolving Credit Facility
or Commitment suffered as a result of such capital requirement. Such additional
amounts shall be payable, in the case of those applicable to prior periods,
within 15 Business Days after request by such Lender to the Borrowers and in the
case of those relating to future periods, on the date specified, or determined
in accordance with a method specified by such Lender. Such Lender will promptly
notify the Agent and the Borrowers of any determination made by it referred to
in this paragraph (c), but the failure to give such notice shall not affect such
Lender's right to such compensation.
(d) Funding Losses. The Borrowers shall pay to the Agent on
behalf of the Lenders, from time to time, upon request, such amount as the Agent
reasonably determines is necessary to compensate the Lenders for any loss, cost
or expense, including, without limitation, loss of the Applicable Margin
incurred by it as a result of (a) any payment, prepayment or conversion of a
LIBOR Loan on a date other than the last day of an Interest
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Period for such LIBOR Loan or (b) a LIBOR Loan for any reason not being made or
converted, or any payment of principal thereof or interest thereof not being
made, on the date therefor determined in accordance with the applicable
provisions of this Agreement. At the election of the Agent, and without limiting
the generality of the foregoing, but without duplication, such compensation on
account of losses may include an amount equal to the excess of (i) the interest
that would have been received from the Borrowers under this Agreement including
the Applicable Margin on any amounts to be reemployed during an Interest Period
or its remaining portion over (ii) the interest component of the return that the
Agent determines the Lenders could have obtained had they placed such amount on
deposit in the London Interbank Eurodollar Market selected by it for a period
equal to such Interest Period or remaining portion.
(e) Determinations. In making the determinations contemplated by
this Section, the Agent or the applicable Lender may make such estimates,
assumptions, allocations and the like that the Agent or such Lender in good
faith determines to be appropriate, and the Agent or specified Lender selection
thereof in accordance with this Section, and the determinations made by such
Lender on the basis thereof, shall be final, binding and conclusive upon the
Borrowers. Notwithstanding any other provision of this Section, such Lender
shall not apply the provisions of subsections (b) or (c) of this Section with
respect to the Borrowers if it shall not at the time be the general policy or
practice of the Agent or such Lender to apply provisions of subsections (b) or
(c) of this Section to other borrowers in substantially similar circumstances
under substantially comparable provisions of other credit agreements.
(f) Rate Quotations. The Borrowers may call the Agent on or
before the date on which a Request for Advance or notice of conversion 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 nor affect
the rate of interest which thereafter is actually in effect when the election is
made.
Section 4.05 TAXES.
(a) Payments Free and Clear.
(i) Any and all payments by the Borrowers hereunder or under
the Notes shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, in the case of each Lender
and the Agent, (A) income and franchise taxes imposed by the jurisdiction under
the laws of which such Lender or the Agent (as the case may be) is organized or
is or should be qualified to do business or any political subdivision thereof,
and (B) income and franchise taxes imposed by the jurisdiction of each Lender's
lending office or any political subdivision thereof, and (C) United States
federal income taxes imposed by reason of failure or the inability of a Lender
to comply with Section 4.05(e) (unless such compliance is precluded as a result
of a change in any law, rule, regulation or treaty or in the administrative
interpretation or application thereof after the date hereof (or, in the case of
a Participant or Assignee, the date on which such Participant or Assignee
receives its interest in the Loans) (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
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(ii) If the Borrowers shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any Note, (A) the
sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) each Lender or the Agent (as the case may be) receives an
amount equal to the amount such party would have received had no such deductions
been made, (B) the Borrowers shall make such deductions, (C) the Borrowers shall
pay the full amount deducted to the relevant taxing authority or other authority
in accordance with applicable law, and (D) the Borrowers shall deliver to the
Agent evidence of such payment to the relevant taxing authority or other
authority in the manner provided in Section 4.05(d).
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay
any present or future stamp, registration, recordation or documentary taxes or
any other similar fees or charges or excise or property taxes, levies of the
United States or any state or political subdivision thereof or any applicable
foreign jurisdiction which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Loans, the other Loan Documents, or the perfection of any rights
or security interest in respect thereto (hereinafter referred to as "Other
Taxes").
(c) Indemnity. The Borrowers shall indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes and Other Taxes imposed by any jurisdiction on amounts
payable under this Section) paid by such Lender or the Agent and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be made within thirty (30) days from the
date such Lender or the Agent makes written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the date
of any payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Agent, at its address referred to in Section 12.01, the original or a certified
copy of a receipt evidencing payment thereof or other evidence of payment
satisfactory to the Agent.
(e) Non-U.S. Lender. On or prior to the date on which any
Participant or Assignee that is not a United States person as defined in Section
7701(a)(30) of the Code (each a "Non-U.S. Lender") receives its interest in the
Loans, each Non-U.S. Lender that is entitled at such time to an exemption from
United States of America withholding tax, or that is subject to such tax at a
reduced rate under an applicable tax treaty, shall provide Agent and the
Borrowers with two duly completed copies of the appropriate United States
Internal Revenue Service Form W-8, or other applicable successor form prescribed
by the Internal Revenue Service of the United States, certifying that such
Non-U.S. Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. The
Borrowers shall have no obligation to pay any taxes with respect to Loans made
to a Non-U.S. Lender pursuant to Section 4.05(a) or indemnify any Non-U.S.
Lender under Section 4.05(c) if such Non-U.S. Lender is eligible to comply with
the provisions of this Section 4.05(e) and has not done so. Notwithstanding any
other provision of this Section 4.05(e), no Non-U.S. Lender shall be required to
deliver any form pursuant to this Section 4.05(e) that such Non-U.S. Lender is
not legally able or obligated to deliver and, for
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purposes of this Section 4.05, such non-delivery of a form shall not be decreed
to be non-compliant with this Section 4.05(e).
(f) Survival. Without prejudice to the survival of any other
agreement of the Borrowers hereunder, the agreements and obligations contained
in this Section shall survive the payment in full of the Obligations and the
termination of the Commitment.
Section 4.06 LENDERS' OBLIGATIONS SEVERAL. Each Lender is severally bound
by this Agreement, but there shall be no joint obligation of the Lenders under
this Agreement. The failure of any Lender to make any share of the Loans or
obligations respecting Letters of Credit to be made by it on the date specified
for the Loans or such obligations shall not relieve any other Lender of its
obligation to make its share of the Loans or other obligations on such date, but
neither any Lender nor the Agent shall be responsible for the failure of any
other Lender to make a share of the Loans or other obligations to be made by
such other Lender.
Section 4.07 PERMITTED ASSUMPTIONS BY AGENT AS TO LENDER PAYMENTS. Unless
the Agent shall have been notified by a Lender prior to noon on the date on
which it is scheduled to fund to the Agent any amount payable by a Lender under
this Agreement (such payment being the "Lender Required Payment") that it does
not intend to make the Lender Required Payment to the Agent, the Agent may
assume that the Lender Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount thereof
available to the Borrowers (or other appropriate party) on such date. If such
Lender has not in fact made the Lender Required Payment to the Agent, the
Borrowers (or other recipient) shall, on demand, repay to the Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate equal to the Base Rate.
The foregoing does not limit the obligation of any Lender to make a Lender
Required Payment. Any Lender Required Payment made by the Agent in reliance on
the assumption that the applicable Lender was funding the same, if not returned
by the Borrowers (or other recipient), shall be paid, on demand, to the Agent by
the applicable Lender, together with interest thereon accruing at the Base Rate.
In addition, any Lender that fails to make a Lender Required Payment upon
receipt of notice therefor, shall not be entitled to vote on any matters that it
otherwise would be entitled to vote on under this Agreement until it makes such
payment.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.01 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of the
Lenders to make the initial Loan is subject to the condition that each of the
Lenders, or the Agent, as applicable, shall have received each of the following,
in form and substance satisfactory to it:
5.01.1 Loan Documents.
(a) a duly executed Revolving Loan Note; and
(b) a duly executed Foreign Subsidiary Guaranty.
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5.01.2 UCC Collateral Documents.
(a) (i) a Security Agreement (also constituting a pledge
agreement), duly executed by each Borrower and each Foreign Subsidiary, which
owns equity interests in another Foreign Subsidiary together with such Uniform
Commercial Code financing statements as are necessary or, in the opinion of the
Agent, desirable to perfect the security interests created by such Security
Agreement, (ii) a landlord waiver to each leased facility of any Borrower, and
(iii) the certificates, if any, representing the equity or other ownership
interests of each Subsidiary Borrower and 66% of the equity or other ownership
interests of each Foreign Subsidiary, together with duly executed, undated stock
powers or similar assignments respecting such equity or other ownership
interests;
(b) A perfection questionnaire duly completed by Borrowers, such
questionnaire to be delivered to the Agent at least fifteen (15) days prior to
the closing of the Initial Loan;
(c) insurance policies or certificates designating the Agent as
lender loss payee or mortgagee as its interests may appear, as appropriate, as
required by Section 9.17 of this Agreement or as required by any other Loan
Document;
(d) an IP Collateral Agreement executed by each Borrower, as
appropriate, as to all registered or pending patents, trademarks and copyrights,
in appropriate form to file of record; and
(e) the results of tax, judgments and other lien searches in form
and substance satisfactory to the Agent, and from such jurisdictions as may be
satisfactory to the Agent, together with U.S. Patent and Trademark Office and
Copyright Office searches of a recent date, in each case, with respect to the
Parent Borrower and each Subsidiary Borrower, showing no Liens except Permitted
Liens.
5.01.3 Real Estate Collateral Documents.
(a) Mortgages on all real property owned by each Borrower; and
(b) title insurance insuring the priority of the Mortgage
covering the property located in Boonton, New Jersey, and for each other
property subject to a Mortgage (i) zoning certification, (ii) a flood
certification, and (iii) a survey; in each case satisfactory to the Agent.
5.01.4 Financial Documents.
(a) audited financial statements of Parent Borrower and its
Subsidiaries on a Consolidated basis for the fiscal year ended December 31,
2004, together with projections of financial statements respecting each fiscal
year through the fiscal year 2008, which projections shall be approved by the
chief financial officer of Parent Borrower and based on reasonable assumptions;
and
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(b) pro forma financial statements giving the effect to the
acquisition of 100% of the capital stock of XYZ, Inc. for consideration paid
entirely in cash.
5.01.5 Consents, Certificates and Opinions.
(a) any required governmental consents or other required consents
to the closing of this Agreement or to the execution, delivery and performance
of this Agreement and the other Loan Documents, each of which shall be in form
and substance satisfactory to the Agent;
(b) a certificate of each Loan Party to which is attached each of
the following certified as such by a duly authorized officer of such Loan Party:
(i) a certificate of incumbency with respect to each
Authorized Signatory thereof that signs any Loan Documents,
(ii) a copy of the charter or other organizational documents
of such Loan Party certified by the Secretary of State or similar state official
of the jurisdiction of formation of such Loan Party,
(iii) a copy of the bylaws or other constituent documents of
such Loan Party,
(iv) a certificate of good standing or subsistence, as the
case may be, for such Loan Party issued as of a recent date by the Secretary of
State or similar state official in the jurisdiction of its organization and in
each state in which such Loan Party is qualified to do business as set forth on
Schedule 6.01,
(v) a copy of the resolutions duly adopted by the Board of
Directors or other governing body of such Loan Party authorizing it to execute,
deliver and perform each Loan Document to which it is, or is to be, a party, and
(vi) a copy of any shareholders agreement or similar
agreement respecting such Loan Party, if any such agreement exists;
(c) a legal opinion of Olshan Grundman Frome Rosenzweig & Wolosky
LLP, counsel to each of the Loan Parties;
(d) a certificate of the chief financial officer or Treasurer of
the Parent Borrower with respect to the solvency and adequacy of capital of
Parent Borrower and each Subsidiary Borrower after giving effect to the initial
Loan and the application of the proceeds thereof.
5.01.6 Third Party Agreements. Evidence that, prior to or
substantially simultaneously with the making of the initial Loan, (i) all
Indebtedness under the Prior Facility shall have been repaid, (ii) all
commitments to lend in respect of the Prior Facility shall have been effectively
terminated and (iii) all UCC-3 termination statements and all other documents
necessary in the determination of the Agent to effectively terminate of record
all security
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interests related to the Prior Facility shall have been duly executed by the
proper parties and shall have been delivered to the Agent, all pledged
instruments shall have been returned to the proper parties, and other
arrangements with respect thereto satisfactory to the Agent shall have been
made;
5.01.7 Merger Documents. True and correct copies of drafts of the
Merger Documents.
Section 5.02 PAYMENT OF FEES AND COSTS. In addition to the conditions
specified in Section 5.01 (Conditions Precedent to Initial Loan) above, prior to
making the initial Loan, the Agent shall receive payment of all accrued costs
and fees and (if then ascertainable) expenses arising out of reasonable
attorneys' fees for the preparation of the Loan Documents and related services.
Section 5.03 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of the
Lenders to make each Loan (including the initial Loan) or issue a Letter of
Credit is subject to the fulfillment of each of the following conditions:
(a) All of the representations and warranties of the Borrowers in
this Agreement and all representations and warranties of each Loan Party in each
other Loan Document shall be true and correct in all material respects at such
time, both before and after giving effect to the application of the proceeds of
such Loan;
(b) No Default or Event of Default hereunder shall then exist or
be caused thereby;
(c) No Material Adverse Change shall have occurred and no event
shall have occurred which could reasonably be expected to result in a Material
Adverse Change;
(d) The Agent shall have received a duly executed Request for
Advance, or, as to a Letter of Credit, a Notice of LC Credit Event; and
(e) If after giving effect to the requested Loan or the requested
issuance of a Letter of Credit, the Revolving Credit Outstandings would exceed
$25 million, then either (i) Parent Borrower shall have acquired 100% of the
outstanding capital stock of XYZ, Inc. and the provisions of Section 9.03(h) and
Section 9.27 shall have been fully satisfied with respect to XYZ, Inc. and its
direct and indirect subsidiaries, or (ii) the Borrower shall have delivered to
the Agent a letter of credit in the stated amount of $5 million in form and
substance satisfactory to the Agent and from an issuing bank satisfactory to the
Agent, upon which the Agent may draw upon the occurrence of an Event of Default,
or, if the conditions of subsection (e)(i) above have not been satisfied on or
before December 30, 2005, after that date and on or before January 15, 2006.
Section 5.04 METHOD OF SATISFYING CERTAIN CONDITIONS. The request for, and
acceptance of, each Loan by the Borrowers shall be deemed a representation and
warranty by the Borrowers that the conditions specified in subparts (a), (b) and
(c) of Section 5.03 (Conditions Precedent to Each Loan) have been satisfied.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS
In order to induce the Lenders to enter into this Agreement, the Borrowers
jointly and severally make the following representations, covenants and
warranties:
Section 6.01 ORGANIZATION AND QUALIFICATION. Each Borrower and each of its
Foreign Subsidiaries are corporations or other entities, duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization. Each Borrower and each of its Foreign Subsidiaries have the
lawful power to own or lease their respective properties and to engage in the
respective business they presently conduct or propose to conduct. Each Borrower
and each of its Foreign Subsidiaries are duly licensed or qualified and in good
standing in each jurisdiction where property is owned or leased by them, or the
nature of the business transacted by them, or both, makes such licensing or
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Change. SCHEDULE 6.01
hereto shows as of the date hereof each state or jurisdiction in which each
Borrower and each of its Foreign Subsidiaries are qualified and their respective
jurisdictions of incorporation or organization, as applicable.
Section 6.02 CAPITALIZATION AND OWNERSHIP OF SUBSIDIARY BORROWERS. The name
of each Borrower and each of its Foreign Subsidiaries, their authorized equity
or other ownership interests, the number of issued and outstanding equity and
other ownership interests and the owners thereof as of the date hereof are set
forth on SCHEDULE 6.02 attached hereto. All outstanding equity or other
ownership interests of the Loan Parties are duly authorized, validly issued,
fully paid and nonassessable and are owned free and clear by the Borrowers
except as pledged pursuant to the Loan Documents and except for Permitted Liens
to the extent arising by operation of law. As of the date hereof, there are no
options, warrants or other rights outstanding to purchase any such equity and
other ownership interests except as indicated on said SCHEDULE 6.02. Each
Borrower has the unrestricted right to vote the issued and outstanding equity
and other ownership interests owned by it. Each Borrower's ownership interest in
a Subsidiary represents a direct controlling interest of such Subsidiary for
purposes of directing or causing the direction of the management and policies of
such Subsidiary.
Section 6.03 AUTHORIZATION AND EXECUTION. The execution, delivery and
performance of this Agreement, and each other Loan Document to which any Loan
Party is, or will be, a party are within such Loan Party's power and authority
and have been duly authorized by all necessary corporate or other applicable
action. This Agreement has been, and each other Loan Document when delivered
hereunder will be, duly executed by each Loan Party which is a party hereto or
thereto, as the case may be.
Section 6.04 ENFORCEABILITY; CONSENTS. This Agreement is, and each of the
other Loan Documents when delivered hereunder will be, a legal, valid and
binding obligation of each of the Loan Parties which is, or will then be, a
party hereto or thereto, as the case may be, enforceable against each such Loan
Party in accordance with its terms. No recording, filing, registration, notice,
consent (governmental or otherwise) or other similar action including, without
limitation,
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any action involving any federal, state, local or other applicable regulatory
body, is required in order to insure the legality, validity, binding effect or
enforceability of this Agreement or the other Loan Documents as against all
Persons, except the filing of UCC-1 financing statements and the recording of
the Mortgages as contemplated by this Agreement.
Section 6.05 SECURITY INTERESTS IN COLLATERAL.
(a) As of the date hereof, upon the filing of the UCC-1 financing
statements in the jurisdictions listed on Schedule 6.05 attached hereto and the
delivery of the stock certificates listed on Schedule 3.9(a) to the Security
Agreement, no further action, including without limitation, any filing or
recording of any document or the obtaining of any consent, is necessary in order
to establish, perfect and maintain the Agent's first priority security interests
in the Collateral being encumbered pursuant to the Security Agreement, subject
to Permitted Liens to the extent taking priority by operation of law, except for
the periodic filing of continuation statements with respect to such UCC-1
financing statements. As of the date hereof, the perfection questionnaire
previously delivered to the Agent by Borrowers is true and correct and there
have been no changes thereto since the date of delivery.
(b) The Mortgages when duly filed in the offices listed on
Schedule 6.05 attached hereto, will create perfected Liens on the real property
described in the Mortgages subject to no Liens of equal or greater priority
except for Permitted Liens to the extent taking priority by operation of law,
and no further action, including, without limitation, the filing or recording of
any document, is necessary to maintain such perfected Liens.
Section 6.06 REAL PROPERTY OF BORROWERS. As of the date hereof, SCHEDULE
6.06 attached hereto is a complete and correct list of all real property owned
or leased by each Borrower, specifying, in each case, whether such property is
owned or leased and specifying the owner/lessee thereof.
Section 6.07 ABSENCE OF CONFLICT WITH OTHER AGREEMENTS, ETC. The execution,
delivery and performance by each Borrower of this Agreement and the other Loan
Documents to which it is, or will be, a party do not and will not (a) require
any consent or approval, governmental or otherwise, not already obtained, (b)
violate any Applicable Law respecting such Borrower, (c) conflict with, result
in a breach of, or constitute a default under, the organizational and governing
documents of such Borrower or any of its Foreign Subsidiaries, or under any
material indenture, agreement, license or other instrument to which such
Borrower or any of its Foreign Subsidiaries are party to or by which any of them
or their respective properties may be bound, or (d) result in, or require the
creation or imposition of, any Lien upon or with respect to any property now
owned or hereafter acquired by any Borrower or any of its Foreign Subsidiaries
other than as contemplated hereby.
Section 6.08 BUSINESS. Each Borrower, together with each of its Foreign
Subsidiaries, is currently engaged in the business of designing, manufacturing
and marketing power electronics, power motion, power protection, teleprotection
and specialized communication equipment that is used in a variety of medical,
aerospace, computer, datacom, industrial, telecom, transportation, and electric
power utility equipment applications.
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Section 6.09 CONDITION OF ASSETS. All of the material properties, equipment
and systems of each Borrower and each of its Foreign Subsidiaries are in good
repair, working order and condition for their intended use, ordinary wear and
tear excepted, and are and will be in material compliance with all standards or
rules imposed by any governmental agency or authority (including, without
limitation, any federal or state or local governments or instrumentalities) or
otherwise under Applicable Law.
Section 6.10 USE OF PROCEEDS. The proceeds of the Loans will be used for
the Acquisition of XYZ, Inc. certain Permitted Acquisitions, general corporate
purposes and working capital purposes. No proceeds of any Loan shall be used for
any illegal purposes.
Section 6.11 LITIGATION. Except as described in SCHEDULE 6.11, There is no
action, suit, proceeding or investigation pending against, or, to the best of
the Borrowers' knowledge, threatened against or in any other manner relating to,
any Borrower or any of its Foreign Subsidiaries or any of their respective
properties, in any court or before any arbitrator of any kind or before or by
any governmental body, which individually or in the aggregate, could (if
adversely determined) reasonably be expected to result in a Material Adverse
Change, nor is any Borrower or any of its Foreign Subsidiaries in violation of
any order, writ, injunction or decree of any such governmental body which could
reasonably be expected to result in a Material Adverse Change.
Section 6.12 INDEBTEDNESS. As of the date hereof, SCHEDULE 6.12 attached
hereto correctly describes all outstanding Indebtedness of each Borrower and
each of its Foreign Subsidiaries, and any commitments of any such Person to
incur additional Indebtedness (other than Indebtedness pursuant to this
Agreement), and shows the Indebtedness to be paid off on the date hereof.
Section 6.13 FINANCIAL STATEMENTS.
(a) The audited financial statements for Parent Borrower and its
Subsidiaries on a Consolidated basis for the fiscal year ended December 31,
2004, and the unaudited consolidated financial statements of Parent Borrower and
its Subsidiaries on a Consolidated basis for the three months ended March 31,
2005, together with any other financial statements furnished to the Lenders, are
complete and correct in all material respects and present fairly in accordance
with GAAP the financial position of Parent Borrower and its Subsidiaries on a
Consolidated basis on and as at such dates and the results of operations for the
periods then ended (subject, in the case of unaudited financial statements, to
normal year-end adjustments). Neither Parent Borrower nor any of its
Subsidiaries has any material liabilities, contingent or otherwise, other than
as disclosed in the financial statements referred to in the preceding sentence
and there are not now and not anticipated any material unrealized losses of
Parent Borrower or any of its Subsidiaries.
(b) The projections delivered to the Lenders pursuant to Section
5.01 (Conditions Precedent to Initial Loan) above and Section 8.01 (Financial
Statements) below are made in good faith, based on reasonable assumptions by the
Parent Borrower.
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(c) Since December 31, 2004, there has been no Material Adverse
Change.
Section 6.14 FISCAL YEAR. The fiscal year of each Borrower ends on December
31.
Section 6.15 TITLE TO ASSETS. Borrowers have good, legal and marketable
title to, or a valid leasehold interest in, all of the assets included on the
last balance sheet previously delivered to the Lenders except for assets
disposed of in the ordinary course of business or as permitted hereby. Each of
Borrowers' Subsidiaries has good, legal and marketable title to, or a valid
leasehold interest in, all of its assets included on the last balance sheet
previously delivered to the Lenders except for assets disposed of in the
ordinary course of business. None of such properties or assets is subject to any
Liens, except for Permitted Liens and liens to be released on the Closing Date.
No financing statement under the Uniform Commercial Code as in effect in any
jurisdiction and no other filing which names any Borrower or any of its
Subsidiaries as debtor or which covers or purports to cover any of the assets of
any Borrower or any of its Subsidiaries is currently effective and on file in
any state or other jurisdiction, and neither any Borrower nor any of its
Subsidiaries have signed any such financing statement or filing or any security
agreement authorizing any secured party thereunder to file any such financing
statement or filing except with respect to Permitted Liens and Liens to be
released on the Closing Date.
Section 6.16 PATENTS, TRADEMARKS, LICENSES AND FRANCHISES. Each Borrower
and each of its Foreign Subsidiaries hold or have the right to use all patents,
trademarks, service marks, trade names, copyrights, franchises, licenses and
authorizations, governmental or otherwise, necessary for the conduct of their
business as now conducted, without any known material conflict with the rights
of others which could reasonably be expected to result in a Material Adverse
Change. As of the date hereof SCHEDULE 6.16 attached hereto correctly lists all
patents, trademarks and copyrights registered to the Loan Parties as well as all
material governmental licenses, authorizations and similar rights. Each license
agreement necessary to any Borrower's or any of its Foreign Subsidiaries'
business, and under which any Borrower or any of its Foreign Subsidiaries are
the licensee is a valid and binding license agreement, enforceable against the
licensee and, to Borrowers' knowledge, the licensor.
Section 6.17 COMPLIANCE WITH LAW. Each Borrower and each of its Foreign
Subsidiaries are in material compliance with all Applicable Law.
Section 6.18 COMPLIANCE WITH ERISA.
(a) Neither Borrowers, Borrowers' Subsidiaries, nor any ERISA
Affiliate thereof maintains or contributes to any Plan, Multiemployer Plan or
other employee benefit plan, except as disclosed on Schedule 6.18 attached
hereto.
(b) Each Plan, which is intended to be qualified within the
meaning of Section 401(a) of the Code, is the subject of a favorable
determination by the Internal Revenue Service with respect to all plan document
qualification requirements for which the remedial amendment period under Section
401(b) of the Code has closed, any plan document amendments required by such
determination letter were made as and when required by such determination
letter, and nothing has occurred, whether by action or failure to act, since the
date of such letter
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which would prevent any such plan from remaining so qualified. Each Borrower has
furnished to the Agent a copy of the most recent actuarial report for each Plan
which is a defined benefit plan as defined in Section 3(35) of ERISA and for any
Plan that is a funded employee welfare benefit plan, and each such report is
accurate in all material respects.
(c) Each Borrower, each of its Subsidiaries and their respective
ERISA Affiliates have operated each Plan in all material respects in compliance
with the requirements of the Code and ERISA and the terms of each Plan.
(d) Except as specifically disclosed on Schedule 6.18 attached
hereto, (1) no Plan has engaged in any transaction in connection with which any
Borrower or any of its Subsidiaries or ERISA Affiliates could be subject to
either a material civil penalty assessed pursuant to Section 502(i) of ERISA or
a material tax penalty imposed pursuant to Section 4975 of the Code, (2) there
is no Accumulated Funding Deficiency with respect to any Plan, whether or not
waived, or an unfulfilled obligation to contribute to any Multiemployer Plan or
withdrawal from any Multiemployer Plan, (3) no Plan has been terminated under
conditions which resulted, or could result in any material liability to the
PBGC, (4) no material liability to the PBGC has been or is expected by any
Borrower to be incurred with respect to any Plan by any Borrower or any of its
Subsidiaries or ERISA Affiliates except for required premium payments to the
PBGC, (5) there has been no Reportable Event with respect to any Plan, and no
event or condition exists which presents a material risk of termination of any
Plan by the PBGC, (6) none of the Borrowers or any of their Subsidiaries or any
ERISA Affiliate have incurred or anticipate incurring Withdrawal Liability with
respect to any Multiemployer Plan, (7) no Multiemployer Plan is in
Reorganization, and neither any Borrower, any of its Subsidiaries, or any ERISA
Affiliate reasonably expects any Multiemployer Plan to be in Reorganization, (8)
each Borrower and each of its Subsidiaries and ERISA Affiliates have complied in
all material respects with the requirements of COBRA and HIPAA, and no material
liability, and no circumstances exist pursuant to which any such material
liability could reasonably be imposed on any Borrower, any of its Subsidiaries
or any ERISA Affiliate under Sections 4980B, 4980D or 5000 of the Code or
Sections 409 and 502(l) of ERISA, (9) there are no unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA) in respect of any Plan, (10) there
is no violation of the Code or ERISA with respect to the filing of applicable
reports, documents and notices regarding any Plan with the Secretary of Labor,
the Secretary of the Treasury, the PBGC or any other governmental entity or the
furnishing of documents as required to participants and/or beneficiaries, (11)
there is no Plan providing for retiree health and/or life insurance or other
death benefits or any other "employee benefit welfare plan" (as defined in
Section 3(1) of ERISA) having unfunded liabilities, and (12) neither any
Borrower, any of its Subsidiaries nor any ERISA Affiliate are subject to the
Early Warning Program of the PBGC (as described in PBGC Technical Update 00-3)
or have been contacted by the PBGC in connection with the PBGC's Early Warning
Program; except for any event described in the foregoing clauses (1)-(12) which
could not reasonably be expected to have a Material Adverse Effect.
(e) No liability (whether or not such liability is being
litigated) has been asserted against any Borrower, any of its Subsidiaries or
any ERISA Affiliate in connection with any Plan or any Multiemployer Plan by the
PBGC other than for required premium payments to the PBGC, by a trustee
appointed pursuant to Section 4042(b) or (c) of ERISA, or by a sponsor or an
agent of a sponsor of a Multiemployer Plan, and no Lien has been attached
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and no Person has threatened to attach a Lien on any property of any Borrower,
any of its Subsidiaries or ERISA Affiliates as a result of failure to comply
with ERISA or as a result of the termination of any Plan.
Section 6.19 COMPLIANCE WITH REGULATIONS U AND X. Neither any Borrower nor
any of its Foreign Subsidiaries are engaged principally or as one of their
important activities in the business of using credit for the purpose of
purchasing or carrying, any "margin security" or "margin stock" as defined in
Regulations U and X of the Board of Governors of the Federal Reserve System.
Section 6.20 INVESTMENT COMPANY ACT. Neither any Borrower nor any of its
Foreign Subsidiaries are an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 6.21 PUBLIC UTILITY HOLDING COMPANY ACT. Neither any Borrower nor
any of its Foreign Subsidiaries are considered a "holding company", or a
"subsidiary company" or "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
Section 6.22 ABSENCE OF DEFAULT. No event has occurred which constitutes a
Default or an Event of Default.
Section 6.23 AGREEMENTS WITH AFFILIATES AND MANAGEMENT AGREEMENTS;
MANAGEMENT COMPENSATION. Except for agreements or arrangements with Affiliates
in which any Borrower or any of its Foreign Subsidiaries provides services to
such Affiliates or vice versa for fair consideration and which are set forth on
SCHEDULE 6.23 attached hereto, as of the date hereof neither any Borrower nor
any of its Foreign Subsidiaries have any contracts or written agreements or
binding arrangements of any kind with any Affiliate.
Section 6.24 NO BURDENSOME AGREEMENTS; MATERIAL AGREEMENTS. Neither any
Borrower nor any of its Foreign Subsidiaries are parties to any agreement or
instrument or subject to any corporate or other restrictions which, assuming
compliance by such Persons with the terms of such agreements or instruments
could result in a Material Adverse Change. SCHEDULE 6.24 hereto lists all
material agreements as of the date hereof (the "Material Agreements") of each
Borrower and each of its Foreign Subsidiaries. Neither any Borrower nor any of
its Foreign Subsidiaries are in material default of any of the Material
Agreements. Except where any Borrower or any of its Foreign Subsidiaries have
allowed a Material Agreement to terminate because such termination was in the
best interests of such Borrower or such Foreign Subsidiary, each of the Material
Agreements remains in full force and effect.
Section 6.25 SOLVENCY. After giving effect to the transactions contemplated
by the Loan Documents: (i) the property of each Borrower, at a fair valuation,
will exceed its debt; (ii) the capital of each Borrower will not be unreasonably
small to conduct its business; (iii) each Borrower will not have incurred debts,
or have intended to incur debts, beyond its ability to pay such debts as they
mature; and (iv) the present fair salable value of the assets of each Borrower
will be materially greater than the amount that will be required to pay its
probable liabilities (including debts) as they become absolute and matured. The
representations set forth in the
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preceding sentence are equally true of the Loan Parties on a Consolidated basis
and of each Subsidiary in a Consolidating basis. For purposes of this Section,
"debt" means any liability on a claim, and "claim" means (i) the right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, undisputed, legal,
equitable, secured or unsecured, or (ii) the right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, undisputed, secured or unsecured.
Section 6.26 TAXES. All federal, state and other tax returns of each
Borrower and each of its Foreign Subsidiaries required by law to be filed have
been duly filed and all federal, state and other taxes, as applicable,
including, without limitation, withholding taxes, assessments and other
governmental charges or levies required to be paid by such Borrower or Foreign
Subsidiary, which are due and payable, have been paid, provided that there shall
not be deemed to be a violation of this representation if any such tax is being
diligently contested in good faith by appropriate proceedings promptly initiated
and diligently conducted and for which adequate reserves shall have been set
aside on the appropriate books, but only if no foreclosure, distraint, sale or
similar proceeding shall have been commenced. The charges, accruals and reserves
on the books of each Borrower and each of its Foreign Subsidiaries in respect of
taxes are adequate.
Section 6.27 ENVIRONMENTAL COMPLIANCE. Except as would not reasonably be
expected to result in a Material Adverse Change or as scheduled in SCHEDULE
6.27:
(a) None of the real property currently owned or occupied by any
Borrower or any of its Foreign Subsidiaries has ever been used by any Borrower
or any of its Foreign Subsidiaries during its or their ownership or occupancy,
or, to the best of Borrowers' knowledge, by previous owners or occupiers to
treat, produce, store, handle, transfer, process, transport, dispose of or
otherwise release any Hazardous Substances in violation of any Environmental
Law.
(b) There is no condition which exists on the real property owned
or occupied by any Borrower or any of its Foreign Subsidiaries which requires
Remedial Action and which was caused by any Borrower or any of its Foreign
Subsidiaries or, to Borrowers' knowledge, any other Person.
(c) Neither any Borrower nor any of its Foreign Subsidiaries have
been notified of, or have actual knowledge of any notification having been filed
with regard to, a Release on or into any real property owned or occupied by any
Borrower or any of its Foreign Subsidiaries.
(d) Neither any Borrower nor any of its Foreign Subsidiaries have
received a summons, citation, notice of violation, administrative order,
directive, letter or other communication, written or oral, from any governmental
or quasi-governmental authority concerning any Release or need for Remedial
Action.
(e) There are no "friable" (as that term is defined in
regulations under the Federal Clean Air Act) asbestos or friable
asbestos-containing materials which have not been
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encapsulated as required by Environmental Laws in accordance with accepted
guidelines promulgated by the United States Environmental Protection Agency
existing in or on any real property owned and/or in the portion of any other
property occupied by any Borrower or any of its Foreign Subsidiaries.
(f) No equipment for which any Borrower or any of its Foreign
Subsidiaries are responsible containing polychlorinated biphenyls, including
electrical transformers, is located on any real property owned or occupied by
any Borrower or any of its Foreign Subsidiaries in levels which exceed those
permitted by any and all governmental authorities with jurisdiction over such
premises or which are not properly labeled in accordance with requisite
standards.
(g) There are no tanks on any real property owned or occupied by
any Borrower or any of its Foreign Subsidiaries that have been used for the
storage of petroleum products or any other substance, nor, to the knowledge of
the Borrowers, have any such tanks been located on such property at any time.
Section 6.28 LABOR DISPUTES AND ACTS OF GOD. Neither the business nor the
properties of any Borrower or any of its Foreign Subsidiaries are affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy, or other
casualty (whether or not covered by insurance) which could reasonably be
expected to result in a Material Adverse Change.
ARTICLE 7
FINANCIAL COVENANTS
Section 7.01 FINANCIAL COVENANTS. Each Borrower shall, and shall cause each
of its Subsidiaries to, maintain compliance with the following financial
covenants:
(a) Maximum Total Leverage Ratio. As of any fiscal quarter end,
the ratio of (a) Total Funded Indebtedness as of such date to (b) EBITDA for the
period of four (4) consecutive fiscal quarters ending on or prior to such date
shall not be greater than 3:25 to 1:00.
(b) Minimum Interest Coverage Ratio. As of any fiscal quarter
end, the ratio of (a) EBIT for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date to (b) Interest Expense
(whether or not paid) payable during the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date, shall not be less than
2:50 to 1:00.
(c) Minimum Net Worth. As of any fiscal quarter end, the total
amount of stockholders' equity of Parent Borrower and its Subsidiaries, on a
consolidated basis, shall be not less than the sum of
(i) Thirty-Three Million, Nine Hundred Eighteen Thousand and
Three Hundred Dollars ($33,918,300)
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plus
(ii) an amount equal to 50% of the cumulative amount of Net
Income (which shall not be reduced by the amount of any net loss for any fiscal
quarter) of Parent Borrower and its Subsidiaries, on a consolidated basis, for
the period commencing on April 1, 2005 and ending on the date of determination
minus
(iii) the aggregate amount paid on or after April 1, 2005
for permitted stock purchases described in Section 9.04(a).
(d) Maximum Capital Expenditures. The aggregate amount of Capital
Expenditures made during any period of twelve (12) calendar months shall not
exceed Five Million Dollars ($5,000,000), without cumulation or carryover, which
amount shall not include any amounts used for Permitted Acquisitions.
Section 7.02 CALCULATIONS. Calculations made pursuant to Section 7.01 shall
give effect, on a pro forma basis, to all Acquisitions and dispositions made
during the period to which the required compliance relates (the "Applicable
Period"), as if such Acquisition or disposition had been consummated on the
first day of the applicable period such that (a) the results of operations of
the assets or entities acquired or disposed of are included or excluded, as
applicable, and (b) any Indebtedness assumed or incurred or paid off in
connection with such Acquisition or disposition is included or excluded, as
applicable, on a pro forma basis from the first day of the Applicable Period.
ARTICLE 8
COVENANTS CONCERNING REPORTING REQUIREMENTS
Section 8.01 FINANCIAL STATEMENTS. So long as any of the Obligations is
unpaid or any Lender has any commitment to make Loans hereunder, the Parent
Borrower shall, from time to time, furnish (or cause to be furnished, as the
case may be) to the Lenders the following information:
(a) Annual Financial Statements. As soon as available and in any
event within ninety (90) calendar days after the end of each of each fiscal year
of the Parent Borrower, but no later than the date upon which the Parent
Borrower's annual report on Form 10-K is to be filed with the Securities and
Exchange Commission, the Parent Borrower shall deliver to the Lenders audited
Consolidated financial statements, together with any notes thereto of the Parent
Borrower and its Subsidiaries, consisting of a balance sheet as at the end of
such fiscal year and related statements of income, cash flows, and changes in
retained earnings for the fiscal year then ended, all in reasonable detail and
setting forth in comparative form the respective consolidated financial
statements as at the end of and for the preceding fiscal year, prepared in
accordance with GAAP and Unqualifiedly Certified by independent certified public
accountants of nationally recognized standing satisfactory to the majority
Lenders. The Parent
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Borrower shall also deliver a letter signed by such accountants stating that,
having conducted an ordinary and customary examination of the affairs of the
Parent Borrower in connection with the preparation of the respective
Consolidated financial statements, they are not aware of the existence of any
condition or event which constitutes a Default or an Event of Default hereunder,
and, promptly upon receipt, a copy of any management letter.
(b) Quarterly Financial Statements. As soon as available and in
any event within forty-five (45) calendar days after the end of each of the
first three fiscal quarters in each fiscal year of the Parent Borrower, the
Parent Borrower shall deliver to the Lenders Consolidated financial statements
of the Parent Borrower and its Subsidiaries, consisting of a balance sheet as at
the end of such fiscal quarter and related statements of income, cash flows, and
changes in retained earnings for the fiscal quarter then ended and the fiscal
year through that date, all in reasonable detail and setting forth in
comparative form the respective Consolidated financial statements of the
corresponding date and period in the previous fiscal year and certified (subject
to normal year-end audit adjustments) by the President or chief financial
officer of the Parent Borrower as (i) having been prepared in accordance with
GAAP and (ii) presenting fairly the financial position of the Parent Borrower
and its Subsidiaries as at the end of each fiscal quarter.
(c) Subsidiary Financial Statements. At the same time as the
financial statements delivered under subsections (a) and (b) above, a balance
sheet, statement of income and statement of cash flows for each Subsidiary of
the Parent Borrower in form reasonably satisfactory to the Agent.
(d) Business Plan. As soon as available and in any event within
seventy-five (75) calendar days after the end of each fiscal year, the Parent
Borrower shall deliver to the Lenders the annual budget for the Parent Borrower
and its Subsidiaries, including forecasts of the income statement, the balance
sheet, cash flow report and an EBITDA statement for such year on a quarter by
quarter basis. Such Business Plan shall be accompanied by a certification of the
President or Chief Financial Officer of the Parent Borrower that such Business
Plan is reasonable, made in good faith, consistent with the Loan Documents, and
represents the Parent Borrower's best judgment as to such matters.
Section 8.02 OFFICER'S COMPLIANCE CERTIFICATES. As soon as available and in
any event within forty-five (45) calendar days after the end of each of the
first three fiscal quarters, and within ninety (90) calendar days after the end
of each fiscal year, but no later than the date upon which the Parent Borrower's
annual report on Form 10-K is to be filed with the Securities and Exchange
Commission, the Parent Borrower shall deliver to the Lenders a certificate of
the President or Chief Financial Officer of the Parent Borrower, in
substantially the form of EXHIBIT D attached hereto, containing the following
information:
(a) a statement that no Default or Event of Default exists and is
continuing on the date of such certificate; and
(b) calculations in sufficient detail to demonstrate compliance
as of the date of the relevant financial statements with all of the financial
covenants contained in Article 7 (Financial Covenants) hereof.
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Section 8.03 AUDITORS' REPORTS. Promptly upon receipt, the Parent Borrower
shall deliver to the Lenders copies of all financial reports or written
recommendations, if any, submitted to the Parent Borrower or any of its
Subsidiaries by its auditors in connection with each annual or interim auditor
examination of its books by such auditors.
Section 8.04 NOTICE OF DEFAULT. Promptly after any officer of any Borrower
has learned of the occurrence of a Default or an Event of Default, the Parent
Borrower shall deliver to the Agent, the Issuer and the Lenders a notice of such
Default or Event of Default. Each such notice pursuant to this Section shall set
forth details of the matter referred to therein and state what action the Parent
Borrower or the affected Subsidiary has taken, is taking and proposes to take,
with respect thereto, and shall be certified by the President or Chief Financial
Officer of the Parent Borrower as true and correct in all material respects.
Section 8.05 NOTICE CONCERNING REPRESENTATIONS AND WARRANTIES. Each
Borrower shall give the Agent notice of any changes in facts or circumstances on
which the representations and warranties set forth in this Agreement are made
which makes such representations and warranties false or misleading in any
material respect. Such notice shall be given promptly, but in any event not
later than ten (10) days after any officer of any Borrower becomes aware of its
occurrence. Except as set forth in the proviso to Section 5.03 (Conditions
Precedent to Each Loan), the delivery of such a notice shall not imply any
waiver by the Lenders.
Section 8.06 NOTICE OF LITIGATION. Promptly after the commencement thereof,
but in any event not later than ten (10) days after any officer or director of
any Borrower becomes aware thereof, the Parent Borrower shall deliver to the
Agent notice of any actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting any Borrower or any of its Subsidiaries in which
the amount involved is $250,000 or more or, which, if not solely for monetary
damages, could result in a Material Adverse Change.
Section 8.07 SEC DISCLOSURE. Promptly after the sending or filing thereof,
the Parent Borrower shall deliver to the Agent and the Lenders copies of all
proxy statements, financial statements, and reports which the Parent Borrower or
any Subsidiary sends to its shareholders, and copies of all regular, periodic,
and special reports, and all registration statements which the Parent Borrower
or any Subsidiary files with the Securities and Exchange Commission (or any
governmental authority which may be substituted therefor, or with any national
securities exchange or regulatory body thereof.
Section 8.08 CONDITIONS AFFECTING COLLATERAL. Each Borrower shall give the
Agent at least thirty (30) days prior written notice of any of the following
conditions: (a) the opening or acquisition of a new facility or office; (b) a
change in the jurisdiction of incorporation of any Borrower or any Subsidiary of
a Borrower; (c) any creation or acquisition of a Subsidiary; (d) acquisition of
any material amount of property by such Borrower or any Subsidiary not subject
to a valid and perfected Lien pursuant to the then existing Loan Documents with
the priority required by the Loan Documents; or (e) or any change of domicile or
change of name or any change of address of the chief executive office of any
Loan Party.
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Section 8.09 ERISA NOTICES. (a) Promptly after the filing or receiving
thereof, each Borrower shall deliver to the Agent copies of all reports and
notices, including annual reports and audited financial statements, which any
Borrower or any Subsidiary or any ERISA Affiliate files with or receives from
PBGC, the U.S. Department of Labor under ERISA, or the Internal Revenue Service,
(b) as soon as possible and in any event within ten (10) business days after any
Borrower or any Subsidiary or any ERISA Affiliate knows or has reason to know
that (i) any Reportable Event has occurred or is reasonably expected to occur
with respect to any Plan, (ii) that the PBGC or any Borrower or any Subsidiary,
or any ERISA Affiliate has instituted or will institute proceedings under Title
IV of ERISA to terminate any Plan, (iii) that any Withdrawal Liability from a
Multiemployer Plan has been or will be incurred by any Borrower or any of its
Subsidiaries or any ERISA Affiliate, (iv) that any Multiemployer Plan is or will
be in Reorganization terminated, partitioned or declared insolvent, (v) an
Accumulated Funding Deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard or an extension of any amortization period under Section 412 of
the Code with respect to a Plan, (vi) an action has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Multiemployer
Plan, (vii) any event, transaction or condition has occurred or will occur that
could reasonably be expected to result in the imposition of a lien under Part 3
of Subtitle B of Title I of ERISA or Title IV of ERISA, (viii) any Prohibited
Transaction or other transaction, event or condition has occurred or will occur
with respect to a Plan that could reasonably be expected to result in any
Borrower, any of its Subsidiaries or any ERISA Affiliate incurring a material
liability or becoming subject to a material penalty or excise tax, or (ix) the
PBGC has contacted any Borrower, any of its Subsidiaries or any ERISA Affiliate
with respect to the PBGC's Early Warning Program, each Borrower shall deliver to
the Agent a certificate of the chief financial officer of such Borrower setting
forth details as to such event, transaction or condition and the action such
Borrower has taken, is taking or proposes to take with respect thereto, in
either case, which respects an event, transaction or condition which could
result in a Material Adverse Change.
Section 8.10 MISCELLANEOUS. With reasonable promptness, each Borrower shall
give to the Agent and the Lenders such other information respecting the business
operations and financial condition of such Borrower or any of its Subsidiaries
as the Agent may, from time to time, request, including with limitation any
change in management.
Section 8.11 AUTHORIZATION OF THIRD PARTIES TO DELIVER INFORMATION. Each
Borrower hereby agrees that any opinion, report or other information delivered
to the Agent or the Lenders pursuant to the Loan Documents is hereby deemed to
have been authorized and directed by the Borrowers to be delivered for the
benefit, and reliance thereupon, of the Agent and the Lenders.
ARTICLE 9
BUSINESS COVENANTS
So long as any of the Obligations is unpaid or any of the Lenders has any
commitment to make Loans hereunder, the Borrowers shall, and shall cause each of
their Subsidiaries to, comply with the following covenants.
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Section 9.01 INDEBTEDNESS.
(a) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, directly or indirectly, create, assume, incur or
otherwise become or remain obligated in respect of, or permit to be outstanding,
any Indebtedness, except:
(i) Indebtedness in favor of the Lenders;
(ii) obligations in an aggregate principal amount not to
exceed at any time Two Million Five Hundred Thousand Dollars ($2,500,000) in
respect of Capital Lease Obligations and purchase money Indebtedness in respect
of equipment;
(iii) obligations owing to any Borrower or any of its
Foreign Subsidiaries;
(iv) Indebtedness outstanding on the Closing Date as set
forth on Schedule 9.01 and refinancings thereof, but not Indebtedness shown
thereon as being paid off on the date hereof; and
(v) Other Indebtedness not described in clauses (i)-(iv)
above in an amount not to exceed Two Million Five Hundred Thousand Dollars
($2,500,000).
(b) In addition to the limitations on the incurrence or existence
of Indebtedness referred to above, no Indebtedness may be incurred by any
Borrower or any of its Foreign Subsidiaries unless immediately before and after
giving effect to the incurrence of such Indebtedness, no Default or Event of
Default shall have occurred and be continuing.
(c) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, directly or indirectly, (i) pay, make or set aside any
amount for payment of the Indebtedness set forth in clauses (i)-(v) of Section
9.01(a) above (collectively, "Permitted Indebtedness"), except for regularly
scheduled payments required by the provisions of any agreements governing
Permitted Indebtedness, or (ii) amend or otherwise modify the terms of any
agreements governing Permitted Indebtedness.
Section 9.02 LIENS.
(a) Each Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, assume, incur or permit to
exist, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except the following (collectively, the "Permitted Liens"):
(i) Liens in favor of the Agent arising out of the
Collateral Agreements;
(ii) Liens for taxes, assessments, or other governmental
charges the payment of which is not at the time required to be paid pursuant to
Section 9.14 (Payment of Taxes and Claims), not yet subject to penalty or which
are being contested in good faith and by
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appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Borrowers in accordance with GAAP;
(iii) statutory Liens of bankers, carriers, landlords,
warehousemen, mechanics, laborers and materialmen incurred in the ordinary
course of business for sums not yet due, or which are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of the Borrowers in accordance with GAAP;
(iv) Capital Leases and purchase money security interests
incurred in compliance with clause (a)(ii) of Section 9.01 (Indebtedness) above,
provided, that no such Liens shall extend to or cover any property other than
the leased property or equipment purchased by proceeds of such permitted
purchase money Indebtedness;
(v) zoning restrictions, easements, rights-of-way, minor
restrictions and other similar encumbrances on real property, in each case
incidental to, and not interfering with, the ordinary conduct of the business of
such Person;
(vi) Liens incurred or deposits made in the ordinary course
of business to secure the obligations of each Borrower and each Foreign
Subsidiary under workers' compensation, unemployment insurance and other types
of social security legislation or otherwise to secure statutory or regulatory
obligations or for the payment of rent of each Borrower or any of its Foreign
Subsidiaries in the ordinary course of business consistent with past practice,
including to secure the performance of tenders, surety and appeal bonds,
performance bonds, performance of bids, leases, trade contracts, governmental
contracts, operating leases, performance and return-of-money bonds and other
similar obligations (exclusive in each case of obligations for the payment of
borrowed money); provided, that the obligations in connection with which such
Liens were incurred or deposits made shall have been incurred in the ordinary
course of business and shall otherwise be permitted by this Agreement;
(vii) Judgment Liens not giving rise to an Event of Default
so long as any such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(viii) Liens securing Indebtedness, or Liens on shares of
capital stock, of a Person existing at the time such Person becomes a Subsidiary
or is merged with or into any Borrower or any of its Foreign Subsidiaries
pursuant to a Permitted Acquisition or any Lien securing Indebtedness incurred
in connection with a Permitted Acquisition, provided that (A) such Liens were in
existence prior to the date of such Permitted Acquisition, were not incurred in
anticipation thereof, and do not extend to any other assets; and (B) do not
exceed One Million Dollars ($1,000,000) in the aggregate;
(ix) licenses, leases or subleases granted to other Persons
in the ordinary course of business not materially interfering with the conduct
of the business of any Borrower or any of its Foreign Subsidiaries or materially
detracting from the value of the assets of any Borrower or any of its Foreign
Subsidiaries; and
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(x) Liens disclosed on the title reports delivered to Agent
on the date hereof or listed on Schedule 9.02, provided that such Liens do not
extend to assets or secure liabilities in addition to those existing on the date
hereof.
(b) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, agree with any Person to restrict or place limitations
on the right of any Borrower or any of its Foreign Subsidiaries to create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset of any Borrower or any of its Foreign Subsidiaries, other than the lessor
as to a Capital Lease or the secured party as to a purchase money security
interest, as long as the restriction applies only to the specific equipment
involved.
(c) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, license or sublicense any of their owned or licensed
Intellectual Property or general intangibles except to any Subsidiary and in the
ordinary course of business consistent with past practice as described on
Schedule 9.02.
Section 9.03 INVESTMENTS AND ACQUISITIONS. Each Borrower shall not, and
shall not permit any Foreign Subsidiary to, directly or indirectly, make or
permit to exist any Investment or make any Acquisition, except that so long as
no Default or Event of Default then exists or would be caused thereby, any
Borrower and any of its Foreign Subsidiaries may:
(a) maintain existing Investments in direct or indirect
wholly-owned Subsidiaries;
(b) create new direct or indirect wholly-owned Subsidiaries,
subject to the provisions of Section 9.27 (Joinder of Subsidiaries);
(c) make Investments in Cash Equivalents;
(d) make Investments in securities of trade creditors, customers
or any debtor of any Borrower or any of its Subsidiaries received in compromise
of obligations incurred in the ordinary course of business, including pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such trade creditors, customers or debtors and any Investments
received in satisfaction of judgments;
(e) make loans or advances to employees, directors, officers or
consultants of any Borrower or any of its Subsidiaries of the types consistent
with past practice in an aggregate amount at any time outstanding not to exceed
Five Hundred Thousand Dollars ($500,000);
(f) make payroll, travel and similar advances to cover matters
that are expected at the time of the advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business and consistent with past practice;
(g) make Investments in any Person to the extent such Investments
consist of prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar deposits
made in the ordinary course of business and consistent with past practice;
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(h) acquire a majority (but not less than a majority) of the
outstanding common stock of XYZ, Inc., provided that each of the requirements
set forth in Schedule 9.03 shall first have been satisfied in form and substance
satisfactory to the Agent; or
(i) make Acquisitions and Investments, including additional
Investments in Foreign Subsidiaries, if the aggregate Consideration paid or
payable with respect thereto, plus all amounts paid or payable under Section
9.04(a), shall not exceed Ten Million Dollars ($10,000,000) for any fiscal year,
without cumulation or carry-over, provided that all of the Acquisition
Requirements shall have been fulfilled and satisfied as to each Acquisition and
Investment.
Section 9.04. RESTRICTED PAYMENTS. Each Borrower shall not, and shall not
permit any of its Foreign Subsidiaries to, directly or indirectly, declare,
order, pay, make or set apart any sum or property for any Restricted Payment or
agree with any Person to restrict or place limitations on the right of each
Borrower or any of its Foreign Subsidiaries to declare, order, pay, make or set
apart any sum or property for any Restricted Payment, except that:
(a) the Parent Borrower may, subject to compliance with 9.03(i),
purchase its registered capital stock then issued and outstanding;
(b) Subsidiaries may make Restricted Payments to the Borrowers or
another Subsidiary of the Borrowers which is not a Foreign Subsidiary;
(c) so long as no Default or Event of Default shall have occurred
and be continuing, the payment of cash dividends to Parent Borrower to the
extent applied by Parent Borrower to repurchase, redeem or otherwise retire or
acquire equity or other ownership interests of Parent Borrower from its
employees or directors (or their heirs or estates) or employees or directors (or
their heirs or estates) of Parent Borrower or its Subsidiaries, in each case,
pursuant to the terms of any stockholders agreement, employment agreement,
severance agreement, employee stock option agreement or similar agreement in
accordance with the provisions of any such arrangement as in effect on the date
hereof, in an aggregate amount pursuant to this paragraph (b) to all such
employees or directors (or their heirs or estates) not to exceed $500,000 per
fiscal year on and after the date hereof;
(d) the payment of cash dividends to Parent Borrower (i) to the
extent applied by Parent Borrower to pay reasonable and customary directors fees
payable to, and indemnity provided on behalf of, the Board of Directors of
Parent Borrower, indemnity provided on behalf of officers and employees of
Parent Borrower, and customary reimbursement of travel and similar expenses
incurred in the ordinary course of business (without giving effect to any
amendment or supplement thereto or modification thereof), (ii) in an aggregate
not to exceed $250,000 per fiscal year, to the extent applied by Parent Borrower
to pay its general administrative expenses, including, without limitation, in
respect of director fees and expenses, administrative, legal and accounting
services, or (iii) solely to enable Parent Borrower to make payments in cash to
holders of its capital stock in lieu of the issuance of fractional shares of its
capital stock in an aggregate amount not to exceed $200,000 on and after the
date hereof;
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(e) Payments may be made to the Parent Borrower to the extent
applied to the tax liability of any Subsidiary, computed as if the Subsidiary
Borrowers and their Subsidiaries were a separate group filing a consolidated
return, reduced by the amount of such tax liability actually paid by the Parent
Borrower; and
(f) Payments may be made pursuant to the Management Agreement
referred to in Section 9.05(b).
Section 9.05 AFFILIATE TRANSACTIONS.
(a) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, directly or indirectly, engage in any transaction with
an Affiliate, or make an assignment or other transfer of any of its properties
or assets to any Affiliate on terms that are less favorable to such Borrower or
such Foreign Subsidiary than those which might be obtained at the time from
unaffiliated third parties; provided, however, the foregoing restrictions shall
not apply to transactions exclusively among the Borrowers;
(i) Each Borrower shall not, and shall not permit any of its
Foreign Subsidiaries to, (a) enter into any management agreement with any Person
that gives such Person the right to manage its business except for usual and
customary employment agreements and consulting agreements consistent with past
practice, or (b) directly or indirectly pay or accrue to any Person any sum or
property for fees for management or similar services rendered in connection with
the operation of a business except as set forth in clause (a) above; except for
a certain Management Agreement dated as of January 23, 2002 between the Parent
Borrower and Steel Partners II, L.P., providing for $475,000 in annual
management fees, which shall not be materially amended, supplemented or
otherwise modified without the Agent's prior written consent, except to permit
(i) an annual bonus of up to $250,000, if approved in advance by the Board of
Directors and the Compensation Committee of Parent Borrower or (ii) reductions
in compensation; provided that, while payments are being made under such
Management Agreement, Steel Partners II, L.P. shall maintain material
involvement in the management of Parent Borrower, and Parent Borrower shall not
hire any senior executive officer not employed by Parent Borrower on the date
hereof.
Section 9.06 DISPOSITION OF ASSETS. Each Borrower shall not, and shall not
permit any of its Foreign Subsidiaries to, directly or indirectly, sell, assign,
lease, abandon, or otherwise transfer or dispose of any of their assets
(including, without limitation, shares of stock and indebtedness of
Subsidiaries, receivables, and leasehold interests), except:
(a) inventory disposed of in the ordinary course of its business
as presently conducted;
(b) the sale or other disposition of assets no longer used or
useful in the conduct of its business;
(c) that any Foreign Subsidiary may assign or otherwise transfer
its assets to any Borrower; or
(d) property subject to a governmental condemnation.
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Section 9.07 LIQUIDATION OR MERGER. Each Borrower shall not, and shall not
permit any of its Foreign Subsidiaries to, liquidate or dissolve itself (or
suffer any liquidation or dissolution) or otherwise wind up, or enter into any
merger or consolidation or division or similar transaction, other than:
(a) a merger or consolidation between any two or more Borrowers,
(b) a merger or consolidation between or among two or more
Foreign Subsidiaries, or
(c) the liquidation and dissolution of a non-operating Subsidiary
or a Subsidiary having book assets not in excess of $100,000.00.
Section 9.08 CHANGE IN ORGANIZATIONAL DOCUMENTS. Each Borrower shall not,
and shall not permit any Foreign Subsidiary to, amend or otherwise modify, the
respective articles or certificate of incorporation, bylaws or other
organizational documents of such Person, except in connection with a merger
permitted by Section 9.07 (Liquidation or Merger) above.
Section 9.09 ISSUANCE OF EQUITY. Each Borrower shall not, and shall not
permit any of its Foreign Subsidiaries to, issue, authorize the issuance of, or
obligate itself to issue any shares of its capital stock or other equity
(including, without limitation, any options, warrants or other rights in respect
thereof) to any Person that (a) would contravene any other provision of this
Agreement (including any provision respecting Change of Control) or (b) would
result in there being equity of any Subsidiary of any Borrower that is not
pledged pursuant to the Security Agreement.
Section 9.10 ENVIRONMENTAL VIOLATIONS. Each Borrower shall not, and shall
not permit any of its Foreign Subsidiaries to, or permit any Person to, use,
generate, treat, store, dispose of or otherwise introduce, any Hazardous
Materials into or on any real property owned or leased by any of them and shall
not permit such actions to occur, except in an environmentally safe manner
through methods which have been approved by and meet all of the standards of the
federal Environmental Protection Agency and any other federal, state or local
agency with authority to enforce Environmental Laws except where the failure to
comply with the foregoing sentence could not reasonably be expected to result in
a Material Adverse Change. Without limiting the generality of any other
indemnities provided under this Agreement, each Borrower hereby agrees to
indemnify, reimburse, defend and hold harmless any Indemnified Person for, from
and against all demands, liabilities, damages, costs, claims, suits, actions,
legal or administrative proceedings, interest, losses, expenses and reasonable
attorney's fees (including any such fees and expenses incurred in enforcing this
indemnity) asserted against, imposed on or incurred by any of the Indemnified
Persons, directly or indirectly, pursuant to, or in connection with, the
application of any Environmental Law to acts or omissions occurring at any time
on or in connection with any real estate owned or leased by any Borrower or any
of its Foreign Subsidiaries or any business conducted thereon except those which
result from the gross negligence or willful misconduct of any Indemnified
Person.
Section 9.11 PRESERVATION OF EXISTENCE, ETC. Except as permitted by Section
9.07, each Borrower shall at all times preserve and keep in full force and
effect (a) its corporate,
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partnership or other existence and (b) the corporate, partnership or other
existence of each Foreign Subsidiary and (c) the good standing of such Persons
in all states or jurisdictions in which they are formed or required to qualify
to do business, except, as to qualification only, where the failure to keep in
full force and effect any such good standing could not result in a Material
Adverse Change.
Section 9.12 PERMITTED BUSINESSES. Each Borrower shall, and shall cause
each of its Foreign Subsidiaries to engage in the businesses permitted under
Section 6.08 and no other business.
Section 9.13 COMPLIANCE WITH LAW. Each Borrower shall, and shall cause each
of its Foreign Subsidiaries to, comply with the requirements of all Applicable
Law and will obtain or maintain all franchises, permits, licenses and other
governmental authorizations and approvals, necessary to the ownership,
acquisition or disposition of their respective properties or to the conduct of
their respective businesses except where failure to comply with, obtain or
maintain any of the foregoing could not reasonably be expected to result in a
Material Adverse Change.
Section 9.14 PAYMENT OF TAXES AND CLAIMS. Each Borrower shall, and shall
cause each of its Foreign Subsidiaries to, timely file all tax and information
returns required by federal, state or local tax authorities. Each Borrower
shall, and shall cause each of its Foreign Subsidiaries to, pay all taxes
(including, without limitation, withholding taxes), assessments and governmental
charges or levies required to be paid by it or imposed on it or on its income or
profits or upon any of its properties or assets, prior to the date on which
penalties attach thereto or interest accrues, and all claims for (including,
without limitation, claims for labor, services, materials and supplies) for sums
which have become due and payable and which, if unpaid, might become a Lien upon
its properties or assets; provided that it shall not be deemed to be a violation
of this covenant if any such charge or claim not paid is being diligently
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and for which adequate reserves shall have been set aside
on the appropriate books, but only so long as no foreclosure, distraint, sale or
similar proceeding shall have been commenced.
Section 9.15 TAX CONSOLIDATION. Each Borrower shall not file or consent to
or permit the filing of any consolidated income tax return on behalf of it or
any Subsidiary with any Person (other than a consolidated return for the group
of which Parent Borrower is the common parent). Each Borrower shall not, and
shall not permit any Subsidiary to, enter into any agreement with any Person
which would cause such Borrower or such Subsidiary to bear more than the amount
of taxes to which it would have been subject had it separately filed (or filed
as part of a consolidated return among the Parent Borrower's Subsidiaries).
Section 9.16 MAINTENANCE OF PROPERTIES. Each Borrower shall, and shall
cause each of its Foreign Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition (ordinary wear and tear excepted) all
properties used or useful in its business (whether owned or leased), such
maintenance to include, without limitation, repair, renewal, replacement or
improvement thereto; and keep, and cause each Subsidiary to keep, all systems
and equipment which may now or in the future be subject to compliance with any
standard or rules imposed by any Governmental Authority in compliance in all
material respects with such standards or rules. Each Borrower shall, and shall
cause each of its Foreign Subsidiaries to,
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maintain, preserve and protect, and, when necessary, renew, all franchises,
licenses, patents, copyrights, permits, service marks, trademarks and trade
names and other general intangibles held by any of them and all agreements to
which any of them are parties which are necessary to conduct such Borrower's or
any applicable Subsidiary's business.
Section 9.17 INSURANCE.
(a) Each Borrower shall, and shall cause each of its Foreign
Subsidiaries to, maintain or cause to be maintained with financially sound and
reputable insurers, insurance with respect to the properties and business of
such Borrower or any such Foreign Subsidiary against loss or damage of the kinds
and in the amounts reasonably prudent for the operation of its business and
including such risks as are customarily insured against by entities of
established reputation having similar properties similarly situated or engaged
in the same or similar type of businesses. Each Borrower and each of its Foreign
Subsidiaries shall cause each insurance policy issued in connection herewith to
provide, and the insurer issuing such policy to certify to the Agent that (i)
the Agent will be named as additional insured and lender loss payee or
mortgagee, as appropriate, under each such insurance policy; (ii) if such
insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Agent and such cancellation or
change shall not be effective as to the Agent for at least thirty (30) days
after receipt by the Agent of such notice, unless the effect of such change is
to extend or increase coverage under the policy; and (iii) the Agent will have
the right (but no obligation) at its election to remedy any default in the
payment of premiums within thirty (30) days of notice from the insurer of such
default.
(b) If no Default or Event of Default exists, loss payments will
be applied by each Borrower or the relevant Subsidiary to the repair and/or
replacement of property with respect to which the loss was incurred to the
extent reasonably feasible, and any loss payments or the balance thereof
remaining, to the extent not so applied or used to purchase other assets useful
in the business of each such Borrower and each such Subsidiary within 360 days
of receipt thereof and subject to the Liens of the Agent hereunder, shall be
payable to the Agent on behalf of the Lenders and applied to the Obligations. If
an Event of Default or Default shall then exist then such proceeds shall, at the
option of the Agent, be applied to reduce the Obligations, and at the Agent's
election the Commitment shall be permanently reduced, or be reinvested in the
business of such Borrower or applicable Subsidiary. Notwithstanding the
foregoing, payments received by the Agent in excess of all Obligations shall be
paid over by the Agent to the Borrowers. Copies of such policies or the related
certificates, in each case, naming the Agent as additional insured and lender
loss payee or mortgagee, as appropriate, shall be delivered to the Agent
annually at the time of the delivery of the financial statements referred to in
Section 8.01(a) above and at the time any new policy of insurance is issued. If
no Default or Event of Default exists, no claim may be adjusted without the
consent of the Borrowers.
(c) Each Borrower shall maintain or cause to be maintained all
insurance available through the PBGC and/or insurers acceptable to the Agent
against their obligations and the obligations of any of its Foreign Subsidiaries
to the PBGC.
Section 9.18 COMPLIANCE WITH ERISA.
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(a) Each Borrower shall, and shall cause each of its Subsidiaries
and any ERISA Affiliates to comply in all material respects with the
requirements of the Code and ERISA with respect to the operation of all Plans
and Multiemployer Plans.
(b) Each Borrower shall, and shall cause each of its Subsidiaries
and any ERISA Affiliates to, comply in all material respects with the
requirements of COBRA, HIPAA and Section 1862(b) of the Social Security Act with
respect to any Plans subject to the requirements thereof.
(c) Each Borrower shall not take, and shall prevent each of its
Subsidiaries and any ERISA Affiliate from taking, any of the following actions
and shall not permit any of the following events to occur if such action or
event together with all other such actions or events, would subject any
Borrower, any of its Subsidiaries or any of its ERISA Affiliates to any tax,
penalty, or other liabilities which could reasonably be expected to result in a
Material Adverse Change:
(i) engage in or knowingly consent to any "party in
interest" or any "disqualified person," as such terms are defined in Section
3(14) of ERISA and Section 4975(e)(2) of the Code respectively, engaging in any
Prohibited Transaction in connection with which any Borrower, any of its
Subsidiaries or any ERISA Affiliate could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code;
(ii) terminate any Plan in a manner, or take any other
action, which could result in any liability of any Borrower, any of its
Subsidiaries or any ERISA Affiliate to the PBGC;
(iii) fail to make full payment when due of all amounts
which, under the provisions of any Plan or any Multiemployer Plan, any Borrower,
any of its Subsidiaries or any ERISA Affiliate is required to pay as
contributions thereto, or permit to exist any Accumulated Funding Deficiency,
whether or not waived, with respect to any Plan or fail to pay PBGC premiums
when due;
(iv) permit the current value of all accrued benefits under
all Plans which are subject to Title IV of ERISA to exceed the current value of
the assets of such Plans allocable to such vested accrued benefits, except as
may be permitted under actuarial funding standards adopted in accordance with
Section 412 of the Code;
(v) withdraw from any Multiemployer Plan, if such withdrawal
would result in the imposition of Withdrawal Liability; or
(vi) adopt a Plan amendment which results in significant
underfunding (as defined in Section 307 of ERISA) which requires any Borrower or
any of its Subsidiaries or ERISA Affiliates to provide security.
(d) The Borrower shall comply with the ERISA reporting
requirements set forth in Section 8.09 (ERISA Notices).
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As used in this Section 9.18, the term "accrued benefit" has the meaning
specified in Section 3(23) of ERISA and the term "current value" has the meaning
specified in Section 4001(a)(18)(B) of ERISA.
Section 9.19. MAINTENANCE OF RECORDS; FISCAL YEAR. Each Borrower shall, and
shall cause each of its Foreign Subsidiaries to, keep at all times books of
record and account in which entries will be made of all dealings or transactions
in relation to its business and affairs as required by GAAP. Each Borrower shall
keep, and shall cause each of its Foreign Subsidiaries to keep, its books of
account and financial statements in accordance with GAAP and report on the basis
of a fiscal year ending December 31.
Section 9.20. INSPECTIONS AND FIELD EXAMINATIONS. Upon reasonable notice
(and for this purpose no more than two Business Days notice shall be required
under any circumstances) if no Event of Default or Default shall exist, or at
any time with or without notice after the occurrence of an Event of Default or
Default, each Borrower shall, and shall cause each of its Foreign Subsidiaries
to, allow any representative of the Agent or any Lender to visit and inspect any
of the properties of such Borrower and any of its Foreign Subsidiaries, to
examine the books of account and other records and files of such Borrower and
any of its Foreign Subsidiaries (including, without limitation, the financial
statements (audited and unaudited, to the extent prepared) of each Subsidiary
and information with respect to each business operated by such Borrower and any
of its Foreign Subsidiaries), to make copies thereof and to discuss the affairs,
business, finances and accounts of such Borrower and its Foreign Subsidiaries
with its personnel and accountants. The Agent or any Lender shall also be
permitted to conduct field examinations at Borrowers' expense, not more than
once a year before the occurrence of an Event of Default and thereafter without
limitation. The Agent and the Lenders' inspections are solely for the protection
of the Agent and the Lenders and no action or inaction of the Agent or the
Lenders shall constitute any representation by the Agent or the Lenders that the
Borrowers are in compliance with the terms of any Loan Documents or that the
Agent or the Lenders approve of the Borrowers' affairs, business, finances or
accounts.
Section 9.21. EXCHANGE OF NOTES. Upon receipt of a written notice of loss,
theft, destruction or mutilation of a Note and of a letter of indemnity from the
affected Lender or its successors or assigns, and upon surrendering for
cancellation such Note if mutilated (in which event no indemnity shall be
required), each Borrower shall execute and deliver a new Note of like tenor in
lieu of such lost, stolen, destroyed or mutilated Note, as the case may be.
Section 9.22. COMPLIANCE WITH FEDERAL RESERVE REGULATIONS. The Loans shall
not be used, in whole or in part, for the purpose of purchasing or carrying any
margin stock, secured directly or indirectly by margin stock, within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System.
Following application of the proceeds of each Loan, not more than 25 percent of
the value of the assets of any Borrower or the Borrowers and their Subsidiaries
on a Consolidated basis, which are subject to the provisions of Section 9.02(a)
or Section 9.06 or subject to any restriction contained in any agreement or
instrument between any Borrower and any Lender or any Affiliate of any Lender,
is represented by margin stock. If requested by the Agent or any Lender, each
Borrower shall complete and sign Part I of a copy of the Federal Reserve Form
U-1 referred to in Regulation U of the Board of Governors of the Federal Reserve
System and deliver such copy to the Agent or such Lender. Neither any
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Borrower nor any of its Foreign Subsidiaries, nor any bank acting on any of
their behalf, have taken or will take any action which might cause this
Agreement or the Notes to violate Regulation U or X or any other regulation of
the Board of Governors of the Federal Reserve System, as now or hereafter in
effect.
Section 9.23. LIMITATIONS ON CERTAIN RESTRICTIVE PROVISIONS. Each Borrower
shall not, and shall not permit any of its Foreign Subsidiaries to (a), permit
or place any restriction, directly or indirectly, on (i) the payment of
dividends or distributions by any Subsidiary or (ii) the making of advances or
other cash payments by any such Subsidiary or (iii) the transfer by any
Subsidiary of any of its properties or assets, in each case to any Borrower or
its Subsidiaries, or (b) agree with any Person other than Agent and the Lenders
that the Borrowers and/or their Subsidiaries shall not amend the Loan Documents.
Section 9.24. CORPORATE SEPARATENESS. Each Borrower and each of its Foreign
Subsidiaries, on the one hand, shall conduct their business and operations
separate from that of each other and their Affiliates, on the other hand.
Without limiting the generality of the foregoing, each Borrower shall not, and
shall not permit any of its Foreign Subsidiaries, to commingle funds with any
Person that is not a Borrower or a Subsidiary of a Borrower.
Section 9.25. DEPOSIT AND SECURITIES ACCOUNTS. Each Borrower and its
Foreign Subsidiaries shall at all times maintain their primary demand, time and
other deposit accounts with the Agent or a Lender approved by the Agent in order
to facilitate the making of the Loans and to provide security for repayment of
the Obligations. Deposits and investments in securities accounts with financial
institutions, other than as provided above, shall at no time exceed an aggregate
of $200,000, provided that, (a) one account may be maintained in each of
England, China, Germany and Mexico, with deposits in each such account to be
limited to an aggregate of $100,000, and (b) amounts in excess of the aggregate
limits stated above may be deposited in employee payroll accounts (whether
domestic or foreign) on any particular day if such excess is paid as
compensation to employees on such day.
Section 9.26. COLLATERAL; LOCKBOX.
(a) Without limiting the generality of the provisions of Section
9.28 (Further Assurances) below, at any time that any Borrower or any of its
Foreign Subsidiaries shall (a) acquire any property, whether real, personal or
other and whether tangible or intangible, (b) change the location of any
property, (c) transfer or otherwise issues shares of capital stock, (d) change
its name or (e) take any action that would cause the Agent to fail to have a
valid, perfected first priority security interest in all the property of the
Borrowers and the Foreign Subsidiaries and in all the equity or other ownership
interests of the Borrowers and the Foreign Subsidiaries, subject only to the
exceptions explicitly permitted under the terms of this Agreement, or at any
time any condition shall exist which results in such failure of the Agent to be
so secured, then each Borrower shall, and shall cause its Subsidiaries to, take
such action as is necessary to provide such security to the Agent, all at the
expense of the Borrowers.
(b) If any Borrower or any of its Foreign Subsidiaries elect at
any time to maintain a lockbox or any other mechanism for the direct deposit or
collection of accounts receivable or from which collected accounts receivable
will be swept into another deposit
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account, such lockbox or mechanism shall be maintained with Agent or with a
Lender approved by the Agent, and no other Person, and it shall be maintained
pursuant to documentation reasonably satisfactory to Agent.
Section 9.27. JOINDER OF SUBSIDIARIES. Without limiting the generality of
the provisions of Section 9.28, at any time that any Borrower or any of its
Foreign Subsidiaries forms or acquires any new Subsidiary (a "New Subsidiary"),
which formation or acquisition shall be effected only if no Default or Event of
Default has occurred or would be caused thereby and only if all of the
Acquisition Requirements are satisfied, then such New Subsidiary shall
simultaneously deliver to the Agent:
(a) a duly executed joinder in the form of Exhibit F to this
Agreement and joinders satisfactory to the Agent to the Security Agreement and
Notes;
(b) a perfection questionnaire duly completed by such New
Subsidiary;
(c) the results of tax, judgments and other lien searches in form
and substance satisfactory to the Agent, and from such jurisdictions as may be
satisfactory to the Agent, together with U.S. Patent and Trademark Office and
Copyright Office searches of a recent date, in each case, with respect to such
New Subsidiary, showing no Liens except Permitted Liens.
(d) Mortgages on all real property located in the United States
owned by such New Subsidiary;
(e) for each property subject to a Mortgage, (i) title insurance
insuring the priority of the Mortgage, (ii) zoning certification, (iii) a flood
certification, and (iv) a survey; in each case satisfactory to the Agent;
(f) any required governmental consents or other required consents
to the execution, delivery and performance of the Loan Documents, each of which
shall be in form and substance satisfactory to the Agent;
(g) a certificate of such New Subsidiary to which is attached
each of the following certified as such by a duly authorized officer of such New
Subsidiary:
(i) a certificate of incumbency with respect to each
Authorized Signatory thereof that signs any Loan Documents,
(ii) a copy of the charter or other organizational documents
of such New Subsidiary certified by the Secretary of State or similar state
official of the jurisdiction of formation of such New Subsidiary,
(iii) a copy of the bylaws or other constituent documents of
such New Subsidiary,
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(iv) a certificate of good standing or subsistence, as the
case may be, for such New Subsidiary issued as of a recent date by the Secretary
of State or similar state official in the jurisdiction of its organization and
in each state in which such New Subsidiary,
(v) a copy of the resolutions duly adopted by the Board of
Directors or other governing body of such New Subsidiary authorizing it to
execute, deliver and perform each Loan Document to which it is, or is to be, a
party, and
(vi) a copy of any shareholders agreement or similar
agreement respecting such New Subsidiary, if any such agreement exists;
(h) a legal opinion of counsel and special local counsel in such
states as may be reasonably requested by the Agent speaking to such matters as
the Agent may reasonably request; and
(i) such stock certificates and other documentation as shall
be necessary or advisable to perfect the pledge of the equity of the New
Subsidiary in favor of the Agent;
provided that, if such New Subsidiary is a Foreign Subsidiary, the foregoing
agreements delivered by the New Subsidiary shall be modified to the extent
necessary that income is not recognized by one or more of the Borrowers due to
the operation of Code Section 956(d); the Agent may waive delivery of one or
more of the required items to the extent that in its discretion such items are
not material; and the Foreign Subsidiary shall execute and deliver a joinder to
the Foreign Subsidiary Guaranty.
Section 9.28. FURTHER ASSURANCES. Each Borrower, at its own expense, will
promptly execute and deliver or cause to be executed and delivered to the Agent
all such other and further documents, agreements and instruments, and shall
provide or cause to be provided to the Agent such additional information, and
shall do or cause to be done such further acts, as may be necessary or proper in
the reasonable opinion of the Agent or any Lender to carry out more effectively
the provisions and purposes of this Agreement and the other Loan Documents.
ARTICLE 10.
DEFAULT
Section 10.01. EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or otherwise:
(a) Any Borrower shall fail to make any payment of principal on
the Loans on the dates when the same shall become due and payable, whether at
stated maturity or at a date fixed for any installment or prepayment thereof or
otherwise;
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(b) Any Borrower shall fail to make any payment of interest on
the Loans or shall fail to pay the commitment fees or any other amounts owing
hereunder (other than principal of the Loans) or under the other Loan Documents
on the dates when such interest, commitment fees or other amounts shall become
due and payable and such failure continues for more than three (3) Business
Days;
(c) Any representation or warranty made in any Loan Document
shall prove to have been incorrect or misleading in any material respect when
made or deemed to have been made;
(d) Any Borrower shall fail (i) to perform or observe of any
agreement or covenant contained in Article 7 or Article 9 (other than those
sections referred to in subsection (d)(iii) below) hereof or (ii) to provide any
financial statement or report under Article 8 hereof, and, with respect to this
clause (ii) only, such failure shall not be cured within a period of ten (10)
days from the occurrence thereof or (iii) to perform or observe any agreement or
covenant contained in Section 9.13, 9.16 or 9.19 and, with respect to this
clause (iii) only, such failure shall not be cured within a period of ten (10)
days from the occurrence thereof;
(e) Any Borrower or any Subsidiary shall fail to perform or
observe any other agreement or covenant contained in this Agreement or any other
Loan Document other than those referred to in subsections (a), (b), (c) or (d)
above, and, if such failure is capable of being remedied, such failure shall not
be cured within a period of thirty (30) days from the occurrence thereof;
(f) Any breach, violation, default or event of default shall
occur in connection with any Indebtedness of any Borrower or any of its
Subsidiaries aggregating Two Hundred Fifty Thousand Dollars ($250,000) or more
which would permit, or which after the giving of notice or passage of time would
permit, the acceleration of the payment or maturity of any such indebtedness;
(g) Any Collateral Agreement shall at any time after its
execution and delivery for any reason cease to create a valid and perfected
first priority security interest in and to the property purported to be subject
to such Collateral Agreement;
(h) Judgments, assessments or orders for the payment of money
which aggregate at any time in excess of Five Hundred Thousand Dollars
($500,000) shall be entered against any Borrower and/or any of its Subsidiaries
by a court or other tribunal of competent jurisdiction, which judgments,
assessments or orders are not discharged, vacated, bonded or stayed pending
appeal within a period of thirty (30) days from the date of entry;
(i) Any Borrower or any of its Subsidiaries shall suspend or
discontinue its business, shall make an assignment for the benefit of creditors
or a composition with creditors, shall generally not be paying their debts as
they mature, shall admit their inability to pay their debts as they mature,
shall file a petition in bankruptcy, shall become insolvent (howsoever such
insolvency may be evidenced), shall be adjudicated insolvent or bankrupt, shall
petition or apply to any tribunal for the appointment of any receiver,
custodian, liquidator or trustee of or for them or any substantial part of their
property or assets, shall commence any
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proceeding relating to them under any bankruptcy, reorganization, arrangement,
readjustment of debt, receivership, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or if there shall be
commenced against any Borrower or any of its Subsidiaries, any such proceeding
and the same shall not be dismissed within sixty (60) days after an order,
judgment or decree approving the petition in any such proceeding shall be
entered against any Borrower or any of its Subsidiaries; or if any Borrower or
any of its Subsidiaries shall by any act or failure to act indicate their
consent to, approval of or acquiescence in, any such proceeding or any
appointment of any receiver, custodian, liquidator or trustee of or for it or
for any substantial part of its property or assets; or if any court of competent
jurisdiction shall assume jurisdiction with respect to any such proceeding and
the same shall not be dismissed within sixty (60) days; or if a receiver or a
trustee or other officer or representative of a court, governmental office or
agency, shall, under color of legal authority, take and hold possession of any
substantial part of the property or assets of any Borrower or any of its
Subsidiaries, and shall not have relinquished possession within sixty (60) days;
or if any Borrower or any of its Subsidiaries shall have concealed, removed, or
permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors, or any of them, or shall have made or
suffered a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law;
(j) There shall be any Accumulated Funding Deficiency, whether or
not waived, with respect to any Plan maintained by any Borrower or any of its
Subsidiaries or any ERISA Affiliate, or to which any Borrower or any of its
Subsidiaries or any ERISA Affiliate has any liabilities, or any trust created
thereunder; or a trustee shall be appointed by a United States District Court to
administer any such Plan; or PBGC shall institute proceedings to terminate any
such Plan; or any Borrower or any of its Subsidiaries or any ERISA Affiliate
shall incur any liability to PBGC in connection with the termination of any such
Plan or their withdrawal from any such Plan with respect to which they are
substantial employer within the meaning of Section 4063(b) of ERISA; or any Plan
or trust created under any Plan of any Borrower or any of its Subsidiaries or
any ERISA Affiliate shall engage in a Prohibited Transaction which would subject
any such Plan, any trust created thereunder, any trustee or administrator
thereof, or any party dealing with any such Plan or trust to the tax or penalty
on Prohibited Transactions imposed by Section 502 of ERISA or Section 4975 of
the Code; or any Borrower or any Subsidiary or ERISA Affiliate fails to make a
quarterly installment to a Plan as required under Section 412(m) of the Code if
such failure results in a lien in favor of the Plan under Section 412(n) of the
Code; or any Borrower or any Subsidiary or ERISA Affiliate incurs any Withdrawal
Liability which, individually or in the aggregate, could reasonably be expected
to result in a liability in excess of One Million Dollars ($1,000,000);
(k) If there shall occur a Material Adverse Change that, in the
reasonable judgment of the Agent, could be expected to result in any Borrower's
failure to pay the Obligations when due;
(l) Any Loan Document shall cease to be a legal, valid and
binding agreement, enforceable against each Loan Party signatory thereto, in
accordance with its terms or shall in any way be declared ineffective or
inoperative or shall in any way be challenged or contested by any Loan Party;
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(m) Any attachment or garnishment proceeding or similar type of
action shall be commenced against or involving the property of any Borrower or
any of its Subsidiaries, which proceeding or action could affect or involve any
deposits held by any Borrower or any of its Subsidiaries with any Lender; or
(n) A Change of Control shall occur.
Section 10.02. REMEDIES.
(a) Termination of Obligation to Make Loans. Without limiting the
generality of Section 5.03, at any time after an Event of Default, the Lenders
shall have no obligation to make any Loans or otherwise extend credit hereunder.
(b) Acceleration. At any time an Event of Default specified in
Section 10.01 above (other than an Event of Default under subsection (i)
thereof) shall have occurred and shall be continuing, the Agent may, by
providing written notice to the Parent Borrower, declare the principal, interest
and other amounts due hereunder and under the Notes and all other Obligations to
be forthwith due and payable without presentment, demand, protest or notice of
protest, notice of dishonor or other notice of any kind, all of which are hereby
expressly waived, anything in any Loan Document to the contrary notwithstanding.
(c) Automatic Acceleration in Connection with Bankruptcy or
Insolvency Proceeding. Upon the occurrence of an Event of Default specified in
subsection (i) of Section 10.01 above, all principal, interest and other amounts
due hereunder and under the Note, and all other Obligations, shall be
immediately due and payable, all without any action by the Agent or the Lenders
and without presentment, demand, protest or other notice of protest or other
notice of dishonor of any kind, all of which are expressly waived, anything in
the Loan Documents to the contrary notwithstanding.
(d) Appointment of Receiver. Upon acceleration of the Note as
provided in paragraphs (b) or (c) above, the Agent shall have the right to the
appointment of a receiver for the properties and assets of any Borrower and its
Subsidiaries. Each Borrower, for itself and on behalf of its Subsidiaries,
hereby consents to such right and such appointment and hereby waives any
objection it or any Subsidiary may have thereto or the right to have a bond or
other security posted by, or on behalf of, the Agent, in connection therewith.
(e) Additional Remedies. In addition to the remedies set forth
above, the Agent and the Lenders shall have all of the post-default rights
granted to it under any of the Loan Documents and under Applicable Law.
Section 10.03. CASH COLLATERAL. If (a) any Event of Default specified in
Section 10.01(i) shall occur, (b) the Obligations shall have otherwise been
accelerated pursuant to Section 10.02, or (c) the Commitment shall have been
terminated pursuant to Section 10.02, then without any request or the taking of
any other action by Agent, Borrowers shall immediately comply with the
provisions of Section 1.04(e) with respect to the deposit of cash collateral to
secure the existing Letter of Credit Liabilities and future payment of related
fees.
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ARTICLE 11.
DEFINITIONS
Section 11.01. DEFINED TERMS. For the purposes of this Agreement, the
following terms shall have the meanings specified in this Article 13 unless the
context otherwise requires:
"ACQUISITION" means (whether by purchase, lease, exchange, issuance of
equity or debt securities, merger, reorganization or any other method) (i) any
acquisition by any Borrower or any of its Subsidiaries of an interest in any
other Person which shall then become Consolidated with any Borrower or any such
Subsidiary in accordance with GAAP, or (ii) any acquisition by any Borrower or
any of its Subsidiaries of all or any substantial part of the assets of any
other Person.
"ACQUISITION REQUIREMENTS" means all of the following:
(a) the Person whose assets or securities are to be acquired does
not oppose the Acquisition or Investment and the line or lines of business of
such Person are, in the reasonable judgment of the Agent, substantially similar
to, or ancillary or complementary to, one or more line or lines of business
conducted by the Borrowers;
(b) no Default or Event of Default is in existence at the time of
the consummation of such Acquisition or Investment or would exist after giving
effect thereto, and the Parent Borrower shall deliver to the Agent a certificate
signed by its chief executive officer, its controller/chief accounting officer
or its treasurer stating that such condition precedent has been fulfilled;
(c) the Parent Borrower shall deliver to the Agent such updated
schedules to this Agreement as may be required to make such schedules accurate
in light of such Acquisition or Investment;
(d) in the case of an Acquisition, the Person acquired shall be
or become a Consolidated Subsidiary, or be merged into a Borrower, immediately
upon consummation of the Acquisition (or if assets are being acquired, the
acquirer shall be a Borrower);
(e) the Parent Borrower shall deliver to the Agent a certificate
signed by its Chief Executive Officer, its Chief Financial Officer,
controller/chief accounting officer, or its treasurer, certifying as to such
officer's good faith belief that the financial covenants contained in Article
VII hereof will continue to be met for the first four (4) full fiscal quarters
following the consummation of such Acquisition or Investment, to which shall be
attached computations as to such financial covenants and pro forma financial
statements in form and substance satisfactory to the Agent giving effect to such
Acquisition or Investment; and
(f) in the case of an Acquisition, all of the requirements of
Section 9.27 shall be satisfied and fulfilled.
"ACCUMULATED FUNDING DEFICIENCY" means any accumulated funding deficiency
as defined in Section 302(a) of ERISA.
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"AFFILIATE" means, with respect to a Person, a spouse of such Person, any
relative (by blood, adoption or marriage) of such Person within the third
degree, any director, officer or employee of such Person, any other Person of
which such first Person is a partner, member, director, officer or employee, and
any other Person directly or indirectly controlling or controlled by or under
common control with such first Person. For purposes of this definition "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
direct or indirect, of the power to direct, or cause the direction of, the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. Without limiting the generality of the
foregoing, (a) Steel shall be deemed to be an "Affiliate" of the Borrowers, and
(b) any Person who has the direct or indirect beneficial ownership of more than
thirty percent (30%) of the voting securities or voting equity of another Person
shall be deemed an Affiliate of such other Person.
"AGREEMENT" means this Revolving Credit Agreement, as the same may be
amended, modified or supplemented, from time to time.
"APPLICABLE LAW" means, with respect to any Person, all provisions of
constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of court or
Governmental Authorities and all orders of arbitrators with appropriate
jurisdiction (by contract or otherwise), and decrees of all courts and
arbitrators in proceedings or actions to which the Person is a party or by which
it (or any of its property) is bound.
"APPLICABLE MARGIN" means the interest rate margin applicable to the Loans
as follows:
REVOLVING CREDIT LOANS
THEN THE APPLICABLE MARGIN IS
------------------------------
TIER IF THE TOTAL LEVERAGE RATIO IS: LIBOR + BASE RATE +
- ---- ------------------------------- ------- -----------
1 Less than or equal to 1.50 to .90% 0%
1.00
2 Greater than 1.50 to 1.00, but 1.40% .25%
less than or equal to 2.50 to
1.00
3 Greater than 2.50 to 1.00 1.90% .50%
The Applicable Margin shall be determined and adjusted quarterly on the date
(each a "Calculation Date") ten (10) Business Days after the date by which the
Parent Borrower is required to provide a Compliance Certificate pursuant to
Section 8.02 for the most recently ended fiscal quarter of the Parent Borrower;
provided, however, that if the Parent Borrower fails to provide the Compliance
Certificate as required by Section 8.02 for the most recently ended fiscal
quarter of the Parent Borrower preceding the applicable Calculation Date, the
Applicable Margin from such Calculation Date shall be based on Tier 3 until such
time as an appropriate Compliance Certificate is provided, at which time the
Tier shall be determined by reference to the Leverage Ratio as of the last day
of the most recently ended fiscal quarter of the Parent Borrower preceding such
Calculation Date. The Applicable Margin shall be effective from one Calculation
Date until the next Calculation Date.
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Any adjustment in the Applicable Margin shall be applicable to all Loans then
existing or subsequently made or issued.
"ASSIGNEE" has the meaning set forth in Section 13.05(c).
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and Acceptance
Agreement in substantially the form of EXHIBIT E attached hereto.
"AUTHORIZED SIGNATORY" means, with respect to any documents, agreements or
instruments, such officer(s) of a Person as may be duly authorized by its Board
of Directors, its bylaws or similar authority to execute the relevant documents,
agreements or instruments on behalf of such Person.
"AVAILABLE COMMITMENT" means that portion of the Commitment which, at any
date of determination, the Borrowers are eligible to borrow under the terms of
this Agreement.
"BASE RATE" means, at any time, the higher of (i) the variable per annum
rate of interest so designated from time to time by the Agent as its prime rate
(which rate is a reference rate and does not necessarily represent the lowest or
best rate being charged to any customer) and (ii) the Federal Funds Rate plus
one-half of one percent (1/2%). The Base Rate is not necessarily the lowest rate
of interest charged by the Agent. Changes in the rate of interest resulting from
changes in the Agent's prime rate shall take place immediately without notice or
demand of any kind.
"BASE RATE LOAN" means any Loan that bears interest at the Base Rate plus
the Applicable Margin.
"BORROWER" means each Borrower referred to in the preamble hereto, together
with such successors and assigns thereof as are permitted pursuant to the terms
of Section 12.05 (Successors and Assigns) below.
"BUSINESS DAY" means any day on which commercial banks are not required or
permitted to be closed for the transaction of business in Philadelphia,
Pennsylvania and, if the applicable Business Day relates to a LIBOR Loan, then
the term "Business Day" shall exclude any day on which dealings are not carried
on in the London Interbank Eurocurrency Market.
"BUSINESS PLAN" means, for any fiscal year of the Parent Borrower, a
detailed budget by operating Subsidiary setting forth the amounts budgeted on a
quarterly basis for revenues and operating expenses by category for each
Subsidiary as well as the amount of Capital Expenditures, along with a
comparison of the actual amounts (and, if applicable, the budgeted amounts) of
such items for the preceding year.
"CAPITAL EXPENDITURES" means expenditures for the purchase of assets of
long-term use which are or should be capitalized in accordance with GAAP.
"CAPITAL LEASE" means, with respect to any Person, any lease which has
been, or should be in accordance with GAAP, accounted for as a capital lease in
respect of which such Person is liable as lessee.
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"CAPITAL LEASE OBLIGATION" means that portion of any obligation of a Person
as lessee under a Capital Lease which at the time appears, or in accordance with
GAAP should appear, on the balance sheet of such Person or in a note to such
balance sheet.
"CASH EQUIVALENT" means:
(a) securities issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided, that the full faith and credit of the United States of America is
pledged in support thereof),
(b) securities issued or directly and fully guaranteed or insured
by any state of the United States of America or any agency or instrumentality
thereof and that are rated within one of the two highest ratings for such
securities by Standard & Poor's Corporation or Moody's Investors Service, Inc.,
(c) demand and time deposits, certificates of deposit, bankers'
acceptances and commercial paper issued by the parent corporation of any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500 million,
(d) commercial paper issued by others rated at least A-2 or the
equivalent thereof by Standard & Poor's Corporation or at least P-2 or the
equivalent thereof by Moody's Investors Service, Inc.,
(e) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in (a) through (d) above
entered into with any financial institution meeting the qualifications specified
in (d) above, or
(f) money market funds, substantially all of the assets of which
constitute Cash Equivalents of the kinds described in (a) through (e) of this
definition,
and in the case of each of (b), (c), (d) and (e) maturing within
one year after the date of acquisition.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.
"CHANGE OF CONTROL" means
(a) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act), other than any person or group which was on
April 14, 2005 the "beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of outstanding shares of common stock of Parent
Borrower (or securities convertible into or exchangeable for such stock)
representing twenty-five percent (25%) or more of the outstanding common stock
of the Parent Borrower as set forth in the Parent Borrower's Proxy Statement
dated April 20, 2005 for the Parent Borrower's 2005 Annual Meeting of
Shareholders, either (A) becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act), directly or
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indirectly, of voting Stock of the Parent Borrower (or securities convertible
into or exchangeable for such voting Stock) representing thirty percent (30%) or
more of the combined voting power of all voting Stock of the Parent Borrower (on
a fully diluted basis) or (B) otherwise has the ability, directly or indirectly,
to elect a majority of the board of directors of the Parent Borrower; or
(b) During any period of two consecutive years, individuals who
at the beginning of such period constituted the board of directors (together
with any new directors whose election by such board of directors or whose
nomination for election by the shareholders of the Parent Borrower was approved
by a vote of 66 2/3% of the directors of the Parent Borrower at the time of such
approval who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) of Parent
Borrower cease for any reason to constitute a majority of the board of directors
then in office;
(c) Parent Borrower shall cease to own 100% of the outstanding
equity or other ownership interests of the Subsidiary Borrowers, except as
permitted under Section 9.07;
(d) The Agent shall fail to have a valid, first priority Lien in
all issued and outstanding shares of capital stock of each Borrower (other than
Parent Borrower) and its Subsidiaries (except to the extent provided in Section
9.27);
(e) Any Borrower or any Subsidiary adopts a plan of liquidation,
except as permitted under Section 9.07;
(f) any merger or consolidation of Parent Borrower with or into
another Person or the merger of another Person with or into Parent Borrower,
unless in the case of a merger or consolidation transaction, holders of
securities that represented 100% of the aggregate voting power of Parent
Borrower's voting stock immediately prior to such transaction (together with
holders of nonvoting securities that were convertible into Borrower's voting
stock immediately prior to such transaction) own directly or indirectly at least
a majority of the aggregate voting power of the voting stock of the surviving
Person in such merger or consolidation transaction immediately after such
transaction or have the right or ability by voting power, contract or otherwise
to elect or designate for a election a majority of Parent Borrower's Board of
Directors;
(g) the sale of all or substantially all of Parent Borrower's
assets (determined on a consolidated basis) to another Person; or
(h) There exists any "change of control" or "change in control"
as defined under any agreement to which any Borrower or any Subsidiary is party
or is subject.
For purposes of this definition, "voting stock" means capital stock or other
ownership interests of any class or classes of a corporation or another entity
the holders of which are entitled to elect a majority of the corporate directors
or Persons performing similar functions.
"COBRA" means group health plan continuation coverage requirements of
Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.
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"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any regulations, revenue rulings or technical information releases
issued thereunder.
"COLLATERAL" means all property which is, or is to be, subject to the Lien
granted by the Collateral Agreements.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages, the IP
Collateral Agreement, the Uniform Commercial Code financing statements, and all
other Loan Documents which purport to grant or perfect a Lien in favor of the
Agent, on behalf of the Lenders, securing the Obligations.
"COMMITMENT" means the obligation of the Lenders pursuant to the terms
hereof to make Revolving Credit Loans to the Borrowers in an initial aggregate
principal amount outstanding at any time not to exceed Thirty Million Dollars
($30,000,000), from time to time until the Termination Date. The amount of the
Commitment may be reduced pursuant to the terms hereof.
"COMMITMENT FEE MARGIN" means the corresponding percentages set forth
below:
THEN THE COMMITMENT FEE
TIER IF THE TOTAL LEVERAGE RATIO IS: MARGIN IS
- ---- ---------------------------------------- -----------------------
1 Less than or equal to 1.50 to 1.00 .25%
2 Greater than 1.50 to 1.00, but less than .35%
or equal to 2.50 to 1.00
3 Greater than 2.50 to 1.00 .50%
The Commitment Fee Margin shall be determined and adjusted quarterly on the date
(each a "Calculation Date") ten (10) Business Days after the date by which the
Parent Borrower is required to provide a Compliance Certificate pursuant to
Section 8.02 for the most recently ended fiscal quarter of the Parent Borrower;
provided, however, that if the Parent Borrower fails to provide the Compliance
Certificate as required by Section 8.02 for the most recently ended fiscal
quarter of the Parent Borrower preceding the applicable Calculation Date, the
Commitment Fee Margin from such Calculation Date shall be based on Tier 3 until
such time as an appropriate Compliance Certificate is provided, at which time
the Tier shall be determined by reference to the Leverage Ratio as of the last
day of the most recently ended fiscal quarter of the Parent Borrower preceding
such Calculation Date. The Commitment Fee Margin shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Margin shall be applicable to all Loans then existing or subsequently
made or issued.
"CONSIDERATION" means an amount equal to the sum of (a) the aggregate fair
market value of any securities and any other non-cash consideration, (including,
without limitation, any joint venture interest delivered to, or retained by, the
applicable selling entity), issued or delivered or to be issued or delivered and
any cash or deferred consideration paid or payable in connection with an
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Acquisition, and (b) the amount of all indebtedness and preferred stock of the
selling entity which is assumed or acquired by the applicable Borrower or
retired or defeased in connection with an Acquisition. The fair market value of
any securities issued and any other non-cash consideration delivered or retained
in connection with an Acquisition shall be the value stated in the agreements
governing such Acquisition.
"CONSOLIDATED" means, with respect to any Person and any specified
Subsidiaries, the consolidation of financial statements of such Person and such
Subsidiaries in accordance with GAAP.
"DEFAULT" means any event which, with the giving of notice or passage of
time, or both, would constitute an Event of Default.
"DEFAULT RATE" is defined in Section 3.03.
"DISQUALIFIED STOCK" means, with respect to any Person, any capital stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable): (a) matures or is mandatorily redeemable for
any reason, (b) is convertible or exchangeable for Indebtedness or Disqualified
Stock, or (c) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the first anniversary of the stated maturity
of the Notes.
"EBIT" means, for any Person for any period, the Net Income of such Person
for such period (before deducting fees either paid in cash or deferred during
the applicable period under the Management Agreement referenced in Section 9.05)
plus the sum of the following (to the extent deducted in the computation of such
Net Income):
(a) Interest Expense;
(b) income taxes including (with respect to each Subsidiary
Borrower) any amounts payable or paid to Parent Borrower for such taxes (but, if
there is a net tax benefit, that should be deducted from Net Income in
calculating EBIT).
"EBITDA" means, for any Person for any period, the Net Income of such
Person for such period (before deducting fees either paid in cash or
deferred during the applicable period under the Management Agreement
referenced in Section 9.05) plus the sum of the following (to the extent
deducted in the computation of such Net Income):
(a) depreciation expense;
(b) amortization expense (including amortization expense
associated with purchase accounting write-up of tangible and intangible assets)
and deferred financing costs;
(c) Interest Expense;
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(d) income taxes including (with respect to each Subsidiary
Borrower) any amounts payable or paid to Parent Borrower for such taxes (but, if
there is a net tax benefit, that should be deducted from Net Income in
calculating EBITDA);
(e) restructuring charges (as determined in accordance with GAAP)
relating to the consolidation of operations or reduction in head-count;
(f) all other non-cash charges reducing Net Income for such
period (A) including, but not limited to, (1) non-cash charges attributable to
the grant, exercise or repurchase of options for or shares of capital stock to
or from employees of such Person and its Consolidated Subsidiaries determined in
accordance with GAAP, (2) unrealized losses resulting solely from the marking to
market of derivative securities or securities held in deferred compensation
plans, (3) non-cash charges associated with the amortization or write-off of
deferred financing costs and debt issuance costs of such Person and its
Consolidated Subsidiaries during such period, and (4) non-cash charges
associated with the purchase accounting write-up of inventory, but (B) excluding
non-cash charges that require an accrual of or a reserve for cash charges for
any future periods and normally occurring accruals such as reserves for accounts
receivable; and
(g) any premium or penalty paid in connection with redeeming or
retiring Indebtedness of such Person and its Consolidated Subsidiaries prior to
the stated maturity thereof pursuant to the agreements governing such
Indebtedness.
less:
(i) all non-cash items increasing Consolidated Net Income
for such period (including unrealized gains resulting solely from the marking to
market of derivative securities or securities held in deferred compensation
plans), and
(ii) the amount of all cash payments made by such Person or
any of the Subsidiaries during such period to the extent such payments relate to
non-cash charges that were added back in determining EBITDA for such period or
any prior period.
"ELIGIBLE ASSIGNEE" one or more banks or other financial institutions, each
having a combined capital surplus of at least $500,000,000.
"ELIGIBLE INSTITUTION" means any federally chartered or state chartered
bank or any financial institution whose deposits are insured by the Federal
Deposit Insurance Corporation.
"ENVIRONMENTAL LAWS" means all Applicable Laws relating to the pollution or
protection of the environment, including, without limitation, Applicable Laws
relating to the release, discharge, emission, spill, leaching, or disposal of
Hazardous Substances to air, water or land, or to the withdrawal or use of
ground water, or to the use, handling, disposal, treatment, storage or
management of Hazardous Substances, including, without limitation, CERCLA and
the Resource Conservation and Recovery Act of 1976, as amended.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rules and regulations issued thereunder.
"ERISA AFFILIATE" means (i) any corporation included with any Borrower in a
controlled group of corporations within the meaning of Section 414(b) of the
Code, (ii) any trade or business (whether or not incorporated) which is under
common control with the Borrowers within the meaning of Section 414(c) of the
Code, (iii) any member of an affiliated service group of which any Borrower is a
member within the meaning of Section 414(m) of the Code, and (iv) any other
entity required to be aggregated with any Borrower pursuant to Section 414(o) of
the Code.
"EVENT OF DEFAULT" means any of the events specified in Section 10.01
(Events of Default), provided that any requirement for notice or lapse of time
has been satisfied.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
equal, for each day during such period, to the rate announced by the Federal
Reserve Bank of New York on each such day as the weighted average of the rates
on overnight federal funds transactions with the members of the Federal Reserve
System arranged by federal funds brokers (or, if such day is not a Business Day,
for the next preceding Business Day) or, if such rate is not so published for
any day which is a Business Day, the average of the quotations for such day on
such transactions received by the Agent from three (3) federal funds brokers of
recognized standing selected by the Agent.
"FOREIGN SUBSIDIARY" means any Subsidiary of any Borrower which (i) is not
organized under the laws of the United States, any state thereof or the District
of Columbia and (ii) conducts substantially all of its business operations
outside the United States of America.
"FOREIGN SUBSIDIARY GUARANTY" means a Guaranty of the Obligations executed
by each Foreign Subsidiary in favor of the Agent and the Lenders.
"FRONTING FEE" has the meaning specified in Subsection 1.04(b).
"GAAP" means generally accepted accounting principles in the United States,
which, as to any Borrower and its Subsidiaries, shall be consistently applied
with those applied in the preparation of the financial statements referred to in
Section 5.01.4(a) (Conditions Precedent to Initial Loan), with such changes as
may be agreed pursuant to Section 11.02.
"GOVERNMENTAL AUTHORITY" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, including, without limitation, any central bank or comparable agency
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTY" or "GUARANTEED," as applied to any Person (the "guarantor")
means and includes any direct or indirect liability, contingent or otherwise, of
such guarantor with respect to any indebtedness, lease, dividend or other
financial or performance obligation of another Person ("primary obligor"),
including, but not limited to (1) any direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
discount or sale with
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recourse by such guarantor of the obligations of the primary obligor and (2) any
agreement (contingent or otherwise) to (a) purchase, repurchase or otherwise
acquire an obligation of the primary obligor or any security therefor, (b)
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise),
(c) maintain the solvency or financial condition of the primary obligor, or (d)
make payment for any products, materials, supplies or services tendered or
rendered to the primary obligor, in any case if the purpose or intent of such
agreement or arrangement is to provide assurance that the primary obligor's
obligation will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be protected
against loss in respect thereof. In addition to the other restrictions on
Guaranties set forth in this Agreement, no Guaranty shall be permitted by this
Agreement unless the maximum dollar amount of the obligation being guaranteed is
readily ascertainable by the terms of such obligation or the agreement or
instrument evidencing such Guaranty specifically limits the dollar amount of the
maximum exposure of the guarantor thereunder. For purposes of making
computations under this Agreement, the amount of any Guaranty made during any
period shall be the aggregate amount of the obligation guaranteed (or such
lesser amount as to which the maximum exposure of the guarantor shall have been
specifically limited), less any amount by which the guarantor may have been
discharged with respect thereto (including any discharge by way of a reduction
in the amount of the obligation guaranteed).
"HAZARDOUS SUBSTANCES" means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required, or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which may be restricted, prohibited or penalized by any Environmental Law
(including, without limitation, petroleum products, asbestos, urea formaldehyde
foam insulation and polychlorinated biphenyls and substances defined as
Hazardous Substances under CERCLA).
"HIPAA" means the Health Insurance Portability and Accountability Act of
1996, as amended from time to time.
"INDEBTEDNESS" means, with respect to any Person (without duplication):
(a) all indebtedness for borrowed money of such Person;
(b) all obligations of such Person for the deferred purchase
price of capital assets or other property or services (other than accounts
payable incurred in the ordinary course of business) to the extent such
liabilities and obligations would appear as a liability upon the Consolidated
balance sheet of such specified Person in accordance with GAAP;
(c) all obligations of such Person evidenced by notes,
bonds, debentures or other instruments;
(d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are
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limited to repossession or sale of such property) and all other obligations
secured by a Lien on the property or assets of such Person;
(e) all Capital Lease Obligations of such Person;
(f) all obligations, contingent or otherwise, of such Person
under acceptances, letters of credit or similar facilities;
(g) all obligations of such Person in respect of
Disqualified Stock or other obligations of such Person to purchase, redeem,
retire or otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, which obligations
shall be valued, in the case of redeemable preferred stock, at the greater of
its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends and, in the case of other such obligations, at the amount that, in
light of all the facts and circumstances existing at the time of determination,
is reasonably expected to be payable;
(h) interest accrued but not paid on the scheduled date;
(i) all Guarantees of such Person;
(j) all Indebtedness referred to in clauses (a) through (i)
above secured by (or which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness;
(k) all fixed (but not variable) payments required by such
Person under non-compete agreements; and
(l) all obligations of such Person that are the functional
equivalent of the Indebtedness referred to in clauses (a) through (k) above.
"INDEMNIFIED PERSON" means the Agent, the Issuer, the other Lenders and
their officers, agents, employees, attorneys, consultants and Affiliates and any
successors, assigns and participants thereof.
"INTELLECTUAL PROPERTY" means the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, registrations
and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, (ii) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, and all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, (iii) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers, and all
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goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, (iv) all rights to obtain any reissues or extensions of
the foregoing and (v) all licenses for any of the foregoing.
"INTEREST EXPENSE" means, with respect to any Person for any period, all
cash interest expense (including imputed interest with respect to Capitalized
Lease Obligations and accreted interest on zero coupon bonds and similar
obligations) paid, accrued or accreted, or to be paid, accrued or accreted, with
respect to any Indebtedness of such Person during such period pursuant to the
terms of the agreement respecting such Indebtedness, together with all fees
(including, without limitation, commitment or unused fees) payable in respect
thereof, all as calculated in accordance with GAAP, excluding amortization or
write-off or deferred financing cost and debt issuance cost of such Person for
such period.
"INTEREST PERIOD" means a period commencing, in the case of the first
Interest Period applicable to a LIBOR Loan, on the day of the making of, or
conversion into, such Loan, and, in the case of each subsequent, successive
Interest Period applicable thereto, on the last day of the immediately preceding
Interest Period, and ending on the same day in the first, second, third or sixth
calendar month thereafter except that
(a) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day, unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day and
(b) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month in which such Interest Period ends) shall end on the
last Business Day of the calendar month in which such Interest Period ends.
"INVENTORY" means "inventory" (as defined in Article 9 of the UCC) of
Borrowers and their Subsidiaries.
"INVESTMENT" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of stock or other securities of
another Person, or any direct or indirect loan, advance or capital contribution
by such Person to any other Person, including all Indebtedness and accounts
receivable from such other Person which are not current assets or did not arise
from sales to such other Person in the ordinary course of business.
"IP COLLATERAL AGREEMENT" means the one or more IP Collateral Agreement(s)
executed or to be executed and delivered pursuant to the terms of the Security
Agreement, as such IP Collateral Agreement(s) may be amended, modified or
supplemented from time to time.
"ISSUER" means Bank so long as it is a Lender, or if Bank is no longer a
Lender, then a Lender designated by the Parent Borrower as Issuer and acceptable
to the Agent.
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"LENDER" means each of the Persons that execute this Agreement as a Lender
together with any other Persons which become parties to this Agreement as a
Lender from time to time.
"LENDER REQUIRED PAYMENT" has the meaning set forth in Section 4.07.
"LETTER OF CREDIT" means a standby letter of credit issued for the account
of Borrowers or any of their Subsidiaries by Issuer which expires by its terms
within one year after the date of issuance and in any event at least thirty (30)
days prior to the Revolving Credit Termination Date. Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its expiry
date for one or more successive one (1) year periods provided that the Issuer
has the right to terminate such Letter of Credit on each such annual expiration
date and no renewal term may extend the term of the Letter of Credit to a date
that is later than the thirtieth (30th) day prior to the Revolving Credit
Termination Date.
"LETTER OF CREDIT FACILITY" means the facility extended pursuant to Section
1.04 for the Borrowers to request Letters of Credit from Issuer.
"LETTER OF CREDIT LIABILITIES" means, at any time of calculation, the sum
of (i) the amount then available for drawing under all outstanding Letters of
Credit (without regard to whether any conditions to drawing thereunder can then
be met), plus (ii) the aggregate unpaid amount of all reimbursement obligations
in respect of previous drawings made under such Letters of Credit.
"LIBOR LOAN" means any Loan bearing interest at a rate equal to the LIBOR
Rate plus Applicable Margin.
"LIBOR RATE" means, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. Dollars, for a
period of time comparable to such LIBOR Loan which appears on the Telerate page
3750 as of 11:00 a.m. London time on the day that is two London Banking Days
preceding the first day of such LIBOR Loan; provided, however, if the rate
described above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR rate shall be the rate (rounded upward,
if necessary, to the nearest one hundred-thousandth of a percentage point),
determined on the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such LIBOR Loan which are offered by four major
banks in the London interbank market at approximately 11:00 a.m. London time, on
the day that is two (2) London Banking Days preceding the first day of such
LIBOR Loan as selected by the Agent. The principal London office of each of the
four major London banks will be requested to provide a quotation of its U.S.
Dollar deposit offered rate. If at least two such quotations are provided, the
rate for that date will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in U.S. dollars to leading
European banks for a period of time comparable to such LIBOR Loan offered by
major banks in New York City at approximately 11:00 am. New York City time, on
the day that is two London Banking Days preceding the first day of such LIBOR
Loan. In the event that the Agent is unable to obtain any such quotation as
provided above, it will be deemed that LIBOR pursuant to a
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LIBOR Loan cannot be determined. In the event that the Board of Governors of the
Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR
deposits of Bank, then for any period during which such Reserve Percentage shall
apply, LIBOR shall be equal to the amount determined above divided by an amount
equal to 1 minus the Reserve Percentage. "Reserve Percentage" shall mean the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of the Federal
Reserve System against "Euro-currency Liabilities" as defined in Regulation D.
"Banking Day" shall mean, in respect of any city, any day on which commercial
banks are open for business in that city.
"LIEN" means any mortgage, lien, pledge, adverse claim, assignment, charge,
security interest, title retention agreement, separate beneficial interest,
levy, execution, seizure, attachment, garnishment or other encumbrance in
respect of any property, whether created by statute, contract, common law or
otherwise, and whether or not choate, vested or perfected.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Foreign Subsidiary
Guarantee, the Collateral Agreements, and all other documents and agreements
executed or delivered in connection with or contemplated by this Agreement, in
each case as amended, modified or supplemented, from time to time.
"LOAN PARTY" means any Borrower, any of its Foreign Subsidiaries, and any
other obligor under any of the Loan Documents.
"LOANS" means the Revolving Credit Loans.
"MAJORITY LENDERS" means at any time, Lenders having greater than or equal
to fifty-one percent (51%) of the Commitment (whether borrowed or not).
"MATERIAL ADVERSE CHANGE" means (a) any material adverse change in the
business, condition (financial or otherwise), assets, liabilities, results of
operations, properties, or business prospects of the Borrowers and the Foreign
Subsidiaries on a Consolidated basis, or (b) any material adverse change with
respect to the binding nature, validity, or enforceability of this Agreement or
any other Loan Document, or with respect to the ability of any Loan Party to
perform its obligations under this Agreement or deed(s) of trust, as applicable,
whether resulting from any single act, omission, situation or event or taken
together with other such acts, omissions, situations or events.
"MATERIAL AGREEMENTS" has the meaning set forth in Section 6.25 (No
Burdensome Agreements; Material Agreements).
"MATURITY DATE" means June 30, 2008.
"MORTGAGE" means one or more real estate mortgages or deeds of trust, as
applicable, executed or to be executed and delivered pursuant to the terms of
this Agreement, as such instruments may be amended, modified or supplemented,
from time to time.
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"MULTIEMPLOYER PLAN" means a multiemployer pension plan as defined in
Section 3(37) of ERISA to which any Borrower, any of its Subsidiaries or any
ERISA Affiliate is, or was, required to contribute.
"NET INCOME" means, for any Person and for any period, the net income (or
net loss) of such Person for such period determined in accordance with GAAP
provided that such amount shall be adjusted to exclude (to the extent otherwise
included therein and without duplication) the following:
(a) any write-up or write-down of any asset;
(b) any net gain from the collection of the proceeds of life
insurance policies;
(c) any gain (or loss) arising from the acquisition or sale of
any securities or Indebtedness of such Person and any gain or loss arising from
the exercise of any warrant of such Person;
(d) any aggregate net gain (or loss) during such period arising
from the sale, exchange or other disposition of capital assets (such term to
include all fixed assets, whether tangible or intangible, all inventory sold in
conjunction with the disposition of fixed assets and all securities) other than
any sale, exchange or other disposition in the ordinary course of business;
(e) all other extraordinary items;
(f) any net income that is attributable to or derived from an
entity or other issuer that is not a Subsidiary of such Person; and
(g) all non-recurring items properly identified as such on such
Person's financial statements and reports including, for the quarter ending June
30, 2004, with respect to all fees and costs relating to the transactions
contemplated by this Agreement.
"NEW SUBSIDIARY" has the meaning set forth in Section 9.27.
"NON-U.S. LENDER" has the meaning set forth in Section 4.05(e).
"NOTES" means the promissory notes in the original aggregate principal
amount of Thirty Million Dollars ($30,000,000) issued by the Borrowers to the
Lenders in substantially the form of EXHIBIT A attached hereto, and any other
promissory note or notes issued by the Borrowers to evidence the Loans and
Reimbursement Obligations pursuant to this Agreement and any replacement or
restatement of, and any supplement to, such note.
"NOTICES" has the meaning set forth in Section 13.01.
"NOTICE OF LC CREDIT EVENT" means a written notice from an Authorized
Signatory of Parent Borrower to the Issuer with respect to any issuance,
increase or extension of a Letter of
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Credit specifying: (i) the date of issuance or increase of a Letter of Credit;
(ii) the expiry date of such Letter of Credit; (iii) the proposed terms of such
Letter of Credit, including the face amount; and (iv) the transactions or
additional transaction or transactions that are to be supported or financed with
such Letter of Credit or increase thereof.
"OBLIGATIONS" means (a) all payment and performance obligations of every
kind, nature and description of the Borrowers and any other Loan Party to the
Agent or any Lender under this Agreement and the other Loan Documents
(including, without limitation, any interest, fees and other charges on the
Loans or otherwise under the Loan Documents that would accrue but for the filing
of a bankruptcy action, whether or not such claim is allowed in such bankruptcy
action), whether such obligations are direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, now existing or hereafter arising, and
(b) (to the extent not included in the preceding clause (a)) the obligation of
the Borrowers or any obligor to pay an amount equal to the amount of any and all
damage which the Agent or any Lender may suffer by reason of a breach by such
Person of any obligation, covenant or undertaking with respect to this Agreement
or any other Loan Document.
"OTHER TAXES" has the meaning set forth in Section 4.05(b).
"PAYMENT DATE" means (a) the last Business Day of each calendar month and
(b) the Revolving Credit Termination Date.
"PERMITTED INDEBTEDNESS" has the meaning set forth in Section 9.01.
"PERMITTED LIENS" has the meaning set forth in Section 9.02 (Liens).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all its functions under ERISA.
"PERSON" means an individual, corporation, limited liability company,
association, partnership, business, joint venture, trust, estate, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.
"PLAN" means an "Employee Pension Benefit Plan" (as defined in Section 3(2)
of ERISA) and/or an "Employee Welfare Benefit Plan" (as defined in Section 3(1)
of ERISA) which is or has been established or maintained, or to which
contributions are, or are required to be, or were, or were required to be, made
by any Borrower, any of its Subsidiaries or any ERISA Affiliate (or any
predecessor thereof), except a Multiemployer Plan.
"PRIOR FACILITY" has the meaning set forth in the Recitals hereto.
"PROHIBITED TRANSACTION" has the meaning given to such term in Section 406
of ERISA, Section 4975(c) of the Code, or any successor sections, and any
Treasury regulations issued thereunder.
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"REGULATORY CHANGE" means any Applicable Law including, without limitation,
any interpretation, directive, request or guideline (whether or not having the
force of law) or any change therein or in the administration or enforcement
thereof, that becomes effective or is implemented or first required or expected
to be complied with after the date of this Agreement (including any Applicable
Law that shall have become such as the result of any act or omission of any
Borrower or any of its Affiliates without regard to when such Applicable Law
shall have been enacted or implemented), whether the same is (i) the result of
an enactment by a government or any agency or political subdivision thereof, a
determination of a court or regulatory authority or otherwise; or (ii) enacted,
adopted, issued or proposed before or after the date of this Agreement,
including any such that imposes, increases or modifies any tax, reserve
requirement, insurance charge, special deposit requirement, assessment or
capital adequacy requirement.
"REIMBURSEMENT OBLIGATIONS" means, at any date, the obligations of
Borrowers then outstanding to reimburse the Issuer for payments made by the
Issuer under a Letter of Credit.
"RELEASE" means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous
Substance into the indoor or outdoor environment or into or out of any property,
including the movement of Hazardous Substances through or in air, soil, surface
water or groundwater on any property.
"REMEDIAL ACTION" means any action necessary to comply with any
Environmental Law with respect to (1) clean up, removal, treatment or handling
of Hazardous Substances in the indoor or outdoor environment; (2) prevention of
Releases or threats of Releases or minimization of further Releases so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (3) performance of pre-remedial studies and
investigations and post-remedial monitoring and care.
"REORGANIZATION" means reorganization as defined in Section 4241(a) of
ERISA.
"REPORTABLE EVENT" means an event described in Section 4043(c) of ERISA.
"REQUEST FOR ADVANCE" means a certificate designated as a "Request for
Advance", signed by an Authorized Signatory of the Parent Borrower requesting an
Advance hereunder, which shall be substantially in the form of EXHIBIT B
attached hereto.
"RESERVE PERCENTAGE" means, with respect to any LIBOR Loan, the maximum
rate at which reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during the relevant Interest Period
under Regulation D (and/or other similar regulation) of the Board of Governors
of the Federal Reserve System against "Eurocurrency Liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Percentage shall reflect any other reserves required to be maintained by
reason of any regulatory change against (i) any category of liabilities which
includes deposits by reference to which LIBOR Rate is to be determined as
provided in the definition of "LIBOR Rate" or (ii) any category of extensions of
credit or other assets which include loans the interest rate of which is based
on LIBOR Rate.
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"RESTRICTED PAYMENT" means:
(a) any direct or indirect distribution, dividend or other
payment (other than stock dividends and stock splits) to any Person on account
of (i) any general or limited partnership interest in, or shares of capital
stock or other securities of, any Borrower or any of its Subsidiaries or (ii)
any warrants or other rights or options to acquire shares of capital stock of,
or other interest in, any Borrower or any of its Subsidiaries;
(b) any redemption, retirement, purchase or other acquisition or
any other payment on account of any interests or securities listed above, except
to the extent that the consideration therefor consists solely of shares of stock
of any Borrower or its Subsidiary, as the case may be;
(c) any sinking fund, other prepayment or installment payment on
account of the foregoing;
(d) any other payment, loan or advance to a shareholder, partner
or equity owner of any Borrower or any of its Subsidiaries (whether or not in
its capacity as shareholder, partner or equity owner) other than salaries or
compensation which are (i) not otherwise restricted under the Loan Documents,
(ii) in reasonable amounts and (iii) paid in the ordinary course of business;
and
(e) any forgiveness or release without adequate consideration by
any Borrower or any of its Subsidiaries of any Indebtedness or other obligation
of a shareholder, partner or equity owner.
"REVOLVING CREDIT FACILITY" means the Revolving Credit Facility of Thirty
Million Dollars ($30,000,000) extended hereunder, consisting of the Revolving
Loan Facility and the Letter of Credit Facility.
"REVOLVING CREDIT LOANS" means the loans made by the Lenders to the
Borrowers pursuant to Section 1.01 (Commitment to Lend) below.
"REVOLVING CREDIT OUTSTANDINGS" means at any time of calculation the sum of
the then existing aggregate outstanding principal amount of Revolving Credit
Loans and the then existing Letter of Credit Liabilities.
"REVOLVING CREDIT TERMINATION DATE" means the Maturity Date, or such
earlier date on which the Commitment shall be completely terminated hereunder.
"REVOLVING LOAN FACILITY" means the facility extended pursuant to Article 1
for the Borrowers to make Revolving Loans from Lender.
"SECURITY AGREEMENT" means the one or more Security Agreement(s) executed
and delivered pursuant to the terms of this Agreement, as such Security
Agreement(s) may be amended, modified or supplemented from time to time.
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"SUBSIDIARY" means, as applied to any Person, (a) any corporation of which
more than fifty percent (50%) of the outstanding stock (other than directors'
qualifying shares) having ordinary voting power to elect a majority of the board
of directors of such corporation (regardless of whether the holders of any class
or classes of securities shall or might have such voting power upon the
occurrence of any contingency) is directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries, or by one
or more of such Person's other Subsidiaries, (b) any partnership, joint venture
or other association which is owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries, or by one or more of such Person's
other Subsidiaries, or (c) any other entity which is directly or indirectly
controlled or capable of being controlled by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person.
"TAXES" has the meaning set forth in Section 4.05(a)(i).
"TOTAL FUNDED INDEBTEDNESS" means all Indebtedness other than that
described in subsections (h), (i), (j) and (k) of the definition thereof.
"TRANSFEREE" has the meaning set forth in Section 9.11.
"TYPE" with respect to any Loan, means its designation as a Base Rate Loan
or LIBOR Loan of a specified Interest Period. Loans with Interest Periods ending
on different days or of differing durations shall be deemed to be different
Types of Loans.
"UCC" shall have the meaning set forth in the Security Agreement.
"UNQUALIFIEDLY CERTIFIED" when used in connection with audited financial
statements delivered pursuant to Section 8.01 (Financial Statements) hereby by
the Parent Borrower's independent auditors or accountants, means the absence of
any qualification, limitation, exception or explanatory paragraph that would (x)
call into question or express substantial doubt about the ability of the Parent
Borrower or any Subsidiary to continue as a going concern, as discussed in the
American Institute of Certified Public Accountants Statement of Auditing
Standard Number 59, (y) relate to the limited scope of examination of matters
relevant to such financial statements or (z) relate to the treatment or
classification of any item in such financial statements and, which as a
condition of its removal would require an adjustment to such item the effect of
which would be to cause the occurrence of a Default or an Event of Default.
"WITHDRAWAL LIABILITY" means any withdrawal liability as defined in Section
4201 of ERISA.
"XYZ, INC." means the corporation identified as such in a separate letter
executed by Parent Borrower and the Agent.
Section 11.02 ACCOUNTING TERMS. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder (including without limitation determinations made pursuant to the
exhibits hereto) shall be made, and all
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financial statements required to be delivered hereunder shall be prepared on a
consolidated basis in accordance with GAAP applied on a basis consistent with
the audited consolidated financial statements of Parent Borrower and its
Consolidated Subsidiaries for the year ended December 31, 2004 delivered to the
Lenders; provided, that if (a) Parent Borrower shall object to determining
compliance with the provisions of this Agreement on such basis by written notice
delivered to the Lenders at the time of delivery of required financial
statements due to any change in GAAP or the rules promulgated with respect
thereto or (b) the Majority Lenders shall so object in writing by written notice
delivered to Parent Borrower within sixty (60) days after delivery of such
financial statements, then compliance with this Agreement shall be determined on
a basis consistent with the above-referenced financial statements, but the
parties hereto shall promptly enter into negotiations in order to amend the
financial covenants and other terms of this Agreement and so as to equitably
reflect such changes in GAAP with the desired result that the criteria for
evaluating the financial condition of Parent Borrower and its Consolidated
Subsidiaries and such other terms shall be the same in all material respects
after such changes as if such changes had not been made. All amounts used for
purposes of financial calculations required to be made herein shall be without
duplication.
Section 11.03 OTHER DEFINITIONAL PROVISIONS. References in this Agreement
to "Articles", "Sections", "Annexes" or "Exhibits" shall be to Articles,
Sections, Annexes or Exhibits of or to this Agreement unless otherwise
specifically provided. Any term defined herein may be used in the singular or
plural. "Include", "includes" and "including" shall be deemed to be followed by
"without limitation". Except as otherwise specified herein, references to any
Person include the successors and assigns of such Person. References "from" or
"through" any date mean, unless otherwise specified, "from and including" or
"through and including", respectively. References to any statute or act shall
include all related current regulations and all amendments and any successor
statutes, acts and regulations. Unless the context otherwise requires, any terms
used in the masculine form shall also include the feminine and neuter forms and
vice versa and any terms used in the plural shall include the singular and vice
versa.
ARTICLE 12
AGENT
Section 12.01 AUTHORITY. The Lenders (for themselves and their successors
and assigns) hereby irrevocably appoint Bank to act as Agent as specified herein
and in the other Loan Documents. Each such Person hereby irrevocably authorizes
Bank to execute and take such action on its behalf under the provisions of this
Agreement, the Notes, and the other Loan Documents and to exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of the Loan Documents and such powers as are reasonably incidental thereto.
Section 12.02 EXPENSES. In default of reimbursement or indemnification by
the Borrowers, the Lenders will, in proportion to their respective portions of
the Commitment, reimburse the Agent for and against all expense, liability,
penalty and damage of any nature whatsoever (including but not limited to
reasonable attorneys' fees) which may be incurred or
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sustained by the Agent in any way in connection with the Loan Documents or its
duties under the Loan Documents provided that no Lender shall be liable for any
portion of the foregoing items resulting from the gross negligence or willful
misconduct of the Agent. Without limiting the generality of any other provision
excusing the Agent form taking any actions, the Agent shall not have any
obligation to take any action in connection with the performance of its duties
as Agent under the Loan Documents which, in its opinion, requires the payment of
expenses or the incurrence of liability, if there is any ground for belief that
reimbursement of such expenses or liability is not reasonably assured to it.
Section 12.03 ACTION BY AGENT. The Agent is authorized to take any action
specified in this Agreement and all actions reasonably related thereto. However,
except for actions expressly required to be taken by the Agent in this Agreement
(which actions the Agent will take as required subject to all of the exculpatory
provisions herein), the Agent is not required to take actions that it may be
authorized to take.
Section 12.04 EXCULPATORY PROVISIONS.
(a) General Standard. Neither the Agent nor any of its officers,
directors, employees or agents, shall be liable for any action taken or omitted
under the Loan Documents or in connection with the Loan Documents unless caused
by its or their gross negligence or willful misconduct. Neither the Agent nor
any of its officers, directors, employees or agents, shall be liable for any
action taken or omitted by it at the direction of the Majority Lenders. The
Agent shall not be responsible for any recitals, warranties or representations
in the Loan Documents or for the validity, enforceability, collectability or due
execution of this Agreement or any of the other Loan Documents.
(b) Agents and Employees. The Agent may execute any of its duties
by or through agents or employees, all of whom shall be entitled to the benefits
of any exculpatory provision herein.
(c) Advice of Professionals. Agent shall be entitled to advice of
counsel, accountants or other professionals of its selection concerning all
matters pertaining to the Loan Documents and its duties under the Loan
Documents. Agent is entitled to rely on the advice of its professionals whether
or not the advice is correct.
(d) Reliance on Information Believed to Be Genuine. The Agent
shall be entitled to rely upon any writing or other document, telegram or
telephone conversation believed by it to have been signed, sent or made by the
proper person or persons.
Section 12.05 INVESTIGATION BY LENDERS. Each Lender expressly acknowledges
that the Agent has not made any representation or warranty to it and that no act
taken by the Agent shall be deemed to constitute a representation or warranty by
the Agent to the Lenders. Each Lender further acknowledges that it has taken and
will continue to take such action and to make such investigation as it deems
necessary to inform itself of the affairs of the Loan Parties. Each Lender
further acknowledges that it has made and will continue to make its own
independent investigation of the creditworthiness and the business and
operations of the Loan Parties. In entering into this Agreement, and in making
an advance under this Agreement, each Lender
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represents that it has not relied and shall not rely upon any information or
representations furnished or given by the Agent or by any other Lender. The
Agent shall be under no duty or responsibility to the Lenders to ascertain or to
inquire into the performance or observance by the Loan Parties of any of the
provisions of this Agreement or any document or instrument now or hereafter
executed in connection with this Agreement.
Section 12.06 NOTICE OF EVENTS OF DEFAULT. Without limiting the generality
of the provisions of the preceding Section 12.05, it is expressly understood and
agreed that the Agent shall not be deemed to have knowledge of the existence,
occurrence or continuance of an Event of Default or Default, unless the Agent
shall have been notified in writing of such Event of Default by any Lender or
the Borrowers pursuant to a writing designated as a "Notice of Event of
Default". For the avoidance of doubt, the provisions of this Section 12.06 are
expressly not for the benefit of the Borrowers.
Section 12.07 RESIGNATION; TERMINATION. The Agent may resign at any time by
giving prior written notice to the Parent Borrower and the Lenders and the Agent
may be removed at any time with or without cause by the Majority Lenders. Such
resignation or removal shall take effect at the end of the sixty (60) day period
after such notice of resignation or removal has been given or upon the earlier
appointment of a successor agent. The Lenders shall (with the consent of the
Parent Borrower so long as no Event of Default has occurred and is then
continuing), upon receipt of such notice, appoint a successor agent from among
the Lenders. The Lenders and the Borrowers shall execute such documents as shall
be necessary to effect such appointment. During any period that there shall not
be a duly appointed and acting Agent, the Borrowers agree to make each payment
due under this Agreement and under the Notes directly to each Lender entitled
thereto and to provide copies of each certificate or other document required
under this Agreement directly to each Lender.
Section 12.08 SHARING. If any Lender shall at any time receive payment of
principal on account of all or a part of any Note held by it, whether by set-off
or otherwise, in a greater proportion than the principal payments made on the
Notes held by the other Lenders, such Lender shall simultaneously purchase,
without recourse, for cash, ratably from each of the other Lenders, such portion
of the Notes held by such other Lenders so that, after such purchase, each
Lender will hold an unpaid principal amount of Notes in the same proportion that
the outstanding principal balance due to such Lender immediately prior to such
payment bore to the aggregate outstanding principal balance due to all Lenders
immediately prior to such payment. In the event that, at any time, any Lender
shall be required to refund any amount which has been paid to or received by it
on account of any Note held by it, and which has been applied to the purchase of
a portion of the Notes held by other Lenders pursuant to this Section, then,
upon notice from such Lender, each of the other Lenders shall simultaneously
purchase, without recourse, its portion for cash, to the extent of its ratable
share thereof, of the Notes held by the Lender required to make such refund.
Section 12.09 OTHER RELATIONSHIPS. It is acknowledged that the Agent, the
Lenders and/or any of their Affiliates may now or hereafter have lending or
other relationships with the Borrowers and Affiliates of the Borrowers. It is
agreed that the Agent and the Lenders are free to act with respect thereto
without consulting with one another and without regard to the effect of any such
action or relationship upon the Loans or other Obligations. With respect to the
portion
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of the Loans made by it and Notes issued to it, the Agent shall have the same
rights and powers under the Loan Documents as any other Lender or holder of a
Note and may exercise the same as though it were not the Agent, and the term
"Lenders" or "Holders of Notes" or any similar term shall, unless the context
otherwise indicates, include the Agent in its capacity as a Lender.
ARTICLE 13
MISCELLANEOUS
Section 13.01 NOTICES. All notices, requests, demands, directions and other
communications (collectively, "Notices") given to or made upon any party hereto
under the provisions of this Agreement shall be by telephone or in writing
(including telex or facsimile communication) unless otherwise expressly provided
hereunder and, if in writing, shall be delivered or sent by telex or facsimile
to the respective parties at the addresses and numbers set forth under their
respective names on the signature pages hereof or in accordance with any
subsequent unrevoked written direction from any party to the others. All Notices
shall, except as otherwise expressly herein provided, be effective (a) in the
case of facsimile, when received, (b) in the case of over-night courier or other
hand-delivered notice, when hand-delivered, (c) in the case of telephone or
e-mail, when telephoned or e-mailed; provided, however, that in order to be
effective, telephonic Notices or e-mail must be confirmed in writing by another
medium provided for in this Section 13.01, received no later than the next day,
(d) if given by mail, four (4) days after such communication is deposited in the
mails with first class postage prepaid, return receipt requested, and (e) if
given by any other means (including by air courier), when delivered. In the
event of a discrepancy between any telephonic or written notice, the written
notice shall control. Any Lender giving any Notice to the Borrowers shall
simultaneously send a copy of such Notice to the Agent.
Section 13.02 DURATION; SURVIVAL. All representations and warranties of the
Borrowers contained in the Loan Documents shall survive the making of the Loans
and shall not be waived by the execution and delivery of any Loan Document or
any investigation by the Agent or the Lenders, or payment in full of the Loans.
All such representations and warranties as well as all other covenants and
agreements of the Borrowers contained in the Loan Documents shall continue in
full force and effect from and after the date hereof so long as the Borrowers
may borrow hereunder and until termination of the Commitment and payment in full
of the Obligations.
Section 13.03 BORROWER REPRESENTATIVE. Each Subsidiary Borrower does hereby
irrevocably make, constitute and appoint the Parent Borrower as its agent and
attorney-in-fact for all purposes in connection with the Loan Documents,
including, without limitation, with respect to any and all payments, borrowings,
disbursements and notices described hereunder. All actions taken by the Agent or
the Lenders for the benefit of the Parent Borrower with respect to the matters
described above shall be deemed to have been taken for the benefit of each
Borrower. The power of attorney granted in this Section 13.03 is coupled with an
interest. All actions taken by the Parent Borrower with respect to the matters
described above shall be deemed to have been taken on behalf of each Borrower.
The Agent and the Lender shall be entitled to rely
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conclusively upon the status of the Parent Borrower as agent and
attorney-in-fact of each Subsidiary Borrower.
Section 13.04 NO IMPLIED WAIVER; RIGHTS CUMULATIVE. No failure or delay on
the part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Loan Document and no course of dealing between the
Borrowers and the Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and not exclusive of any other rights
or remedies which the Agent or any Lender would otherwise have. No notice to or
demand on the Borrowers in any case shall entitle the Borrowers to any other or
further notice or demand in similar or other circumstances or shall constitute a
waiver of the right of the Agent or any Lender to take any other or further
action in any circumstances without notice or demand.
Section 13.05 ENTIRE AGREEMENT AND AMENDMENTS.
(a) This Agreement and the other Loan Documents are intended by
the parties as the final, complete and exclusive statement of the transactions
evidenced by this Agreement. All prior or contemporaneous promises, agreements
and understandings, whether oral or written, are deemed to be superceded by this
Agreement and the other Loan Documents, and no party is relying on any promise,
agreement or understanding not set forth in this Agreement and the other Loan
Documents.
(b) This Agreement and the other Loan Documents may not be
amended, waived or modified except by a written instrument describing such
amendment, waiver or modification executed by Borrowers, Agent and Majority
Lenders provided, however, that, unless approved in writing by all the Lenders,
no such amendment, waiver or consent shall (i) waive any Event of Default under
Section 10.01(a) or (b) hereof, change the amount or maturity date of the
principal of, or reduce the rate or extend the time of payment of interest on,
any Note, or reduce any fee to be paid to the Lenders, (ii) change the amount of
any of the Commitments, (iii) change or affect the definition of "Majority
Lenders," (iv) subordinate the Obligations in right of payment to any other
Indebtedness or obligation whatsoever, (v) change or affect any provision of
this Section, (vi) waive a Section 10.01(i) Event of Default or release a
material part of the Collateral, (vii) release all or substantially all of the
Guarantors or (viii) change or affect Section 4.01(f) in a manner that would
alter the pro rata sharing of payments among the Lenders.
(c) Any such waiver, consent or approval shall be effective only
in the specific instance and for the purpose for which given. No notice to or
demand on the Borrowers, any Subsidiary or any Guarantor in any case shall
entitle the Borrowers, any Subsidiary or any Guarantor to any other or further
notice or demand in the same, similar or other circumstances. Each holder of any
Note outstanding shall be bound by any modification, waiver, or consent
authorized by this Section, whether or not such Note shall have been marked to
indicate such modification, waiver or consent.
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(d) No waiver by the Agent or any Lender of any breach or default
of or by the Borrowers, any Subsidiary or any Guarantor under this Agreement or
Loan Document shall be deemed a waiver of any other previous breach or default
or any thereafter occurring.
Section 13.06 SUCCESSORS AND ASSIGNS.
(a) Successors Bound. Whenever in this Agreement or any other
Loan Document any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrowers or the Agent or the
Lenders that are contained in such agreement shall bind and inure to the benefit
of their respective successors and assigns; provided, however, without the prior
written consent of the Lenders, the Borrowers may not assign, or permit or
suffer the assignment whether by operation of law or otherwise any of its rights
or delegate any of its duties or obligations hereunder.
(b) Participations. With the prior written consent of the Parent
Borrower and the Agent, which shall not be unreasonably withheld, any Lender may
sell participations to any Person (other than a natural person or the Borrowers
or any of the Borrowers' Affiliates or Subsidiaries) (each a "Participant") in
all or a portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender shall not, without the consent of the Participant,
agree to any amendment, modification or waiver with respect to the amounts and
dates on which the Obligations are due and payable and the release of any
material portion of the Collateral. A Lender may furnish any information
concerning Borrowers in its possession from time to time to prospective
Participants provided that such Lender shall require any such prospective
Participant to agree in writing to maintain the confidentiality of such
information.
(c) Assignments. Any Lender shall have the right at any time or
from time to time, upon the Parent Borrower's and Agent's prior written consent,
which shall not be unreasonably withheld, to assign all or any portion of its
rights and obligations hereunder to one or more Lenders or other financial
institutions (each, an "Assignee"), and Borrowers and each Guarantor agrees that
it shall execute, or cause to be executed, such documents, including without
limitation, amendments to this Agreement and to any other documents, instruments
and agreements executed in connection herewith as the Agent shall deem necessary
to effect the foregoing. In addition, upon request Borrowers shall issue one or
more new Notes, as applicable, to any such Assignee and, if the transferor
Lender has retained any of its rights and obligations hereunder following such
assignment, to such transferor Lender, which new Notes shall be issued in
replacement of, but not in discharge of, the liability evidenced by the Note
held by such transferor Lender prior to such assignment and shall reflect the
amount of the respective
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commitments and loans held by such Assignee and the transferor Lender after
giving effect to such assignment. Upon the execution and delivery of the
Assignment and Assumption Agreement in the form attached hereto as Exhibit G and
any other documentation required by the Agent in connection with such
assignment, and the payment by Assignee of the purchase price agreed to by the
transferor Lender, and such Assignee, such Assignee shall be a party to this
Agreement and shall have all of the rights and obligations of a Lender hereunder
(and under any and all other guaranties, documents, instruments and agreements
executed in connection herewith) to the extent that such rights and obligations
have been assigned by such transferor Lender pursuant to the assignment
documentation between such transferor Lender and such Assignee, and such
transferor Lender shall be released from its obligations hereunder and
thereunder to a corresponding extent. Borrowers may furnish any information
concerning Borrowers in their possession from time to time to prospective
Assignees, provided that the transferor Lender shall require any such
prospective Assignees to agree in writing to maintain the confidentiality of
such information.
(d) Issuance of New Note. Within five (5) Business Days after
receipt of an Assignment and Acceptance Agreement, the Borrowers, at their own
expense, shall execute and deliver to the Assignee in exchange for the
surrendered Note (a) a new Note (or Notes) to the order of the Assignee in an
amount equal to its portion of the Commitment and Loans assigned to it pursuant
to such Assignment and Acceptance Agreement and (b) a new Note (or Notes) to the
order of the transferor Lender in an amount equal to the Commitment and Loans
retained by it thereunder. Such Note(s) shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Note(s) shall
be dated the date of such surrendered Note(s) and shall otherwise be in
substantially the form of Exhibit A hereto. Cancelled Notes shall be returned to
the Borrowers upon the execution of such new Notes.
(e) Assignment to Federal Reserve Lender. Any Lender may at any
time pledge or assign all or any portion of its rights under the Loan Documents
including any portion of the promissory note to any of the twelve (12) Federal
Reserve Lenders organized under Section 4 of the Federal Reserve Act. 12 U.S.C.
Section 341. No such pledge or assignment or enforcement thereof shall release
the Lender from its obligations under any of the Loan Documents.
(f) Register. The Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at one of its offices in the United
States a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Borrowers, the Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrowers and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
Section 13.07 DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
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Section 13.08 GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with
the laws of the Commonwealth of Pennsylvania (the "Governing State") (excluding
the laws applicable to conflicts or choice of law).
Section 13.09 PAYMENTS DUE ON NON-BUSINESS DAYS. If any payment under the
Loan Documents becomes due on a day which is not a Business Day, the due date of
such payment shall be extended to the next succeeding Business Day, and such
extension of time shall be included in computing interest and fees in connection
with such payment.
Section 13.10 COUNTERPARTS. This Agreement and the other Loan Documents may
be executed in one or more counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same
instrument. Delivery of a photocopy or telecopy of an executed counterpart of a
signature page to any Loan Document shall be as effective as delivery of a
manually executed counterpart of such Loan Document.
Section 13.11 MAXIMUM LAWFUL INTEREST RATE.
(a) All agreements between Borrowers and Guarantor(s) and the
Lenders are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Lenders for the use or the forbearance of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"Applicable Law" shall mean the law in effect as of the date hereof; provided,
however, that in the event there is a change in the law, which results in a
higher permissible rate of interest, then this Agreement shall be governed by
such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of Borrowers and the Lenders in the execution, delivery
and acceptance of this Agreement to contract in strict compliance with the laws
of the Commonwealth of Pennsylvania from time to time in effect. If, under or
from any circumstances whatsoever, fulfillment of any provision hereof or of any
of the Loan Documents at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by Applicable
Law, then the obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances whatsoever the
Lenders should ever receive as interest an amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the principal balance evidenced hereby and not to the payment
of interest. This provision shall control every other provision of all
agreements between Borrowers, Guarantor(s) and the Lenders.
(b) If, at any time, the rate of interest, together with all
amounts which constitute interest and which are reserved, charged or taken by
the Lenders as compensation for fees, services or expenses incidental to the
making, negotiating or collection of the loan evidenced hereby, shall be deemed
by any competent court of law, governmental agency or tribunal to exceed the
maximum rate of interest permitted to be charged by the Lenders to Borrowers
under applicable law, then, during such time as such rate of interest would be
deemed excessive, that portion of each sum paid attributable to that portion of
such interest rate that exceeds the maximum rate of interest so permitted shall
be deemed a voluntary prepayment of principal.
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Section 13.12 SET-OFF OF BANK ACCOUNTS. The Borrowers hereby grant to Agent
for the pro rata benefit of the Lenders and their successors and assigns a
continuing lien, security interest and right of set-off as security for all
Obligations, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property now or hereafter in the possession,
custody, safekeeping or control of any Lender or any entity under common control
with any Lender or in transit to any of them. At any time following an Event of
Default which is continuing without demand or notice (any such notice being
expressly waived by the Borrowers), the Agent and/or such Lender may set-off the
same or any part thereof and apply the same to the Obligations of the Borrowers
or any Guarantor even though unmatured and regardless of the adequacy of the
other Collateral. ALL RIGHTS TO REQUIRE THE AGENT OR ANY LENDER TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS,
PRIOR TO EXERCISING ITS RIGHT TO SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWERS, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.
Section 13.13 SEVERABILITY. Every provision of the Loan Documents is
intended to be severable, and if any term or provision hereof or thereof shall
be invalid, illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not be
affected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.
Section 13.14 PAYMENT AND REIMBURSEMENT OF COSTS AND EXPENSES;
INDEMNIFICATION.
(a) Whether or not any Loans are made, the Borrowers shall,
unconditionally upon demand, pay or reimburse the Agent for, and indemnify and
save the Agent harmless against, any and all liabilities, losses (including
judgments, penalties and fines), costs, expenses, claims, and/or charges
(including without limitation reasonable fees and disbursements of legal
counsel, accountants, investigators, the reasonable allocated costs of in-house
legal counsel, accounting, consulting, brokerage or other similar professional
fees and expenses, and any fees and expenses associated with travel or other
costs relating to any appraisals or examinations conduction with the Loans or
any Collateral, and other experts, whether or not they are employees of the
Agent) (collectively, "Losses") arising out of, relating to or connected with:
(i) the negotiation, preparation, default, collection,
waiver or amendment of any of the Loan Documents, whether or not executed, or
any waiver, modification, restatement, reaffirmation, amendment or consent
thereunder or thereto;
(ii) the administration of the Loan Documents, including,
without limitation, performing audits or investigations or consulting with
attorneys or other advisors with respect to any matter in any way arising out
of, related to, or connected with, the Loan Documents; and
(iii) the Agent's exercise, preservation or enforcement of
any of its rights, remedies or options hereunder.
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(b) Without limiting the generality of the foregoing paragraph
(a), whether or not any Loans are made, the Borrowers shall, unconditionally
upon demand, pay or reimburse each Indemnified Person for, and indemnify and
save each Indemnified Person harmless against, any and all Losses incurred by
such Indemnified Person in connection with, arising out of or in any way
relating to:
(i) any claim (whether civil, criminal or administrative and
whether sounding in tort, contract or otherwise) arising out of, related to or
connected with, the Loan Documents (including, without limitation, related to
property subject to Mortgages or Leasehold Mortgages), whether such claim arises
or is asserted before or after the date hereof or before or after the Maturity
Date (whether such claim is asserted by such Indemnified Person or the Borrowers
or any other Person), or
(ii) any investigation, governmental or otherwise, arising
out of, related to, or in any way connected with, the Loan Documents or the
relationships established thereunder, including the prosecution or defense or
investigation thereof and any litigation or proceeding with respect thereto
(whether or not, in the case of any such litigation or proceeding, such
Indemnified Party is a party thereto);
(iii) protecting, preserving, exercising or enforcing any of
the rights of the Agent and the Lenders in, under or related to the Loan
Documents;
(iv) all transfer, documentary, stamp and similar taxes, and
all recording and filing fees and taxes payable in connection with, arising out
of, or in any way related to, the execution, delivery and performance of the
Loan Documents or the making of the Loans; and
(v) commissions or claims by or on behalf of brokers,
finders or agents not retained by the Lenders; the Borrowers represent that they
have not engaged or used any such broker, finder or agent;
except to the extent any of the foregoing is held by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted solely and
directly from the gross negligence or willful misconduct of such Indemnified
Person.
(c) The amount of all of such Losses shall, beginning ten (10)
days following notification of the Parent Borrower thereof until paid, bear
interest at the rate applicable to Base Rate Loans hereunder (including the
Default Rate) and all obligations of Borrowers in respect thereof shall be
secured by the Collateral.
Section 13.15 CONSENT TO JURISDICTION. For the purpose of any action that
may be brought in connection with this Agreement or any Loan Document, the
Borrowers hereby consent to the jurisdiction and venue of the courts of the
Commonwealth of Pennsylvania or of any federal court located in such state 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
Borrowers at the address provided for in Section 13.01 (Notices) and service so
made shall be deemed to be completed on actual receipt. The Borrowers waive the
right to contest the jurisdiction and venue of the courts located in the
Commonwealth of Pennsylvania on the ground
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of inconvenience or otherwise and, further, waives any right to bring any action
or proceeding against the Lenders in any court outside the City of Philadelphia
in the Commonwealth of Pennsylvania. The provisions of this Section shall not
limit or otherwise affect the right of the Agent or any Lender to institute and
conduct an action in any other appropriate manner, jurisdiction or court.
Section 13.16 TERMINATION. This Agreement shall remain in full force and
effect until the later of (a) the time that all Obligations shall have been
indefeasibly paid in full and (b) the time that there shall be no Commitment;
provided, however, that the Borrowers' expense and indemnification obligations
pursuant to Section 13.13 above as well as any liability in connection with any
untrue representation or warranty, shall survive such termination.
Section 13.17 WAIVER OF RIGHT TO JURY TRIAL. EACH PARTY MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWERS HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWERS CERTIFY THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
LENDER TO ACCEPT THIS AGREEMENT AND MAKE THE LOAN.
Section 13.18 CONFIDENTIALITY. The Agent and the Lenders agree to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent the Agent
and the Lenders from disclosing any such information (a) to any Transferee or
prospective Transferee that agrees to comply with the provisions of this Section
(or executes a confidentiality agreement with confidentiality terms that are
substantially similar to the terms of this Section), (b) to any of its
employees, directors, agents, attorneys, accountants and other professional
advisors), (c) upon the request or demand of any Governmental Authority or
self-regulatory body having or claiming to have jurisdiction over it, (d) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any requirement of law, (e) if requested or
required to do so in connection with any litigation or similar proceeding to
which it is a party (so long as the pertinent Loan Party is given a reasonable
opportunity to seek a protective order to safeguard such information), or (f) in
connection with the exercise of any remedy hereunder or under any
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other Loan Document. Notwithstanding any other express or implied agreement,
arrangement or understanding to the contrary, each of the parties hereto hereby
agree that, each party hereto (and each of its employees, representatives or
agents) are permitted to disclose to any and all persons, without limitation,
the tax treatment and tax aspects of the Loans and the other transactions
contemplated hereby, and all materials of any kind (including opinions or other
tax analyses) that are provided to the Loan Parties or the Agent and the
Lenders, related to such tax treatment and tax aspects. To the extent not
inconsistent with the immediately preceding sentence, this authorization does
not extend to disclosure of any other information or any other term or detail
not related to the tax treatment or tax aspects of the Loans or the other
transactions contemplated hereby.
Section 13.19 USA PATRIOT ACT. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrowers that, pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies each Borrower, which information includes the name
and address of each Borrower and other information that will allow such Lender
to identify such Borrower in accordance with the Act.
[THE NEXT PAGES ARE THE SIGNATURE PAGES]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
PARENT BORROWER:
SL INDUSTRIES, INC.
By: /s/ David R. Nuzzo
------------------------------------
Name: David R. Nuzzo
Title: Vice President, Finance &
Administration, Secretary and
Treasurer
Phone: (856) 222-5515
Fax: (856) 727-1683
E-Mail: david.nuzzo@slindustries.com
SUBSIDIARY BORROWERS:
CEDAR CORPORATION
CONDOR D.C. POWER SUPPLIES, INC.
CONDOR HOLDINGS, INC.
RFL ELECTRONICS INC.
SL AUBURN, INC.
SL DELAWARE, INC.
SL DELAWARE HOLDINGS, INC.
SL SURFACE TECHNOLOGIES, INC.
SL MONTEVIDEO TECHNOLOGY, INC.
SLW HOLDINGS, INC.
TEAL ELECTRONICS CORPORATION
WABER POWER, LTD
By: /s/ David R. Nuzzo
------------------------------------
Name: David R. Nuzzo
Title: Authorized Officer
See contact information above
[signature page for Credit Agreement]
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AGENT AND LENDER:
BANK OF AMERICA, N.A.
By: /s/ Henry Bullitt
------------------------------------
Name: Henry Bullitt
Title: Senior Vice President
Mail Stop: PA7-188-11-01
1600 John F. Kennedy Blvd.
4 Penn Center, Suite 1100
Philadelphia, PA 19103
Phone: 267-675-0194
Fax: 267-675-0219
E-Mail: henry.bullitt@bankofamerica.com
Wire Transfer Information:
ABA#
G/L AC/#
RE:
------------------------------------
Att:
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[signature page for Credit Agreement]