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EXHIBIT 4
LOAN AGREEMENT
Agreement, dated the 14th day of August, 1996, by and between Tuscarora
Incorporated, a Pennsylvania corporation (the "Borrower"), and Mellon Bank,
N.A., a national banking association (the "Bank") ("Agreement").
W I T N E S S E T H:
WHEREAS, pursuant to the Secured Term Loan, Revolving Credit and Line of
Credit Agreement, dated July 27, 1983, by and between the Borrower (under its
former name, Tuscarora Plastics, Inc.) and Bank, as amended by (i) the First
Amendment to Secured Term Loan, Revolving Credit and Line of Credit Agreement,
dated September 4, 1984, (ii) the Second Amendment to Secured Term Loan,
Revolving Credit and Line of Credit Agreement, dated October 2, 1985, (iii) the
Third Amendment to Secured Term Loan, Revolving Credit and Line of Credit
Agreement, dated January 30, 1987, (iv) the Fourth Amendment to Secured Term
Loan, Revolving Credit and Line of Credit Agreement, dated August 31, 1987, (v)
the Fifth Amendment to Secured Term Loan, Revolving Credit and Line of Credit
Agreement, dated February 29, 1988, (vi) the Sixth Amendment to Secured Term
Loan, Revolving Credit and Line of Credit Agreement, dated August 1, 1989,
(vii) the Seventh Amendment to Secured Term Loan, Revolving Credit and Line of
Credit Agreement, dated May 31, 1990, (viii) the Eighth Amendment to Secured
Term Loan, Revolving Credit and Line of Credit Agreement, dated August 1, 1991,
(ix) the Ninth Amendment to Secured Term Loan, Revolving Credit and Line of
Credit Agreement, dated December 18, 1991, (x) the Tenth Amendment to Secured
Term Loan, Revolving Credit and Line of Credit Agreement, dated August 18,
1992, (xi) the Eleventh Amendment to Secured Term Loan, Revolving Credit and
Line of Credit Agreement, dated February 26, 1993, (xii) the Twelfth Amendment
to Secured Term Loan, Revolving Credit and Line of Credit Agreement, dated June
30, 1994 and (xiii) the Thirteenth Amendment to Secured Term Loan, Revolving
Credit and Line of Credit Agreement, dated May 31, 1995 (as amended, the "Prior
Loan Agreement"), the Bank has, among other things, extended credit to the
Borrower in the form of (a) a revolving credit loan facility in an aggregate
principal amount not to exceed Fourteen Million and 00/100 Dollars
($14,000,000.00) and (b) four (4) separate term loans (defined in the Prior
Loan Agreement as Term Loan No. 7, Term Loan No. 8, Term Loan No. 9 and Term
Loan No. 10) in an original principal amount of Forty Million Eight Hundred
Thousand and 00/100 Dollars ($40,800,000.00); and
WHEREAS, the Borrower has requested the Bank (i) to provide a revolving
credit facility to the Borrower in an aggregate principal amount not to exceed
Forty Million and 00/100 Dollars
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($40,000,000.00), the proceeds of which will be used for general corporate
purposes and acquisitions and (ii) to extend a term loan to the Borrower in the
original principal amount of Thirty Seven Million and 00/100 Dollars
($37,000,000.00), the proceeds of which will be used to pay to the Bank all
amounts due to it under the Prior Loan Agreement; and
WHEREAS, the Bank is willing to extend such credit to Borrower pursuant to
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINITIONS. In addition to other words
and terms defined elsewhere in this Agreement, the following words and terms
have the following meanings, respectively, unless the context otherwise clearly
requires:
"Affiliate" shall mean, as of the date hereof or any time
during the term of this Agreement, any Person which directly or indirectly
controls, is controlled by or is under common control with Borrower. The term
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Loan Agreement as amended,
modified or supplemented from time to time.
"As Offered Rate" shall mean, for any Interest Period for any
As Offered Rate Loan, the fixed interest rate per annum offered by the Bank to
the Borrower in Bank's sole discretion.
"As Offered Rate Loan" shall mean any Loan that bears interest
with reference to the As Offered Rate.
"Assessment Rate" shall mean, for any day of any Interest
Period for a CD Rate Loan, the fixed rate per annum (rounded upward to the next
higher whole multiple of 1/100% if such rate is not such a multiple) determined
in good faith by the Bank in accordance with its usual procedures (which
determination shall be conclusive
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absent manifest error) as representing for such day the maximum effective rate
per annum payable by the Bank to the Federal Deposit Insurance Corporation (or
any successor) for such day for insurance on dollar time deposits in an amount
and for a maturity equal to such CD Rate Loan and such Interest Period,
exclusive of any credit allowed against such annual assessment on account of
assessment payments made or to be made by Bank. The CD Rate shall be adjusted
automatically as of the effective date of each change in the Assessment Rate.
"Bank" means Mellon Bank, N.A., a national banking association
with its main office located at Two Mellon Bank Center, Pittsburgh,
Pennsylvania 15259.
"Borrower" shall mean Tuscarora Incorporated, a Pennsylvania
corporation, with its chief executive office at 800 Fifth Avenue, New Brighton,
Pennsylvania 15066.
"Business Day" shall mean a day of the year on which banks are
not required or authorized to close in Pittsburgh, Pennsylvania and, if the
applicable Business Day relates to any Libor Rate Loan, a day on which dealings
are carried on in the London interbank eurodollar market.
"Capital Expenditure" shall mean any expenditure made or
liability incurred which is, in accordance with GAAP, treated as a capital
expenditure and not as an expense item for the year in which it was made or
incurred, as the case may be.
"Capitalized Lease Obligations" shall mean any amount payable
with respect to any lease of any tangible or intangible property (whether real,
personal or mixed), however denoted, which is required by GAAP to be reflected
as a liability on the balance sheet of the lessee.
"Cash Flow" shall mean, for the period of determination, (i)
Net Income, (ii) plus depreciation, depletion and amortization, (iii) minus
Eight Million Dollars ($8,000,000.00), (iv) minus Distributions, in each case
determined and Consolidated for the Borrower and its Subsidiaries in accordance
with GAAP.
"CD Rate" shall mean, for any Interest Period for any CD Rate
Loan, the interest rate per annum determined by Bank by adding:
(A) the rate per annum (rounded upwards to the next
higher whole multiple of 1/100% if such rate is
not such a multiple) equal at all times during
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such Interest Period to the quotient of (i) the
rate of interest estimated in good faith by the
Bank (which determination shall be conclusive) to
be the average of the secondary market bid rates
at or about 11:00 a.m., Pittsburgh, Pennsylvania
time, on the first day of such Interest Period by
dealers of recognized standing for negotiable
certificates of deposit of major money center
banks for delivery on such day in an amount and
for a maturity equal to such CD Rate Loan and
such Interest Period, divided by (ii) a number
equal to 1.00 minus the CD Reserve Requirement
and
(B) the Assessment Rate for such date.
"CD Rate Loan" shall mean any Loan that bears interest with
reference to the CD Rate.
"CD Reserve Requirement" shall mean, for any day of any
Interest Period for a CD Rate Loan, the percentage (rounded upward to the next
higher whole multiple of 1/100% if such rate is not such a multiple),
determined in good faith by Bank in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) as representing for
such day the maximum effective reserve requirement (whether basic,
supplemental, marginal, emergency or otherwise) prescribed by the Board of
Governors of the Federal Reserve System (or any successor) with respect to
liabilities or assets consisting of non-personal time deposits in dollars of
the United States in an amount and for a maturity equal to such CD Rate Loan
and such Interest Period. The CD Rate shall be adjusted automatically as of
the effective date of such change and the CD Reserve Requirement.
"Change of Control" shall mean (i) any Person or group within
the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Agreement, has become the owner of,
directly or indirectly, beneficially or of record, shares representing more
than 35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; or (ii) the Continuing Directors
have ceased to occupy a majority of the seats (excluding vacant seats) on the
Board of Directors of the Borrower.
"Closing" shall mean the closing of the transactions provided
for in this Agreement on the Closing Date.
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"Closing Date" shall mean August 14, 1996 or such other date
upon which the parties may agree.
"Code" shall mean the Internal Revenue Code of 1986 as amended
along with the rules, regulations, decisions and other official interpretations
in connection therewith.
"Consolidated" shall mean the resulted consolidation of the
financial statements of the Borrower and each of its Subsidiaries in accordance
with GAAP, including principles of consolidation consistent with those applied
in preparation of the Consolidated financial statements referred to in Section
6.1 herein.
"Continuing Directors" shall mean, collectively, (i) all
members of the Board of Directors of the Borrower who have held office
continuously since the date of this Agreement and (ii) all members of the Board
of Directors of the Borrower who assume office after the date of this Agreement
and whose election and nomination for election by the Borrower's shareholders
was approved by a vote of two-thirds of the then Continuing Directors.
"Distributions" shall mean, for the period of determination,
(a) all distributions of cash, securities or other property (other than capital
stock) on or in respect of any shares of any class of capital stock of the
Borrower; and (b) all purchases, redemptions or other acquisitions by Borrower
of any shares of any class of capital stock of the Borrower other than in
connection with the exercise of stock options granted by the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as in effect as of the date of this Agreement and as amended from time
to time in the future.
"ERISA Affiliate" shall mean a Person which is under common
control with Borrower within the meaning of Section 414(b) of the Code
including, but not limited to, a Subsidiary of the Borrower.
"Event of Default" means any of the Events of Default
described in Section 7.01 of this Agreement.
"Expiry Date" shall mean, with respect to the Revolving Credit
Loans, the Revolving Credit Expiry Date and, with respect to the Term Loan, the
Term Loan Expiry Date.
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"Fixed Rate" shall mean, for any Interest Period for any Fixed
Rate Loan, the sum of (A) the interest rate per annum (rounded upward to the
next higher whole multiple of 1/100% if such rate is not such a multiple)
determined in good faith by Bank in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the rate of
interest which the Bank is required to pay (or will offer to pay) on a
liability in an amount and for a maturity equal to such Fixed Rate Loan and
such Interest Period as adjusted at the time it is being determined by Bank for
reserve requirements and such other requirements as may be imposed by any
Official Body, together with fees assessed by Bank's money management
department plus (B) one and one quarter of one percent (1.25%).
"Fixed Rate Loan" shall mean any Loan that bears interest with
reference to the Fixed Rate.
"Funded Debt" shall mean, as of the date of determination, (i)
all Indebtedness which would as of such date be classified in whole or in part
as a long-term liability in accordance with GAAP (including the current portion
thereof), all Indebtedness having a final maturity more than one (1) year from
the date of creation of such Indebtedness and all Indebtedness, regardless of
its term, which is renewable or extendable (pursuant to the terms thereof or
otherwise) to a date more than one year from the date of the creation of such
Indebtedness, and (ii) all Indebtedness which would as of such date be
classified in whole or in part as a current liability in accordance with GAAP,
in each case determined and Consolidated for the Borrower and its Subsidiaries
in accordance with GAAP.
"Funded Debt to Cash Flow Ratio" shall mean, as of the date of
determination, the ratio of Funded Debt to Cash Flow for the preceding twelve
(12) month period.
"Funding Breakage Date" shall mean as set forth in Section
2.09(c) hereof.
"Funding Breakage Indemnity" shall mean as set forth in
Section 2.09(c) hereof.
"GAAP" means generally accepted accounting principles (as such
principles may change from time to time) applied on a consistent basis (except
for changes in application in which the Borrower's independent certified public
accountants concur).
"Indebtedness" shall mean (i) all obligations for borrowed
money (including, without limitation, all notes payable
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and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or similar instruments, all obligations
on which interest charges are customarily paid, all obligations under
conditional sale or other title retention agreements and all obligations issued
or assumed as full or partial payment for property whether or not any such
notes, drafts or obligations are obligations for borrowed money), (ii) all
obligations secured by any Lien existing on property owned or acquired subject
thereto, whether or not the obligations secured thereby shall have been
assumed, (iii) all obligations to repay amounts drawn down by beneficiaries of
letters of credit and (iv) indebtedness represented by obligations under a
lease that is required to be capitalized for financial reporting purposes in
accordance with GAAP and the amount of such indebtedness shall be the
capitalized amount of such obligations as determined in accordance with such
principles; provided, however, that obligations of the Borrower to pay
supplemental pension benefits, deferred compensation or deferred income taxes
shall not in any event be deemed to constitute Indebtedness for purposes of
this Agreement.
"Interest Coverage Ratio" shall mean, for the period of
determination, the ratio of Operating Earnings to Interest Expense.
"Interest Expense" shall mean, for the period of
determination, all interest accruing during such period on Indebtedness,
including without limitation, all interest required under GAAP to be
capitalized during such period, in each case determined and Consolidated for
the Borrower and its Subsidiaries in accordance with GAAP.
"Interest Period" shall mean, with respect to any Libor Rate
Loan, As Offered Rate Loan, CD Rate Loan, or Fixed Rate Loan, the period
commencing on the date such Loan is made or converted and ending on the last
day of such period as selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of such period
as selected by the Borrower pursuant to the provisions below. The duration of
each Interest Period for any Libor Rate Loan, As Offered Rate Loan, CD Rate
Loan or Fixed Rate Loan shall be for the number of days, months or years
selected by Borrower upon notice, in accordance with Sections 2.01(c) or
2.02(c) provided that:
(i) the Interest Period for any Libor Rate
Loan or CD Rate Loan shall be one (1), two (2), three (3), four (4) five (5),
six (6), nine (9) or twelve (12) months or such other period as may be agreed
upon by Borrower and Bank;
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(ii) the Interest Period for any As Offered
Rate Loan shall be one (1), two (2), three (3), four (4), five (5) or six (6)
months or such other period as may be agreed upon by Borrower and Bank;
(iii) the Interest Period for any Fixed Rate
Loan shall be for one (1), two (2), three (3), four (4), five (5), six (6),
seven (7) or eight (8) years or such other period as may be agreed upon by
Borrower and Bank;
(iv) Interest Periods shall be selected in a
manner which will insure that Borrower shall be able to make scheduled payments
of principal under the Notes without incurring liability under Section 2.09(c)
hereof; provided, however, that in the event the Borrower is required to prepay
any Libor Rate Loan, As Offered Rate Loan, CD Rate Loan or Fixed Rate Loan in
order to make a scheduled payment of principal under the Notes, the Borrower
shall indemnify the Bank as provided in Section 2.09(c) hereof;
(v) whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall occur on the next succeeding Business Day,
provided that if such extension of time would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day;
(vi) if the Borrower fails to so select the
duration of any Interest Period for an As Offered Rate Loan, Libor Rate Loan or
CD Rate Loan, the duration of such Interest Period shall be one (1) month;
(vii) if the Borrower fails to so select the
duration of an Interest Period for a Fixed Rate Loan, the Borrower shall be
deemed to have selected a Prime Rate Loan; and
(viii) the last day of any Interest Period
shall not occur after the Expiry Date of the facility under which such Loan is
made.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree
or award of any Official Body.
"Libor Rate" shall mean, for any Interest Period for any Libor
Rate Loan, a fixed rate per annum (rounded upwards to the next higher whole
multiple of 1/100% if such rate is not such a multiple) equal at all times
during such Interest Period to the
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quotient of (a) the rate determined in good faith by the Bank in accordance
with its usual procedures (such determination to be conclusive absent manifest
error) to be the average of the rates per annum (rounded upwards to the next
higher whole multiple of 1/100% if such rate is not such a multiple) at which
deposits in United States Dollars are offered at 11:00 a.m. (London, England
Time) (or as soon thereafter as is reasonably practicable) by prime banks in
the London interbank eurodollar market two (2) Business Days prior to the first
day of such Interest Period in an amount and maturity equal to the amount and
maturity of such Libor Rate Loan, divided by (b) a number equal to 1.00 minus
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of the Libor Reserve Requirements.
"Libor Rate Loan" shall mean any Loan that bears interest with
reference to the Libor Rate.
"Libor Reserve Requirements" shall mean, for any day of any
Interest Period for a Libor Rate Loan, the percentage (rounded upward to the
next higher whole multiple of 1/100% if such rate is not such a multiple) as
determined in good faith by the Bank in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) as representing
the maximum reserves (whether basic, supplemental, marginal, emergency or
otherwise) prescribed by the Board of Governors of the Federal Reserve System
(or any successor) with respect to liabilities or assets consisting of or
including "Eurocurrency Liabilities" (as defined in Regulation D of the Board
of Governors of the Federal Reserve System) in an amount and for a maturity
equal to such Libor Rate Loan and such Interest Period. The Libor Rate shall
be adjusted automatically as of the effective date of each change in the Libor
Reserve Requirement.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature including, but not limited to, any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loan" or "Loans" shall mean the Revolving Credit Loans, the
Term Loan (whether made as or converted to Prime Rate Loans, Libor Rate Loans,
As Offered Rate Loans, CD Rate Loans or Fixed Rate Loans) and any other credit
to the Borrower extended by the Bank in accordance with Article II hereof as
evidenced by the Notes, as the case may be.
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"Loan Document" or "Loan Documents" mean, singularly or
collectively as the context may require, this Agreement, the Notes and any and
all other documents, instruments, certificates and agreements executed and
delivered in connection with this Agreement, as any of them may be amended,
modified, extended or supplemented from time to time.
"Material Adverse Change" shall mean a material adverse change
in the business, operations, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect
on the business, operations, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
"Net Income" means, for the period of determination, net
income (after taxes), excluding, however, extraordinary gains, in each case
determined and Consolidated for the Borrower and its Subsidiaries in accordance
with GAAP.
"Notes" shall collectively mean the Revolving Credit Note, the
Term Note and any other note of the Borrower executed and delivered pursuant to
this Agreement, together with all extensions, renewals, refinancings or
refundings in whole or in part.
"Office", when used in connection with the Bank, means its
designated office located at Two Mellon Bank Center, Pittsburgh, Pennsylvania
15259 or such other office of the Bank as the Bank may designate in writing
from time to time.
"Official Body" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Operating Earnings" shall mean, for the period of
determination, Net Income, plus Interest Expense plus all income taxes included
in Net Income.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Title IV of ERISA.
"Person" shall mean an individual, corporation, partnership,
joint venture, trust, or unincorporated organization or government or agency or
political subdivision thereof.
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"Plan" means any deferred compensation program, including both
single and multi-employer plans, subject to Title IV of ERISA and established
and maintained for employees of the Borrower or any Subsidiary or any ERISA
Affiliate.
"Potential Default" shall mean any event or condition which
with notice, passage of time or determination by Bank, or any combination of
the foregoing, would constitute an Event of Default.
"Prime Rate" shall mean that rate of interest per annum
announced by Bank from time to time as its Prime Rate which may not represent
the lowest rate charged by Bank to other borrowers at any time or from time to
time.
"Prime Rate Loan" shall mean any Loan that bears interest with
reference to the Prime Rate.
"Prior Loan Agreement" shall have the meaning assigned to such
term in the preamble hereof.
"Prior Security Documents" shall have the meaning assigned to
such term in Section 2.14 hereof.
"Prohibited Transaction" shall mean any transaction which is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not
exempt under Section 4975 of the Code or Section 408 of ERISA.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, except any such event
as to which the provision for thirty (30) days notice to the PBGC is waived
under applicable regulations.
"Revolving Credit Expiry Date" shall mean August 31, 1999, or
such earlier date on which the Revolving Credit Facility Commitment shall have
been terminated pursuant to this Agreement.
"Revolving Credit Facility Commitment" shall mean as set forth
in Section 2.01(a) hereof.
"Revolving Credit Loans" shall mean as set forth in Section
2.01(a) hereof.
"Revolving Credit Note" means the Revolving Credit Note of
Borrower executed and delivered pursuant to Section 2.01(b) of this Agreement,
as the same may be amended, modified or supplemented from time to time,
together with all extensions, renewals, refinancings or refundings, in whole or
in part.
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"Subsidiary" of Borrower at any time means (i) any corporation
more than fifty percent (50%) of whose stock of any class or classes having by
the terms thereof ordinary voting power to elect a majority of the directors of
such corporation is owned (directly or indirectly) by the Borrower and/or one
or more Subsidiaries of the Borrower and (ii) any partnership, association,
joint venture or other entity in which the Borrower and/or one or more
Subsidiaries of the Borrower has more than a fifty percent (50%) equity
interest.
"Tangible Net Worth" means, as of the date of determination,
net worth less all intangible assets, in each case determined and Consolidated
for the Borrower and its Subsidiaries in accordance with GAAP.
"Termination Event" shall mean (i) a Reportable Event, (ii)
the termination of a single employer Plan or the treatment of a single employer
Plan amendment as the termination of such Plan under Section 4041 of ERISA, or
the filing of a notice of intent to terminate a single employer Plan, or (iii)
the institution of proceedings to terminate a single employer Plan by the PBGC
under Section 4042 of ERISA, or (iv) the appointment of a trustee to administer
any single employer Plan.
"Term Loan" shall mean as set forth in Section 2.02(a) hereof.
"Term Loan Expiry Date" shall mean August 31, 2004.
"Term Note" means the Term Note of Borrower executed and
delivered pursuant to Section 2.02(b) of this Agreement, as may be amended,
modified or supplemented from time to time, together with all extensions,
renewals, refinancings or refundings, in whole or in part.
"Treasury Rate" as of any Funding Breakage Date shall mean the
rate per annum determined by the Bank in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the
semiannual equivalent yield to maturity (expressed as a semiannual equivalent
and decimal and, in the case of United States Treasury bills, converted to a
bond equivalent yield) for United States Treasury securities maturing on the
last day of the corresponding Interest Period and trading in the secondary
market in reasonable volume (or if no such securities mature on such date, the
rate determined by standard securities interpolation methods as applied to the
series of securities maturing as close as possible to, but earlier than, such
date, and
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the series of such securities maturing as close as possible to, but later than,
such date).
ARTICLE II
THE CREDIT FACILITIES
2.01 Revolving Credit Facility Commitment.
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(a) REVOLVING CREDIT LOANS. Subject to the
terms and conditions and relying upon the representations and warranties set
forth in this Agreement and the other Loan Documents, the Bank agrees to make,
continue or convert loans (the "Revolving Credit Loans") to the Borrower at any
time or from time to time on or after the Closing Date and to and including the
day immediately preceding the Revolving Credit Expiry Date, in an aggregate
principal amount not exceeding at any one time outstanding Forty Million and
00/100 Dollars ($40,000,000.00) (the "Revolving Credit Facility Commitment").
Within the limits of time and amount set forth in this Section 2.01, and
subject to the provisions of this Agreement including, without limitation, the
Bank's right to demand repayment of the Revolving Credit Loans upon the
occurrence of an Event of Default, Borrower may borrow, repay and reborrow
under this Section 2.01; provided, however, that Borrower may prepay any Libor
Rate Loan, As Offered Rate Loan or CD Rate Loan only on the last day of the
applicable Interest Period for such Libor Rate Loan, As Offered Rate Loan or CD
Rate Loan.
(b) REVOLVING CREDIT NOTE. The obligation
of Borrower to repay the unpaid principal amount of the Revolving Credit Loans
made to Borrower by the Bank and to pay interest on the unpaid principal amount
thereof will be evidenced in part by the Revolving Credit Note of Borrower
dated the Closing Date, in substantially the form attached as Exhibit "A" to
this Agreement with the blanks appropriately filled. The executed Revolving
Credit Note will be delivered by Borrower to the Bank on the Closing Date.
(c) MAKING, CONTINUING OR CONVERTING OF
REVOLVING CREDIT LOANS. Subject to the terms and conditions set forth in this
Agreement and the other Loan Documents, and provided that the Borrower has
satisfied all applicable conditions specified in Article IV hereof, the Bank
shall make Revolving Credit Loans to the Borrower which, as selected by the
Borrower pursuant to this Section 2.01(c), shall be Prime Rate Loans, Libor
Rate Loans, As Offered Rate Loans or CD Rate Loans.
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(i) Each Revolving Credit Loan that is made as
or converted into a Prime Rate Loan shall be made or converted on such Business
Day and in such amount as Borrower shall request by written notice received by
the Bank no later than 10:00 a.m. (Pittsburgh, Pennsylvania time) on the
Business Day requested by the Borrower to be the date of disbursement of the
requested Prime Rate Loan. On each borrowing date, the Bank shall make the
proceeds of the Prime Rate Loan available to Borrower at the Bank's Office in
immediately available funds not later than 12:00 noon (Pittsburgh,
Pennsylvania, time).
(ii) Each Revolving Credit Loan that is made
as, continued or converted into a Libor Rate Loan shall be made on such
Business Day, in such amount (greater than or equal to Five Hundred Thousand
Dollars ($500,000) provided, however, that any amount in excess of Five Hundred
Thousand Dollars ($500,000) may only be in increments of One Hundred Thousand
Dollars ($100,000)), and with such an Interest Period as Borrower shall request
by written notice received by the Bank no later than 10:00 a.m. (Pittsburgh,
Pennsylvania time) on the Second (2nd) Business Day prior to the date of
disbursement of the requested Libor Rate Loan. On each borrowing date, the
Bank shall make the proceeds of the Libor Rate Loan available to Borrower at
the Bank's Office in immediately available funds, no later than 12:00 noon
(Pittsburgh, Pennsylvania time). In addition, in the event that Borrower
desires to continue a Libor Rate Loan for an additional Interest Period,
Borrower shall provide Bank with written notice thereof on the Second (2nd)
Business Day prior to the expiration of the applicable Interest Period. In the
event that Borrower fails to provide the Bank with the required written notice
on the Second (2nd) Business Day prior to the expiration of the applicable
Interest Period for a Libor Rate Loan, Borrower shall be deemed to have given
written notice that such Loan shall be converted to a Prime Rate Loan on the
last day of the applicable Interest Period. Each written notice of any Libor
Rate Loan shall be irrevocable and binding on Borrower and Borrower shall
indemnify the Bank against any loss or expense incurred by the Bank as a result
of any failure by Borrower to consummate such transaction calculated as set
forth in Section 2.09(c) hereof.
(iii) Each Revolving Credit Loan that is made
as, continued or converted into an As Offered Rate Loan shall be made on such
Business Day, in such amount (greater than or equal to One Million Dollars
($1,000,000), provided, however, that any amount in excess of One Million
Dollars ($1,000,000) may only be in increments of One Hundred Thousand Dollars
($100,000)), and with such Interest Period as Borrower shall request by written
notice received by the Bank no later than 10:00 a.m. (Pittsburgh,
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Pennsylvania time) on the Second (2nd) Business Day prior to the date of
requested disbursement of the requested As Offered Rate Loan. On each
borrowing date, the Bank shall make the proceeds of the As Offered Rate Loan
available to Borrower at the Bank's Office in immediately available funds not
later than 12:00 noon (Pittsburgh, Pennsylvania time). In addition, in the
event that Borrower desires to continue an As Offered Rate Loan for an
additional Interest Period, Borrower shall provide Bank with written notice
thereof on the Second (2nd) Business Day prior to the expiration of the
applicable Interest Period. In the event that Borrower fails to provide the
Bank with the required written notice on the Second (2nd) Business Day prior to
the expiration of the applicable Interest Period for an As Offered Rate Loan,
Borrower shall be deemed to have given written notice that such Loan shall be
converted to a Prime Rate Loan on the last day of the applicable Interest
Period. Each written notice of any As Offered Rate Loan shall be irrevocable
and binding on Borrower and Borrower shall indemnify the Bank against any loss
or expense incurred by the Bank as a result of any failure by Borrower to
consummate such transaction calculated as set forth in Section 2.09(c) hereof.
(iv) Each Revolving Credit Line that is made
as, continued or converted into a CD Rate Loan shall be made on such Business
Day, in such amount (greater than or equal to One Million Dollars ($1,000,000),
provided, however, that any amount in excess of One Million Dollars
($1,000,000) may only be in increments of One Hundred Thousand Dollars
($100,000)), and with such Interest Period as Borrower shall request by written
notice received by the Bank no later than 10:00 a.m. (Pittsburgh, Pennsylvania
time) on the Second (2nd) Business Day prior to the date of requested
disbursement of the requested CD Rate Loan. On each borrowing date, the Bank
shall make the proceeds of the CD Rate Loan available to Borrower at the Bank's
office in immediately available funds, no later than 12:00 noon (Pittsburgh,
Pennsylvania time). In addition, in the event that Borrower desires to
continue a CD Rate Loan for an additional Interest Period, Borrower shall
provide Bank with written notice thereof on the Second (2nd) Business Day prior
to the expiration of the applicable Interest Period. In the event that
Borrower fails to provide the Bank with the required written notice on the
Second (2nd) Business Day prior to the expiration of the applicable Interest
Period for a CD Rate Loan, Borrower shall be deemed to have given written
notice that such Loan shall be converted to a Prime Rate Loan on the last day
of the applicable Interest Period. Each written notice of any CD Rate Loan
shall be irrevocable and binding on Borrower and Borrower shall indemnify the
Bank against any loss or expense incurred by
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the Bank as the result of any failure by Borrower to consummate such
transaction calculated as set forth in Section 2.09(c) hereof.
(d) MAXIMUM PRINCIPAL BALANCE OF REVOLVING
CREDIT LOANS. The aggregate principal amount of all Revolving Credit Loans
outstanding shall not exceed the Revolving Credit Facility Commitment. The
Borrower agrees that if at any time the aggregate principal amount of all
Revolving Credit Loans outstanding exceeds the Revolving Credit Facility
Commitment ("Over Advance"), the Borrower shall promptly pay to the Bank such
amount as may be necessary to eliminate such Over Advance. If not sooner paid,
all of the Revolving Credit Loans, all unpaid accrued interest thereon, and all
other sums and costs incurred by Bank pursuant to this Agreement with respect
to the Revolving Credit Loans, shall be immediately due and payable on the
Revolving Credit Expiry Date, without notice, presentment or demand.
(e) EXTENSION OF REVOLVING CREDIT EXPIRY
DATE. On or before each annual anniversary of the date of this Agreement and
so long as no Event of Default has occurred and is continuing, the Bank will,
in the ordinary course of its business and in its sole and absolute discretion,
(i) determine whether to extend the Revolving Credit Expiry Date by one (1)
additional year, and (ii) advise the Borrower in writing of its decision. The
Borrower acknowledges that the Bank has no obligation whatsoever to the
Borrower to extend the Revolving Credit Expiry Date.
2.02 Term Loan.
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(a) TERM LOAN. Subject to the terms and
conditions of, and relying upon the representations and warranties set forth
in, this Agreement and the other Loan Documents, the Bank agrees to make a term
loan ("Term Loan") to the Borrower on the Closing Date in an aggregate
principal amount of Thirty Seven Million Dollars ($37,000,000).
(b) TERM LOAN NOTE. The obligation of the
Borrower to repay the unpaid principal amount of the Term Loan made to the
Borrower by the Bank and to pay interest on the unpaid principal amount thereof
shall be evidenced in part by the Term Loan Note of the Borrower, dated the
Closing Date, in substantially the form attached as Exhibit "B" to this
Agreement, with the blanks appropriately filled. The executed Term Loan Note
shall be delivered by the Borrower to the Bank on the Closing Date.
(c) MAKING THE TERM LOAN AND TERM LOAN RATE
OPTIONS.
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(i) On or before 10:00 a.m. (Pittsburgh,
Pennsylvania time) on the Second (2nd) Business Day prior to the Closing Date,
the Borrower shall advise the Bank of the portion of the Term Loan which shall
be made as a Libor Rate Loan(s) and the Interest Period(s) with respect
thereto; provided, however, that such Libor Rate Loan(s) shall only be made in
such amount(s) greater than or equal to Five Hundred Thousand Dollars
($500,000) and, provided further, that any amounts in excess of Five Hundred
Thousand Dollars ($500,000) may only be in increments of One Hundred Thousand
Dollars ($100,000). After the Closing Date, the Borrower may, subject to the
terms and conditions of this Agreement, convert all or a portion of the Term
Loan which is a Libor Rate Loan(s) to a Prime Rate Loan, As Offered Rate Loan
or Fixed Rate Loan as set forth in this Section 2.02(c). Any portion of the
Term Loan that is converted from either a Prime Rate Loan, As Offered Rate Loan
or Fixed Rate Loan into a Libor Rate Loan shall be converted, and shall begin
to accrue interest with reference to the Libor Rate, on such Business Day, in
such amount (greater than or equal to Five Hundred Thousand Dollars
($500,000.00) provided, however, that any amount in excess of Five Hundred
Thousand Dollars ($500,000) may only be in increments of One Hundred Thousand
Dollars ($100,000)), and with such Interest Period as the Borrower shall
request by written notice received by the Bank no later than 10:00 a.m.
(Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day prior to the
requested date of conversion into such Libor Rate Loan. In addition, in the
event that the Borrower desires to continue the portion of the Term Loan which
is a Libor Rate Loan for an additional Interest Period, the Borrower shall
provide the Bank with written notice thereof on or before 10:00 a.m.
(Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day prior to the
expiration of the applicable Interest Period. In the event that the Borrower
fails to provide the Bank with the required written notice prior to 10:00 a.m.
(Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day prior to the
expiration of the applicable Interest Period for a Libor Rate Loan, the
Borrower shall be deemed to have given notice that such portion of the Term
Loan shall be converted to a Prime Rate Loan on the last day of the applicable
Interest Period. Each written notice of any Libor Rate Loan shall be
irrevocable and binding on the Borrower and the Borrower shall indemnify the
Bank against any loss or expense incurred by the Bank as a result of any
failure by the Borrower to consummate such transaction calculated as set forth
in Section 2.09(c) hereof.
(ii) On or before 10:00 a.m. (Pittsburgh,
Pennsylvania time) on the Second (2nd) Business Day prior to the Closing Date,
the Borrower shall advise the Bank of the portion of the Term Loan which shall
be made as an As Offered Rate Loan(s) and
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the Interest Period(s) with respect thereto; provided, however, that such As
Offered Rate Loan(s) shall only be made in such amount(s) greater than or equal
to One Million Dollars ($1,000,000) and, provided further, that any amounts in
excess of One Million and 00/100 Dollars ($1,000,000.00) may only be in
increments of One Hundred Thousand Dollars ($100,000). After the Closing Date,
the Borrower may, subject to the terms and conditions of this Agreement,
convert all or a portion of the Term Loan which is an As Offered Rate Loan(s)
to a Prime Rate Loan, Libor Rate Loan, or Fixed Rate Loan as set forth in this
Section 2.02(c). Any portion of the Term Loan that is converted from either a
Prime Rate Loan, Libor Rate Loan, or Fixed Rate Loan into an As Offered Rate
Loan shall be converted, and shall begin to accrue interest with reference to
the As Offered Rate, on such Business Day, in such amount (greater than or
equal to One Million Dollars ($1,000,000) provided, however, that any amount in
excess of One Million Dollars ($1,000,000) may only be in increments of One
Hundred Thousand Dollars ($100,000)), and with such Interest Period as the
Borrower shall request by written notice received by the Bank no later than
10:00 a.m. (Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day
prior to the requested date of conversion into such As Offered Rate Loan. In
addition, in the event that the Borrower desires to continue the portion of the
Term Loan which is an As Offered Rate Loan for an additional Interest Period,
the Borrower shall provide the Bank with written notice thereof on or before
10:00 a.m. (Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day
prior to the expiration of the applicable Interest Period. In the event that
the Borrower fails to provide the Bank with the required written notice prior
to 10:00 a.m. (Pittsburgh, Pennsylvania time) on the Second (2nd) Business Day
prior to the expiration of the applicable Interest Period for an As Offered
Rate Loan, the Borrower shall be deemed to have given notice that such portion
of the Term Loan shall be converted to a Prime Rate Loan on the last day of the
applicable Interest Period. Each written notice of any As Offered Rate Loan
shall be irrevocable and binding on the Borrower and the Borrower shall
indemnify the Bank against any loss or expense incurred by the Bank as a result
of any failure by the Borrower to consummate such transaction calculated as set
forth in Section 2.09(c) hereof.
(iii) On or before 10:00 a.m. (Pittsburgh,
Pennsylvania time) on the Second (2nd) Business Day prior to the Closing Date,
the Borrower shall advise the Bank of the portion of the Term Loan which shall
be made as a Fixed Rate Loan(s) and the Interest Period(s) with respect
thereto; provided, however, that such Fixed Rate Loan(s) shall only be made in
such amount(s) greater than or equal to One Million Dollars ($1,000,000) and,
provided further, that any amounts in excess of One Million Dollars
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($1,000,000) may only be in increments of One Hundred Thousand Dollars
($100,000). After the Closing Date, the Borrower may, subject to the terms and
conditions of this Agreement, convert all or a portion of the Term Loan which
is a Fixed Rate Loan(s) to a Prime Rate Loan, Libor Rate Loan or As Offered
Rate Loan as set forth in this Section 2.02(c). Any portion of the Term Loan
that is converted from either a Prime Rate Loan, Libor Rate Loan or As Offered
Rate Loan into a Fixed Rate Loan shall be converted, and shall begin to accrue
interest with reference to the Fixed Rate, on such Business Day, in such amount
(greater than or equal to One Million Dollars ($1,000,000) provided, however,
that any amount in excess of One Million Dollars ($1,000,000) may only be in
increments of One Hundred Thousand Dollars ($100,000)), and with such Interest
Period as the Borrower shall request by written notice received by the Bank no
later than 10:00 a.m. (Pittsburgh, Pennsylvania time) on the Second (2nd)
Business Day prior to the requested date of conversion into such Fixed Rate
Loan. In addition, in the event that the Borrower desires to continue the
portion of the Term Loan which is a Fixed Rate Loan for an additional Interest
Period, the Borrower shall provide the Bank with written notice thereof on or
before 10:00 a.m. (Pittsburgh, Pennsylvania time) on the Second (2nd) Business
Day prior to the expiration of the applicable Interest Period. In the event
that the Borrower fails to provide the Bank with the required written notice
prior to 10:00 a.m. (Pittsburgh, Pennsylvania time) on the Business Day prior
to the expiration of the applicable Interest Period for a Fixed Rate Loan, the
Borrower shall be deemed to have given notice that such portion of the Term
Loan shall be converted to a Prime Rate Loan on the last day of the applicable
Interest Period. Each written notice of any Fixed Rate Loan shall be
irrevocable and binding on the Borrower and the Borrower shall indemnify the
Bank against any loss or expense incurred by the Bank as a result of any
failure by the Borrower to consummate such transaction calculated as set forth
in Section 2.09(c) hereof.
(iv) On the Closing Date and until conversion,
if any, pursuant to the terms and conditions of this Agreement, the portion of
the Term Loan which is not a Libor Rate Loan, As Offered Rate Loan or Fixed
Rate Loan shall be a Prime Rate Loan. After the Closing Date, the Borrower
shall have the option, subject to the terms and conditions of this Agreement,
to convert a portion of the Term Loan which is a Prime Rate Loan to a Libor
Rate Loan, As Offered Rate Loan or Fixed Rate Loan as set forth in this Section
2.02(c). Any portion of the Term Loan that is converted from a Libor Rate
Loan, As Offered Rate Loan or Fixed Rate Loan into a Prime Rate Loan shall be
converted, and shall begin to accrue interest with reference to the Prime Rate,
on such Business Day and in such amount as the Borrower shall request by
written notice
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received by the Bank no later than 10:00 a.m. (Pittsburgh, Pennsylvania time)
on the Business Day of the requested conversion of such portion of the Term
Loan into a Prime Rate Loan.
(d) PAYMENTS OF PRINCIPAL AND MATURITY.
Commencing on October 1, 1996, and continuing on the first day of each January,
April, July and October thereafter through and including the Term Loan Expiry
Date, the Borrower shall make a principal payment in the amount of One Million
One Hundred Fifty Six Thousand Two Hundred Fifty and 00/100 Dollars
($1,156,250.00). All remaining unpaid principal, accrued interest and all
other sums and costs incurred by the Bank pursuant to this Agreement with
respect to the Term Loan shall be immediately due and payable on the Term Loan
Expiry Date without notice, presentment or demand.
2.03 Interest Rates.
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(a) Subject to the terms and conditions of this Agreement,
the aggregate outstanding principal balance of the Revolving Credit Loans shall
be, at the option of Borrower, as selected pursuant to Section 2.01(c), (i)
Prime Rate Loans which shall bear interest at a rate per annum equal to the
Prime Rate, (ii) Libor Rate Loans which shall bear interest during each
Interest Period at a rate per annum equal to one percent (1.00%) in excess of
the Libor Rate for such Interest Period, (iii) As Offered Rate Loans which
shall bear interest during each Interest Period at a rate per annum equal to
the As Offered Rate for such Interest Period, or (iv) CD Rate Loans which shall
bear interest during each Interest Period at a rate per annum equal to one
percent (1.00%) in excess of the CD Rate for such Interest Period.
(b) Subject to the terms and conditions of this Agreement,
the aggregate outstanding principal balance of the Term Loan shall be, at the
option of Borrower, as selected pursuant to Section 2.02(c), (i) Prime Rate
Loans which shall bear interest at a rate per annum equal to the Prime Rate,
(ii) Libor Rate Loans which shall bear interest during each Interest Period at
a rate per annum equal to one and one quarter of one percent (1.25%) in excess
of the Libor Rate for such Interest Period, (iii) As Offered Rate Loans which
shall bear interest during each Interest Period at a rate per annum equal to
the As Offered Rate for such Interest Period or (iv) Fixed Rate Loans which
shall bear interest during each Interest Period at a rate per annum equal to
the Fixed Rate for such Interest Period.
2.04 INTEREST PAYMENTS. The Borrower shall pay to
the Bank interest on the unpaid principal balance of the aggregate outstanding
balance of the Revolving Credit Loans which are Prime
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Rate Loans on the first (1st) day of each January, April, July and October
during the period from the Closing Date to and including the Revolving Credit
Expiry Date. The Borrower shall pay to the Bank interest on the unpaid
principal balance of the Revolving Credit Loans which are Libor Rate Loans, As
Offered Rate Loans or CD Rate Loans on the earlier of (i) the last day of the
applicable Interest Period for such Loan or (ii) for such Loans with an
applicable Interest Period exceeding three (3) months, on the three (3) month
anniversary of each Loan during the period from the Closing Date to and
including the Revolving Credit Expiry Date. The Borrower shall pay to the Bank
interest on the portion of the unpaid principal balance of the Term Loan which
is a Prime Rate Loan, in arrears, on the first (1st) day of each January,
April, July and October during the period from the Closing Date to and
including the Term Loan Expiry Date. The Borrower shall pay to the Bank
interest on the portions of the unpaid principal balance of the Term Loan which
are Libor Rate Loans, As Offered Rate Loans or Fixed Rate Loans, in arrears, on
the earlier of (i) the last day of the applicable Interest Period for each such
Loan or (ii) for such Loans with an applicable Interest Period exceeding three
(3) months, on the three (3) month anniversary of each Loan during the period
from the Closing Date to and including the Term Loan Expiry Date. After
maturity of any part of the Loans (whether by acceleration or otherwise),
interest on such part of the Loans shall be immediately due and payable without
notice, presentment, or demand.
2.05 INTEREST AFTER DEFAULT; USURY. Whenever the
unpaid principal amount of the Loans or any portion thereof, accrued interest
thereon, any fees, or any other sums payable hereunder shall become due and
payable and remain unpaid (whether at maturity, upon the occurrence of an Event
of Default, by acceleration or otherwise) the amount thereof shall thereafter
until paid in full bear interest: (i) in the case of principal on a Prime Rate
Loan, at a rate per annum equal to two percent (2.00%) above the Prime Rate
then in effect, such interest rate to change automatically from time to time
effective as of the effective date of each change in the Prime Rate; and (ii)
in the case of principal on Libor Rate Loans, As Offered Rate Loans, CD Rate
Loans or Fixed Rate Loans, at a rate per annum equal to two percent (2.00%)
above the then current interest rate with respect to each such Loan during the
remainder of the Interest Period applicable to such Loan and, thereafter, in
accordance with clause (i) of this Section 2.05. In the event the rates of
interest provided for in this Section 2.05, or any other section of this
Agreement, are finally determined by any Official Body to exceed the maximum
rate of interest permitted by applicable usury or similar laws, their or
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its application will be suspended and there will be charged instead the maximum
rate of interest permitted by such laws.
2.06 LATE CHARGE. Upon the occurrence of an Event of
Default with respect to the payment of any installment of interest or principal
on the Notes for more than five (5) days after said installment becomes due, in
addition to making a payment of the installment due and any interest thereon at
the applicable default interest rate, the Borrower shall pay to Bank a late
charge in an amount equal to five percent (5%) of any such overdue installment.
2.07 FEES. The Borrower shall pay to Bank a
commitment fee on the unused portion of the Revolving Credit Facility
Commitment during the period from the Closing Date to the Revolving Credit
Expiry Date, payable quarterly in arrears beginning on October 1, 1996 and
continuing on the first (1st) day of each January, April, July and October
thereafter and on the Revolving Credit Expiry Date. Such fee shall be equal to
the amount by which Forty Million and 00/100 Dollars ($40,000,000.00) has
exceeded the average daily closing principal balance of the Revolving Credit
Loans during the preceding calendar quarter, multiplied by one-eighth of one
percent (0.125%), multiplied by a fraction, the numerator of which is the
actual number of days in such calendar quarter and the denominator of which is
360. In addition, the Borrower shall, on the Closing Date, pay to the Bank a
restructuring fee in the amount of Twenty-Five Thousand and 00/100 Dollars
($25,000.00).
2.08 ADJUSTMENT TO PRIME RATE; COMPUTATION OF
INTEREST AND FEES. In the event of any change in the Prime Rate, the rate of
interest upon each Prime Rate Loan shall be adjusted to immediately correspond
with such change; except any interest rate charged hereunder shall not exceed
the highest rate permitted by law. Interest on Loans, unpaid fees and other
sums payable hereunder shall be computed on the basis of a year of three
hundred sixty (360) days and paid for the actual number of days elapsed.
2.09 Additional Costs.
-----------------
(a) If, due to either (i) the introduction of, or any change
in, or in the interpretation of, any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to, or reduction in income receivable by, the Bank of making,
funding or maintaining Loans (or commitments to make the Loans), then the
Borrower shall from time to time, upon demand by the Bank, pay to the Bank
additional amounts sufficient to reimburse such Bank for
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any such additional costs or reduction in income. A certificate of the Bank
submitted to the Borrower on or before the date such demand is made in good
faith as to the amount of such additional costs shall be conclusive and binding
for all purposes, absent manifest error. Upon notice from the Bank to the
Borrower within five (5) Business Days after the Bank notifies the Borrower of
any such additional costs pursuant to this Section 2.09(a), the Borrower may
either (A) prepay in full all Loans of any types so affected then outstanding,
together with interest accrued thereon to the date of such prepayment, or (B)
convert all Loans of any types so affected then outstanding into Loans of any
other type not so affected upon not less than four (4) Business Days' notice to
the Bank. If any such prepayment or conversion of any Libor Rate Loan, As
Offered Rate Loan, CD Rate Loan or Fixed Rate Loan occurs on any day other than
the last day of the applicable Interest Period for such Loan, the Borrower also
shall pay to the Bank such additional amounts as set forth in Section 2.09(c).
(b) If either (i) the introduction of, or any change in, or
in the interpretation of, any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), affects or would affect the amount of
capital required or expected to be maintained by the Bank or any corporation
controlling the Bank and the Bank determines in good faith that the amount of
such capital is increased by or based upon the existence of the Loans (or
commitment to make the Loans) and other extensions of credit (or commitments to
extend credit) of similar type, then, upon demand by the Bank, the Borrower
shall pay to the Bank from time to time as specified by the Bank additional
amounts sufficient to compensate the Bank in the light of such circumstances,
to the extent that the Bank reasonably determines such increase in capital to
be allocable to the existence of the Bank's Loans (or commitment to make the
Loans). A certificate of the Bank in good faith submitted to the Borrower on
or before the date such demand is made as to such amounts shall be conclusive
and binding for all purposes, absent manifest error. Upon notice from the
Borrower to the Bank within five (5) Business Days after the Bank notifies the
Borrower of any such additional costs pursuant to this Section 2.09(b), the
Borrower may either (A) prepay in full all Loans of any types so affected then
outstanding, together with interest accrued thereon to the date of such
prepayment, or (B) convert all Loans of any types so affected then outstanding
into Loans of any other type not so affected upon not less than four (4)
Business Days' notice to the Bank. If any such prepayment or conversion of any
Libor Rate Loan, As Offered Rate Loan, CD Rate Loan or Fixed Rate Loan occurs
on any day other than the last day of the applicable Interest Period for such
Loan, the Borrower also shall
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pay to the Bank such additional amounts as set forth in Section 2.09(c).
(c) If the Borrower shall prepay any Libor Rate
Loan, As Offered Rate Loan, CD Rate Loan or Fixed Rate Loan on a day other than
the last day of the applicable Interest Period for such Loan (whether such
prepayment is permitted by Section 2.09 or 2.10, as a result of the failure by
Borrower to consummate a transaction after providing notice as set forth in
Sections 2.01(c)(ii), (iii) and (iv) and 2.02(c)(i,) (ii) and (iii), or
otherwise permitted by Bank or otherwise required under the terms of this
Agreement) (a "Funding Breakage Date"), the Borrower shall pay to the Bank an
amount (the "Funding Breakage Indemnity") determined by the Bank as follows:
(i) first, calculate the following amount: (A)
the principal amount of such Loans owing to the Bank which
shall be prepaid times (B) the greater of (x) zero or (y) the
rate of interest applicable to such principal amount on the
Funding Breakage Date minus the Treasury Rate as of the
Funding Breakage Date, times (c) the number of days from and
including the Funding Breakage Date to, but not including, the
last day of such Interest Period, times (d) 1/360;
(ii) the Funding Breakage Indemnity to be paid
by the Borrower to the Bank shall be the amount equal to the
present value as of the Funding Breakage Date (discounted at
the Treasury Rate as of such Funding Breakage Date, and
calculated on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed) of the amount described
in the preceding clause (i) (which amount described in the
preceding clause (i) is assumed for purposes of such present
value calculation to be payable on the last day of the
corresponding Interest Period).
Such Funding Breakage Indemnity shall be due and payable on demand, and the
Bank shall, upon making such demand, notify the Borrower of the amount so
demanded. In addition, the Borrower shall, on the due date for payment of any
Funding Breakage Indemnity, pay to the Bank an additional amount equal to
interest on such Funding Breakage Indemnity from the Funding Breakage Date to,
but not including, such date at the Prime Rate (calculated on the basis of a
year of 360 days and actual days elapsed). The amount payable to the Bank
under this Section 2.09(c) shall be determined in good faith by the Bank, and
such determination shall be conclusive absent manifest error.
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2.10 ILLEGALITY; IMPRACTICABILITY. Notwithstanding
any other provision contained in this Agreement, if on any date on which a
Libor Rateor CD Rate, as the case may be, would otherwise be set, the Bank
shall have in good faith determined (which determination shall be conclusive
absent manifest error) that (i) adequate and reasonable means do not exist for
ascertaining a Libor Rateor CD Rate, as the case may be, (ii) a contingency has
occurred which materially and adversely affects the interbank markets, or (iii)
the effective cost to the Bank of funding a proposed Libor Rate Loan or CD Rate
Loan exceeds the Libor Rate or CD Rate respectively, then (y) on notice thereof
by the Bank to the Borrower, the obligation of the Bank to make or continue a
Loan of a type so affected or to convert any type of Loan into a Loan of a type
so affected shall terminate and the Bank shall thereafter be obligated to make
Prime Rate Loans whenever any written notice requests any type of Loans so
affected and (z) upon demand therefor by the Bank to the Borrower, the Borrower
shall either (i) forthwith prepay in full all Loans of the type so affected
then outstanding, together with interest accrued thereon or (ii) request that
the Bank, upon four (4) Business Days' notice, convert all Loans of the type so
affected then outstanding into Loans of a type not so affected. If any such
prepayment or conversion of any Libor Rate Loan or CD Rate Loan, as the case
may be, occurs on any day other than the last day of the applicable Interest
Period for such Loan, the Borrower also shall pay to the Bank such additional
amounts as set forth in Section 2.09(c).
2.11 PAYMENTS. All payments to be made with respect
to principal, interest, fees or other amounts due from the Borrower under this
Agreement or under the Notes are payable at 12:00 noon (Pittsburgh,
Pennsylvania time), on the day when due, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived, and an action
for the payments will accrue immediately. All such payments must be made to
the Bank at its Office in U.S. Dollars and in funds immediately available at
such Office, without setoff, counterclaim or other deduction of any nature.
The Bank may in its discretion deduct such payments from the Borrower's demand
or deposit accounts with Bank on the due date. All such payments shall be
applied at the option of the Bank to accrued and unpaid interest, outstanding
principal and other sums due under this Agreement in such order as the Bank, in
its sole discretion, shall elect. All such payments shall be made net of,
without deduction or offset, and free and clear of any and all present and
future taxes, levies, deductions, charges, and withholdings and all liabilities
with respect thereto, excluding income and franchise taxes imposed on the Bank
under the laws of the United States or any state or political subdivision
thereof. If the Borrower is compelled by law to deduct any such taxes or
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levies (other than such excluded taxes) or to make any such other deductions,
charges, or withholdings, it will pay such additional amounts as may be
necessary in order that the net payments after such deduction, and after giving
effect to any United States federal or state income taxes required to be paid
by the Bank in respect of such additional amounts, shall equal the amount of
such payment without such tax, deduction or withholding.
2.12 OPTIONAL PREPAYMENTS OF TERM LOAN. Subject to
the provisions of this Section 2.12, the Borrower shall have the right, at its
option, to prepay the Term Loan in whole or in part at any time; provided,
however, that any portion of the Term Loan which is a Libor Rate Loan or an As
Offered Rate Loan may only be converted or prepaid hereunder at the end of the
Interest Period for such Loan. All prepayments of any portion of the Term Loan
shall be applied to the unpaid installments of principal in the reverse order
of their scheduled maturities. For any prepayment of any portion of the Term
Loan, the Borrower shall give the Bank written notice (which shall be
irrevocable) of each prepayment not later than 10:00 a.m. (Pittsburgh,
Pennsylvania time) on the Second (2nd) Business Day immediately preceding the
date of prepayment, specifying the aggregate amount of principal to be prepaid
and the prepayment date. Following receipt of the notice as specified in the
preceding sentence, the principal amount specified therein, together with
accrued unpaid interest thereon to the date of such prepayment, shall be due
and payable on such prepayment date without notice, presentment or demand. In
addition, in the event that any portion of the Term Note which is being prepaid
is a Fixed Rate Loan, the Bank may deliver to the Borrower written notice of
the amount determined by the Bank to be the difference between (a) the present
value of the interest payments that would have been paid in the future to the
Bank by the Borrower on such prepaid portion of principal accruing at the Fixed
Rate, but for such prepayment and (b) the present value of the interest
payments that would be paid in the future to the Bank at the United States
Treasury Rate if, on or about the date of prepayment, the Bank made a
hypothetical investment of the prepaid portion of principal accruing at the
Fixed Rate in United States Treasury Securities maturing on or about the date
that the prepaid portion of principal would have matured but for such
prepayment and bearing interest accruing from the date of prepayment, payable
on each date on which Borrower, but for such prepayment, would have paid
interest on the prepaid portion of principal. As used herein, "United States
Treasury Rate" shall mean a rate of interest per annum (rounded upward to the
next higher whole multiple of 1/100% if such rate is not such a multiple),
equal to the annual yield the Bank could obtain by purchasing on the date of
prepayment United States Treasury Securities with semi-annual interest
payments, maturing on
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or about the date on which the prepaid portion of principal would have matured
in amounts approximately equal to the prepaid portion. The amounts specified
in such notice shall be due and payable by the Borrower to the Bank upon
delivery of such notice.
2.13 LOAN ACCOUNT. The Bank will open and maintain
on its books a loan account (the "Loan Account") for the Borrower with respect
to Loans made, repayments, prepayments, the computation and payment of interest
and fees and the computation and final payment of all other amounts due and
sums paid to the Bank under this Agreement. Except in the case of manifest
error in computation, the Loan Account for the Borrower will be conclusive and
binding on the Borrower as to the amount at any time due to the Bank from the
Borrower under this Agreement or the Notes.
2.14 SECURITY. The Bank hereby releases, discharges
and terminates all security interests, liens and other encumbrances created
pursuant to the security documents listed on Schedule 2.14 to this Agreement
(the "Prior Security Documents"), and such Prior Security Documents are hereby
terminated and are of no further force and effect. Notwithstanding anything to
the contrary contained in the preceding sentence, all indemnity and expense
obligations contained in the Prior Security Documents shall survive the
termination of, and the release of the security interests and mortgages created
under, the Prior Security Documents. The Bank agrees to, within thirty (30)
days after appropriate UCC-3 termination statements and mortgage satisfaction
pieces are prepared by the Borrower's counsel and received by the Bank, execute
appropriate UCC-3 termination statements and mortgage satisfaction pieces to,
at Borrower's sole cost and expense and upon the appropriate filing by the
Borrower or its counsel, release, discharge and terminate of record all Liens
created under the Prior Security Documents. Bank acknowledges that, as of the
Closing Date, it is not aware of any indemnity or expense obligation due and
payable by the Borrower under the Prior Security Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
3.01 ORGANIZATION AND QUALIFICATION. The Borrower
and each of its United States Subsidiaries are corporations, partnerships or
limited partnerships, as the case may be, duly organized, validly existing and
in good standing under their
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respective jurisdictions of incorporation. The Borrower and each of its United
States Subsidiaries are duly qualified or licensed to do business as a foreign
corporation and are in good standing in all jurisdictions in which the
ownership of their properties or the nature of their activities or both makes
such qualification or licensing necessary, except only to the extent that the
failure to be so qualified or licensed would not have a Material Adverse
Effect.
3.02 POWER TO CARRY ON BUSINESS; LICENSES. The
Borrower and each of its United States Subsidiaries have all requisite
corporate power and authority to own and operate their properties and to carry
on their business as now conducted and as presently planned to be conducted.
The Borrower and each of its United States Subsidiaries have all licenses,
permits, consents and governmental approvals or authorizations necessary to
carry on their business as now conducted or as presently planned to be
conducted except only for such licenses, permits, consents and governmental
approvals or authorizations the failure of which to obtain would not have a
Material Adverse Effect.
3.03 EXECUTION AND BINDING EFFECT. This Agreement,
the Notes, and the other Loan Documents to which the Borrower is a party have
been duly authorized by all appropriate corporation action of the Borrowerand
have been duly and validly executed and delivered by the Borrower, and each
such agreement constitutes a legal, valid and binding obligation of the
Borrower, enforceable against Borrower in accordance with its terms.
3.04 ABSENCE OF CONFLICTS. Neither the execution and
delivery of this Agreement or the other Loan Documents by the Borrower, nor the
consummation of the transactions contemplated in any of them by the Borrower,
nor the performance of or compliance with their terms and conditions by the
Borrower will (a) violate any Law, (b) conflict with or result in a breach of
or a default under the articles of incorporation or by-laws of the Borrower,
(c) conflict with or result in a breach or a default under any material
agreement or instrument to which the Borrower or any of its Subsidiaries is a
party or by which any of them or any of their material properties (now owned or
acquired in the future) may be subject or bound or (d) result in the creation
or imposition of any Lien upon any property (owned or leased) of the Borrower
or any of its Subsidiaries.
3.05 AUTHORIZATIONS AND FILINGS. No authorization,
consent, approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in
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connection with the execution and delivery of this Agreement or the other Loan
Documents by the Borrower, the consummation by the Borrower of the transactions
contemplated in any of them, or the performance of or compliance by the
Borrower with the terms and conditions of this Agreement or the other Loan
Documents.
3.06 TITLE TO PROPERTY. The Borrower and each of its
Subsidiaries has good and marketable title in fee simple to all real property
and good and marketable title to all other property purported to be owned by
them, including that reflected in the most recent balance sheet referred to in
Section 3.07 of this Agreement or submitted pursuant to Section 5.01(a) of this
Agreement (except as sold or otherwise disposed of in the ordinary course of
business), subject only to Liens not forbidden by Section 6.01 of this
Agreement.
3.07 Financial Statements.
---------------------
(a) The Borrower has delivered to the Bank a
Consolidated balance sheet and related statements of income, cash flow and
shareholders' equity of the Borrower and its Subsidiaries for the fiscal year
ending August 31, 1995, as audited by S.R. Snodgrass A.C. without
qualification. Such financial statements (including the notes) present fairly
the Consolidated financial position of the Borrower and its Subsidiaries as of
the end of such fiscal period and the results of their operations and their
cash flow for the fiscal period then ended, all in accordance with GAAP applied
consistently with the audited financial statements for the preceding fiscal
year.
(b) The Borrower has delivered to the Bank
internally prepared Consolidated balance sheets and related statements of
income and cash flow of the Borrower and its Subsidiaries for the fiscal
quarters ending November 30, 1995, February 29, 1996 and May 31, 1996. Such
financial statements provided by the Borrower present fairly the financial
position of the Borrower and its Subsidiaries as of the end of each period and
the results of their operations and their cash flow for each period, all in
conformity with GAAP (except that such financial statements do not contain all
of the footnote disclosure required by GAAP), subject to year end adjustments,
applied on a basis consistent with that of the preceding fiscal year's audited
financial statements.
3.08 TAXES. All tax returns required to be filed by
the Borrower and each Subsidiary have been properly prepared, executed and
filed. All taxes, assessments, fees and other governmental charges upon the
Borrower, its Subsidiaries or upon
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any of their properties, income, sales or franchises which are due and payable
have been paid other than those not yet payable without premium or penalty and
those contested with due diligence in good faith without the incurrence of any
Lien against the Borrower which would have a Material Adverse Effect. The
reserves and provisions for taxes on the books of the Borrower and its
Subsidiaries are adequate for all open years and for their current fiscal
period. Neither the Borrower nor any Subsidiary knows of any proposed
additional assessment or basis for any assessment for additional taxes (whether
or not reserved against).
3.09 LITIGATION. Except as set forth in the
Borrower's annual report on Form 10-K for the fiscal year ended August 31, 1995
(the "1995 Form 10-K"), there is no pending, or to the best knowledge of
Borrower and its Subsidiaries, contemplated or threatened, action, suit or
proceeding by or before any Official Body against or affecting the Borrower or
its Subsidiaries, at law or equity, which, if adversely decided, would have a
Material Adverse Effect.
3.10 COMPLIANCE WITH LAWS. Neither the Borrower nor
any Subsidiary is subject to any material contingent liability on account of
any Law or in violation of any Law which would have a Material Adverse Effect.
3.11 PENSION PLANS. (a) Each Plan has been and will
be maintained and funded in accordance with its terms and with all provisions
of ERISA and other applicable laws; (b) no Reportable Event as defined in ERISA
has occurred and is continuing with respect to any Plan; (c) no liability to
the PBGC has been incurred with respect to any Plan, other than for premiums
due and payable; (d) no Plan has been terminated, no proceedings have been
instituted to terminate any Plan, and there exists no intent to terminate or
institute proceedings to terminate any Plan; (e) no withdrawal, either complete
or partial, has occurred or commenced with respect to any multi-employer Plan,
and there exists no intent to withdraw either completely or partially from any
multi-employer Plan; and (f) there has been no cessation of, and there is no
intent to cease, operations at a facility or facilities where such cessation
could reasonably be expected to result in a separation from employment of more
than 20% of the total number of employees who are participants under a Plan.
3.12 PATENTS, LICENSES, FRANCHISES. The Borrower and
each Subsidiary owns or possesses the right to use all of the material patents,
trademarks, service marks, trade names, copyrights, licenses, franchises and
permits and rights with respect to the foregoing necessary to own and operate
their
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properties and to carry on their business as presently conducted and presently
planned to be conducted without conflict with the rights of others.
3.13 ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 3.13 hereof, (a) neither the Borrower nor any of its United States
Subsidiaries are in violation of The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, The Resource Conservation and Recovery Act of
1976, as amended by the Hazardous and Solid Waste Amendments of 1984, The Clean
Water Act, The Toxic Substances Control Act and The Clean Air Act or any rule
or regulation promulgated pursuant to any of the foregoing statutes, or any
other federal, state or local environmental law, statute, rule, regulation or
ordinance applicable to the Borrower, any Subsidiary or their respective
properties (all of the foregoing are sometimes collectively referred to in this
Section 3.13 as the "Environmental Laws") which would have a Material Adverse
Effect;
(b) Neither the Borrower, its United States
Subsidiaries nor any of their Affiliates, directors, officers, employees,
agents or independent contractors have arranged, by contract, agreement or
otherwise, (i) for the disposal or treatment of, or (ii) with a transporter for
the transport, disposal or treatment of, any Hazardous Substance (as defined by
CERCLA, as amended), owned, used or possessed by the Borrower or any
Subsidiary, whether or not to a location identified by the Environmental
Protection Agency (the "EPA") on the National Priorities List, 40 C.F.R. Part
300, (or proposed by the EPA in the Federal Register for listing on such
National Priorities List) or identified under any corresponding state statute
or regulation concerning cleanup of waste disposal sites (a "State Superfund
Law") in violation of any applicable Environmental Laws which would have a
Material Adverse Effect;
(c) To the best knowledge of the Borrower,
no predecessor of the Borrower has arranged by contract, agreement or
otherwise, (i) for the disposal or treatment of, or (ii) with a transporter for
the transport, disposal or treatment of, any Hazardous Substance, owned, used
or possessed by the predecessor in violation of any applicable Environmental
Laws which would have a Material Adverse Effect;
(d) To the best knowledge of the Borrower,
neither the Borrower, its United States Subsidiaries nor any of their
Affiliates "owned" or "operated" any "facility" at the time any waste
containing Hazardous Substances was disposed of at such
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facility within the meaning of CERCLA, as amended, or any State Superfund Law
in violation of any applicable Environmental Laws which would have a Material
Adverse Effect.
3.14 PROCEEDS. The Borrower will use the proceeds of
the Revolving Credit Loans for general corporate purposes and for acquisitions
of businesses operating in lines of business similar to those described in the
1995 Form 10-K. The Borrower will use the proceeds of the Term Loan to repay
Indebtedness of the Borrower to the Bank under the Prior Loan Agreement.
3.15 MARGIN STOCK. The Borrower will make no
borrowing under this Agreement for the purpose of buying or carrying any
"margin stock", as such term is used in Regulation U and related regulations of
the Board of Governors of the Federal Reserve System, as amended from time to
time. Neither the Borrower nor any Subsidiary owns any "margin stock".
Neither the Borrower nor any Subsidiary is engaged in the business of extending
credit to others for such purpose, and no part of the proceeds of any borrowing
under this Agreement will be used to purchase or carry any "margin stock" or to
extend credit to others for the purpose of purchasing or carrying any "margin
stock".
3.16 NO EVENT OF DEFAULT: COMPLIANCE WITH MATERIAL
AGREEMENTS. Except as set forth on Schedule 3.16 to this Agreement, no event
has occurred and is continuing and no condition exists which constitutes an
Event of Default or Potential Default. Neither the Borrower nor any of its
Subsidiaries are (i) in violation of any term of any charter instrument or
bylaw or (ii) in default under any material agreement, lease or instrument to
which the Borrower or its Subsidiaries are a party or by which they or any of
their properties (owned or leased) may be subject or bound.
3.17 NO MATERIAL ADVERSE CHANGE. Since May 31, 1996,
there has been no Material Adverse Change.
3.18 SUBSIDIARIES. Schedule 3.18 to this Agreement
sets forth each Subsidiary of the Borrower, the authorized and outstanding
capital stock (or other equity interest) of such Subsidiary and the outstanding
capital stock (or other equity interest) of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries.
3.19 LABOR CONTROVERSIES. There are no labor
controversies pending or, to the best knowledge of the Borrower, threatened,
against the Borrower or any of its Subsidiaries which, if adversely determined,
would have a Material Adverse Effect.
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3.20 SOLVENCY. After the making of the Loans, the
Borrower (a) will be able to pay its debts as they become due, (b) will have
funds and capital sufficient to carry on its business and all businesses in
which it is about to engage, and (c) will own property having a value at both
fair valuation and at fair saleable value in the ordinary course of Borrower's
business greater than the amount required to pay its debts as they become due.
The Borrower was not insolvent immediately prior to the date of this Agreement
and will not be rendered insolvent by the execution and delivery of this
Agreement, the borrowing hereunder and/or the consummation of any transactions
contemplated by this Agreement.
3.21 ACCURATE AND COMPLETE DISCLOSURE. No
representation or warranty made by the Borrower under this Agreement, the other
Loan Documents or the schedules and exhibits attached thereto, and no statement
made by the Borrower in any financial statement (furnished pursuant to Sections
3.07 or 5.01 or otherwise), certificate, report, exhibit or document furnished
by the Borrower to the Bank pursuant to or in connection with this Agreement is
false or misleading in any material respect (including by omission of material
information necessary to make such representation, warranty or statement not
misleading). The Borrower is not aware of any facts which it has not disclosed
to the Bank in writing which materially and adversely affects, or would
materially and adversely affect, the assets, business, operations or financial
condition of the Borrower or any Subsidiary or the ability of the Borrower to
perform its obligations under this Agreement and the other Loan Documents.
ARTICLE IV
CONDITIONS OF LENDING
The obligation of the Bank to make any Loan is subject to the
satisfaction of the following conditions:
4.01 REPRESENTATIONS AND WARRANTIES: EVENTS OF
DEFAULT AND POTENTIAL DEFAULTS. The representations and warranties contained
in Article III shall be true and correct on and as of the date of each Loan
with the same effect as though made on and as of each such date, except to the
extent that any such representation or warranty (including any Schedule
referred to therein) relates specifically to a prior date and except to the
extent that any such representation and warranty (including any Schedule
referred to therein) is not true and correct in any material respect as a
result of activities or actions permitted to be taken by the Borrower or any of
its Subsidiaries pursuant to Article VI hereof.
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On the date of each Loan, no Event of Default and no Potential Default shall
have occurred and be continuing or exist or shall occur or exist after giving
effect to the Loan to be made on such date. Each request by the Borrower for
any Loan shall constitute a representation and warranty by the Borrower that
the conditions set forth in this Section 4.01 have been satisfied as of the
date of such request. Failure of the Bank to receive notice from the Borrower
to the contrary before such Loan is made shall constitute a further
representation and warranty by the Borrower that the conditions referred to in
this Section 4.01 have been satisfied as of the date such Loan is made.
4.02 PROCEEDINGS AND INCUMBENCY. On the Closing
Date, the Borrower shall have delivered to the Bank a certificate, in form and
substance reasonably satisfactory to the Bank, dated the Closing Date and
signed on behalf of the Borrower by the Secretary or an Assistant Secretary of
the Borrower, certifying as to (a) true copies of the articles of incorporation
and bylaws of the Borrower as in effect on such date, (b) true copies of all
corporate action taken by the Borrower relative to this Agreement, the Notes
and the other Loan Documents including, but not limited to, that described in
Section 3.03 of this Agreement, and (c) the names, true signatures and
incumbency of the officers of the Borrower authorized to execute and deliver
this Agreement, the Notes and the other Loan Documents. The Bank may
conclusively rely on each such certificate unless and until a later certificate
revising the prior certificate has been furnished to the Bank.
4.03 AGREEMENT AND NOTES. On the Closing Date, this
Agreement and the Notes, satisfactory in terms, form and substance to the Bank,
shall have been executed and delivered by the Borrower to the Bank.
4.04 OPINION OF COUNSEL. On the Closing Date, there
shall have been delivered to the Bank a written opinion, dated the Closing
Date, of counsel to the Borrower, in form and substance reasonably satisfactory
to Bank and its counsel.
4.05 OTHER DOCUMENTS AND CONDITIONS. On or before the
Closing Date, the following documents and conditions shall have been delivered
to Bank or satisfied by or on behalf of the Borrower:
(a) GOOD STANDING AND TAX LIEN CERTIFICATES.
A good standing certificate of the Borrower certifying to the good standing and
corporate status of the Borrower, good standing/foreign qualification
certificates from other jurisdictions in which the Borrower is qualified to do
business and
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tax lien certificates of the Borrower from each jurisdiction in which the
Borrower is qualified to do business.
(b) FINANCIAL STATEMENTS. Financial
statements as described in Section 3.07 of this Agreement.
(c) INSURANCE. Evidence, in form and
substance satisfactory to the Bank, that the business and all assets of the
Borrower and each of its Subsidiaries are adequately insured and that the Bank
is entitled to thirty (30) days notice of cancellation and modification of such
insurance policies.
(d) LIEN SEARCH. Copies of record searches
(including UCC searches, judgment, tax and other lien searches) evidencing that
no Liens exist against the Borrower or any of its Subsidiaries except those
Liens permitted by Section 6.01 of this Agreement.
(e) NO MATERIAL ADVERSE CHANGE. No Material
Adverse Change shall have occurred with respect to the Borrower since May 31,
1996.
(f) OTHER DOCUMENTS AND CONDITIONS. Such
other documents and conditions as may be required to be submitted to the Bank
by the terms of this Agreement or of any Loan Document or set forth on the
Closing Checklist with respect to the transaction contemplated by this
Agreement.
4.06 DETAILS PROCEEDINGS AND DOCUMENTS. All legal
details and proceedings in connection with the transactions contemplated by
this Agreement shall be satisfactory to the Bank and the Bank shall have
received all such counterpart originals or certified or other copies of such
documents and proceedings in connection with such transactions, in form and
substance reasonably satisfactory to the Bank, as the Bank may from time to
time reasonably request.
4.07 FEES AND EXPENSES. The Borrower shall have paid
all reasonable fees and charges as required for the Closing and relating to the
Closing, including reasonable legal fees, closing costs, filing and notary fees
and any other similar matters pertinent to the Closing.
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ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants to the Bank as follows:
5.01 Reporting and Information Requirements.
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(a) ANNUAL AUDITED REPORTS. As soon as
practicable, and in any event within one hundred twenty (120) days after the
close of each fiscal year of the Borrower, the Borrower will furnish to the
Bank Consolidated audited statements of income, cash flow and shareholders'
equity of the Borrower and its Subsidiaries for such fiscal year and a
Consolidated audited balance sheet of the Borrower and its Subsidiaries as of
the close of such fiscal year, and notes to each, all in reasonable detail,
setting forth in comparative form the corresponding figures for the preceding
fiscal year, prepared in accordance with GAAP applied on a basis consistent
with that of the preceding fiscal year (except for changes in application in
which such accountants concur) with such statements and balance sheet to be
certified by independent certified public accountants of recognized standing
selected by the Borrower and satisfactory to the Bank. The certificate or
report of such accountants shall be free of exceptions or qualifications not
acceptable to the Bank and shall in any event contain a written statement of
such accountants substantially to the effect that such accountants examined
such statements and balance sheet in accordance with generally accepted
auditing standards.
(b) QUARTERLY REPORTS. As soon as
practicable, and in any event within sixty (60) days after the close of each
fiscal quarter of the Borrower during the term of this Agreement, the Borrower
will furnish to the Bank Consolidated statements of income and cash flow for
the Borrower and its Subsidiaries for such quarter and for the portion of the
fiscal year to the end of such quarter, and a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the close of such quarter, all in
reasonable detail. All such statements and balance sheets shall be prepared by
the Borrower and certified by the President or the Chief Financial Officer of
the Borrower as presenting fairly the financial position of the Borrower and
its Subsidiaries as of the end of such quarter and the results of their
operations for such periods, subject to year end adjustment, in conformity with
GAAP (except that such financial statements do not contain all footnote
disclosure required by GAAP) applied in a manner consistent with that of the
most recent audited financial statements furnished to the Bank.
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(c) QUARTERLY COMPLIANCE CERTIFICATE. Each
set of statements and balance sheets delivered pursuant to Sections 5.01(a) and
5.01(b) of this Agreement shall be accompanied by a compliance certificate,
substantially in the form of Exhibit C attached hereto, executed by the
President or Chief Financial Officer of the Borrower, stating that no Event of
Default or Potential Default exists and that the Borrower is in compliance with
the financial covenants set forth in Section 5.13 of this Agreement. Such
certificate shall include all figures necessary to calculate the Borrower's
compliance with such financial covenants. If an Event of Default or Potential
Default has occurred and is continuing or exists, such certificate shall
specify in detail the nature and period of existence of the Event of Default or
Potential Default and any action taken or contemplated to be taken by the
Borrower.
(d) FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. As soon as practicable, and in any event within ten (10) days
after the filing thereof, the Borrower shall furnish to the Bank a copy of (i)
each proxy statement or report filed by the Borrower with the United States
Securities and Exchange Commission (the "SEC") under the Securities Exchange
Act of 1934, as amended, and (ii) each registration statement (except
registration statements on Form S-8) filed by the Borrower with the SEC under
the Securities Act of 1933, as amended.
(e) AUDIT REPORTS. Promptly upon receipt
thereof, the Borrower will deliver to the Bank one copy of each other report
submitted to the Borrower by its independent accountants, including comment or
management letters, in connection with any annual, interim or special audit
report made by them of the Borrower or its books and records.
(f) VISITATION: AUDITS. The Borrower will
permit such persons as the Bank may designate to visit and inspect any of the
properties of the Borrower or its Subsidiaries, to examine, and to make copies
and extracts from, the books and records of the Borrower and its Subsidiaries
and to discuss their affairs with their officers, employees and independent
accountants upon reasonable prior notice and during normal business hours. The
Borrower authorizes the officers, employees and independent accountants for the
Borrower and its Subsidiaries to discuss with the Bank the affairs of the
Borrower and its Subsidiaries. The Bank agrees to enter into customary
confidentiality agreements in form and substance reasonably satisfactory to
Bank in connection therewith.
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(g) NOTICE OF EVENT OF DEFAULT. Promptly
upon becoming aware of an Event of Default or Potential Default, the Borrower
will give the Bank notice of the Event of Default or Potential Default,
together with a written statement of the President or Chief Financial Officer
of the Borrower setting forth the details of the Event of Default or Potential
Default and any action taken or contemplated to be taken by the Borrower.
(h) NOTICE OF MATERIAL ADVERSE CHANGE.
Promptly upon becoming aware thereof, the Borrower will give the Bank notice by
telephone or telecopier (with written confirmation sent on the same or next
Business Day) with respect to any Material Adverse Change or any development or
occurrence which would have a Material Adverse Effect.
(i) FURTHER INFORMATION. The Borrower will
promptly furnish to the Bank such other information relating to the Borrower
and its Subsidiaries, and in such form, as the Bank may reasonably request from
time to time.
5.02 PRESERVATION OF EXISTENCE AND FRANCHISES. The
Borrower and each of its Subsidiaries will maintain their respective corporate
existences, rights and franchises in full force and effect in their respective
jurisdictions of incorporation. The Borrower and each of its Subsidiaries will
qualify and remain qualified as a foreign corporation in each jurisdiction in
which the ownership of their properties or the nature of their activities or
both makes such qualification necessary except only to the extent that the
failure to be so qualified would not have a Material Adverse Effect.
5.03 INSURANCE. The Borrower and each of its
Subsidiaries will maintain with financially sound and reputable insurers
insurance with respect to their properties and business and against such
liabilities, casualties and contingencies and of such types and in such amounts
as is reasonably satisfactory to the Bank and as is customary in the case of
corporations or other entities engaged in the same or similar business or
having similar properties similarly situated. The Borrower and each of its
Subsidiaries will cause the Bank to be provided with thirty (30) days advance
notice of the termination of any such policy of insurance.
5.04 MAINTENANCE OF PROPERTIES. The Borrower and
each of its Subsidiaries will maintain or cause to be maintained in good
repair, working order and condition, the properties now or in the future owned,
leased or otherwise possessed by each of them and shall make or cause to be
made all needful and proper repairs,
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renewals, replacements and improvements to the properties so that the business
carried on in connection with the properties may be properly and advantageously
conducted at all times except only to the extent that the failure to do so
would not have a Material Adverse Effect.
5.05 PAYMENT OF LIABILITIES. The Borrower and each
of its Subsidiaries will pay or discharge:
(a) on or prior to the date on which a
premium or penalty attaches, all taxes, assessments, fees and other
governmental charges or levies imposed upon them or any of their respective
properties, income, sales or franchises other than those contested with due
diligence in good faith without the incurrence of any Lien which would have a
Material Adverse Effect;
(b) on or prior to the date when due, all
lawful claims of materialmen, mechanics, carriers, warehousemen, landlords and
other like persons which, if unpaid, would result in the creation of a Lien
upon any of their property which would have a Material Adverse Effect;
(c) on or prior to the date when due, all
other lawful claims which, if unpaid, would result in the creation of a Lien
upon any of their property which would have a Material Adverse Effect; and
(d) all other current liabilities so that
none is due more than one hundred twenty (120) days after the due date for each
liability, except current liabilities which are subject to good faith dispute
and as to which the Borrower or such Subsidiary has created adequate reserves
on its books.
5.06 FINANCIAL ACCOUNTING PRACTICES. The Borrower
and each of its Subsidiaries will make and keep books, records and accounts
which, in reasonable detail, accurately and fairly reflect their respective
transactions and dispositions of assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to
maintain accountability for assets, (c) to ensure access to assets is permitted
only in accordance with management's general or specific authorization and (d)
to ensure the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
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5.07 COMPLIANCE WITH LAWS. The Borrower and each of
its Subsidiaries shall comply with all applicable Laws except only to the
extent that the failure to do so would not have a Material Adverse Effect.
5.08 PENSION PLANS. The Borrower and each of its
Subsidiaries shall (a) keep in full force and effect any and all Plans which
are presently in existence or may, from time to time, come into existence under
ERISA, unless such Plans can be terminated without material liability to the
Borrower or any Subsidiary in connection with such termination; (b) make
contributions to each of their Plans in a timely manner and in a sufficient
amount to comply with the requirements of ERISA; (c) comply with all material
requirements of ERISA which relate to such Plans so as to preclude the
occurrence of any Reportable Event, Prohibited Transaction (other than a
Prohibited Transaction subject to an exemption under ERISA) or material
accumulated funding deficiency as such term is defined in ERISA; and (d) notify
the Bank immediately upon receipt by the Borrower or any Subsidiary of any
notice of the institution of any proceeding or other action which may result in
the termination of any Plan. The Borrower shall deliver to the Bank, promptly
after the filing or receipt thereof, copies of all reports or notices which the
Borrower or any Subsidiary files or receives under ERISA with respect to the
Plans with or from the Internal Revenue Service, the PBGC, or the U.S.
Department of Labor, other than reports or notices which do not materially or
adversely affect the Borrower, any Subsidiary, their businesses, assets,
financial condition, or the ability of the Borrower to perform its respective
obligations under this Agreement.
5.09 USE OF PROCEEDS. Borrower shall use the
proceeds of the Loans for the purposes set forth in Section 3.14 hereof.
5.10 CONTINUATION OF AND CHANGE IN BUSINESS. The
Borrower and its Subsidiaries will continue to engage in the business and
activities described in the 1995 Form 10-K and the Borrower and its
Subsidiaries will not engage in any other business or activity without the
prior written consent of the Bank, which consent shall not be unreasonably
withheld or delayed.
5.11 LIEN SEARCHES. The Bank may, but shall not be
obligated to, conduct lien searches of the Borrower and its Subsidiaries and
their assets and properties on an annual basis and at such other times as the
Bank, in its reasonable discretion, may determine to be necessary. The
Borrower shall reimburse the Bank for the Bank's reasonable out-of-pocket costs
and expenses in connection with such lien searches.
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5.11 FURTHER ASSURANCES. The Borrower, at its own
cost and expense, will cause to be promptly and duly taken, executed,
acknowledged and delivered all further acts, documents and assurances as the
Bank may from time to time reasonably request in order to more effectively
carry out the intent and purposes of this Agreement and the transactions
contemplated by this Agreement.
5.12 OWNERSHIP OF STOCK IN SUBSIDIARIES. The
Borrower shall, directly or through its Subsidiaries, maintain an ownership
interest in each of its Subsidiaries equal to the percentage ownership interest
set forth on Schedule 3.18 hereto except as otherwise permitted by Sections
6.04 and 6.05 hereof.
5.13 FINANCIAL COVENANTS. The following financial
covenants with respect to the Borrower shall apply:
(a) TANGIBLE NET WORTH. From the date
hereof until August 31, 1996, the Borrower shall maintain a Tangible Net Worth
not less than Forty Five Million and 00/100 Dollars ($45,000,000.00). On
September 1, 1996 and, at all times thereafter, during the term of this
Agreement, the Borrower shall maintain a Tangible Net Worth not less than (a)
Forty Five Million and 00/100 Dollars ($45,000,000.00) plus (b) fifty percent
(50%) of the Net Income of the Borrower for the fiscal year ending August 31,
1996 and each fiscal year thereafter (excluding any net loss in any such fiscal
year) plus (c) the proceeds to the Borrower from the sale by the Borrower of
its capital stock after August 31, 1996 as reflected in the Borrower's
Consolidated cash flow statements.
(b) FUNDED DEBT TO CASH FLOW RATIO. The
Borrower's Funded Debt to Cash Flow Ratio shall be less than or equal to 6.00
to 1.00 for the period equal to the four (4) most recently ended consecutive
fiscal quarters during the term of this Agreement.
(c) INTEREST COVERAGE RATIO. The Borrower's
Interest Coverage Ratio shall be greater than or equal to 3.50 to 1.00 for the
period equal to the four (4) most recently ended consecutive fiscal quarters
during the term of this Agreement.
5.14 ACQUISITIONS FINANCED BY REVOLVING CREDIT LOANS.
On or prior to the date on which any Revolving Credit Loan is made to the
Borrower for the purposes of completing any acquisition of all or substantially
all of the property, assets or equity interest of any Person, Borrower shall
deliver to Bank historical financial information and all other information
reasonably requested by the Bank with respect to the Person to be acquired. In
addition, if the purchase price for any such acquisition is in excess of Seven
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Million Five Hundred Dollars ($7,500,000), Borrower will provide Bank with pro
forma financial statements and a certificate from the President or Chief
Financial Officer of the Borrower which certifies that the Borrower is, and
following such acquisition, will be, in compliance with all financial covenants
set forth in Section 5.13 of this Agreement.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants to the Bank as follows:
6.01 LIENS. The Borrower will not, and will not
permit any Subsidiary to, at any time, incur, create, assume or permit to
exist, any Lien on any of its property or assets, tangible or intangible, now
or hereafter owned, or agree to become liable to do so, except:
(a) Liens existing on the Closing Date and
set forth on Schedule 6.01 to this Agreement;
(b) Liens granted in favor of the Bank;
(c) pledges or deposits under workers
compensation, unemployment insurance and social security laws, or to secure the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases or to secure statutory obligations or surety or
similar bonds used in the ordinary course of business;
(d) Liens arising from taxes, assessments,
fees, charges, levies or claims described in Section 5.05 of this Agreement;
(e) purchase money security interests for
purchases of equipment permitted under Section 6.02(d) of this Agreement;
(f) unfiled materialmen's, mechanics,
workmen's and repairmen's liens (provided, that if such a lien shall be filed
or perfected, it shall be discharged of record promptly by payment, bond or
otherwise); and
(g) zoning restrictions, easements, minor
restrictions on the use of real property, minor irregularities in title thereto
and other minor Liens that do not secure the payment
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of money or the performance of an obligation and that do not in the aggregate
materially detract from the value of a property or asset to, or materially
impair its use in the business of, the Borrower or any Subsidiary.
6.02 INDEBTEDNESS. The Borrower will not, and will
not permit any Subsidiary to, at any time, create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness existing on the Closing
Date, and set forth on Schedule 6.02 to this Agreement, provided, however, that
none of such Indebtedness shall be extended, renewed or refinanced without the
prior written consent of the Bank;
(b) Indebtedness under this Agreement, the
Notes, the other Loan Documents or under any other document, instrument or
agreement between the Borrower or a Subsidiary and the Bank or Mellon Europe
Limited;
(c) current accounts payable, accrued taxes
reflected as current liabilities and other current items arising out of
transactions (other than borrowings) in the ordinary course of business;
(d) purchase money Indebtedness for
purchases of equipment in the ordinary course of business and in amounts which
shall not exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00) as to
any one purchase of equipment or One Million and 00/100 Dollars ($1,000,000.00)
as to the aggregate of all such purchases in each case in any one fiscal year;
(e) Indebtedness represented by unsecured
short term trade notes with suppliers provided that such Indebtedness shall not
exceed Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) as to any
one transaction or One Million and 00/100 Dollars ($1,000,000.00) as to the
aggregate of all outstanding unsecured trade notes with suppliers;
(f) Capitalized Lease Obligations in amounts
less than Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00) for any
single Capitalized Lease Obligation and One Million and 00/100 Dollars
($1,000,000.00) as to the aggregate of all such Capitalized Lease Obligations;
(g) Indebtedness constituting loans and
advances permitted by Section 6.04 of this Agreement; and
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(h) Indebtedness under interest rate or
currency protection agreements, interest rate or currency futures, interest
rate or currency options, interest rate or currency swap or cap agreements or
other interest rate or currency hedge agreements incurred in the ordinary
course of business, provided that (i) such Indebtedness is incurred with the
Bank as counterparty and (ii) such Indebtedness shall not be entered into for
speculative purposes.
6.03 GUARANTEES AND CONTINGENT LIABILITIES. The
Borrower will not, and will not permit any Subsidiary to, at any time directly
or indirectly assume, guarantee, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of any other Person, except:
(a) those guarantees existing on the Closing
Date and set forth on Schedule 6.03 to this Agreement;
(b) endorsements on negotiable or other
instruments in any amount for deposit or collection or similar transactions in
the ordinary course of their businesses;
(c) guarantees by the Borrower of obligations or
liabilities of any Subsidiary to the Bank or Mellon Europe Limited;
(d) the indemnity obligations of the Borrower to
its directors and officers under the articles of incorporation of the Borrower
and to its directors under indemnification agreements entered into between the
Borrower and each of its directors; and
(e) indemnities by the Borrower or any
Subsidiary arising from or under contracts and agreements with unrelated
Persons entered into by the Borrower or such Subsidiary in the ordinary course
of business.
6.04 LOANS AND INVESTMENTS; CERTAIN BUSINESS
TRANSACTIONS. The Borrower will not and will not permit any Subsidiary to,
purchase, own, invest in or otherwise acquire, directly or indirectly, any
stock or other securities of any Person, or all or substantially all of the
assets of any Person (whether in a single or series of related transactions) or
make or permit to exist any investment or capital contribution to or acquire
any interest whatsoever in any other Person or permit to exist any loans or
advances for such purposes except:
(a) loans and investments existing on the
Closing Date and set forth on Schedule 6.04 to this Agreement;
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(b) additional loans to and investments in
the Subsidiaries named on Schedule 3.18 to this Agreement;
(c) acquisitions of the stock, equity or
assets of Persons in businesses similar to those described in the 1995 10-K
provided, however, that the total amount of all such acquisitions shall not, in
any fiscal year, exceed Twenty Five Million and 00/100 Dollars ($25,000,000) in
the aggregate;
(d) investments in direct obligations of the
United States of America or any agency thereof and in obligations guaranteed by
the United States of America or the Bank or other reputable financial
institution, each of which is organized under the laws of the United States;
(e) certificates of deposit issued by the
Bank or Century National Bank and investments in money market mutual funds or
other money market accounts with the Bank or Century National Bank; and
(f) other loans and investments after the
Closing Date reflected on the Consolidated balance sheet from time to time of
an amount not in excess of One Million Dollars ($1,000,000.00).
6.05 MERGER OR CONSOLIDATION; OTHER BUSINESS
TRANSACTIONS. Borrower will not, and will not permit any Subsidiary to, form a
partnership or a joint venture or merge or consolidate with or into any other
Person, or agree to do any of the foregoing, except that the Borrower may
permit any Subsidiary to, merge or consolidate with or into, the Borrower or
any Subsidiary.
6.06 DISPOSITIONS OF ASSETS. The Borrower will not,
and will not permit any Subsidiary to, sell, convey, pledge, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily any
of its respective properties or assets, tangible or intangible (including stock
of Subsidiaries) except in the ordinary course of business and except that the
Borrower may permit any Subsidiary to transfer assets or stock to the Borrower
or any other Subsidiary.
6.07 CAPITAL EXPENDITURES. The Borrower will not,
and will not permit any Subsidiary to, make or commit to make, Capital
Expenditures in any fiscal year aggregating more than the sum of (i) Twenty
Five Million and 00/100 Dollars ($25,000,000.00). For purposes of this Section
6.07, amounts paid in transactions accounted for as business acquisitions shall
not be considered as Capital Expenditures.
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6.08 NEGATIVE PLEDGE. Except for Section 4.02(d) of
the Reimbursement Agreement, dated as of December 1, 1991, by and between the
Borrower and NCNB National Bank of North Carolina, the Borrower will not, and
will not permit any of its Subsidiaries to, enter into or suffer to exist any
agreement with any Person other than in connection with this Agreement, which
prohibits or limits the ability of the Borrower or any Subsidiary to create,
incur, assume or suffer to exist any Lien upon or with respect to any property
or assets of any kind (real or personal, tangible or intangible) of the
Borrower or any Subsidiary, whether now owned or hereafter acquired or created.
6.09 CONTINUATION OF BUSINESS. The Borrower will
not, and will not permit any Subsidiary to, engage in any business not
substantially similar to those conducted as of the Closing Date and described
in the 1995 Form 10-K.
6.10 MARGIN STOCK. The Borrower will not use the
proceeds of any Loans directly or indirectly to purchase or carry any "margin
stock" (within the meaning of Regulations U, G, T, or X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying, directly or indirectly, any margin stock.
6.11 SELF-DEALING. The Borrower and its Subsidiaries
will not enter into or carry out any loan, advance or other transaction
(including, without limitation, purchasing property or services or selling
property or services) with any shareholder, director, officer or partner,
except that any such Person may render services to the Borrower for
compensation at rates substantially similar to those generally paid by
corporations or partnerships engaged in the same or similar businesses for the
same or similar services.
6.12 LEASES. The Borrower and its Subsidiaries will
not at any time enter into or suffer to remain in effect any agreement to
lease, as lessee, any real or personal property except leases of real and
personal property in the ordinary course of business.
ARTICLE VII
DEFAULTS
7.01 EVENTS OF DEFAULT. An Event of Default means
the occurrence or existence of one or more of the following events or
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conditions (whatever the reason for such Event of Default and whether
voluntary, involuntary or effected by operation of Law):
(a) The Borrower shall fail to pay principal
on any of the Noteswithin five (5) Business Days after the date principal on
any of the Notes is due; or
(b) The Borrower shall fail to pay interest
on the Loans or any fees payable pursuant to Article II of this Agreement
within five (5) Business Days after the date such interest or fees are due; or
(c) The Borrower shall fail to pay any other
fee, or other amount payable pursuant to this Agreement, the Notes or any of
the other Loan Documents when due and such failure shall continue for a period
of five (5) Business Days after notice thereof is given to the Borrower; or
(d) Any representation or warranty made by
the Borrower under this Agreement, the Notes or any of the other Loan Documents
or any statement made by the Borrower in any financial statement, certificate,
report, exhibit or document furnished by the Borrower to the Bank pursuant to
this Agreement or the other Loan Documents shall prove to have been false or
misleading in any material respect as of the time when made; or
(e) The Borrower shall be in default in the
performance or observance of any covenant contained in Articles V and VI of
this Agreement; or
(f) The Borrower shall be in default in the
performance or observance of any other covenant, agreement or duty under this
Agreement, the Notes or the other Loan Documents (not constituting an Event of
Default under any other provisions of this Section 7.01) and such default shall
continue for a period of thirty (30) days after notice thereof is given to the
Borrower; or
(g) The Borrower or any Subsidiary shall (i)
default (as principal or guarantor or other surety) in any payment of principal
of or interest on any obligation (or set of related obligations) for borrowed
money in excess of $250,000, beyond any period of grace with respect to the
payment or, if an obligation for borrowed money (or set of related obligations)
in excess of $250,000 is or are payable or repayable on demand, the Borrower or
such Subsidiary fails to pay or repay such obligation or obligations when
demanded, or (ii) default in the observance of any other covenant, term or
condition contained in any agreement or instrument by which an obligation for
borrowed money (or set of
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related obligations) in excess of $250,000 is or are created, secured or
evidenced, if the effect of such default is to cause all or part of such
obligation or obligations to become due before its or their otherwise stated
maturity; or
(h) One or more judgments for the payment of
money in excess of $1,000,000 shall have been entered against the Borrower or
any Subsidiary; or
(i) A writ or warrant of attachment,
garnishment, execution, distraint or similar process shall have been issued
against the Borrower or any Subsidiary or any of their respective properties
and the same shall remain undischarged or unstayed for a period of thirty (30)
consecutive days; or
(j) Bank has determined in good faith that a
Material Adverse Change has occurred or that the prospect of payment or
performance of any covenant, agreement or duty under this Agreement, the Notes
or the other Loan Documents is impaired or that the Bank is insecure; or
(k) A Change of Control shall occur; or
(l) (i) A Termination Event with respect to a
Plan shall occur, (ii) any Person shall engage in any prohibited transaction
involving any Plan, (iii) an accumulated funding deficiency, whether or not
waived, shall exist with respect to any Plan, (iv) either of the Borrowers or
any ERISA Affiliate shall be in "Default" (as defined in Section 4219(c)(5) of
ERISA with respect to payments due to a multi-employer Plan resulting from such
Borrower's or any ERISA affiliate's, complete or partial withdrawal (as
described in Section 4203 or 4205 of ERISA) from such Plan, or (v) any other
event or condition shall occur or exist with respect to a single employer Plan,
except that no such event or condition shall constitute an Event of Default if
it, together with all other events or conditions at the time existing, would
not subject the Borrower or any of its Subsidiaries to any tax, penalty, debt
or liability which, alone or in the aggregate, would have a material adverse
effect on the Borrower or any Subsidiary; or
(m) A proceeding shall be instituted in
respect of the Borrower or any Subsidiary:
(i) seeking to have an order for relief
entered in respect of the Borrower or
any Subsidiary, or seeking a declaration
or entailing a finding that the Borrower
or
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any Subsidiary is insolvent or a similar
declaration or finding, or seeking
dissolution, winding-up, charter
revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment,
composition or other similar relief with
respect to the Borrower or any
Subsidiary, their assets or debts under
any law relating to bankruptcy,
insolvency, relief of debtors or
protection of creditors, termination of
legal entities or any other similar law
now or in the future which shall not have
been dismissed or stayed within sixty
(60) days after such proceedings were
instituted; or
(ii) seeking appointment of a receiver,
trustee, custodian, liquidator,
assignee, sequestrator or other similar
official for the Borrower or any
Subsidiary or for all or any substantial
part of their property which shall not
have been dismissed or stayed within
sixty (60) days after such proceedings
were instituted; or
(n) The Borrower or any Subsidiary shall
become insolvent, shall become generally unable to pay their debts as they
become due, shall voluntarily suspend transaction of their businesses, shall
make a general assignment for the benefit of creditors, shall institute a
proceeding described in Section 7.01(m)(i) of this Agreement or shall consent
to any order for relief, declaration, finding or relief described in Section
7.01(m)(i) of this Agreement, shall institute a proceeding described in Section
7.01(m)(ii) of this Agreement or shall consent to the appointment or to the
taking of possession by any such official of all or any substantial part of
their property whether or not any proceeding is instituted, dissolve, wind-up
or liquidate themselves or any substantial part of their property, or shall
take any action in furtherance of any of the foregoing.
7.02 Consequences of an Event of Default.
------------------------------------
(a) If an Event of Default specified in
subsections (a) through (l) of Section 7.01 of this Agreement occurs, the Bank
will be under no further obligation to make Loans and may at its option demand
the unpaid principal amount of the Notes, interest accrued on the unpaid
principal amount and all other amounts owing by the Borrower under this
Agreement, the Notes and the other Loan Documents to be immediately due and
payable
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without presentment, demand, protest or further notice of any kind, all of
which are expressly waived, and an action for any amounts due shall accrue
immediately.
(b) If an Event of Default specified in
subsections (m) or (n) of Section 7.01 of this Agreement occurs and continues
or exists, the Bank will be under no further obligation to make Loans and the
unpaid principal amount of the Notes, interest accrued on the unpaid principal
amount of the Notes and all other amounts owing by the Borrowers under this
Agreement, the Notes and the other Loan Documents shall automatically become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are expressly waived, and an action for any amounts due
shall accrue immediately.
7.03 SET-OFF. If the unpaid principal amount of the
Notes, interest accrued on the unpaid principal amount of the Notes or other
amount owing by the Borrowers under this Agreement, the Notes or the other Loan
Documents shall have become due and payable (at maturity, by acceleration or
otherwise), the Bank and any assignee of the Bank will each have the right, in
addition to all other rights and remedies available to it, without notice to
the Borrower, to set-off against and to appropriate and apply to such due and
payable amounts any debt owing to, and any other funds held in any manner for
the account of, the Borrower by the Bank or by such assignee including, without
limitation, all funds in all deposit accounts (whether time or demand, general
or special, provisionally credited or finally credited, or otherwise) now or in
the future maintained by the Borrower with the Bank or such assignee. The
Borrower consents to and confirms the foregoing arrangements and confirms the
Bank's rights and such assignee's rights of banker's lien and set-off. Nothing
in this Agreement will be deemed a waiver or prohibition of or restriction on
the Bank's rights or any such assignee's rights of banker's lien or set-off.
ARTICLE VIII
MISCELLANEOUS
8.01 BUSINESS DAYS. Except as otherwise provided in
this Agreement, whenever any payment or action to be made or taken under this
Agreement, or under the Notes or under any of the other Loan Documents is
stated to be due on a day which is not a Business Day, such payment or action
will be made or taken on the next following Business Day and such extension of
time will be included in computing interest or fees, if any, in connection with
such payment or action.
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8.02 RECORDS. The unpaid principal amount of the
Notes, the unpaid interest accrued thereon, the interest rate or rates
applicable to such unpaid principal amount and the duration of such
applicability shall at all times be ascertained from the records of the Bank,
which shall be conclusive absent manifest error.
8.03 AMENDMENTS AND WAIVERS. The Bank and the
Borrower may from time to time enter into agreements amending, modifying or
supplementing this Agreement, the Notes or any other Loan Document or changing
the rights of the Bank or of the Borrower under this Agreement, under the Notes
or under any other Loan Document and the Bank may from time to time grant
waivers or consents to a departure from the due performance of the obligations
of the Borrower under this Agreement, under the Notes or under any other Loan
Document. Any such agreement, waiver or consent must be in writing and will be
effective only to the extent specifically set forth in such writing. In the
case of any such waiver or consent relating to any provision of this Agreement,
any Event of Default or Potential Default so waived or consented to will be
deemed to be cured and not continuing, but no such waiver or consent will
extend to any other or subsequent Event of Default or Potential Default or
impair any right consequent to any other or subsequent Event of Default or
Potential Default or impair any right consequent thereto.
8.04 NO IMPLIED WAIVER: CUMULATIVE REMEDIES. No
course of dealing and no delay or failure of the Bank in exercising any right,
power or privilege under this Agreement, the Notes or any other Loan Document
will affect any other or future exercise of any such right, power or privilege
or exercise of any other right, power or privilege except as and to the extent
that the assertion of any such right, power or privilege shall be barred by an
applicable statute of limitations; nor shall any single or partial exercise of
any such right, power or privilege or any abandonment or discontinuance of
steps to enforce such a right, power or privilege preclude any further exercise
of such right, power or privilege or of any other right, power or privilege.
The rights and remedies of the Bank under this Agreement, the Notes or any
other Loan Document are cumulative and not exclusive of any rights or remedies
which the Bank would otherwise have.
8.05 NOTICES. All notices, requests, demands,
directions and other communications (collectively notices) under the provisions
of this Agreement or the Notes must be in writing (including telexed or
telecopied communication) unless otherwise expressly permitted under this
Agreement and must be sent by first-class or first-class express mail, private
overnight or next Business Day courier or by telecopy with confirmation in
writing
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mailed first class, in all cases with charges prepaid, and any such properly
given notice will be effective when received. All notices will be sent to the
applicable party at the addresses stated below or in accordance with the last
unrevoked written direction from such party to the other parties.
If to Borrower: John P. O'Leary, Jr.
President and Chief Executive Officer
Tuscarora Incorporated
800 Fifth Avenue
New Brighton, PA 15066
Telecopier: (412) 843-4845
and a copy to: Arlie R. Nogay, Esquire
Reed Smith Shaw & McClay
435 Sixth Avenue
Pittsburgh, PA 15219
Telecopier: (412) 288-3063
If to Bank: Brian V. Ciaverella
Vice President
Mellon Bank, N.A.
Two Mellon Bank Center, Room 152-0230
Pittsburgh, PA 15259-0001
Telecopier: (412) 236-9010
and a copy to: Jeffrey J. Conn, Esquire
Thorp, Reed & Armstrong
One Riverfront Center
Pittsburgh, PA 15222
Telecopier: (412) 394-2555
8.06 EXPENSES; TAXES; ATTORNEYS FEES. The Borrower
agrees to pay or cause to be paid and to save the Bank harmless against
liability for the payment of all reasonable out-of-pocket expenses, including,
but not limited to reasonable fees and expenses of counsel and paralegals for
the Bank, incurred by the Bank from time to time (i) arising in connection with
the preparation, execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents, (ii) relating to any requested amendments,
waivers or consents to this Agreement, the Notes or any of the other Loan
Documents and (iii) arising in connection with the Bank's enforcement or
preservation of rights under this Agreement, the Notes or any of the other Loan
Documents, including but not limited to such reasonable expenses as may be
incurred by the Bank in the collection of the outstanding principal amount of
the Loans. The Borrower agrees to pay all stamp, document, transfer, recording
or filing taxes or fees and similar impositions now or in the future reasonably
determined by the Bank
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to be payable in connection with this Agreement, the Notes or any other Loan
Document. The Borrower agrees to save the Bank harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions. In the event of a determination adverse to the Borrower of any
action at law or suit in equity in relation to this Agreement, the Notes or the
other Loan Documents, the Borrower will pay, in addition to all other sums
which the Borrower may be required to pay, a reasonable sum for attorneys and
paralegals fees incurred by the Bank or the holder of the Notes in connection
with such action or suit. All payments due from the Borrower under this Section
will be added to and become part of the Loans until paid in full.
8.07 SEVERABILITY. The provisions of this Agreement
are intended to be severable. If any provision of this Agreement is held
invalid or unenforceable in whole or in part in any jurisdiction, the provision
will, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability of the provision in any other jurisdiction or the remaining
provisions of this Agreement in any jurisdiction.
8.08 GOVERNING LAW: CONSENT TO JURISDICTION. This
Agreement will be deemed to be a contract under the laws of the Commonwealth of
Pennsylvania and for all purposes will be governed by and construed and
enforced in accordance with the substantive laws, and not the laws of
conflicts, of said Commonwealth. The Borrower consents to the exclusive
jurisdiction and venue of the federal and state courts located in Allegheny
County, Pennsylvania, in any action on, relating to or mentioning this
Agreement, the Notes, the other Loan Documents, or any one or more of them.
8.09 PRIOR UNDERSTANDINGS. This Agreement, the Notes
and the other Loan Documents supersede all prior understandings and agreements,
whether written or oral, among the parties relating to the transactions
provided for in this Agreement, the Notes and the other Loan Documents.
8.10 DURATION; SURVIVAL. All representations and
warranties of the Borrowers contained in this Agreement or made in connection
with this Agreement or any of the other Loan Documents shall survive the making
of and will not be waived by the execution and delivery of this Agreement, the
Notes or the other Loan Documents, by any investigation by the Bank, or the
making of any Loan. Notwithstanding termination of this Agreement or an Event
of Default, all covenants and agreements of the Borrower will continue in full
force and effect from and after the date of this Agreement so long as the
Borrower may borrow under this Agreement and until
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payment in full of the Notes, interest thereon, and all fees and other
obligations of the Borrower under this Agreement or the Notes. Without
limitation, it is understood that all obligations of the Borrower to make
payments to or indemnify the Bank will survive the payment in full of the Notes
and of all other obligations of the Borrower under this Agreement, the Notes
and the other Loan Documents.
8.11 TERM OF AGREEMENT. This Agreement will
terminate when all Indebtedness of the Borrower to Bank including, without
limitation, the Loans and interest on the Loans is paid in full, and the
Borrower has no right to borrow under this Agreement and the Bank has no
obligation to make Loans under this Agreement.
8.12 COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by the different parties to this Agreement on
separate counterparts each of which, when so executed, will be deemed an
original, but all such counterparts will constitute but one and the same
instrument.
8.13 SUCCESSORS AND ASSIGNS. This Agreement will be
binding upon and inure to the benefit of the Bank, the Borrower and its
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under this Agreement without the prior written consent of the
Bank.
8.14 NO THIRD PARTY BENEFICIARIES. The rights and
benefits of this Agreement and the other Loan Documents are not intended to,
and shall not, inure to the benefit of any third party.
8.15 PARTICIPATION AND ASSIGNMENT. (a) The Bank may
from time to time sell, assign or grant one or more participations in all or
any part of the Loans made by Bank or which may be made by the Bank, or its
right, title and interest in the Loans in or to this Agreement (including,
without limitation, all or a portion of the Revolving Credit Loans and the Term
Loan), to another lending office, lender or financial institution; provided,
however, that:
(i) the Bank's obligations under this
Agreement and the other Loan Documents shall remain unchanged and the Bank
shall remain responsible for performance of such obligations;
(ii) no participant shall be entitled to
require the Bank to take or refrain from taking any action under this Agreement
or any other Loan Document, except that the Bank may agree with a participant
that the Bank will not, without the consent of such participant (which consent
shall not be unreasonably withheld or delayed), take the following type of
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action: (x) increase the Revolving Credit Facility Commitment over the amount
then in effect, (y) extend the Revolving Credit Expiry Date or the Term Loan
Expiry Date or (z) reduce the principal amount of or extend the time for
payment of principal of any Loan, or reduce the rate of interest or extend the
time for payment of interest borne by any Loan (other than as a result of
waiving the applicability of any increase in the interest rate applicable to
overdue amounts), or extend the time for payment of or reduce the amount of the
commitment fee payable under Section 2.07, or reduce or postpone the payment of
any other fees, expenses, indemnities or amounts payable under any Loan
Document;
(iii) such participation shall not include a
transfer of all or any portion of the Bank's obligation to make Revolving
Credit Loans under the Revolving Credit Facility Commitment; and
(iv) the Borrower shall continue to deal solely
and exclusively with the Bank in connection with this Agreement and the other
Loan Documents.
(b) ASSIGNMENT. The Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or any portion of
the Revolving Credit Facility Commitment and Loans owing to it and any of the
Notes held by it) to any affiliate of the Bank or to one or more additional
commercial banks or other Persons (each a "Purchasing Lender"); provided, that:
(i) any such assignment to a Purchasing Lender
which is not an affiliate of the Bank shall be made only with the consent
(which shall not be unreasonably withheld or delayed) of the Borrower;
(ii) if the Bank makes such an assignment of
less than all of its then remaining rights and obligations under this Agreement
and the other Loan Documents, the Bank shall retain, after such assignment, a
minimum principal amount of $25,000,000 of the Revolving Credit Facility
Commitment and Loans then outstanding, and such assignment shall be in a
minimum aggregate principal amount of $5,000,000 of the Revolving Credit
Facility Commitment and Loans then outstanding;
(iii) each such assignment shall be of a
constant, and not a varying, percentage of the Revolving Credit Facility
Commitment and the Loans of the Bank and of all of the
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Bank's rights and obligations under this Agreement and the other Loan
Documents; and
(iv) each such assignment shall be made
pursuant to a written agreement between the Bank and the Purchasing Lender.
8.16 The Borrower shall, upon the Bank's reasonable
request from time to time, use its reasonable best efforts to cooperate with
the Bank's syndication effort including, without limitation, assisting the Bank
from time to time in preparing information packages for delivery to prospective
participants and Purchasing Lenders containing relevant information about the
Borrower and the Loan Documents, and causing appropriate officers,
representatives and experts to meet with prospective participants and
Purchasing Lenders from time to time.
8.17 CONSTRUCTION. Unless the context of this
Agreement otherwise clearly requires, references to the plural include the
singular, the singular the plural, the part the whole and "or" has the
inclusive meaning represented by the phrase "and/or". References in this
Agreement to "judgments" of Bank include good faith estimates by Bank (in the
case of quantitative judgments) and good faith beliefs by Bank (in the case of
qualitative judgments).
8.18 EXHIBITS. All exhibits and schedules attached
to this Agreement are incorporated and made a part of this Agreement.
8.19 HEADINGS. The section headings contained in
this Agreement are for convenience only and do not limit or define or affect
the construction or interpretation of this Agreement in any respect.
8.20 LIMITATION OF LIABILITY. To the fullest extent
permitted by Law, no claim may be made by the Borrower against the Bank or any
affiliate, director, officer, employee, attorney or agent of the Bank for any
special, incidental, indirect, consequential or punitive damages in respect of
any claim arising from or relating to this Agreement or any other Loan Document
or any statement, course of conduct, act, omission or event occurring in
connection herewith or therewith (whether for breach of contract, tort or any
other theory of liability). The Borrower hereby waives, releases and agrees
not to sue upon any claim for any such damages, whether such claim presently
exists or arises hereafter and whether or not such claim is known or suspected
to exist in its favor. This Section 8.19 shall not limit any rights of the
Borrower arising solely out of willful misconduct.
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8.21 WAIVER OF TRIAL BY JURY.
THE BORROWER AND THE BANK EXPRESSLY,
KNOWINGLY AND VOLUNTARILY WAIVE ALL
BENEFIT AND ADVANTAGE OF ANY RIGHT TO A INITIALS:
TRIAL BY JURY, AND NEITHER WILL AT ANY TIME
INSIST UPON, OR PLEAD OR IN ANY MANNER /s/ J P O'L
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR -------------
ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION BORROWER
ARISING IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR ANY OF THE LOAN DOCUMENTS. /s/ B V C
-------------
BANK
[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, and intending to be legally bound, the
parties, by their duly authorized officers, have executed and delivered this
Agreement on the date set forth at the beginning of this Agreement.
Attest: Tuscarora Incorporated
By: /s/ BRIAN C. MULLINS By: /s/ JOHN P. O'LEARY, JR.
-------------------- ------------------------
Title: Vice President - Treasurer Title: President - CEO
------------------------- ---------------------
Mellon Bank, N.A.
By: /s/ BRIAN V. CIAVERELLA
-----------------------
Vice President
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REVOLVING CREDIT NOTE
$40,000,000 Pittsburgh, Pennsylvania
August 14, 1996
FOR VALUE RECEIVED, the undersigned, Tuscarora Incorporated a
Pennsylvania corporation (the "Borrower") hereby promises to pay to the order
of Mellon Bank, N.A., a national banking association (the "Bank"), as provided
for in the Loan Agreement (as defined below), the lesser of (i) the principal
sum of Forty Million and 00/100 Dollars ($40,000,000.00), or (ii) the aggregate
unpaid principal amount of all Revolving Credit Loans made by Bank to Borrower
pursuant to that certain Loan Agreement, by and between Borrower and Bank,
dated the date hereof, as such agreement may be amended, modified or
supplemented from time to time (the "Loan Agreement"). Borrower hereby further
promises to pay to the order of Bank interest on the unpaid principal amount of
this Revolving Credit Note from time to time outstanding at the rate or rates
per annum determined pursuant to Article II of, or as otherwise provided in,
the Loan Agreement, and with such amounts being payable on the dates set forth
in Article II of, or as otherwise provided in, the Loan Agreement.
All payments and prepayments to be made in respect of principal,
interest, or other amounts due from Borrower under this Revolving Credit Note
shall be payable at 12:00 noon, Pittsburgh, Pennsylvania time, on the day when
due, without presentment,
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demand, protest or notice of any kind, all of which are expressly waived, and
an action therefor shall immediately accrue. All such payments shall be made to
Bank at its designated office located at Two Mellon Bank Center, Pittsburgh,
Pennsylvania 15259, in lawful money of the United States of America in
immediately available funds without setoff, counterclaim or other deduction of
any nature.
Except as otherwise provided in the Loan Agreement, if any payment of
principal or interest under this Revolving Credit Note shall become due on a
day which is not a Business Day, such payment shall be made on the next
following Business Day and such extension of time shall be included in
computing interest in connection with such payment.
This Revolving Credit Note is one of the Notes referred to in, and is
entitled to the benefits of, the Loan Agreement, as the same may be amended,
modified or supplemented from time to time. Capitalized terms used in this
Revolving Credit Note which are defined in the Loan Agreement shall have the
meanings assigned to them therein unless otherwise defined in this Revolving
Credit Note.
WARRANT OF ATTORNEY TO CONFESS JUDGMENT. THE BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK
OF ANY COURT OF RECORD, UPON AN EVENT OF DEFAULT, TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST THE BORROWER
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FOR SUCH SUMS AS ARE DUE AND/OR MAY BECOME DUE UNDER THIS REVOLVING CREDIT
NOTE, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT STAY OF
EXECUTION AND WITH A REASONABLE AMOUNT ADDED FOR ATTORNEYS' COLLECTION FEES. TO
THE EXTENT PERMITTED BY LAW, THE BORROWER RELEASES ALL ERRORS IN SUCH
PROCEEDINGS. IF A COPY OF THIS REVOLVING CREDIT NOTE, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THIS REVOLVING CREDIT NOTE SHALL HAVE BEEN FILED
IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL REVOLVING CREDIT
NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED BY THE INITIAL
EXERCISE THEREOF AND MAY BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT
NECESSARY AND DESIRABLE AND THIS REVOLVING CREDIT NOTE OR A COPY THEREOF SHALL
BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF MAY CONFESS ONE OR MORE
JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL OR ANY PART OF THE
AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS THERETOFORE BEEN
CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN THE EVENT ANY
JUDGMENT CONFESSED AGAINST THE BORROWER HEREUNDER IS STRICKEN OR OPENED UPON
APPLICATION BY OR ON THE BORROWER'S BEHALF FOR ANY REASON, HOLDER IS HEREBY
AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT AGAINST THE
BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING HEREUNDER, AS PROVIDED FOR
HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR PROCEEDINGS.
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This Revolving Credit Note shall be governed by, and shall be construed
and enforced in accordance with, the laws of the Commonwealth of Pennsylvania
without regard to the principles of the conflicts of laws thereof. Borrower
hereby consents to the jurisdiction and venue of the Court of Common Pleas of
Allegheny County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this Revolving Credit Note.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Borrower has executed, issued and delivered this Revolving Credit Note in
Pittsburgh, Pennsylvania on the day and year written above.
Attest: Tuscarora Incorporated
By: /s/ BRIAN C. MULLINS By: /s/ JOHN P. O'LEARY, JR.
-------------------- ------------------------
Title: Vice President & Treasurer Title: President & CEO
-------------------------- ---------------------
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TERM NOTE
$37,000,000 Pittsburgh, Pennsylvania
August 14, 1996
FOR VALUE RECEIVED, the undersigned, Tuscarora Incorporated a
Pennsylvania corporation ("Borrower") hereby promises to pay to the order of
Mellon Bank, N.A., a national banking association (the "Bank"), as provided for
in the Loan Agreement (as defined below), the aggregate principal amount of
Thirty Seven Million and 00/100 Dollars ($37,000,000.00), together with interest
on the unpaid principal amount of this Term Note at the rate or rates per annum
determined pursuant to Article II of, or as otherwise provided in, that certain
Loan Agreement, by and between Borrower and Bank, dated the date hereof, as such
agreement may be amended, modified or supplemented from time to time (the "Loan
Agreement") and with such amounts being payable on the dates set forth in
Article II of, or as otherwise provided in, the Loan Agreement.
All payments and prepayments to be made in respect of principal,
interest or other amounts due from Borrower under this Term Note shall be
payable at 12:00 noon, Pittsburgh, Pennsylvania time, on the day when due,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived, and an action therefor shall immediately accrue. All such
payments shall be made to Bank at its designated office located at Two Mellon
Bank
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Center, Pittsburgh, Pennsylvania 15259, in lawful money of the United States of
America in immediately available funds without setoff, counterclaim or other
deduction of any nature.
Except as otherwise provided in the Loan Agreement, if any payment of
principal or interest under this Term Note shall become due on a day which is
not a Business Day, such payment shall be made on the next following Business
Day and such extension of time shall be included in computing interest in
connection with such payment.
This Term Note is one of the Notes referred to in, and is entitled to
the benefits of, the Loan Agreement, as the same may be amended, modified or
supplemented from time to time. Capitalized terms used in this Term Note which
are defined in the Loan Agreement shall have the meanings assigned to them
therein unless otherwise defined in this Term Note.
This Term Note shall be governed by, and shall be construed and enforced
in accordance with, the laws of the Commonwealth of Pennsylvania without regard
to the principles of the conflicts of laws thereof. Borrower hereby consents to
the jurisdiction and venue of the Court of Common Pleas of Allegheny County,
Pennsylvania and the United States District Court for the Western District of
Pennsylvania with respect to any suit arising out of or mentioning this Term
Note.
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WARRANT OF ATTORNEY TO CONFESS JUDGMENT. THE BORROWER HEREBY IRREVOCABLY
AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK OF ANY COURT
COURT OF RECORD, UPON AN EVENT OF DEFAULT, TO APPEAR FOR AND CONFESS RECORD,
UPON AN EVENT OF DEFAULT, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST THE
BORROWER FOR SUCH SUMS AS ARE DUE AND/OR MAY BECOME DUE UNDER THIS TERM NOTE,
WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT STAY OF EXECUTION AND
WITH A REASONABLE AMOUNT ADDED FOR ATTORNEYS' COLLECTION FEES. TO THE EXTENT
PERMITTED BY LAW, THE BORROWER RELEASES ALL ERRORS IN SUCH PROCEEDINGS. IF A
COPY OF THIS TERM NOTE, VERIFIED BY AFFIDAVIT BY OR ON BEHALF OF THE HOLDER OF
THIS TERM NOTE SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY
TO FILE THE ORIGINAL TERM NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER
TO APPEAR FOR AND CONFESS JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXHAUSTED
BY THE INITIAL EXERCISE THEREOF AND MAY BE EXERCISED AS OFTEN AS THE HOLDER
SHALL FIND IT NECESSARY AND DESIRABLE AND THIS TERM NOTE OR A COPY THEREOF SHALL
BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF MAY CONFESS ONE OR MORE
JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL OR ANY PART OF THE
AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS THERETOFORE BEEN
CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN THE EVENT ANY
JUDGMENT CONFESSED AGAINST THE BORROWER HEREUNDER IS STRICKEN OR OPENED UPON
APPLICATION BY OR ON THE BORROWER'S BEHALF FOR ANY REASON, HOLDER IS HEREBY
AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT AGAINST THE
BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING
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HEREUNDER, AS PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS
IN SUCH PRIOR PROCEEDINGS.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Borrower has excuted, issued and delivered this Term Note in Pittsburgh,
Pennsylvania on the day and year written above.
Attest: Tuscarora Incorporated
By: /s/ BRIAN C. MULLINS By: /s/ JOHN P. O'LEARY, JR.
-------------------- ------------------------
Title: Vice President & Treasurer Title: President & CEO
-------------------------- ---------------------
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