EXHIBIT 10.10
EXECUTION COPY
$25,000,000 REVOLVING CREDIT FACILITY
$30,000,000 TERM LOAN FACILITY
CREDIT AGREEMENT
by and among
CUNO INCORPORATED, as Borrower
and
THE BANKS PARTY HERETO
and
MELLON BANK, N.A., as Agent
Dated as of August 9, 1996
TABLE OF CONTENTS
Article Page
- ------- ----
1. CERTAIN DEFINITIONS................................................... 1
1.1 Certain Definitions................................................ 1
1.2 Construction....................................................... 18
1.2.1 Number; Inclusion.............................................. 18
1.2.2 Determination.................................................. 19
1.2.3 Agent's Discretion and Consent................................. 19
1.2.4 Documents Taken as a Whole..................................... 19
1.2.5 Headings....................................................... 19
1.2.6 Implied References to this Agreement........................... 19
1.2.7 Persons........................................................ 19
1.2.8 Modifications to Documents..................................... 19
1.2.9 From, To and Through........................................... 20
1.2.10 Shall; Will.................................................... 20
1.3 Accounting Principles.............................................. 20
2. REVOLVING CREDIT FACILITY AND TERM FACILITY........................... 20
2.1 Revolving Credit Commitments....................................... 20
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans 20
2.3 Revolving Credit and Term Loan Commitment Fees..................... 21
2.4 Voluntary Reduction of Revolving Credit and Term Loan Commitments.. 21
2.5 Revolving Credit Loan Requests..................................... 22
2.6 Making Revolving Credit Loans...................................... 22
2.7 Revolving Credit Notes............................................. 23
2.8 Use of Revolving Credit Proceeds................................... 23
2.9 Letters of Credit Subfacility...................................... 23
2.9.1 Issuance of Letters of Credit.................................. 23
2.9.2 Participations................................................. 23
2.9.3 Letter of Credit Fees.......................................... 24
2.9.4 Disbursements, Reimbursement................................... 24
2.9.5 Documentation.................................................. 25
2.9.6 Determinations to Honor Drawing Requests....................... 25
2.9.7 Nature of Participation and Reimbursement Obligations.......... 25
2.9.8 Indemnity...................................................... 27
2.9.9 Liability for Acts and Omissions............................... 27
2.10 Term Facility..................................................... 28
2.10.1 Term Loan Commitments......................................... 28
2.10.2 Nature of Banks' Obligations With Respect to Term Loans....... 28
- i -
TABLE OF CONTENTS
Article Page
- ------- ----
2.10.3 Term Loan Notes.....................................28
2.10.4 Use of Term Loan Proceeds...........................29
3. INTEREST RATES....................................................29
--------------
3.1 Interest....................................................29
3.1.1 Interest Rate Options................................29
3.2 Interest Periods............................................31
3.2.1 Ending Date and Business Day.........................31
3.2.2 Amount of Borrowing Tranche..........................31
3.2.3 Termination Before Expiration Date...................31
3.2.4 Renewals.............................................31
3.3 Interest After Default......................................31
3.3.1 Letters of Credit Fees, Interest Rate................31
3.3.2 Other Obligations....................................31
3.3.3 Acknowledgment.......................................32
3.4 Euro-Rate Unascertainable...................................32
3.4.1 Unascertainable......................................32
3.4.2 Illegality; Increased Costs; Deposits Not Available..32
3.4.3 Agent's and Bank's Rights............................33
3.5 Selection of Interest Rate Options..........................33
4. PAYMENTS..........................................................34
--------
4.1 Payments....................................................34
4.2 Pro Rata Treatment of Banks.................................34
4.3 Interest Payment Dates......................................34
4.4 Voluntary Prepayments.......................................35
4.4.1 Right to Prepay......................................35
4.5 Mandatory Reduction of Commitments; Mandatory Prepayments...36
4.5.1 Sale of Assets.......................................36
4.6 Additional Compensation in Certain Circumstances............36
4.6.1 Increased Costs or Reduced Return Resulting
From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc..........................36
4.6.2 Indemnity............................................37
5. REPRESENTATIONS AND WARRANTIES....................................38
------------------------------
5.1 Representations and Warranties..............................38
5.1.1 Organization and Qualification.......................38
5.1.2 Subsidiary Matters...................................39
-ii-
TABLE OF CONTENTS
Article Page
- ------- ----
5.1.3 Power and Authority.............................................. 39
5.1.4 Validity and Binding Effect...................................... 39
5.1.5 No Conflict...................................................... 39
5.1.6 Litigation....................................................... 40
5.1.7 Title to Properties.............................................. 40
5.1.8 Financial Statements............................................. 40
5.1.9 Margin Stock..................................................... 41
5.1.10 Full Disclosure.................................................. 42
5.1.11 Taxes............................................................ 42
5.1.12 Consents and Approvals........................................... 42
5.1.13 No Event of Default; Compliance with Instruments................. 42
5.1.14 Patents, Trademarks, Copyrights, Licenses, Etc................... 43
5.1.15 Insurance........................................................ 43
5.1.16 Compliance with Laws............................................. 43
5.1.17 Material Contracts............................................... 43
5.1.18 Investment Companies............................................. 44
5.1.19 Plans and Benefit Arrangements................................... 44
5.1.20 Employment Matters............................................... 45
5.1.21 Environmental Matters............................................ 46
5.1.22 Senior Debt Status............................................... 48
5.1.23 Security Interests............................................... 48
5.1.24 Mortgage Liens................................................... 49
5.1.25 Status of the Pledged Collateral................................. 49
5.1.26 Solvency......................................................... 49
5.2 Updates to Schedules.................................................. 49
6. CONDITIONS OF LENDING................................................... 50
6.1 First Revolving Credit Loans and Term Loans......................... 50
6.1.1 Officer's Certificate............................................ 50
6.1.2 Secretary's Certificate.......................................... 50
6.1.3 Delivery of Loan Documents....................................... 51
6.1.4 Opinions of Counsel.............................................. 51
6.1.5 Legal Details.................................................... 51
6.1.6 Payment of Fees.................................................. 52
6.1.7 Consents......................................................... 52
6.1.8 Officer's Certificate Regarding MACs............................. 52
6.1.9 No Violation of Laws............................................. 52
6.1.10 No Actions or Proceedings........................................ 52
6.1.11 Insurance Policies; Certificates of Insurance.................... 52
6.1.12 Termination of Existing Debt..................................... 53
6.1.13 Solvency Certificate............................................. 53
6.1.14 Spin-Off......................................................... 53
-iii-
TABLE OF CONTENTS
Article Page
- ------- ----
6.2 Each Additional Loan...............................................53
6.3 Syndication........................................................54
6.3.1 Syndication Representation and Warranties................54
6.3.2 Syndication Documents....................................54
7. COVENANTS................................................................55
7.1 Affirmative Covenants..............................................55
7.1.1 Preservation of Existence, Etc...........................55
7.1.2 Payment of Liabilities, Including Taxes, Etc.............55
7.1.3 Maintenance of Insurance.................................55
7.1.4 Maintenance of Properties and Leases.....................57
7.1.5 Maintenance of Patents, Trademarks, Etc..................57
7.1.6 Visitation Rights........................................57
7.1.7 Keeping of Records and Books of Account..................57
7.1.8 Plans and Benefit Arrangements...........................57
7.1.9 Compliance with Laws.....................................58
7.1.10 Use of Proceeds.........................................58
7.1.11 Subordination of Intercompany Loans.....................58
7.1.12 Further Assurances Regarding Banks' Liens and Prior
Security Interests......................................59
7.1.13 Post-Closing Matters....................................59
7.1.14 Payments of Inter-Company Obligations Related to
Intertech...............................................59
7.2 Negative Covenants.................................................59
7.2.1 Indebtedness.............................................60
7.2.2 Liens....................................................60
7.2.3 Guaranties...............................................61
7.2.4 Loans and Investments....................................61
7.2.5 Dividends and Related Distributions......................62
7.2.6 Liquidations, Mergers, Consolidations,
Acquisitions.............................................62
7.2.7 Dispositions of Assets or Subsidiaries...................63
7.2.8 Affiliate Transactions...................................64
7.2.9 Subsidiaries, Partnerships and Joint Ventures............65
7.2.10 Continuation of or Change in Business...................65
7.2.11 Plans and Benefit Arrangements..........................65
7.2.12 Fiscal Year.............................................66
7.2.13 Issuance of Stock.......................................67
7.2.14 Changes in Organizational Documents.....................67
7.2.15 Capital Expenditures and Leases.........................67
7.2.16 Minimum Interest Coverage Ratio.........................68
7.2.17 Consolidated Funded Indebtedness to Consolidated
EBITDA Ratio............................................68
7.2.18 Minimum Consolidated Tangible Net Worth.................69
7.2.19 Amendments to Certain Documents.........................69
7.2.20 No Prepayment of Existing Indebtedness..................69
-iv-
TABLE OF CONTENTS
Article Page
- ------- ----
7.3 Reporting Requirements.............................................70
7.3.1 Quarterly Financial Statements...........................70
7.3.2 Annual Financial Statements..............................70
7.3.3 Certificate of the Borrower..............................71
7.3.4 Notice of Default........................................71
7.3.5 Notice of Litigation.....................................71
7.3.6 Certain Events...........................................71
7.3.7 Budgets, Forecasts, Other Reports and Information........72
7.3.8 Notices Regarding Plans and Benefit Arrangements.........73
8. DEFAULT..................................................................74
8.1 Events of Default..................................................74
8.1.1 Payments Under Loan Documents............................74
8.1.2 Breach of Warranty.......................................75
8.1.3 Breach of Negative Covenants and Section 7.1.13..........75
8.1.4 Breach of Other Covenants................................75
8.1.5 Defaults in Other Agreements or Indebtedness.............75
8.1.6 Final Judgments or Orders................................75
8.1.7 Loan Document Unenforceable..............................76
8.1.8 Notice of Lien or Assessment.............................76
8.1.9 Insolvency...............................................76
8.1.10 Events Relating to Plans and Benefit Arrangements.......76
8.1.11 Cessation of Business...................................77
8.1.12 Change of Control.......................................77
8.1.13 Involuntary Proceedings.................................77
8.1.14 Voluntary Proceedings...................................78
8.2 Consequences of Event of Default...................................78
8.2.1 Events of Default Other Than Bankruptcy, Insolvency
or Reorganization Proceedings............................78
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.....79
8.2.3 Set-off..................................................79
8.2.4 Suits, Actions, Proceedings..............................79
8.2.5 Application of Proceeds..................................80
8.2.6 Other Rights and Remedies................................80
8.3 Notice of Sale.....................................................80
9. THE AGENT................................................................81
9.1 Appointment........................................................81
9.2 Delegation of Duties...............................................81
9.3 Nature of Duties; Independent Credit Investigation.................81
9.4 Actions in Discretion of Agent; Instructions from the Banks........82
-v-
TABLE OF CONTENTS
Article Page
- ------- ----
9.5 Reimbursement and Indemnification of Agent by the Borrower........................ 82
9.6 Exculpatory Provisions............................................................ 83
9.7 Reimbursement and Indemnification by Banks of the Agent........................... 83
9.8 Reliance by Agent................................................................. 84
9.9 Notice of Default................................................................. 84
9.10 Notices.......................................................................... 84
9.11 Banks in Their Individual Capacities............................................. 84
9.12 Holders of Notes................................................................. 85
9.13 Equalization of Banks............................................................ 85
9.14 Successor Agent.................................................................. 85
9.15 Other Fees....................................................................... 86
9.16 Availability of Funds............................................................ 86
9.17 Calculations..................................................................... 86
9.18 Beneficiaries.................................................................... 86
10. MISCELLANEOUS...................................................................... 87
10.1 Modifications, Amendments or Waivers............................................. 87
10.1.1 Increase of Commitments; Extension or Expiration Date........................ 87
10.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment............................................ 87
10.1.3 Release of Guarantor; Release of Security.................................... 87
10.1.4 Miscellaneous................................................................ 87
10.2 No Implied Waivers; Cumulative Remedies; Writing Required........................ 88
10.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes................ 88
10.4 Holidays......................................................................... 89
10.5 Funding by Branch, Subsidiary or Affiliate....................................... 89
10.5.1 Notional Funding............................................................. 89
10.5.2 Actual Funding............................................................... 90
10.5.3 Changes to Other Branches, Subsidiaries or Affiliates........................ 90
10.6 Notices.......................................................................... 90
10.7 Severability..................................................................... 91
10.8 Governing Law.................................................................... 91
10.9 Prior Understanding.............................................................. 91
vi
TABLE OF CONTENTS
Article Page
- ------- ----
10.10 Duration; Survival..................................... 91
10.11 Successors and Assigns................................. 92
10.12 Confidentiality........................................ 93
10.13 Counterparts........................................... 93
10.14 Agent's or Bank's Consent.............................. 93
10.15 Exceptions............................................. 93
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL................. 94
10.17 Tax Withholding Clause................................. 94
10.18 Joinder of Subsidiaries................................ 95
vii
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS
SCHEDULE 1.1(I) - EXISTING DEPOSITORY INSTITUTIONS
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 5.1.1 - SUBSIDIARIES
SCHEDULE 5.1.2 - SUBSIDIARY MATTERS
SCHEDULE 5.1.12 - CONSENTS AND APPROVALS
SCHEDULE 5.1.6 - LITIGATION
SCHEDULE 5.1.7 - PROPERTY
SCHEDULE 5.1.17 - MATERIAL CONTRACTS
SCHEDULE 5.1.19 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.1.21 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 5.1.25 - STATUS OF PLEDGED COLLATERAL
SCHEDULE 6.1.4 - COUNSEL TO LOAN PARTIES
SCHEDULE 7.1.13 - POST-CLOSING MATTERS
SCHEDULE 7.2.1 - EXISTING INDEBTEDNESS
SCHEDULE 7.2.4 - LOANS AND INVESTMENTS
SCHEDULE 7.2.8 - AFFILIATE TRANSACTIONS
EXHIBITS
EXHIBIT 1.1(A) - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(I)(1) - FORM OF INTERCOMPANY NOTE
EXHIBIT 1.1(M)(1) - FORM OF MASTER GUARANTY AGREEMENT
EXHIBIT 1.1(M)(2) - FORM OF MASTER INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(M)(3) - FORM OF MORTGAGE
EXHIBIT 1.1(M)(4) - FORM OF LEASEHOLD MORTGAGE
EXHIBIT 1.1(N) - FORM OF NOTE PLEDGE AGREEMENT
EXHIBIT 1.1(P)(1) - FORM OF PATENT, TRADEMARK AND COPYRIGHT SECURITY
AGREEMENT
EXHIBIT 1.1(P)(2) - FORM OF PLEDGE AGREEMENT
EXHIBIT 1.1(S) - FORM OF SECURITY AGREEMENT
EXHIBIT 1.1(R) - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.1(T) - FORM OF TERM NOTE
EXHIBIT 2.5 - FORM OF LOAN REQUEST
EXHIBIT 2.9.1 - FORM OF APPLICATION AND AGREEMENT FOR LETTERS OF CREDIT
EXHIBIT 6.1.4 - OPINION OF COUNSEL
EXHIBIT 7.3.3 - FORM OF COMPLIANCE CERTIFICATE
-viii-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of August 9, 1996 and is made by and
among CUNO INCORPORATED, a Delaware corporation (the "Borrower"), the BANKS (as
hereinafter defined), and MELLON BANK, N.A., in its capacity as Agent.
WITNESSETH:
WHEREAS, the Borrower has requested a revolving credit facility in an
aggregate principal amount of $25,000,000, including a $20,000,000 sublimit for
letters of credit and a $30,000,000 term loan facility; and
WHEREAS, the Banks are willing to provide such credit facilities upon
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
-------------------
1.1 Certain Definitions.
------------------------
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting or other equity interests of which is beneficially owned or
held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
Agent shall mean Mellon Bank, N.A., in its capacity as agent and
its successors and assigns.
Agent's Fee shall have the meaning assigned to that term in
Section 9.15.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Annual Statements shall have the meaning assigned to that term in
Section 5.1.8(i).
Applicable Percentage Over Base Rate shall have the meaning
assigned to that term in Section 3.1.1.
Applicable Percentage Over Euro Rate shall have the meaning
assigned to that term in Section 3.1.1.
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent on behalf of the other Banks, substantially in the form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals, designated by
written notice to the Agent from the Borrower, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder.
The Borrower may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a "Bank".
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
1/2% per annum.
Base Rate Option shall mean Loans subject to the Revolving Credit
Base Rate Option or the Term Loan Base Rate Option.
Benefit Arrangement shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
Borrower shall mean CUNO Incorporated, a corporation organized
and existing under the laws of the State of Delaware.
Borrowing Date shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof at or to the same or a
different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) Loans to which a Euro-Rate applies by reason of the
selection of, conversion to or
-2-
renewal of such Interest Rate Option on the same day and having the same
Interest Period shall constitute one Borrowing Tranche, and (ii) with respect to
the Loans to which the Base Rate Option applies by reason of the selection of or
conversion to such Interest Rate Option shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania or New York, New York, and, if
the applicable Business Day relates to any Loan to which the Euro-Rate Option
applies, such day must also be a day on which dealings in Dollar deposits are
carried on in the London interbank market.
Capitalized Lease shall mean any lease of Property by a Person as
lessee which is a capital lease in accordance with GAAP.
Closing Date shall mean the date of the Spin-Off. The closing
shall take place at 10:00 a.m., Pittsburgh time, on the Closing Date at the
offices of Buchanan Ingersoll Professional Corporation, Pittsburgh,
Pennsylvania, or at such other time and place as the parties agree.
Collateral shall mean the Pledged Collateral, the UCC Collateral,
the property described in the Patent, Trademark and Copyright Security Agreement
and the Property.
Commitment shall mean as to any Bank the aggregate of its
Revolving Credit Commitment and Term Loan Commitment, and Commitments shall mean
the aggregate of the Revolving Credit Commitments and Term Loan Commitments of
all of the Banks.
Commitment Fee shall have the meaning assigned to that term in
Section 2.3.
Consolidated Capital Expenditures means, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including that portion of Capitalized Leases which is capitalized on a
consolidated balance sheet of the Borrower and its Subsidiaries) by the Borrower
and its Subsidiaries during that period that, in conformity with GAAP, are
required to be included in or reflected in the property, plant or equipment or
similar fixed asset accounts reflected on a consolidated balance sheet of the
Borrower and its Subsidiaries. Any amount which is included in any period as an
accrual shall not be duplicated in any calculation at the time payment thereof
is actually made to the extent included in such prior accrual.
Consolidated EBITDA for any period of determination shall mean an
amount equal to the sum of (i) the net income for such period plus (ii) interest
expense in respect of Indebtedness to the extent deducted in determining net
income for such period ("Interest Expense"), plus (iii) the provision for taxes
for such period based on income or profits to the
-3-
extent such income or profits were included in computing net income for such
period, plus (iv) depreciation deducted in determining net income for such
period, plus (v) amortization deducted in determining net income for such
period, plus (vi) expense to the extent deducted in determining net income for
such period in respect of fees and costs which were incurred in connection with
the consummation of the transactions contemplated hereby and in connection with
the Tender Offer and the Spin-Off (provided, that no such expense described in
this clause (vi) shall be added to determine Consolidated EBITDA for any period
of determination if the aggregate expense for that period of determination
together with all expense included in determining net income in all periods
prior to the period of determination for all such fees and costs would exceed
$4,000,000), in each case of the Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided, however,
there shall be excluded from the foregoing computation all extraordinary income,
gains and losses to the extent included in net income under the foregoing clause
(i) for such period.
Consolidated Funded Indebtedness as of any date of determination
shall mean the aggregate of any and all indebtedness, obligations or liabilities
of the Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP for or in respect of: (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations under any letter of credit drawn upon
and not reimbursed within the time period required, currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
management device (net of any payments made to the Borrower under any of the
foregoing interest rate management devices), (iv) any other transaction
(including forward sale or purchase agreements, capitalized leases (but not
operating leases) and conditional sales agreements) having the commercial effect
of a borrowing of money entered into by such Person to finance its operations or
capital requirements (but not including trade payables, trade credits and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than sixty (60) days past due), or (v) any Guaranty of any liability
described in the foregoing clauses (i) through (iv).
Consolidated Cash Income Tax Expense for any period of
determination shall be equal to the aggregate cash payments of income taxes by
the Borrower and its Subsidiaries in respect of their consolidated net income
for such period.
Consolidated Interest Expense for any period of determination
shall be equal to the Interest Expense of the Borrower and its Subsidiaries as
determined in subclause (ii) of clause (A) of the definition of the term
"Consolidated EBITDA" for such period on a consolidated basis determined in
accordance with GAAP less any amortization of fees and costs which were incurred
and paid in a period prior to the period of determination in connection with the
consummation of the transactions contemplated hereby and are included in
Interest Expense for such period.
-4-
Consolidated Tangible Net Worth shall mean as of any date of
determination total stockholders' equity of the Borrower and its Subsidiaries,
less intangible assets of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP.
Cumulative Consolidated Net Income shall mean as of any date of
determination the sum of the net income of the Borrower and its Subsidiaries on
a consolidated basis determined in accordance with GAAP for each fiscal quarter
completed prior to the date of determination commencing with the fiscal quarter
beginning on August 1, 1996, provided that there shall be excluded (and the
computation of Cumulative Consolidated Net Income shall not be reduced by) any
net loss incurred by the Borrower and its Subsidiaries on a consolidated basis
in any fiscal quarter.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
Domestic Subsidiary shall mean any Subsidiary of Borrower other
than a Foreign Subsidiary and Domestic Subsidiaries shall mean more than one
Domestic Subsidiary.
Environmental Complaint shall mean any written complaint setting
forth a cause of action for personal or property damage or natural resource
damage or equitable relief, order, notice of violation, citation, request for
information issued pursuant to any Environmental Laws by an Official Body,
subpoena or other written notice of any type relating to, arising out of, or
issued pursuant, to any of the Environmental Laws or any Environmental
Conditions, as the case may be.
Environmental Conditions shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances resulting
from the use of, or operations on, any Property.
Environmental Laws shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
-5-
ERISA Group shall mean, at any time, the Borrower and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control and all other entities which, together
with the Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
Euro-Rate shall mean with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period,
the interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upward to the nearest 1/16 of 1% per annum) (i) the rate of
interest determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates set forth on the "LIBO" page of the Reuters
Monitor Money Rate Service (or appropriate successor) or, if Reuters or its
successor ceases to provide such quotes, a comparable replacement determined by
the Agent, at approximately 11:00 a.m. London time two (2) Business Days prior
to the first day of such Interest Period for an amount comparable to such
Borrowing Tranche and having a maturity comparable to such Interest Period by
(ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-
Rate may also be expressed by the following formula:
Average of London interbank offered rates
on LIBO page of Reuters Monitor Money
Euro-Rate = Rate Service or appropriate successor
-------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Option shall mean Loans subject to the Revolving Credit
Euro-Rate Option or the Term Loan Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
Event of Default shall mean any of the events described in
Section 8.1.
Executive Officer shall mean as to any designated Person a
natural Person who constitutes an executive officer of such designated Person
for purposes of item 401(b) of Regulation S-K promulgated under the Securities
Act of 1933 and the Securities Exchange Act of 1934.
-6-
Expiration Date shall mean January 30, 1998.
Federal Funds Effective Rate for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day of which such rate was announced.
Financial Projections shall have the meaning assigned to that
term in Section 5.1.8(ii).
Foreign Subsidiary means any Subsidiary of Borrower that (i) is
formed under the laws of a jurisdiction other than the United States, any state
of the United States, the District of Columbia or any territory or possession of
the United States and (ii) maintains the major portion of its assets outside of
the United States and Foreign Subsidiaries means more than one Foreign
Subsidiary.
Form 10 shall mean the Borrower's Form 10 filed with the
Securities and Exchange Commission on July 29, 1996, as amended.
GAAP shall mean generally accepted accounting principles as are
in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
Governmental Acts shall have the meaning assigned to that term in
Section 2.9.8.
Guarantor shall mean each of the Domestic Subsidiaries of the
Borrower which is designated as a "Guarantor" on the signature page to the
Master Guaranty Agreement and each other Domestic Subsidiary of the Borrower
which joins the Master Guaranty Agreement and the other Loan Documents as a
Guarantor after the date hereof pursuant to Section 10.18.
Guarantor Joinder shall mean a joinder to the Master Guaranty
Agreement as provided in the Master Guaranty Agreement.
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly (whether matured or
unmatured, liquidated or
-7-
unliquidated, direct or indirect, absolute or contingent or joint or several),
including any agreement to indemnify or hold harmless any other Person, any
performance bond or other suretyship arrangement and any other form of assurance
against loss, except endorsement of negotiable or other instruments for deposit
or collection in the ordinary course of business.
Historical Statements shall have the meaning assigned to that
term in Section 5.1.8(i).
Indebtedness shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device
(net of any payments made to Borrower under any of the foregoing interest rate
management devices), (iv) any other transaction (including forward sale or
purchase agreements, capitalized leases (but not operating leases) and
conditional sales agreements) having the commercial effect of a borrowing of
money entered into by such Person to finance its operations or capital
requirements (but not including trade payables, trade credits and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than sixty (60) days past due), or (v) any Guaranty of the Indebtedness
described in the foregoing clauses (i) through (iv).
InterCompany Loans shall mean loans made by one Loan Party to one
or more other Loan Parties or their Subsidiaries and, in the case of loans
between the Borrower and the Material Subsidiaries, evidenced by intercompany
notes (the "Intercompany Notes") in the form attached hereto as Exhibit
1.1(I)(1).
Intercompany Notes shall have the meaning assigned to that term
in the definition of the term "Intercompany Loans".
Interest Coverage Ratio shall mean on any date of determination,
the ratio of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense with
such ratio determined as of October 31, 1996 for the fiscal quarter then ended,
as of January 31, 1997 for the two fiscal quarters then ended, as of April 30,
1997 for the three fiscal quarters then ended and as of July 31, 1997 and
thereafter for the four fiscal quarters then ended.
Interest Payment Date shall mean each date specified for the
payment of interest in Section 4.3.
Interest Period shall have the meaning assigned to such term in
Section 3.2.
-8-
Interest Rate Option shall mean any Euro-Rate Option or Base Rate
Option.
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Intertech shall mean Commercial Intertech Corp., an Ohio
corporation which until the Spin-Off owns all of the capital stock of the
Borrower.
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
Letter of Credit shall have the meaning assigned to that term in
Section 2.9.1.
Letter of Credit Outstandings shall mean collectively at any time
the sum of: (i) the aggregate undrawn face amount of all Letters of Credit and,
without duplication, (ii) all unpaid and outstanding Reimbursement Obligations.
Letters of Credit Fees shall have the meaning assigned to that
term in Section 2.9.3.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
Loan Documents shall mean this Agreement, the Master Guaranty
Agreement, the Master Intercompany Subordination Agreement, the Mortgages, the
Notes, the Patent, Trademark and Copyright Security Agreements, the Pledge
Agreements, the Security Agreements, the Note Pledge Agreement, the Intercompany
Notes, and any other instruments, certificates or documents delivered or
contemplated to be delivered hereunder or thereunder or in connection herewith
or therewith, as the same may be supplemented or amended from time to time in
accordance herewith or therewith, and Loan Document shall mean any of the Loan
Documents.
-9-
Loan Parties shall mean the Borrower and the Guarantors.
Loan Request shall have the meaning ascribed thereto in Section
2.5.
Loans shall mean collectively the Revolving Credit Loans and Term
Loans and Loan shall mean separately any of the Loans.
Master Guaranty Agreement shall mean the Master Guaranty and
Suretyship Agreement in substantially the form of Exhibit 1.1(M)(1) or in such
other form as is acceptable to the Agent in form and substance in its sole
discretion, in all cases executed and delivered by the Guarantors to the Agent
for the benefit of the Banks.
Master Intercompany Subordination Agreement shall mean a
subordination agreement among the Loan Parties in the form attached hereto as
Exhibit 1.1(M)(2).
Material Adverse Change shall mean any circumstance or event or
set of circumstances or events which (a) has or could reasonably be expected to
have any material adverse effect whatsoever upon the validity or enforceability
of this Agreement or any other Loan Document, (b) is or could reasonably be
expected to be material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Loan Parties
taken as a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Loan Parties taken as a whole to duly and
punctually pay or perform their indebtedness, or (d) impairs materially or could
reasonably be expected to impair materially the ability of the Agent or any of
the Banks, to the extent permitted, to enforce their legal remedies pursuant to
this Agreement or any other Loan Document.
Material Subsidiary shall mean any Subsidiary of the Borrower
having at least 5% of the total consolidated assets of the Borrower and its
Subsidiaries or at least 5% of the total consolidated revenues of the Borrower
and its Subsidiaries for the 12-month period ending on the last day of the most
recent fiscal quarter of the Borrower.
Month, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any Euro-
Rate Interest Period begins on a day of a calendar month for which there is no
numerically corresponding day in the month in which such Interest Period is to
end, the final month of such Interest Period shall be deemed to end on the last
Business Day of such final month.
Mortgages shall mean collectively the Mortgages in substantially
the form of Exhibits 1.1(M)(3) or 1.1(M)(4) hereto, or in such other form as is
acceptable to the Agent in form and substance in its sole discretion, as the
case may be, with respect to the Property, in all cases executed and delivered
by the Borrower and each Domestic Subsidiary to the Agent for the benefit of the
Banks, and Mortgage shall mean separately any Mortgage.
-10-
Multiemployer Plan shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five plan years,
has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Note Pledge Agreement shall mean that certain Note Pledge
Agreement in substantially form of Exhibit 1.1(N) executed and delivered by the
Borrower and each Subsidiary to the Agent for the benefit of the Banks with
respect to the pledge of the Intercompany Notes.
Notes shall mean collectively the Revolving Credit Notes and Term
Notes and Note shall mean separately any of the Notes.
Notices shall have the meaning assigned to that term in Section
10.6.
Obligation shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit or any other Loan Document.
Official Body shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Patent, Trademark and Copyright Security Agreements shall mean
collectively the Patent, Trademark and Copyright Security Agreements in
substantially the form attached hereto as Exhibit 1.1(P)(1) or such other form
satisfactory in form and substance to the Agent in its sole discretion, in all
cases executed and delivered by the Borrower and each Domestic Subsidiary to the
Agent for the benefit of the Banks and Patent, Trademark and Copyright Security
Agreement shall mean separately any Patent, Trademark and Copyright Security
Agreement.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor
thereto.
-11-
Permitted Cash Equivalent Investments shall mean readily
marketable:
(i) direct obligations of the United States of America or
any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in six (6) months or less
from the date of acquisition;
(ii) commercial paper maturing in six (6) months or less
rated not lower than "A-1" by Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc. or "P-1" by Moody's Investors Service, Inc. on
the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within six (6) months which either (x) are held by any
commercial bank listed on Schedule 1.1(I) or (y) held by any commercial bank
which the Agent has approved or which has capital and surplus in excess of
$500,000,000 and has, or the holding company of which has, obligations rated not
lower than "A-1" by Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. or "P-1" by Moody's Investors Service, Inc. on the date of
acquisition;
(iv) repurchase obligations of any commercial bank described
in clause (iii) above with a term of not more than seven days for underlying
securities of the type described in clause (i) above; and
(v) investments in common funds which invest exclusively in
obligations of the type describe in clauses (i) through (iv) above.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure
-12-
statutory obligations, or surety, appeal, indemnity, performance or other
similar bonds required in the ordinary course of business;
(v) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially impairs
the use of such property or the value thereof, and none of which is violated in
any material respect by existing or proposed structures or land use;
(vi) Liens and security interests in favor of the Agent for the
benefit of the Banks or any Issuing Letter of Credit Bank in the application for
a Letter of Credit;
(vii) Liens on property leased by any Loan Party or Subsidiary of
a Loan Party or other interest or title of the lessor under capital and
operating leases not otherwise prohibited by Section 7.2.15 securing
obligations of such Loan Party or Subsidiary to the lessor under such leases;
(viii) Any Lien or rights or restrictions with respect thereto
existing on the date of this Agreement and described on Schedule 1.1(P),
provided that the principal amount secured thereby is not hereafter increased
(although it may be refinanced), and no additional assets become subject to such
Lien, other than additions or accessions to the assets which are subject to such
Lien or any replacements of any such assets acquired in the ordinary course of
business;
(ix) Purchase Money Security Interests to the extent that (X)
such Purchase Money Security Interests attach to inventory purchased in the
ordinary course of business pursuant to customary payment terms and are not
perfected by the filing of financing statements or other public filings or (Y)
the aggregate amount of loans and deferred payments secured by Purchase Money
Security Interests not described in the foregoing clause (X) do not exceed at
any one time outstanding $5,000,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P));
(x) Liens relating to the licensing by Borrower, the other Loan
Parties or their Subsidiaries of intellectual property;
(xi) Liens relating to a sublease entered into by a Loan
Party or its Subsidiary;
(xii) The following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (B) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry or (C) if payments thereof are covered in full
(subject to customary deductibles) by an insurance company of reputable standing
which insurance company has acknowledged that the applicable policy applies to
the following and is not reserving any right to contest applicability, and in
any case
-13-
they do not in the aggregate, materially impair the ability of any Loan Party to
perform its Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges by the United
States, or any department, agency or instrumentality thereof, or by any
state, county, municipal or other governmental agency, including the PBGC,
due and payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings to
foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title to, real
or personal property, including any attachment of personal or real property
or other legal process prior to adjudication of a dispute on the merits;
and
(3) Claims or Liens of mechanics, materialmen, warehousemen, carriers,
or other statutory nonconsensual Liens;
(xiii) Liens granted by the Japanese Foreign Subsidiary in its accounts
receivable to Japanese commercial banks to secure Indebtedness incurred in the
ordinary course of business by such Japanese Subsidiary for working capital in
Japan; and
(xiv) additional Liens securing Indebtedness not to exceed $3,000,000.
Person shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, joint venture, limited
liability company, government or political subdivision or agency thereof, or any
other entity.
Plan shall mean at any time an employee pension benefit plan (including a
Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title
IV of ERISA or is subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and either (i) is maintained by any member of the
ERISA Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity which was at
such time a member of the ERISA Group for employees of any entity which was at
such time a member of the ERISA Group.
Pledge Agreements shall mean collectively the Pledge Agreements in
substantially the form attached hereto as Exhibit 1.1(P)(2) hereto or in such
other form as is acceptable to the Agent in form and substance in its sole
discretion, in all cases, executed and delivered by the Borrower and each
Domestic Subsidiary owning equity interests in any Subsidiary of the Borrower,
as pledgors, to the Agent for the benefit of the Banks, and Pledge Agreement
shall mean separately any Pledge Agreement.
-14-
Pledged Collateral shall have the meaning assigned to that term in the
Pledge Agreements.
Potential Default shall mean any event or condition which with notice,
passage of time or a determination by the Agent or the Required Banks, or any
combination of the foregoing, would constitute an Event of Default.
Principal Office shall mean the main banking office of the Agent in
Pittsburgh, Pennsylvania at the address shown on the signature page hereto.
Prior Security Interest shall mean a valid and enforceable perfected first
priority security interest under the Uniform Commercial Code in the UCC
Collateral and the Pledged Collateral which is subject only to Liens for taxes
not yet due and payable to the extent such prospective tax payments are given
priority by statute or Purchase Money Security Interests as permitted hereunder.
Prohibited Transaction shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which
neither an individual nor a class exemption has been issued by the United States
Department of Labor.
Property shall mean all real property, both owned and leased, of the
Borrower or any Subsidiary.
Purchase Money Security Interest shall mean Liens upon real or personal
property securing loans to any Loan Party or Subsidiary of a Loan Party or
deferred payments by such Loan Party or Subsidiary for the purchase of such
property.
Purchasing Bank shall mean a Bank which becomes a party to this Agreement
by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's Revolving Credit
Commitment and Term Loan Commitment bears to the Revolving Credit Commitments
and Term Loan Commitments of all of the Banks, respectively.
Regulated Substances shall mean any substance including any solid, liquid,
semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage,
wastes, chemicals, petroleum products, by-products and coproducts, impurities,
dust, scrap, and heavy metals defined as a "hazardous substance," "pollutant,"
"pollution," "contaminant," "hazardous or toxic substance," "extremely hazardous
substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial
waste," "residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," or "regulated
substance" or any related materials, substances or wastes as now or hereafter
defined pursuant to any Environmental Laws, ordinances, rules, regulations or
other directives of any Official Body, the generation, manufacture, extraction,
processing, distribution, treatment, storage, disposal,
-15-
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as promulgated by the Board
of Governors of the Federal Reserve System, as amended from time to time.
Reimbursement Obligation shall have the meaning assigned to such term in
Section 2.9.4.
Reportable Event shall mean a reportable event described in Section 4043 of
ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan.
Required Banks shall mean (i) if there are no Loans outstanding, Banks
whose Commitments aggregate at least 66-2/3% of the Commitments of all of the
Banks, or (ii) if there are Loans outstanding, Banks whose Loans outstanding
aggregate at least 66-2/3% of the total principal amount of the Loans
outstanding hereunder.
Revolving Credit Base Rate Option shall mean the option of the Borrower to
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.1.1(i).
Revolving Credit Commitment shall mean, as to any Bank at any time the
amount initially set forth opposite its name on Schedule 1.1(B) in the column
labeled "Revolving Credit Commitment" and thereafter on Schedule I to the most
recent Assignment and Assumption Agreement, as the same may have been reduced in
accordance with Section 2.4 or Section 4.5.1 and Revolving Credit Commitments
shall mean the aggregate Revolving Credit Commitments of all of the Banks.
Revolving Credit Euro-Rate Option shall mean the option of the Borrower to
have Revolving Credit Loans bear interest at the rate and under the terms and
conditions set forth in Section 3.1.1(ii).
Revolving Credit Loans shall mean collectively and Revolving Credit Loan
shall mean separately all loans or any loan made by the Banks or one of the
Banks to the Borrower pursuant to Section 2.1 or 2.9.4.
Revolving Credit Notes shall mean collectively and Revolving Credit Note
shall mean separately all the Revolving Credit Notes of the Borrower in the form
attached hereto as Exhibit 1.1(R) evidencing the Revolving Credit Loans together
with all amendments, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the Revolving
Credit Loans outstanding and the Letter of Credit Outstandings.
-16-
Security Agreements shall mean the Security Agreements in substantially the
form attached hereto as Exhibit 1.1(S) or such other form as is acceptable in
form and substance to the Agent, in its sole discretion, in all cases executed
and delivered by the Borrower and each Domestic Subsidiary to the Agent for the
benefit of the Banks, and Security Agreement shall mean separately any Security
Agreement.
Solvent shall mean, with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
Spin-Off shall mean the dividend distribution by Intertech to its
shareholders of all of the outstanding shares of common stock of the Borrower.
Subsidiary of any Person at any time shall mean (i) any corporation or
trust of which 50% or more (by number of shares or number of votes) of the
outstanding capital stock or shares of beneficial interest normally entitled to
vote for the election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, or any partnership of which such Person is a general partner or of
which 50% or more of the partnership interests is at the time directly or
indirectly owned by such Person or one or more of such Person's Subsidiaries, or
(ii) any corporation, trust, partnership or other entity which is controlled or
capable of being controlled by such Person and/or one or more of such Person's
Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term in Section
5.1.2.
Syndication Date shall mean a date on or before 30 days after the Closing
Date selected by the Agent and notice of which is given by the Agent to the
Borrower at least five (5) Business Days prior thereto.
-17-
Tender Offer shall mean the offer by United Dominion, Inc. to purchase any
and all shares of the common stock of Intertech.
Term Loans shall mean collectively and Term Loan shall mean separately all
Term Loans or any Term Loan made by the Banks or one of the Banks to the
Borrower pursuant to Section 2.10.1 hereof.
Term Loan Base Rate Option shall mean the option of the Borrower to have
Term Loans bear interest at the rate and under the terms and conditions set
forth in Section 3.1.1(i).
Term Loan Commitment shall mean, as to any Bank at any time, the amount
initially set forth opposite its name on Schedule 1.01(B) hereto in the column
labeled "Amount of Commitment for Term Loans," and thereafter on Schedule I to
the most recent Assignment and Assumption Agreement, and Term Loan Commitments
shall mean the aggregate Term Loan Commitments of all of the Banks.
Term Loan Euro-Rate Option shall mean the option of the Borrower to have
Term Loans bear interest at the rate and under the terms and conditions set
forth in Section 3.1.1(ii).
Term Notes shall mean collectively and Term Note shall mean separately all
of the Term Notes of the Borrower in the form of Exhibit 1.1(T) hereto
evidencing the Term Loans together with all amendments, extensions, renewals,
replacements, refinancings or refunds thereof in whole or in part.
Transferor Bank shall mean the selling Bank pursuant to an Assignment and
Assumption Agreement.
UCC Collateral shall mean the property of the Borrower and each Domestic
Subsidiary in which security interests are granted under the Security Agreements
and under the Note Pledge Agreement.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
1.2.1 Number; Inclusion.
References to the plural include the singular, the plural, the part and the
whole; "or" has the inclusive meaning represented by the phrase "and/or," and
"including" has the meaning represented by the phrase "including without
limitation";
-18-
1.2.2 Determination.
References to "determination" of or by the Agent or the Banks shall be
deemed to include good-faith estimates by the Agent or the Banks (in the case of
quantitative determinations) and good-faith beliefs by the Agent or the Banks
(in the case of qualitative determinations) and such determination shall be
conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
Whenever the Agent or the Banks are granted the right herein to act in its
or their sole discretion or to grant or withhold consent such right shall be
exercised in good-faith;
1.2.4 Documents Taken as a Whole.
The words "hereof," "herein," "hereunder," "hereto" and similar terms in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document as a whole and not to any particular provision of this Agreement
or such other Loan Document;
1.2.5 Headings.
The section and other headings contained in this Agreement or such other
Loan Document and the Table of Contents (if any) preceding this Agreement or
such other Loan Document are for reference purposes only and shall not control
or affect the construction of this Agreement or such other Loan Document or the
interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
Article, section, subsection, clause, schedule and exhibit references are
to this Agreement or such other Loan Document, as the case may be, unless
otherwise specified;
1.2.7 Persons.
Reference to any Person includes such Person's successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement or such other Loan Document, as the case may be, and reference to a
Person in a particular capacity excludes such Person in any other capacity;
1.2.8 Modifications to Documents.
Reference to any agreement (including this Agreement and any other Loan
Document together with the schedules and exhibits hereto or thereto), document
or instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated;
-19-
1.2.9 From, To and Through.
Relative to the determination of any period of time, "from" means "from and
including," "to" means "to but excluding," and "through" means "through and
including"; and
1.2.10 Shall; Will.
References to "shall" and "will" are intended to have the same meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP. In the event that on or after the date hereof, a
material change occurs in GAAP, the Banks and the Borrower will consult in good
faith regarding whether such change in GAAP affects any financial covenants
contained herein that should be adjusted due to such change in GAAP.
2. REVOLVING CREDIT FACILITY AND TERM FACILITY
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date in an aggregate principal amount
not to exceed at any one time such Bank's Revolving Credit Commitment minus such
Bank's Ratable Share of the Letter of Credit Outstandings. Within such limits of
time and amount and subject to the other provisions of this Agreement, the
Borrower may borrow, repay and reborrow pursuant to this Section 2.1.
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans.
Each Bank shall be obligated to participate in each request for Revolving
Credit Loans pursuant to Section 2.5 in accordance with its Ratable Share. The
aggregate of each Bank's Revolving Credit Loans outstanding hereunder to the
Borrower at any time shall never exceed its Revolving Credit Commitment minus
its Ratable Share of the Letter of Credit Outstandings. The obligations of each
Bank hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the Obligations of the Borrower to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations
-20-
hereunder. The Banks shall have no obligation to make Revolving Credit Loans
hereunder on or after the Expiration Date.
2.3 Revolving Credit and Term Loan Commitment Fees.
Accruing from the date hereof until the Expiration Date, the Borrower
agrees to pay to the Agent for the account of each Bank, as consideration for
such Bank's Commitment hereunder, a nonrefundable commitment fee (the
"Commitment Fee") equal to one half of one percent (0.5%) per annum (computed on
the basis of a year of 360 days, as the case may be, and actual days elapsed)
times the average daily difference between (i) the amount of such Bank's
Commitment as the same may be constituted from time to time, and (ii) the sum of
such Bank's Revolving Credit Loans outstanding, its Term Loans outstanding plus
its Ratable Share of Letters of Credit Outstandings.
All Commitment Fees shall be payable monthly in arrears on the first
Business Day of each month after the date hereof and on the Expiration Date or
upon acceleration of the Notes.
2.4 Voluntary Reduction of Revolving Credit and Term Loan Commitments.
The Borrower shall have the right at any time and from time to time upon
not less than three (3) Business Days' prior written notice to the Banks to
permanently reduce, in a minimum amount of $5,000,000 and in integral multiples
of $1,000,000, or terminate the Commitments, both without penalty or premium,
except as hereinafter set forth, provided that any such reduction or termination
shall be accompanied by (a) the payment in full of any Commitment Fee then
accrued on the amount of such reduction or termination and (b) prepayment of the
Revolving Credit Notes and/or Term Notes in an amount equal to such reduction or
termination, as applicable, together with the full amount of interest accrued on
the principal sum to be prepaid (and all amounts referred to in Section 4.6)
and the Borrower shall deposit in a non-interest bearing account (provided that
with the consent of the Agent, such account may be an interest bearing account)
with the Agent, as cash collateral for its Obligations in respect of the Letters
of Credit and related applications and agreements, an amount equal to the
maximum amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower hereby pledges to the Agent and
the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such Obligations, to the extent that the Revolving
Facility Usage then exceeds the Revolving Credit Commitments as so reduced or
terminated. From time to time the Agent shall return to the Borrower any excess
of the amount held in such account over the amount by which the Revolving
Facility Usage then exceeds the Revolving Credit Commitments. From the effective
date of any such reduction or termination, the obligations of Borrower to pay
the Commitment Fee pursuant to Section 2.3 shall correspondingly be reduced or
cease.
-21-
2.5 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from time to time
prior to the Expiration Date request the Banks to make Revolving Credit Loans,
or renew or convert the Interest Rate Option applicable to existing Revolving
Credit Loans pursuant to Section 3.1.1, by delivering to the Agent, (i) not
later than 12:00 p.m., Pittsburgh, Pennsylvania time, three (3) Business Days
prior to the proposed Borrowing Date with respect to the making of Revolving
Credit Loans to which the Revolving Credit Euro-Rate Option applies or the
conversion to or the renewal of the Revolving Credit Euro-Rate Option for any
Revolving Credit Loans; and (ii) not later than 12:00 p.m., Pittsburgh,
Pennsylvania time on the proposed Borrowing Date with respect to the making of a
Revolving Credit Loan to which the Revolving Credit Base Rate Option applies or
the last day of the preceding Interest Period with respect to the conversion to
the Revolving Credit Base Rate Option for any Revolving Credit Loan, of a duly
completed request therefor substantially in the form of Exhibit 2.5 or a request
by telephone immediately confirmed in writing by letter, facsimile or telex in
such form (each, a "Loan Request"), it being understood that the Agent may rely
on the authority of any individual making such a telephonic request without the
necessity of receipt of such written confirmation. Each Loan Request shall be
irrevocable and shall specify (i) the proposed Borrowing Date; (ii) the
aggregate amount of the proposed Revolving Credit Loans comprising each
Borrowing Tranche, which shall be in integral multiples of $1,000,000 and not
less than $3,000,000 for each Borrowing Tranche to which the Revolving Credit
Euro-Rate Option applies and not less than the lesser of $1,000,000 or the
maximum amount available for Borrowing Tranches to which the Revolving Credit
Base Rate Option applies; (iii) whether the Revolving Credit Euro-Rate Option or
Revolving Credit Base Rate Option shall apply to the proposed Revolving Credit
Loans comprising the applicable Borrowing Tranche; and (iv) in the case of a
Borrowing Tranche to which the Revolving Credit Euro-Rate Option applies, an
appropriate Interest Period for the proposed Revolving Credit Loans comprising
such Borrowing Tranche.
2.6 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan Request pursuant to
Section 2.5, notify the Banks of its receipt of the related Loan Request
specifying: (i) the proposed Borrowing Date of such Revolving Credit Loans; (ii)
the amount and type of each such Revolving Credit Loan and the applicable
Interest Period (if any); and (iii) the apportionment among the Banks of such
Revolving Credit Loans as determined by the Agent in accordance with Section
2.2. Each Bank shall remit the principal amount of each Revolving Credit Loan
to the Agent such that the Agent is able to, and the Agent shall, to the extent
the Banks have made funds available to it for such purpose, fund such Revolving
Credit Loans to the Borrower in Dollars and immediately available funds at the
Principal Office prior to 2:00 p.m., Pittsburgh, Pennsylvania time, on the
applicable Borrowing Date, provided that if the Agent assumes pursuant to
Section 9.16 that a Bank will make available to the Agent such Bank's portion
of a Revolving Credit Loan and such Bank fails to remit such funds to the Agent
in a timely manner, the Agent may elect in its sole discretion to fund with its
own funds the Revolving Credit Loans
-22-
of such Bank on such Borrowing Date, and such Bank shall be subject to the
repayment obligation in Section 9.16.
2.7 Revolving Credit Notes.
-----------------------
The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by each Bank, together with
interest thereon, shall be evidenced by a Revolving Credit Note payable to the
order of such Bank in a face amount equal to the Revolving Credit Commitment of
such Bank.
2.8 Use of Revolving Credit Proceeds.
---------------------------------
The proceeds of the Revolving Credit Loans shall be used for working
capital and other general corporate purposes.
2.9 Letters of Credit Subfacility.
------------------------------
2.9.1 Issuance of Letters of Credit.
------------------------------
The Borrower may request the issuance of (or modification of any
issued) letters of credit (each a "Letter of Credit" and in the aggregate the
"Letters of Credit") on behalf of itself delivering by no later than 12:00 p.m.,
Pittsburgh, Pennsylvania time three (3) Business Days prior to the requested
date of issuance of such Letter of Credit to the Agent a written notice
specifying the proposed beneficiary, date of issuance and expiry date for such
Letter of Credit or modification to an existing Letter of Credit and the nature
of the transactions to be supported thereby. Subject to the terms and conditions
hereof and to the execution of a completed application and agreement for letters
of credit in the form attached hereto as Exhibit 2.9.1 or such other form as the
Agent may specify from time to time and in reliance on the agreements of the
Banks set forth in this Section 2.9, the Agent will issue a Letter of Credit
provided that each Letter of Credit shall (A) have a maximum maturity of 365
days from and including the date of issuance, (B) in no event expire later than
five Business Days prior to the Expiration Date and provided further that in no
event shall (i) the Letter of Credit Outstandings exceed, at any one time,
$20,000,000 or (ii) the Revolving Facility Usage exceed, at any one time, the
Revolving Credit Commitments. In the event of any conflict between the terms of
this Agreement and the terms of any Issuing Letter of Credit Bank's application
and agreement for letters of credit, the terms of this Agreement shall control
(provided that terms of any Issuing Letter of Credit Bank's application and
agreement for letters of credit which are in addition to those contained herein
and which do not expressly conflict with the terms contained herein shall not be
deemed to be in conflict with this Agreement).
2.9.2 Participations.
----------------------
Immediately upon issuance of each Letter of Credit, and without further
action, each Bank shall be deemed to, and hereby agrees that it shall, have
irrevocably purchased
-23-
for such Bank's own account and risk from the Agent an individual participation
interest in such Letter of Credit and drawings thereunder in an amount equal to
such Bank's Ratable Share of the maximum amount which is or at any time may
become available to be drawn thereunder, and each Bank shall be responsible to
reimburse the Agent immediately for its Ratable Share of any disbursement under
any Letter of Credit which has not been reimbursed by Borrower in accordance
with Section 2.9.4 by making its Ratable Share of the Revolving Credit Loans
referred to in Section 2.9.4 available to the Agent. Upon the request of any
Bank and no less frequently than once in each calendar month, the Agent shall
notify each Bank of the amount of such Bank's participation in Letters of
Credit.
2.9.3 Letter of Credit Fees.
---------------------
The Borrower shall pay to the Agent for the ratable account of the Banks
fees ("Letters of Credit Fees") with respect to Letter of Credit Outstandings in
an amount equal to the Letter of Credit Outstandings multiplied by a rate per
annum (computed on the basis of a year of 360 days and actual days elapsed) as
specified below, for the applicable period specified below, payable monthly in
arrears commencing with the first Business Day of the month following the
Closing Date and on the earlier of the Expiration Date or the acceleration of
the Notes:
Period Letters of Credit Fees
- ---------------------------------------- -----------------------
From the Closing Date through and
including 1/30/97 3.00%
1/31/97 through and including 4/29/97 3.50%
4/30/97 through and including 7/30/97 4.00%
7/31/97 through and including 10/30/97 4.50%
10/31/97 through and including the
Expiration Date 5.00%
The Borrower shall also pay to the Agent for its sole account (i) a
facing fee equal to one-eighth of one percent (0.125%) per annum of the
aggregate undrawn face amount of each Letter of Credit payable monthly in
arrears and (ii) its then in effect customary issuance fees and administrative
expense payable with respect to its Letters of Credit as the Agent may generally
charge or incur from time to time in connection with the issuance, maintenance,
modification (if any), assignment or transfer (if any), negotiation, and
administration of letters of credit, payable at such times as the Agent may
specify.
2.9.4 Disbursements, Reimbursement.
----------------------------
Borrower shall be obligated immediately to reimburse the Agent (each a
"Reimbursement Obligation") for all amounts which the Agent is required to pay
pursuant to the Letters of Credit issued by the Agent on or before the date on
which the Agent is required to make payment with respect to a draft presented
thereunder. The Agent will promptly notify the Borrower of each demand or
presentment for payment or draft accepted for payment or other drawing under
each Letter of Credit issued by the Agent. The Agent shall promptly notify each
-24-
Bank of the amount required to be paid by such Bank as a result of a drawing
upon such Letter of Credit if the Borrower has not timely reimbursed the Agent
for such draw. If such notice is received by a Bank before 1:00 p.m.,
Pittsburgh, Pennsylvania time, such Bank shall deliver such Bank's Ratable Share
of such payment in immediately available funds to the Agent on that Business
Day. If such notice is received by a Bank after 1:00 p.m., Pittsburgh,
Pennsylvania time, such Bank shall before 10:00 a.m., Pittsburgh, Pennsylvania
time, on the next succeeding Business Day deliver to the Agent such Bank's
Ratable Share of such payment as a Revolving Credit Loan from such Bank in
immediately available funds.
2.9.5 Documentation.
-------------
The Borrower agrees to be bound by the terms of the Agent's application
and agreement for letters of credit and the Agent's written regulations and
customary practices relating to letters of credit, though such interpretation
may be different from the Borrower's own. In the event of a conflict between
such application or agreement and this Agreement, this Agreement shall govern
(provided that terms of the Agent's application and agreement for letters of
credit which are in addition to those contained herein and which do not
expressly conflict with the terms contained herein shall be deemed not to be in
conflict with this Agreement). It is understood and agreed that, except in the
case of gross negligence or willful misconduct, the Agent shall not be liable
for any error, negligence and/or mistakes, whether of omission or commission, in
following the Borrower's instructions or those contained in the Letters of
Credit issued by the Agent or any modifications, amendments or supplements
thereto.
2.9.6 Determinations to Honor Drawing Requests.
----------------------------------------
In determining whether to honor any request for drawing under any Letter
of Credit by the beneficiary thereof, the Agent shall be responsible only to
determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit.
2.9.7 Nature of Participation and Reimbursement Obligations.
-----------------------------------------------------
The obligation of the Banks to participate in Letters of Credit pursuant
to Section 2.9.2 and the obligation of the Banks pursuant to Section 2.9.4 to
fund Revolving Credit Loans upon a draw under a Letter of Credit or to acquire
participations in Letters of Credit and the Obligations of the Borrower to
reimburse the Agent upon a draw under any Letter of Credit pursuant to Section
2.9 shall be absolute unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of such sections under all circumstances,
including the following circumstances:
(i) the failure of any Loan Party or any other Person to comply with
the conditions set forth in Sections 2.1 or 6.2 or as otherwise
set forth in this Agreement for the making of a Revolving
Credit Loan, it being acknowledged that such conditions are not
required for the making of a Revolving Credit Loan under
Section 2.9.4;
-25-
(ii) any lack of validity or enforceability of any Letter of Credit;
(iii) the existence of any claim, set-off, defense or other right which any
Loan Party or any Bank may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), the Agent or any Bank or any other Person or
whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Loan Party or Subsidiaries of a Loan Party and the
beneficiary for which any Letter of Credit was procured);
(iv) any draft, demand, certificate or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect even if the Agent has been notified thereof;
(v) payment by the Agent under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not comply with
the terms of such Letter of Credit;
(vi) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Borrower, any
other Loan Party or Subsidiaries of a Loan Party;
(vii) any breach of this Agreement or any other Loan Document by any party
thereto;
(viii) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing;
-26-
(ix) the fact that an Event of Default or a Potential Default
shall have occurred and be continuing; and
(x) the fact that the Expiration Date shall have passed or
this Agreement or the Revolving Credit Commitments
hereunder shall have been terminated.
2.9.8 Indemnity.
----------
In addition to amounts payable as provided in Section 9.5, the
Borrower hereby agrees to pay and to protect, indemnify and save harmless the
Agent and the Banks from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which any of them may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit, other than as a result of
(A) the gross negligence or willful misconduct of the Agent with respect to the
Letters of Credit as determined by a final judgment of a court of competent
jurisdiction or (B) subject to the following clause (ii), the wrongful dishonor
by the Agent of a proper demand for payment made under any Letter of Credit or
(ii) the failure of the Agent to honor a drawing under any such Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of any present
or future de jure or de facto government or governmental authority (all such
acts or omissions herein called "Governmental Acts").
2.9.9 Liability for Acts and Omissions.
---------------------------------
As between any Loan Party and the Agent, such Loan Party assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of the Letters of Credit. In furtherance and not in
limitation of the foregoing, neither the Agent nor any Bank shall be responsible
for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for an
issuance of any Letter of Credit issued by the Agent, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged (even if the Agent shall have been notified thereof); (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of
-27-
the Agent, including any Governmental Acts, and none of the above shall affect
or impair, or prevent the vesting of, any of the Agent's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
put the Agent under any resulting liability to the Borrower or any Banks.
The Banks and any Loan Party may not commence a proceeding against the
Agent for wrongful disbursement under a Letter of Credit issued by the Agent as
a result of acts or omissions constituting gross negligence or willful
misconduct of the Agent, until the Banks have made and the Borrower has repaid
the Revolving Credit Loans described in Section 2.9.4; provided, however, that
nothing in this Section 2.9 shall adversely affect the right of any Loan Party,
after such payment, to commence any proceeding against the Agent for any breach
of its obligations hereunder.
2.10 Term Facility.
--------------
2.10.1 Term Loan Commitments.
----------------------
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make a term loan (the "Term Loan") to the Borrower on the Closing Date in such
principal amount as the Borrower shall request up to but not exceeding such
Bank's Term Loan Commitment.
2.10.2 Nature of Banks' Obligations With Respect to Term Loans.
--------------------------------------------------------
The obligations of each Bank to make a Term Loan to the Borrower shall
be in the proportion that such Bank's Term Loan Commitment bears to the Term
Loan Commitments of all Banks to the Borrower, but each Bank's Term Loan to the
Borrower shall never exceed its Term Loan Commitment. The failure of any Bank
to make a Term Loan shall not relieve any other Bank of its obligations to make
a Term Loan nor shall it impose any additional liability on any other Bank
hereunder. The Banks shall have no obligation to make Term Loans hereunder
after the Closing Date. The Term Loan Commitments are not revolving credit
commitments and the Borrower shall not have the right to borrow, repay and
reborrow under Section 2.10.1.
2.10.3 Term Loan Notes.
----------------
The obligation of the Borrower to repay the unpaid principal amount of
the Term Loans made to it by each Bank, together with interest thereon, shall be
evidenced by a promissory note of the Borrower dated the Closing Date in
substantially the form attached hereto as Exhibit 1.1(T) payable to the order of
each Bank in a face amount equal to the Term Loan
-28-
Commitment of such Bank. The outstanding principal amount of the Term Notes
shall be payable on the Expiration Date.
2.10.4 Use of Term Loan Proceeds
-------------------------
The proceeds of the Term Loans will be used to repay Indebtedness
owing by the Borrower to Intertech and to pay a dividend declared by the
Borrower to Intertech.
3. INTEREST RATES
--------------
3.1 Interest.
---------
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrower by delivering to
the Agent a duly completed Loan Request may select different Interest Rate
Options and different Interest Periods to apply simultaneously to the Loans
comprising different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the Revolving Credit
Loans or Term Loans comprising any Borrowing Tranche by delivering to the Agent
a duly completed Loan Request by the time described in Section 2.5 for
conversion or renewal of such Interest Rate Option for a Revolving Credit Loan,
provided that there shall not be at any one time outstanding more than ten (10)
Borrowing Tranches in the aggregate among all the Loans. If at any time the
designated rate applicable to any Loan made by any Bank exceeds such Bank's
highest lawful rate, the rate of interest on such Bank's Loan shall be limited
to such Bank's highest lawful rate.
3.1.1 Interest Rate Options.
------------------------
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Loans:
(i) Base Rate Option: A fluctuating rate per annum
(computed on the basis of a year of 365 days and
actual days elapsed) equal to the Base Rate plus the
percentage rate per annum (the "Applicable Percentage
Over Base Rate") for the applicable period, as set
forth below, such interest rate to change
automatically from time to time effective as of the
effective date of each change in the Base Rate:
-29-
Applicable Percentage
Period Over Base Rate
------ ---------------------
From the Closing Date through and .25%
including 1/30/97
1/31/97 through and including 4/29/97 .75%
4/30/97 through and including 7/30/97 1.25%
7/31/97 through and including 10/30/97 1.75%
10/31/97 through and including the 2.25%
Expiration Date
(ii) Euro-Rate Option: A rate per annum (computed on the
basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus a percentage rate per
annum (the "Applicable Percentage over Euro-Rate")
for the applicable period, set forth below:
Applicable Percentage
Period Over Euro-Rate
------ ---------------------
From the Closing Date through and 3.00%
including 1/30/97
1/31/97 through and including 4/29/97 3.50%
4/30/97 through and including 7/30/97 4.00%
7/31/97 through and including 10/30/97 4.50%
10/31/97 through and including the 5.00%
Expiration Date
The Euro-Rate Option shall be adjusted on the beginning date of each
period which changes the Applicable Percentage Over Euro-Rate.
-30-
3.2 Interest Periods.
-----------------
The interest period specified in a Loan Request (the "Interest
Period") during which a Euro Rate Option shall apply shall be one, two, three or
six Months, provided, that prior to the Business Day following the Syndication
Date, such Interest Period shall be one month and provided, further, that:
3.2.1 Ending Date and Business Day.
-----------------------------
Any Interest Period which would otherwise end on a date which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day;
3.2.2 Amount of Borrowing Tranche.
----------------------------
Each Borrowing Tranche of a Loan to which the Euro-Rate Option applies
shall be in integral multiples of $1,000,000 and not less than $3,000,000;
3.2.3 Termination Before Expiration Date.
-----------------------------------
The Borrower shall not select, convert to or renew an Interest Period
for any portion of the Loans that would end after the Expiration Date; and
3.2.4 Renewals.
---------
In the case of the renewal of a Euro-Rate Option at the end of an
Interest Period, the first day of the new Interest Period shall be the last day
of the preceding Interest Period, without duplication in payment of interest for
such day.
3.3 Interest After Default.
-----------------------
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
3.3.1 Letters of Credit Fees, Interest Rate.
--------------------------------------
The Letters of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Section 2.9 or Section 3.1, respectively,
shall be increased by 1.0% per annum;
3.3.2 Other Obligations.
------------------
Each other Obligation hereunder if not paid when due shall bear
interest at a rate per annum equal to the sum of the rate of interest applicable
under the Base Rate Option
-31-
plus an additional 1.0% per annum from the time such Obligation becomes due and
payable and until it is paid in full; and
3.3.3 Acknowledgment.
The Borrower acknowledges that the increased rates referred to in this
Section 3.3 reflect, among other things, the fact that the Loans or other
amounts have become a substantially greater risk given their default status and
that the Banks are entitled to additional compensation for such risk. All such
interest shall be payable by Borrower upon demand by the Agent.
3.4 Euro-Rate Unascertainable.
3.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be determined, the
Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) a contingency has occurred which materially and adversely
affects the London interbank eurodollar market relating
to the Euro-Rate,
then the Agent shall have the rights specified in Section 3.4.3.
3.4.2 Illegality; Increased Costs; Deposits Not Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to which a
Euro-Rate Option applies has been made impracticable or
unlawful by compliance by such Bank in good faith with
any Law or any interpretation or application thereof by
any Official Body or with any request or directive of any
Official Body (whether or not having the force of Law),
or
(ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or
maintenance of any such Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars for the relevant Interest
Period for a Loan to which a Euro-Rate Option applies,
are not
-32-
available to such Bank with respect to such Loan in the
London interbank market,
then such Bank shall have the rights specified in Section 3.4.3.
3.4.3 Agent's and Bank's Rights.
In the case of any event specified in Section 3.4.1, the Agent shall
promptly so notify the Banks and the Borrower thereof, and in the case of a
determination specified in Section 3.4.2, such Bank shall promptly so notify
the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given) the obligation of (A) the Banks, in the case of such notice
given by the Agent in respect of Section 3.4.1, or (B) such Bank, in the case
of such notice given by such Bank in respect of Section 3.4.2, to allow the
Borrower to select, convert to or renew a Euro-Rate Option shall be suspended
until the Agent shall have later notified the Borrower, or such Bank shall have
later notified the Agent, of the Agent's or such Bank's, as the case may be,
determination that the circumstances giving rise to such previous determination
no longer exist. If at any time the Agent makes a determination under Section
3.4.1 and the Borrower has previously notified the Agent of its selection of,
conversion to or renewal of a Euro-Rate Option and such Interest Rate Option has
not yet gone into effect, such notification shall be deemed to provide for
selection of, conversion to or renewal of the Base Rate Option otherwise
available with respect to the affected Loans. If any Bank notifies the Agent of
a determination under Section 3.4.2, the Borrower shall, subject to the
Borrower's indemnification Obligations under Section 4.6.2, as to any Loan of
such Bank to which a Euro-Rate Option applies, on the date specified in such
notice convert such Loan to the Base Rate Option otherwise available with
respect to such Loan. Absent due notice from the Borrower of conversion, such
Loan shall automatically be converted to the Base Rate Option otherwise
available with respect to such Loan upon such specified date. Upon any such
conversion, the Borrower shall have the right to prepay Loans in the amount of
such Loan on the date of such conversion without providing the notice otherwise
required by Section 4.4.1.
3.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to any
Borrowing Tranche to which a Euro-Rate Option applies at the expiration of an
existing Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 3.2, the Borrower shall be deemed to have converted
such Borrowing Tranche to the Base Rate Option commencing upon the last day of
such Interest Period.
-33-
4. PAYMENTS
4.1 Payments.
All payments and prepayments to be made in respect of principal, interest,
Commitment Fees, Letters of Credit Fees, the Agent's Fee, or other amounts due
from the Borrower hereunder (other than the fees and expenses referenced in
Section 2.9.3 which are to be paid to the Agent as provided in such sections and
the fees and expenses referenced in Section 9.15, each of which shall be paid in
accordance with such sections) shall be payable prior to 12:00 p.m., Pittsburgh,
Pennsylvania time, on the date when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by the Borrower,
and without set-off, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Payments of principal and interest on
Loans and of Commitment Fees and Letters of Credit Fees shall be made to the
Agent at the Principal Office for the ratable accounts of the Banks in Dollars
and in immediately available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds; provided that in the event
payments are received by noon (Pittsburgh, Pennsylvania time) by the Agent with
respect to the Loans and such payments are not distributed to the Banks on the
same day received by the Agent, the Agent shall pay the Banks the Federal Funds
Effective Rate with respect to the amount of such payments for each day held by
the Agent and not distributed to the Banks. The Agent's and each Bank's
statement of account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement and shall be
deemed an "account stated."
4.2 Pro Rata Treatment of Banks.
Each borrowing of a Loan shall be allocated to each Bank according to its
Ratable Share, and each selection of, conversion to or renewal of any Interest
Rate Option and each payment or prepayment by the Borrower with respect to
principal, interest, Commitment Fees, Letters of Credit Fees, or other fees
(except for the Agent's Fee, any fees to the Agent with respect to the issuance,
administration or payments under Letters of Credit) or amounts due from the
Borrower hereunder to the Banks with respect to the Loans, shall (except as
provided in Section 3.4.2 [Illegality, Increased Costs; Deposits not Available],
4.4 [Voluntary Prepayments] or 4.6 [Additional Compensation in Certain
Circumstances]) be made in proportion to the applicable Loans outstanding from
each Bank and, if no such Loans are then outstanding, in proportion to the
Ratable Share of Each Bank.
4.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall be due and
payable in arrears on the first Business Day of each month after the date hereof
and on the Expiration Date or upon acceleration of the Notes. Interest on Loans
to which the Euro-Rate Option applies shall be due and payable on the last day
of each Interest Period for those Loans and, if any such
-34-
Interest Period is longer than three Months, also on the last day of every third
Month during such Interest Period. Without limitation on Section 4.4.1, interest
on mandatory prepayments of principal under Section 4.5 shall be due on the date
such mandatory prepayment is due. Interest on the principal amount of each Loan
or other monetary Obligation shall be due and payable on demand after such
principal amount or other monetary Obligation becomes due and payable (whether
on the stated maturity date, upon acceleration or otherwise).
4.4 Voluntary Prepayments.
4.4.1 Right to Prepay.
The Borrower shall have the right at its option from time to time to prepay
the Loans in whole or part without premium or penalty (except as provided in
Section 4.6):
(i) at any time with respect to any Loan to which the Base
Rate Option applies,
(ii) on the last day of the applicable Interest Period with
respect to Loans to which a Euro-Rate Option applies, and
(iii) on the date specified in a notice by any Bank pursuant to
Section 3.4 [Euro-Rate Unascertainable] with respect to
any Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it shall
provide a prepayment notice to the Agent not later than 10:00 a.m., Pittsburgh,
Pennsylvania time on the Business Day prior to the date of prepayment of Loans
setting forth the following information (provided no notice from Borrower is
required pursuant to subsection (iii) above):
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment to the
Revolving Credit Loans or Term Loans; and
(z) the total principal amount of such prepayment, which shall not be
less than $1,000,000 or integral multiples thereof.
All prepayment notices shall be irrevocable. The principal amount of the
Loans for which a prepayment notice is given, together with interest on such
principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made. If the
Borrower prepays a Loan pursuant to this section but fails to specify the
applicable Borrowing Tranche which the Borrower is prepaying, the prepayment
shall be applied
- 35 -
first to Loans to which the Base Rate Option applies, then to Loans to which the
Euro-Rate Option applies. If the Borrower prepays a loan pursuant to this
section but fails to specify whether the Term Loans or Revolving Credit Loans
are being prepaid, the prepayment shall be applied first to Revolving Credit
Loans and then to Term Loans. Upon any voluntary prepayment of Term Loans
pursuant to this Section 4.4, the Term Loan Commitments shall be automatically
and permanently reduced in an amount equal to the amount of the prepayment of
the Term Loans. Any prepayment hereunder shall be subject to the Borrower's
Obligation to indemnify the Banks under Section 4.6.2.
4.5 Mandatory Reduction of Commitments; Mandatory Prepayments.
4.5.1 Sale of Assets.
Within five (5) Business Days of any sale of assets authorized by Section
7.2.7(v), the Borrower shall make a mandatory prepayment of principal on the
Loans (together with accrued interest on such principal amount) equal to the
lesser of (i) the aggregate after-tax net cash proceeds (including without
limitation cash, as and when collected, pursuant to any notes or other
securities received as consideration for such sale, transfer or lease), or (ii)
the amount of the outstanding Loans. All proceeds received for prepayment of
Loans pursuant to this Section 4.5.1 shall be first applied to the payment of
the Terms Loans and second to the payment of the Revolving Credit Loans.
Further, all proceeds received for prepayment of Loans pursuant to this Section
4.5.1 shall be first applied to Loans to which the Base Rate Option applies,
then to Loans to which the Euro-Rate Option applies. Upon mandatory prepayment
of Term Loans pursuant to this Section 4.5.1, the Term Loan Commitments
automatically shall be permanently and irrevocably reduced by an amount equal to
the aggregate after-tax net cash proceeds of such sale. Upon mandatory
prepayment of Revolving Credit Loans pursuant to this Section 4.5.1, the
Revolving Credit Commitments automatically shall be permanently and irrevocably
reduced by an amount equal to the aggregate after-tax net cash proceeds of such
sale and, from and after any such reduction, the obligation of Borrower to pay
the Commitment Fee pursuant to Section 2.3 shall correspondingly reduce. Each
reduction of Commitments required by this Section 4.5.1 shall first be a
reduction of the Term Loan Commitments and second a reduction of the Revolving
Credit Commitments.
4.6 Additional Compensation in Certain Circumstances.
4.6.1 Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any Law, guideline
or interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:
- 36 -
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the
Loans or payments by the Borrower of principal, interest,
Commitment Fees, or other amounts due from the Borrower
hereunder or under the Notes (except for taxes on the
overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or
commitments to extend credit extended by, or assets
(funded or contingent) of, deposits with or for the
account of, or other acquisitions of funds by, any Bank,
or
(iii) imposes, modifies or deems applicable any capital adequacy
or similar requirement (A) against assets (funded or
contingent) of, or letters of credit, other credits or
commitments to extend credit extended by, any Bank, or (B)
otherwise applicable to the obligations of any Bank under
this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrower and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith and shall be binding upon the parties
absent manifest error) by such Bank to be necessary to compensate such Bank for
such increase in cost, reduction of income or additional expense or reduced
rates of return. Such notice shall set forth in reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrower to such
Bank five (5) Business Days after such notice is given, subject, however, to the
provisions of Section 10.5.3.
4.6.2 Indemnity.
In addition to the compensation required by Section 4.6.1, the Borrower
shall indemnify each Bank against all liabilities, losses or expenses (including
loss of margin, any loss or expense incurred in liquidating or employing
deposits from third parties and any loss or expense incurred in connection with
funds acquired by a Bank to fund or maintain Loans subject to a Euro-Rate
Option) which such Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion or renewal of any Loan to which
a Euro-Rate Option applies on a day other than the
- 37 -
last day of the corresponding Interest Period (whether or
not such payment or prepayment is mandatory, voluntary or
automatic and whether or not such payment or prepayment is
then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any
Loan Requests under Section 2.5 or any notice relating to
prepayments under Section 4.4, or
(iii) default by the Borrower in the performance or observance
of any covenant or condition contained in this Agreement
or any other Loan Document, including any failure of the
Borrower to pay when due (by acceleration or otherwise)
any principal, interest, Commitment Fee or any other
amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it shall from time
to time notify the Borrower of the amount determined in good faith by such Bank
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Bank shall deem reasonable
and shall be binding on the parties absent manifest error) to be necessary to
indemnify such Bank for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due and
payable by the Borrower to such Bank ten (10) Business Days after such notice is
given.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties.
The Borrower represents and warrants to the Agent and each of the Banks as
follows:
5.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of any Loan Party is a corporation or
partnership, duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each Loan Party and each Subsidiary of
any Loan Party has the lawful power to own or lease its properties and to engage
in the business it presently conducts or proposes to conduct. Each Loan Party
and each Subsidiary of any Loan Party is listed on Schedule 5.1.1 and is duly
licensed or qualified and in good standing in each jurisdiction where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary (except where the failure
to be so licensed or qualified would not constitute a Material Adverse Change),
and upon request of the Agent, the Borrower
- 38 -
will promptly furnish a written list of every jurisdiction where each
Subsidiary and Loan Party is so qualified.
5.1.2 Subsidiary Matters.
-------------------
Schedule 5.1.2 sets forth the authorized, issued and outstanding
capital stock of each Subsidiary and the record owner of such capital stock.
Other than as set forth on Schedule 5.1.2, each of the Borrower's Subsidiaries
is directly or indirectly wholly owned by the Borrower and all of the issued and
outstanding shares of capital stock of each such Subsidiary (referred to herein
as the "Subsidiary Shares") are owned free and clear in each case of any Lien.
All Subsidiary Shares have been validly issued, and all Subsidiary Shares are
fully paid and, except as otherwise set forth on such Schedule 5.1.2
nonassessable. There are no options, warrants or other rights outstanding to
purchase any Subsidiary Shares except as indicated on Schedule 5.1.2.
5.1.3 Power and Authority.
--------------------
Each Loan Party has full power to enter into, execute, deliver and
carry out this Agreement and the other Loan Documents to which it is a party, to
incur the Indebtedness contemplated by the Loan Documents and to perform its
Obligations under the Loan Documents to which it is a party, and all such
actions have been duly authorized by all necessary proceedings on its part.
5.1.4 Validity and Binding Effect.
----------------------------
This Agreement has been duly and validly executed and delivered by
each Loan Party, and each other Loan Document which any Loan Party is required
to execute and deliver on or after the date hereof will have been duly executed
and delivered by such Loan Party on the required date of delivery of such Loan
Document. This Agreement and each other Loan Document constitutes, or will
constitute, legal, valid and binding obligations of each Loan Party which is or
will be a party thereto on and after its date of delivery thereof, enforceable
against such Loan Party in accordance with its terms, except to the extent that
enforceability of any such Loan Document may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors' rights generally or limiting the right of specific
performance.
5.1.5 No Conflict.
------------
Neither the execution and delivery of this Agreement or the other Loan
Documents by any Loan Party nor the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them (i) will conflict with, constitute a default under or
result in any breach of (A) the terms and conditions of the certificate of
incorporation, bylaws or other organizational documents of any Loan Party or any
of its Subsidiaries or (B) any Law or any agreement or instrument or order,
-39-
writ, judgment, injunction or decree to which any Loan Party or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries is bound or to
which it or any of its Subsidiaries is subject, which conflict, default or
breach reasonably would be expected to result in a Material Adverse Change, or
(ii) will result in the creation or enforcement of any Lien whatsoever upon any
property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
5.1.6 Litigation.
-----------
Except as set forth on Schedule 5.1.6, there are no actions, suits,
proceedings or investigations pending or, to the knowledge of any Loan Party,
threatened against such Loan Party or any Subsidiary of any Loan Party at law or
equity before any Official Body which individually or in the aggregate may
result in any Material Adverse Change. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of any order, writ, injunction or
any decree of any Official Body which reasonably would be expected to result in
any Material Adverse Change.
5.1.7 Title to Properties.
--------------------
Each Loan Party and each Subsidiary of any Loan Party has good and
marketable title to or a valid leasehold interest in all material properties,
assets and other rights which it purports to own or lease or which are reflected
as owned or leased on its books and records, free and clear of all Liens except
Permitted Liens, and subject to the terms and conditions of the applicable
leases. All material leases of property are in full force and effect without
the necessity for any consent which has not previously been obtained upon
consummation of the transactions contemplated hereby. Schedule 5.1.7 sets
forth a correct and accurate description of the Property.
5.1.8 Financial Statements.
---------------------
(i) Historical Statements. The Borrower has delivered to the
Agent copies of its audited consolidated year-end
financial statements for and as of the end of the three
fiscal years ended October 31, 1995 (the "Annual
Statements" and the Annual Statements are sometimes
collectively referred to as the "Historical Statements").
The Historical Statements were compiled from the books and
records maintained by the Borrower's management, are
correct and complete and fairly represent the consolidated
financial condition of the Borrower and its Subsidiaries
as of their dates and the results of operations for the
fiscal periods then ended and have been prepared in
accordance with GAAP consistently applied;
-40-
(ii) Financial Projections. The Borrower has delivered to the Agent
financial projections of the Borrower and its Subsidiaries for
fiscal years 1996 through 2000 derived from various assumptions
of the Borrower's management (the "Financial Projections"). The
Financial Projections reflect the reasonable expectations of
the Borrower's management as of the Closing Date in light of
the history of the business, present and foreseeable conditions
and intentions of the Borrower's management, all based on the
assumptions thereto, which assumptions were made and based upon
information available at the time of preparation of such
projections. The Financial Projections accurately reflect the
liabilities of the Borrower and its Subsidiaries incurred
pursuant to the Loan Documents upon consummation of the
transactions contemplated hereby as of the Closing Date; and
(iii) Accuracy of Financial Statements. Neither the Borrower nor any
Subsidiary of the Borrower has as of the date of the Historical
Statements any material liabilities, contingent or otherwise,
or forward or long-term commitments that are not disclosed in
the Historical Statements or in the notes thereto, and except
as disclosed therein there are no unrealized or anticipated
losses from any commitments of the Borrower or any Subsidiary
of the Borrower which reasonably would be expected to cause a
Material Adverse Change. Since October 31, 1995, no Material
Adverse Change has occurred.
5.1.9 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan Party engages or
intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan or issued Letter of Credit
has been or will be used, immediately, incidentally or ultimately, to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock or to refund Indebtedness originally
incurred for such purpose, or for any purpose which entails a violation of or
which is inconsistent with the provisions of the regulations of the Board of
Governors of the Federal Reserve System.
-41-
5.1.10 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any certificate,
statement, agreement or other documents furnished to the Agent or any Bank in
connection herewith or therewith, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to any Loan Party which
materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.
5.1.11 Taxes.
All federal, state, local and other tax returns required to have been filed
with respect to each Loan Party and each Subsidiary of any Loan Party have been
filed, other than those for which the failure to file the same would not
reasonably be expected to result in a Material Adverse Change, and payment or
adequate provision has been made for the payment of all taxes, fees, assessments
and other governmental charges shown to be owing pursuant to said returns or to
assessments received, except to the extent that such taxes, fees, assessments
and other charges are being contested in good faith by appropriate proceedings
diligently conducted and for which such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made. There are
no agreements or waivers extending the statutory period of limitations
applicable to any federal income tax return of any Loan Party or Subsidiary of
any Loan Party for any period.
5.1.12 Consents and Approvals.
No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Loan Party,
except as listed on Schedule 5.1.12, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on Schedule
5.1.12.
5.1.13 No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition exists now or will
exist after giving effect to and as a result of the extensions of credit to be
made on the Closing Date under the Loan Documents which constitutes an Event of
Default or Potential Default. None of the Loan Parties or any Subsidiaries of
any Loan Party is in violation of (i) any term of its certificate of
incorporation, bylaws, or other organizational documents or (ii) any
-42-
material agreement or instrument to which it is a party or by which it or any of
its properties may be subject or bound where such violation would constitute a
Material Adverse Change.
5.1.14 Patents, Trademarks, Copyrights, Licenses, Etc.
A Loan Party or a Subsidiary of a Loan Party owns or possesses all the
material patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and planned to be
conducted by the Borrower and its Subsidiaries taken as a whole, without known
conflict by, or with the rights of, others.
5.1.15 Insurance.
The Borrower has delivered to the Agent a true and correct listing of the
property and general liability insurance of the Borrower. No notice has been
given or claim made and to the best knowledge of the Loan Parties no grounds
exist to cancel or avoid any of such policies or bonds or to reduce the coverage
provided thereby. Such policies and bonds provide adequate coverage from
reputable and financially sound insurers in amounts sufficient to insure the
assets and risks of each Loan Party and each Subsidiary of any Loan Party in
accordance with prudent business practice in the industry of the Loan Parties
and their Subsidiaries.
5.1.16 Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in all material
respects with all applicable Laws (other than Environmental Laws which are
specifically addressed in Section 5.1.21) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently or currently anticipates
it will be doing business except where the failure to do so would not constitute
a Material Adverse Change.
5.1.17 Material Contracts.
Schedule 5.1.17 lists all material contracts relating to the business
operations of each Loan Party and each Subsidiary of any Loan Party, including
all employee benefit plans and Labor Contracts. All such material contracts are
valid, binding and enforceable upon such Loan Party or Subsidiary in accordance
with their respective terms, and the Loan Party which is a party thereto has not
received actual notice of a default thereunder with respect to parties other
than such Loan Party or Subsidiary. For purposes of this Section 5.1.17 the
term "material contracts" shall mean those contracts or other agreements which
the Borrower would be required to file with the Securities and Exchange
Commission pursuant to item 601(a)(10) of Regulation S-K promulgated under the
Securities Act of 1933 and the Securities Exchange Act of 1934.
-43-
5.1.18 Investment Companies.
None of the Loan Parties or any Subsidiaries of any Loan Party is an
"investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control".
5.1.19 Plans and Benefit Arrangements.
Except as set forth on Schedule 5.1.19:
(i) The Borrower and each other member of the ERISA Group are in
compliance in all material respects with any applicable
provisions of ERISA with respect to all Benefit Arrangements,
Plans and Multiemployer Plans. There has been no Prohibited
Transaction with respect to any Benefit Arrangement or any Plan
or, to the best knowledge of the Borrower, with respect to any
Multiemployer Plan or Multiple Employer Plan, which reasonably
would be expected to result in any material liability of the
Borrower or any other member of the ERISA Group. The Borrower
and all other members of the ERISA Group have made when due any
and all payments required to be made under any agreement
relating to a Multiemployer Plan or a Multiple Employer Plan or
any Law pertaining thereto. With respect to each Plan and
Multiemployer Plan, the Borrower and each other member of the
ERISA Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii)
have not incurred any liability to the PBGC, and (iii) have not
had asserted against them any penalty for failure to fulfill the
minimum funding requirements of ERISA;
(ii) To the best of each Loan Parties' knowledge, each Multiemployer
Plan and Multiple Employer Plan is able to pay benefits
thereunder when due;
(iii) Neither the Borrower nor any other member of the ERISA Group
has instituted or intends to institute proceedings to terminate
any Plan;
(iv) No event requiring notice to the PBGC under Section 302(f)(4)(A)
of ERISA has occurred or is
-44-
reasonably expected to occur with respect to any Plan, and no
amendment with respect to which security is required under
Section 307 of ERISA has been made or is reasonably expected
to be made to any Plan;
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under the Plans,
determined on an ongoing basis, as disclosed in, and as of the
date of, the most recent actuarial report for each such Plan,
does not exceed the aggregate fair market value of the assets
of such Plans;
(vi) Neither the Borrower nor any other member of the ERISA Group
has incurred or reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan or
Multiple Employer Plan. Neither the Borrower nor any other
member of the ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been
terminated within the meaning of Title IV of ERISA and, to the
best knowledge of the Borrower, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be
reorganized or terminated, within the meaning of Title IV of
ERISA;
(vii) To the extent that any Benefit Arrangement is insured, the
Borrower and all other members of the ERISA Group have paid
when due all premiums required to be paid for all periods
through the Closing Date. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower
and all other members of the ERISA Group have made when due
all contributions required to be paid for all periods through
the Closing Date; and
(viii) All Plans, Benefit Arrangements and Multiemployer Plans have
been administered in accordance with their terms and
applicable Law.
5.1.20 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in compliance
with the Labor Contracts and all applicable federal, state and local labor and
employment Laws including those related to equal employment opportunity and
affirmative action, labor relations, minimum wage, overtime, child labor,
medical insurance continuation, worker adjustment and
-45-
relocation notices, immigration controls and worker and unemployment
compensation, where the failure to comply reasonably would be expected to
constitute a Material Adverse Change. There are no outstanding grievances,
arbitration awards or appeals therefrom arising out of the Labor Contracts or
current or threatened strikes, picketing, handbilling or other work stoppages or
slowdowns at facilities of any of the Loan Parties or any of their Subsidiaries
which in any case would constitute a Material Adverse Change.
5.1.21 Environmental Matters.
Except as disclosed on Schedule 5.1.21:
(i) Except for notices which would not reasonably be expected to
result in a Material Adverse Change, none of the Loan Parties
or any Subsidiaries of any Loan Party has received any
Environmental Complaint from any Official Body or private
Person alleging that such Loan Party or Subsidiary or any prior
owner of any Property or acquirer of any Property from any Loan
Party or Subsidiary is a potentially responsible party under
the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. (S) 9601, et seq., and none of the
Loan Parties has any reason to believe that such an
Environmental Complaint might be received. There are no pending
or, to any Loan Party's knowledge, threatened Environmental
Complaints relating to any Loan Party or any Subsidiary of any
Loan Party or, to any Loan Party's knowledge, any prior or
subsequent owner of any Property pertaining to, or arising out
of, any Environmental Conditions which reasonably would be
expected to result in a Material Adverse Change,
(ii) Except for Environmental Conditions, violations or failures
which individually and in the aggregate would not reasonably be
expected to result in a Material Adverse Change, there are no
circumstances at, on or under any Property that constitute a
breach of or non-compliance with any of the Environmental Laws,
and there are no past or present Environmental Conditions at,
on or under any Property or, to any Loan Party's knowledge, at,
on or under adjacent property, that prevent compliance with the
Environmental Laws at any Property,
(iii) Neither any Property nor any structures, improvements,
equipment, fixtures, activities or facilities thereon or
-46-
thereunder contain or use Regulated Substances, except in
compliance with Environmental Laws, which would reasonably be
expected to result in a Material Adverse Change. There are no
processes, facilities, operations, equipment or other activities
at, on or under any Property, or, to any Loan Party's knowledge,
at, on or under adjacent property, that currently result in the
release or threatened release of Regulated Substances onto any
Property, except to the extent that such releases or threatened
releases are not a breach of or otherwise not a violation of the
Environmental Laws or would not reasonably be expected to result
in a Material Adverse Change,
(iv) There are no aboveground storage tanks, underground storage
tanks or underground piping associated with such tanks, used for
the management of Regulated Substances at, on or under any
Property that (a) do not have, to the extent required by
Environmental Laws, a full operational secondary containment
system in place, and (b) are not otherwise in compliance with
all Environmental Laws, except in any case where such would not
reasonably be expected to result in a Material Adverse Change.
There are no abandoned underground storage tanks or underground
piping associated with such tanks, previously used for the
management of Regulated Substances at, on or under any Property
that have not either been closed in place in accordance with
Environmental Laws or removed in compliance with all applicable
Environmental Laws and no contamination associated with the use
of such tanks exists on any Property that is not in compliance
with Environmental Laws, except in any case where such would not
reasonably be expected to result in a Material Adverse Change,
(v) The applicable Loan Party or a Subsidiary of a Loan Party has
all permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of the
business of the Borrower and its Subsidiaries taken as a whole,
except in any case where the failure to so have would not
reasonably be expected to result in a Material Adverse Change.
Each Loan Party and each Subsidiary of a Loan Party has
submitted all notices, reports and other filings required by the
Environmental
-47-
Laws to be submitted to an Official Body which pertain to past
and current operations on any Property, except in any case where
the failure to so submit would not reasonably be expected to
result in a Material Adverse Change, and
(vi) Except for violations which individually and in the aggregate
would not result in a Material Adverse Change, all past and
present on-site generation, storage, processing, treatment,
recycling, reclamation, disposal or other use or management of
Regulated Substances at, on, or under any Property and all off-
site transportation, storage, processing, treatment, recycling,
reclamation, disposal or other use or management of Regulated
Substances have been done in accordance with the Environmental
Laws.
5.1.22 Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the Notes, the
Master Guaranty Agreement and each of the other Loan Documents to which it is a
party do rank and will rank at least pari passu in priority of payment with all
other Indebtedness of such Loan Party except Indebtedness of such Loan Party to
the extent secured by Permitted Liens. There is no Lien upon or with respect to
any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.
5.1.23 Security Interests.
The Liens and security interests granted to the Agent for the benefit of
the Banks pursuant to the Patent, Trademark and Copyright Security Agreements,
the Pledge Agreements, the Note Pledge Agreement and the Security Agreements in
the Collateral (other than the Real Property) constitute and will continue to
constitute Prior Security Interests under the Uniform Commercial Code as in
effect in each applicable jurisdiction (the "Uniform Commercial Code") or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform commercial Code or such Law. Upon the filing of financing statements
relating to said security interests in each office and in each jurisdiction
where required in order to perfect the security interests described above,
taking possession of any stock certificates evidencing the Pledged Collateral,
taking possession of the Intercompany Notes pledged pursuant to the Note Pledge
Agreement and recordation of the Patent, Trademark and Copyright Security
Agreements in the United States Patent and Trademark office and United States
Copyright Office (or equivalent Office of a foreign Official Body in the case of
Patents, Trademarks or Copyrights granted by such foreign Official Body) as
applicable, all such action as is necessary or advisable to establish such
rights of the Agent will have been taken, and there will be upon execution and
delivery of the Patent, Trademark and Copyright Security
-48-
Agreements, the Pledge Agreements, the Note Pledge Agreement and the Security
Agreements, such filings and such taking of possession, no necessity for any
further action in order to preserve, protect and continue such rights, except
the filing of continuation statements with respect to such financing statements
within six months prior to each five-year (five year and six month anniversary
with respect to Tennessee) anniversary of the filing of such financing
statements. All filing fees and other expenses in connection with each such
action have been or will be paid by the Borrower.
5.1.24 Mortgage Liens.
---------------
The Liens granted to the Agent for the benefit of the Banks pursuant
to the Mortgages constitute a valid first priority Lien under applicable law.
Upon the due recordation of the Mortgages in the filing offices designated in
each Mortgage, all such action as have been necessary or advisable to establish
such Lien of the Agent and its priority as described in the preceding sentence
will have been taken, and there will be no necessity for any further action in
order to protect, preserve and continue such Lien and such priority.
5.1.25 Status of the Pledged Collateral.
---------------------------------
All the shares of capital stock included in the Pledged Collateral to
be pledged pursuant to the Pledge Agreements are or will be upon issuance duly
authorized, validly issued, fully paid, (except as described on Schedule
5.1.25) nonassessable and owned beneficially and of record by the pledgor, free
and clear of any Lien or restriction on transfer, except as otherwise provided
by the Pledge Agreements and except as the right of the Banks to dispose of such
shares may be limited by the Securities Act of 1933, as amended, and the
regulations promulgated by the Securities and Exchange Commission thereunder and
by applicable state securities laws. There are no shareholder or other
agreements or understandings with respect to the shares of capital stock
included in the Pledged Collateral.
5.1.26 Solvency.
---------
The Borrower and each Material Subsidiary is Solvent. After giving
effect to the Spin-Off and the transactions contemplated by the Loan Documents,
including all Indebtedness incurred thereby, the Liens granted by the Loan
Parties in connection therewith and the payment of all fees related thereto, the
Borrower and each Material Subsidiary will be Solvent as of the Closing Date.
5.2 Updates to Schedules.
---------------------
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material respect,
the applicable Loan Parties shall promptly provide to the Agent in writing with
such revisions or updates to such Schedule as may be necessary or appropriate to
update or correct same; provided, however,
-49-
that no Schedule shall be deemed to have been amended, modified or superseded by
any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Banks, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule, which decision to accept or not must
be communicated to the Borrower promptly.
6. CONDITIONS OF LENDING
---------------------
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit is subject to the performance by each of the Loan Parties of
its Obligations to be performed hereunder at or prior to the making of any such
Loans or issuance of such Letters of Credit and to the satisfaction of the
following further conditions:
6.1 First Revolving Credit Loans and Term Loans.
-------------------------------------------
On the Closing Date:
6.1.1 Officer's Certificate.
---------------------
The representations and warranties of each of the Loan Parties
contained in Article 5 and in each of the other Loan Documents shall be true
and accurate on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Agent for the
benefit of each Bank a certificate of the Borrower, and each of the Material
Subsidiaries, dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of such Person, to each such effect.
6.1.2 Secretary's Certificate.
-----------------------
There shall be delivered to the Agent for the benefit of each Bank a
certificate dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Borrower, each other Loan Party and each Foreign Subsidiary
which is directly owned by one or more Loan Parties certifying as appropriate as
to:
(i) all action taken by such Loan Party in connection with
this Agreement and the other Loan Documents;
-50-
(ii) the names of the officer or officers authorized to sign this Agreement
and the other Loan Documents and the true signatures of such officer or
officers and specifying the Authorized Officers permitted to act on
behalf of such Loan Party for purposes of this Agreement and the true
signatures of such officers, on which the Agent and each Bank may
conclusively rely; and
(iii) copies of its organizational documents, including its certificate of
incorporation and bylaws (or their equivalents) as in effect on the
Closing Date certified by the appropriate governmental official where
such documents are filed in a governmental office together with
certificates from the appropriate governmental officials as to the
continued existence and good standing of such Loan Party and Foreign
Subsidiary in each jurisdiction where organized or qualified to do
business.
6.1.3 Delivery of Loan Documents.
---------------------------
The Loan Documents shall have been executed and delivered to the
Agent for the benefit of the Banks.
6.1.4 Opinions of Counsel.
--------------------
There shall be delivered to the Agent for the benefit of each Bank
written opinions of counsel for the Loan Parties listed on Schedule 6.1.4 (who
may rely on the opinions of such other counsel as may be acceptable to the
Agent), dated the Closing Date and in form and substance satisfactory to the
Agent and its counsel.
6.1.5 Legal Details.
--------------
All legal details and proceedings in connection with the transactions
contemplated by this Agreement, the Spin-Off and the other Loan Documents shall
be in form and substance reasonably satisfactory to the Agent and its counsel,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance reasonably satisfactory to the Agent
and said counsel, as the Agent or said counsel may reasonably request.
-51-
6.1.6 Payment of Fees.
----------------
The Borrower shall have paid or caused to be paid to the Agent for
itself and for the account of the Banks to the extent not previously paid all
commitment and other fees accrued through the Closing Date including without
limitation all fees set forth in that certain agreement between the Borrower and
the Agent dated July 11, 1996, with respect to the Commitments and the costs and
expenses for which the Agent and the Banks are entitled to be reimbursed.
6.1.7 Consents.
---------
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 5.1.12 and the Spin-Off shall have
been obtained.
6.1.8 Officer's Certificate Regarding MACs.
-------------------------------------
Since October 31, 1995 (i) no Material Adverse Change shall have
occurred and (ii) there shall have been no material change in the management of
the Borrower other than those described in the Form 10 and there shall have been
delivered to the Agent for the benefit of each Bank a certificate dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower to each such effect.
6.1.9 No Violation of Laws.
---------------------
The making of the Loans and issuance of the Letters of Credit shall
not contravene any Law applicable to any Loan Party or any of the Banks.
6.1.10 No Actions or Proceedings.
--------------------------
No action, proceeding, investigation, regulation or legislation shall
have been instituted, threatened or proposed against the Borrower, any
Subidiary, the Agent or any Bank or any of their respective officers or
directors in their capacity as such before any court, governmental agency or
legislative body (i) to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Agreement or the other Loan Documents, or (ii) arising out of
or relating to the tender offer commenced by United Dominion, Inc., on July 11,
1996 for shares of Intertech, which, in either case, in the Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.
6.1.11 Insurance Policies; Certificates of Insurance.
----------------------------------------------
The Borrower shall have delivered to the Agent upon its request
evidence acceptable to the Agent that adequate insurance in compliance with
Section 7.1.3 is in full force and effect and that all premiums then due
thereon have been paid, together with if requested by the Agent a certified copy
of each Loan Party's casualty insurance policy or policies.
-52-
6.1.12 Termination of Existing Debt.
-----------------------------
The Borrower simultaneously shall have terminated the Indebtedness
listed on section 3 of Schedule 7.2.1 and paid all amounts owed thereunder.
6.1.13 Solvency Certificate.
---------------------
The Chief Financial Officer of the Borrower and each Material
Subsidiary shall certify as to the solvency and capital adequacy of the Borrower
and each Material Subsidiary after giving effect to the transactions
contemplated hereby and shall also certify as to the other matters set forth in
Section 5.1.26.
6.1.14 Spin-Off.
---------
With respect to the Spin-Off:
(i) opinions of counsel shall have been delivered addressed to the
Banks and in form and substance satisfactory to the Agent and the Required Banks
relating to the Spin-Off being "tax-free" under the Internal Revenue Code of
1986 to the Borrower and Intertech under Section 355 of the Internal Revenue
Code of 1986, as amended, and compliance of the Spin-Off with all applicable
securities laws and NYSE and NASDAQ rules and requirements;
(ii) Intertech shall have entered into and closed under an Amended and
Restated Credit Agreement for a credit facility providing then available credit
in an aggregate amount of $135,000,000 in form and substance satisfactory to the
Agent and the Required Banks;
(iii) the Agent and the Required Banks shall have been delivered
copies of all agreements which relate to the post-Spin-Off obligations between
the Borrower and Intertech (including, without limitation, the Distribution and
Interim Services Agreement, the Tax Allocation Agreement and the Employee
Benefit Agreement) and the Agent and the Required Banks shall have been
satisfied with the form and substance of such agreements; and
(iv) the Agent and the Required Banks shall be satisfied with the
results of their due diligence with respect to the Spin-Off and its affect upon
the Borrower and Intertech including, without limitation, being satisfied with
the capital structure of the Borrower and Intertech after giving effect to the
Spin-Off and with the financial condition, operations, assets, nature of assets
liabilities and prospects of the Borrower and Intertech.
6.2 Each Additional Loan.
---------------------
At the time of making any Loans or issuance of any Letters of Credit
other than Loans made on the Closing Date and after giving effect to the
proposed extensions of credit: the representations and warranties of the Loan
Parties contained in Article 5 and in the other Loan
-53-
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Banks; and the Borrower
shall have delivered to the Agent, a duly executed and completed Loan Request or
application for a Letter of Credit, as the case may be.
6.3 Syndication.
------------
6.3.1 Syndication Representation and Warranties.
------------------------------------------
On the Syndication Date, the representations and warranties of
the Loan Parties contained in Article 5 and in the other Loan Documents shall
be true on and as of such date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein) and the Loan Parties
shall have performed and complied with all covenants and conditions hereof; and
no Event of Default or Potential Default shall have occurred and be continuing
or shall exist.
6.3.2 Syndication Documents.
----------------------
On the Syndication Date, the Borrower shall deliver to the Agent
for the benefit of the Banks (a) an Officer's Certificate dated as of the
Syndication Date with respect to the matters set forth in Section 6.3.1 and
Section 6.1.8(i), (b) a Secretary's Certificate dated as of the Syndication
Date with respect to the matters set forth in Section 6.1.2(i) and 6.1.2(ii)
and that there have been no changes in the charter documents or bylaws of the
Borrower or any Material Subsidiary since the Closing Date, (c) Notes dated as
of the Syndication Date which give effect to the syndication on the Syndication
Date of the Commitments of the Banks which originally executed the Credit
Agreement in exchange for the original Notes issued to such Banks, (d) written
opinions of the counsel to the Borrower identified in Section 6.1.4 with respect
to such matters as the Agent may request and (e) acknowledgments dated as of the
Syndication Date to the Loan Documents in form and substance satisfactory to the
Agent.
-54-
7. COVENANTS
---------
7.1 Affirmative Covenants.
----------------------
The Borrower covenants and agrees that until payment in full of the
Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations under the Loan Documents and termination of the Commitments,
the Loan Parties and their Subsidiaries shall comply at all times with the
following affirmative covenants:
7.1.1 Preservation of Existence, Etc.
-------------------------------
The Borrower and, except as permitted by Section 7.2.6, each Material
Subsidiary shall maintain its corporate existence and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except where the failure to be so licensed or qualified
would not result in a Material Adverse Change.
7.1.2 Payment of Liabilities, Including Taxes, Etc.
---------------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made, but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which would adversely affect to a
material extent the financial condition of the Loan Parties and their
Subsidiaries taken as a whole, provided that the Loan Parties and their
Subsidiaries will pay all such liabilities forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor
unless and as long as such proceedings are stayed.
7.1.3 Maintenance of Insurance.
-------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
insure its properties and assets against loss or damage by fire and such other
insurable hazards as such assets are commonly insured (including fire, extended
coverage, property damage, workers' compensation, public liability and business
interruption insurance) and against other risks (including errors and omissions
with respect to directors and officers) in such amounts as similar properties
and assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary, all as reasonably determined by the
Agent. At the request of the Agent, the
-55-
Loan Parties shall deliver to the Agent (1) on the Closing Date and annually
thereafter an original certificate of insurance signed by the Loan Parties'
independent insurance broker describing and certifying as to the existence of
the insurance required to be maintained by this Agreement and the other Loan
Documents, and (2) from time to time a summary schedule indicating all insurance
then in force with respect to each of the Loan Parties; provided, however, that,
unless a Potential Default or Event of Default shall have occurred and be
continuing, no such request for a summary schedule shall be made more than twice
a year. At the request of the Agent, such policies of insurance shall contain
special endorsements, in form and substance acceptable to the Agent, which shall
(1) specify the Agent as an additional insured, mortgagee and lender loss payee
as its interests may appear, with the understanding that any obligation imposed
upon the insured (including the liability to pay premiums) shall be the sole
obligation of the applicable Loan Parties and not that of the insured, (2)
provide that the interest of the Banks shall be insured regardless of any breach
or violation by the applicable Loan Parties of any warranties, declarations or
conditions contained in such policies or any action or inaction of the
applicable Loan Parties or others insured under such policies, (3) provide a
waiver of any right of the insurers to set off or counterclaim or any other
deduction, whether by attachment or otherwise, (4) provide that any and all
rights of subrogation which the insurers may have or acquire shall be, at all
times and in all respects, junior and subordinate to the prior payment in full
of the Indebtedness hereunder until such time as the Indebtedness hereunder has
been paid in full and the Revolving Credit Commitments have terminated, (5)
provide, except in the case of public liability insurance and workmen's
compensation insurance, that all insurance proceeds for losses of less than
$2,500,000 shall be adjusted with and payable to the applicable Loan Parties and
that all insurance proceeds for losses of $2,500,000 or more shall be adjusted
with and payable to the Agent, (6) include effective waivers by the insurer of
all claims for insurance premiums against the Agent, (7) provide that no
cancellation of such policies for any reason (including non-payment of premium)
nor any change therein shall be effective until at least thirty (30) days after
receipt by the Agent of written notice of such cancellation or change (with the
exception that notice of cancellation for non-payment of premium in the State of
Ohio may be effective with no less than ten (10) days prior written notice to
Agent), (8) be primary without right of contribution of any other insurance
carried by or on behalf of any additional insureds with respect to their
respective interests in the Collateral, and (9) provide that inasmuch as the
policy covers more than one insured, all terms, conditions, insuring agreements
and endorsements (except limits of liability) shall operate as if there were a
separate policy covering each insured. The applicable Loan Parties shall notify
the Agent promptly of any occurrence causing a material loss or decline in value
of the Collateral and the estimated (or actual, if available) amount of such
loss or decline. Any moneys received by the Agent constituting insurance
proceeds or condemnation proceeds (pursuant to the Mortgages) may, at the option
of the Agent, (i) be applied by the Agent to the payment of the Loans in such
manner as the Agent may reasonably determine, or (ii) be disbursed to the
applicable Loan Parties on such terms as are deemed appropriate by the Agent for
the repair, restoration and/or replacement of property in respect of which such
proceeds were received.
-56-
7.1.4 Maintenance of Properties and Leases.
------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar
character and size, all of those material properties necessary to its business,
and from time to time, such Loan Party or such Subsidiary will make or cause to
be made all appropriate repairs, renewals or replacements thereof.
7.1.5 Maintenance of Patents, Trademarks, Etc.
---------------------------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect all patents, trademarks, service marks, trade
names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
7.1.6 Visitation Rights.
-----------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
permit any of the officers or authorized employees or representatives of the
Agent or any of the Banks to visit and inspect any of its properties and to
examine and make excerpts from its books and records and discuss its business
affairs, finances and accounts with its Authorized Officers, all in such detail
as any of the Banks may reasonably request, provided that each Bank shall
provide the Borrower and the Agent with reasonable notice prior to any visit or
inspection, the Banks shall attempt to reasonably coordinate such requests and
all information obtained by any Bank shall be subject to Section 10.12.
7.1.7 Keeping of Records and Books of Account.
---------------------------------------
The Borrower shall, and shall cause each Subsidiary to, maintain and
keep proper books and records which enable the Borrower and its Subsidiaries
to issue consolidated financial statements in accordance with GAAP and as
otherwise required by applicable Laws of any Official Body having jurisdiction
over the Borrower or any Subsidiary of the Borrower, and in which full, true and
correct entries shall be made in all material respects of all dealings and
business and financial affairs on a consolidated basis.
7.1.8 Plans and Benefit Arrangements.
------------------------------
The Borrower shall, and shall cause each other member of the ERISA
Group to, comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Plans and Benefit Arrangements except where such failure, alone or
in conjunction with any other failure, would not result in a Material Adverse
Change. Without limiting the generality of the foregoing, the Borrower shall
cause all of its Plans and all Plans maintained by any other member of the ERISA
Group to be funded in accordance with the minimum funding
-57-
requirements of ERISA and shall make, and cause each other member of the ERISA
Group to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.
7.1.9 Compliance with Laws.
--------------------
Each Loan Party shall, and shall cause each of its Subsidiaries to,
comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this Section
7.1.9 if any failure to comply with any Law would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would reasonably be expected to constitute a Material
Adverse Change.
7.1.10 Use of Proceeds.
---------------
The Borrower will use the Letters of Credit and the proceeds of the
Loans only for lawful purposes in accordance with Sections 2.8 and 2.10.4 and
such uses shall not contravene any applicable Law or any other provision hereof.
7.1.11 Subordination of Intercompany Loans.
-----------------------------------
Each Loan Party shall cause any Intercompany Loans owed by any Loan
Party to any other Loan Party or Domestic Subsidiary of a Loan Party to be
subordinated pursuant to the terms of the Master Intercompany Subordination
Agreement and evidenced by an Intercompany Note which is pledged to the Agent
for the benefit of the Banks pursuant to the Note Pledge Agreement.
7.1.12 Further Assurances Regarding Banks' Liens and Prior Security
------------------------------------------------------------
Interests.
---------
The Borrower shall, from time to time, at its expense, faithfully
preserve and protect the Agent's Lien on and Prior Security Interest in the
Collateral (subject, in the case of the Property which is part of the
Collateral, to maintaining such a first priority Lien at the request of the
Agent) as a continuing first priority perfected Lien, subject only to Permitted
Liens, and shall do such other acts and things as the Agent in its sole
discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens and Prior Security Interests granted
under the Loan Documents and to exercise and enforce its rights and remedies
thereunder with respect to the Collateral.
In the event that the Required Banks determine to record the
Mortgages, the Borrower and the other Loan Parties shall (i) within five days of
a request therefor of the Agent confirm in writing that the legal descriptions
of the Property are true, accurate and complete or provide true, accurate and
complete descriptions of the Property, (ii) in the event that any legal
descriptions of the Property are inaccurate, immediately execute amendments to
any Mortgages to correct any inaccuracies, (iii) upon request of the Agent,
deliver a title insurance
-58-
policy or policies or binder or binders in favor of the Agent for the benefit of
the Banks, in customary ALTA current mortgagee's form, and in amounts not less
than $55,000,000, with premiums paid thereon, issued by a title insurance
company acceptable to the Agent and insuring the Mortgages as valid first
priority Lien upon the applicable Loan Parties' fee simple title to, or
leasehold interest in, the Property Collateral and all improvements and all
appurtenances thereto (including such easements and appurtenances as may be
required by the Agent), free and clear of any and all defects and Liens other
than Permitted Liens, with endorsements thereto as to such matters as the Agent
may designate, (iv) upon the request of the Agent furnish or engage third
parties of reputable standing to furnish any requested information for or
studies regarding the Property including without limitation any requested
environmental studies or audit, appraisals, surveys and evidence of zoning
compliance and (v) pay all transfer fees, mortgage or intangible taxes and
recording fees due upon recording of the Mortgages. Each of Borrower and
Guarantors will do all such other acts and things and, execute, deliver, file
and record all such other documents and instruments, including, without
limitation, mortgages, amendments to mortgagees, deeds of trust, financing
statements, security agreements, assignments and documents and powers of
attorney with respect to the Property, as the Agent in its reasonable discretion
may deem necessary or advisable from time to time in order to continue,
preserve, perfect and protect the Lien created by the Mortgages; and each Loan
Party hereby irrevocably appoints the Agent, its officers, employees and agents,
or any of them, as attorneys-in-fact for such Loan Party to execute, deliver,
file and record such items for such Loan Party and in the Loan Party's name,
place and stead. This power of attorney, being coupled with an interest, shall
be irrevocable for the life of this Agreement; provided, however, that the Agent
may not exercise any actions hereunder unless and until either (i) an Event of
Default has occurred; or (ii) if prior to an Event of Default, five (5) Business
Days have elapsed since the Agent has requested a Loan Party to undertake
certain actions and the Loan Party has not complied with such request within
such five (5) Business Day time period.
7.1.13 Post-Closing Matters.
--------------------
The Borrower shall deliver to the Agent for the benefit of the Banks
the documents set forth on Schedule 7.1.13 at the times indicated therein.
7.1.14 Payment of Inter-Company Obligations Related to Intertech
---------------------------------------------------------
The Borrower and its Subsidiaries shall settle all inter-company
obligations owed by them in respect of all dividends and Indebtedness owed as of
the date of the Spin-Off to Intertech and its Subsidiaries (after the Spin-Off)
in the manner (including by set-off to the extent feasible) and within the time
period stated in the Form 10.
7.2 Negative Covenants.
------------------
The Borrower covenants and agrees that until payment in full of the
Loans and Reimbursement Obligations and interest thereon, expiration or
termination of all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations hereunder and termination of the
-59-
Commitments, the Loan Parties and their Subsidiaries shall comply with the
following negative covenants:
7.2.1 Indebtedness.
------------
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) existing Indebtedness as set forth on Schedule 7.2.1
(including any extensions, amendments or refinancings or
renewals thereof, provided there is no increase in the
outstanding amount thereof or imposition of additional
material obligations therein unless otherwise specified on
Schedule 7.2.1);
(iii) Indebtedness of a Foreign Subsidiary to a Foreign
Subsidiary, Indebtedness of a Loan Party to a Foreign
Subsidiary or Indebtedness of a Loan Party to a Loan
Party;
(iv) Indebtedness of a Foreign Subsidiary to a Loan Party or
Indebtedness of a Foreign Subsidiary to any other Person,
provided, that the aggregate of all such Indebtedness,
including any Indebtedness of this type set forth on
Schedule 7.2.1, does not exceed at any one time
outstanding $22,000,000;
(v) any other Indebtedness (x) which constitutes Consolidated
Funded Indebtedness, (y) which is not of a type described
in clause (iv) above of this Section 7.2.1 and (z) which,
after giving effect thereto, the Borrower is in compliance
with Section 7.2.17.
7.2.2 Liens.
-----
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, (i) at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens
or (ii) at any time enter into an agreement, directly or indirectly, with
respect to any asset of the Borrower or any Subsidiary, that would be violated
if the Borrower or any Subsidiary were to grant to the Agent a Lien on any of
the Borrower's or any Subsidiary's real or personal property.
-60-
7.2.3 Guaranties.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time, directly or indirectly, become liable in respect
of any Guaranty, except for: (i) Guaranties of Indebtedness of the Loan Parties
under the Loan Documents; (ii) Guaranties of Indebtedness of Foreign
Subsidiaries which constitute Consolidated Funded Indebtedness; and (iii) such
other Guaranties so long as the liability of the Loan Parties thereunder under
such other Guaranties does not exceed in the aggregate at any time outstanding
$2,000,000.
7.2.4 Loans and Investments.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any loan or
advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) in, or any other
investment or interest in, or make any capital contribution to, any other
person, or agree, become or remain liable to do any of the foregoing, except as
set forth on schedule 7.2.4 and:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business;
(iii) Permitted Cash Equivalent Investments;
(iv) investments in Foreign Subsidiaries by Loan Parties so
long as the aggregate outstanding amount of such
investments permitted by this Section 7.2.4(iv)
(excluding Indebtedness of Foreign Subsidiaries to Loan
Parties permitted by Section 7.2.1(iv), Indebtedness of
Foreign Subsidiaries to Loan Parties set forth on
Schedule 7.2.1, and investments which arise and exist as
part of a Loan Party's permitted acquisition pursuant to
Section 7.2.6) does not exceed at any one time
$5,000,000;
(v) investments in other Loan Parties;
(vi) investments in Foreign Subsidiaries by Foreign
Subsidiaries;
(vii) liquidations, mergers, consolidations and acquisitions
permitted by Section 7.2.6, provided, that in the case of
a
-61-
Foreign Subsidiary making an acquisition, after giving
effect thereto, the aggregate investments in Foreign
Subsidiaries by Loan Parties does not exceed the amount
permitted by clause (iv) above;
(viii) capital expenditures permitted by Section 7.2.15; and
(ix) investments permitted by clause (iii) of Section 7.2.9;
provided, however, in no event shall the aggregate investments made by the Loan
Parties after the date hereof of the types described in clauses (vii) and (ix)
above exceed $10,000,000.
7.2.5 Dividends and Related Distributions.
Except dividends or other distributions payable to a shareholder that
is another Loan Party or Subsidiary and except for the dividend described in
Section 7.1.14, each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, declare, make or pay, or agree to become or remain liable
to make or pay, any dividend or other distribution of any nature (whether in
cash, property, securities or otherwise) on account of or in respect of its
shares of capital stock or partnership interests on account of the purchase,
redemption, retirement or acquisition of its shares of capital stock (or
warrants, options or rights therefor) or partnership interests.
7.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
Except as permitted by Section 7.2.7 the Borrower shall not, and
shall not permit any of its Subsidiaries to, dissolve, liquidate or wind-up its
affairs, or become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the assets or capital
stock of any other Person; provided that any Domestic Subsidiary may
consolidate, liquidate, dissolve or merge into, or acquire, any Domestic
Subsidiary which is wholly-owned, directly or indirectly, by the Borrower, so
long as at all times all the capital stock or other equity interests of each
Domestic Subsidiary shall be pledged to the Agent for the benefit of the Banks,
on a first priority perfected basis, pursuant to a Pledge Agreement; provided
further that any Foreign Subsidiary that is not directly owned by the Borrower
and/or one or more Domestic Subsidiaries may consolidate, liquidate, dissolve or
merge into or acquire a Foreign Subsidiary that is not directly owned by the
Borrower and/or one or more Domestic Subsidiaries; provided further that any
Foreign Subsidiary directly owned by the Borrower and/or one or more Domestic
Subsidiaries may consolidate, liquidate, dissolve or merge with or into, or
acquire, any Foreign Subsidiary so long as at all times 65 percent of the
outstanding capital stock or other equity interests of either of such Foreign
Subsidiaries shall be pledged to the Agent for the benefit of the Banks, on a
first priority perfected basis, pursuant to a Pledge Agreement; and provided
further that on and after September 30, 1996 the Borrower, any Domestic
Subsidiary, or any Foreign Subsidiary which either has pledged 65 percent of its
capital stock or other equity to the Agent for the benefit of the Banks pursuant
to Section 10.18
-62-
or is owned directly or indirectly by another Foreign Subsidiary that pledged 65
percent of its capital stock or other equity to the Agent for the benefit of the
Banks pursuant to Section 10.18, may acquire by merger, purchase or otherwise
all or substantially all of the assets of any other Person or any division or
subsidiary which constitutes a "reportable industry segment" or "class of
similar products" of an industry segment (as such terms are defined in Item
101(c) of Regulation S-K promulgated under the Securities Act of 1933 and the
Securities Exchange Act of 1934) of such other Person if (a) after giving effect
to such acquisition, the aggregate of the purchase prices (as determined in
accordance with GAAP) for all acquisitions by the Borrower and its Subsidiaries
permitted pursuant to this clause from the Closing Date through the Expiration
Date shall not exceed $10,000,000 (with respect to any non-cash consideration
paid by a Loan Party, the value reasonably assigned to such consideration on the
books of such Loan Party shall be used for purposes of this calculation), (b)
the Borrower and the other Loan Parties are in compliance with all of the
provisions of this Agreement and the other Loan Documents immediately prior to
such acquisition and after giving effect to such acquisition the Borrower and
the other Loan Parties will be in compliance with all of the provisions of this
Agreement and the other Loan Documents, and (c) with respect to any acquisition
of capital stock of another Person, (1) within ten (10) business days of such
acquisition of any capital stock of another Person, all outstanding shares of
capital stock of such Person (other than minimum legally required director's
qualifying or similar shares) are acquired by the Borrower and one or more
Subsidiaries and no rights to acquire shares of such capital stock shall be held
by any person other than the Borrower and its Subsidiaries, (2) if such other
Person becomes a Foreign Subsidiary that is directly owned by one or more Loan
Parties, 65 percent of its capital stock or other equity is pledged to the Agent
for the benefit of the Banks in accordance with Section 10.18, and (3) if such
other Person becomes a Domestic Subsidiary of the Borrower or other Loan Party,
it joins in the Master Guaranty Agreement and other Loan Documents in accordance
with Section 10.18 and 100% of its capital stock or other equity interest is
pledged to the Agent for the benefit of the Banks in accordance with Section
10.18.
7.2.7 Dispositions of Assets or Subsidiaries.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest or partnership interests of a Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or
required in the conduct of such Loan Party's or such
Subsidiary's business;
-63-
(iii) any sale, transfer or lease of assets (x) by any Domestic
Subsidiary to another Loan Party so long as at all times
all of the capital stock or other equity interests of
each Domestic Subsidiary shall be pledged to the Agent
for the benefit of the Banks, on a first priority
perfected basis, pursuant to a Pledge Agreement, (y) by
any Foreign Subsidiary directly owned by one or more Loan
Parties to another Foreign Subsidiary so long as at all
times 65 percent of the capital stock or equity interests
of either of such Foreign Subsidiaries shall be pledged
to the Agent for the benefit of the Banks, on a first
priority perfected basis, pursuant to a Pledge Agreement,
or (z) by any Foreign Subsidiary that is not directly
owned by one or more Loan Parties to a Foreign
Subsidiary;
(iv) the discounting, assigning or sale of accounts receivable
of the Japanese Foreign Subsidiary in connection with
Indebtedness incurred in the ordinary course of business
by such Foreign Subsidiary for working capital in Japan;
and
(v) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through
(iii) above, provided that the aggregate after-tax net
cash proceeds (including without limitation cash, as and
when collected, pursuant to any notes or other securities
received as consideration for such sale, transfer or
lease) of all such sales, transfers or leases on and
after the date hereof through the Expiration Date shall
not exceed $10,000,000 in the aggregate and all such cash
proceeds in excess of $1,000,000 shall be applied as a
mandatory prepayment of the loans in accordance with the
provisions of section 4.5.1.
7.2.8 Affiliate Transactions.
Except as set forth on Schedule 7.2.8 each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, enter into or carry out
any transaction with any of its Affiliates (including purchasing property or
services from or selling property or services to any Affiliate of any Loan Party
or other Person other than a Loan Party) unless such transaction is not
otherwise prohibited by this Agreement, is entered into in the ordinary course
of business upon fair and reasonable arm's-length terms and conditions or is
approved by the independent Compensation Committee of the Borrower's Board of
Directors as being upon fair and reasonable arm's length terms and conditions
(including without limitation employment
-64-
arrangements with any Executive Officer of the Borrower or any Subsidiary), all
of which are fully disclosed to the Agent and is in accordance with all
applicable Law.
7.2.9 Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, own or create directly or indirectly any Subsidiaries other
than (i) any Domestic Subsidiary which has (x) joined the Master Guaranty
Agreement, as Guarantor on the Closing Date, joined the Master Intercompany
Subordination Agreement, duly executed and delivered all Pledge Agreements,
Security Agreements, Mortgages, Patent, Trademark and Copyright Collateral
Assignments and such other documents to perfect in favor of the Banks a Prior
Security Interest in all personal property of such Subsidiary and to create a
valid Lien in favor of the Banks on all Property of such Subsidiary, and (y) the
owners of all of the equity interests of such Domestic Subsidiary shall have
pledged all such equity interests, on a first priority perfected basis, to the
Agent for the benefit of the Banks, (ii) any Foreign Subsidiary which is
directly owned by the Borrower and/or one or more Domestic Subsidiaries who
shall have pledged 65 percent of all equity interests of such Foreign
Subsidiary, on a first priority perfected basis, to the Agent for the benefit of
the Banks; and (iii) any Foreign Subsidiary which is directly owned by one or
more Foreign Subsidiaries. Each of the Loan Parties shall not become or agree to
become or permit any of its Subsidiaries to become a general or limited partner
in any general or limited partnership or a joint venturer in any joint venture
or a member in any limited liability company other than (i) solely with Persons
who are or pursuant to such transaction will become other Loan Parties; and (ii)
for transactions which when aggregated do not exceed $2,500,000, except that the
Loan Parties may be general or limited partners in other Loan Parties.
7.2.10 Continuation of or Change in Business.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than substantially those businesses as
conducted and operated by the Borrower and its Subsidiaries on the Closing Date
and those businesses reasonably related thereto.
7.2.11 Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of ERISA
and the Internal Revenue Code with respect to any Plan
where such would result in a Material Adverse Change;
(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
-65-
(iii) engage in a Prohibited Transaction with any Plan,
Benefit Arrangement or Multiemployer Plan which, alone
or in conjunction with any other circumstances or set of
circumstances resulting in liability under ERISA, would
constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under the
Plans, determined on an ongoing basis, as disclosed in
the most recent actuarial report completed with respect
to each such Plan, to exceed, as of any actuarial
valuation date, the fair market value of the assets of
such Plans;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of
the ERISA Group may be required to make under any
agreement relating to such Multiemployer Plan, or any
Law pertaining thereto where such would result in a
Material Adverse Change;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under
Section 4062(e) of ERISA to withdraw) from any Multiple
Employer Plan, where any such withdrawal would result in
a material liability of the Borrower or any member of
the ERISA Group;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination would result in a material
liability to the Borrower or any member of the ERISA
Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under
ERISA or the Internal Revenue Code, where such failure
would result in a Material Adverse Change.
7.2.12 Fiscal Year.
The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, change its fiscal year from the fiscal year beginning on and ending
on October 31 each year.
-66-
7.2.13 Issuance of Stock.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, issue any additional shares of its capital stock or any
options, warrants or other rights in respect thereof other than to another Loan
Party or Subsidiary of a Loan Party or to a Person which becomes a Loan Party or
Subsidiary of a Loan Party; provided that, (i) in the case of a Domestic
Subsidiary, all such additional shares, options, warrants or other rights are
pledged to the Agent for the benefit of the Banks pursuant to a Pledge Agreement
on a first priority perfected basis resulting in all of its equity interests
being pledged to the Agent and (ii) in the case of a Foreign Subsidiary directly
owned by the Borrower and/or one or more Domestic Subsidiaries, a sufficient
number of such additional shares, options, warrants, rights or other equity are
pledged to the Agent for the benefit of the Banks pursuant to a Pledge Agreement
on a first priority perfected basis resulting in 65 percent of its capital stock
or other equity interests being pledged to the Agent. Notwithstanding the
foregoing, nothing contained herein shall prohibit the Borrower from issuing
shares of its capital stock or other equity interests of the Borrower.
7.2.14 Changes in Organizational Documents.
Except as permitted by Section 7.2.6, each of the Loan Parties shall
not, and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws or other organizational documents without providing
at least five (5) calendar days' prior written notice to the Agent and the Banks
and, in the event such change would be adverse to the Banks as determined by the
Required Banks in their sole discretion, obtaining the prior written consent of
the Required Banks.
7.2.15 Capital Expenditures and Leases.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, make any payments or incure any obligation on account of
Consolidated Capital Expenditures if the aggregate of such payments and incurred
obligations together with all other similar payments and incurred obligations
made during such period would exceed the amount set forth below for such period:
-67-
Maximum Consolidated
Period Capital Expenditures
-------------------------- --------------------
November 1, 1995 to and $12,500,000
including October 31, 1996
November 1, 1996 to and $12,500,000
including October 31, 1997
November 1, 1997 to and $ 3,125,000
including January 31, 1998
7.2.16 Minimum Interest Coverage Ratio.
--------------------------------
The Loan Parties shall not permit the Interest Coverage Ratio to be
less than the amount set forth below for the indicated period:
Minimum Interest
Period Coverage Ratio
---------------------------- ----------------
August 1, 1996 to and 2.75 to 1.00
including October 31, 1996
August 1, 1996 to and 2.75 to 1.00
including January 31, 1997
August 1, 1996 to and 2.75 to 1.00
including April 30, 1997
August 1, 1996 to and 2.75 to 1.00
including July 31, 1997 and
each four consecutive fiscal
quarter periods thereafter
7.2.17 Consolidated Funded Indebtedness to Consolidated EBITDA Ratio.
--------------------------------------------------------------
The Loan Parties shall not permit at any time the ratio of (i)
Consolidated Funded Indebtedness, as of the last day of the fiscal quarter most
recently ended, to (ii) Consolidated EBITDA, for the four fiscal quarters most
recently ended, to be greater than (A) 3.15 to 1.0 for the four quarter fiscal
periods ending on January 31, 1997, April 30, 1997 and July 31, 1997, and (B)
3.0 to 1.0 for each four quarter fiscal period ending thereafter.
-68-
7.2.18 Minimum Consolidated Tangible Net Worth.
---------------------------------------
The Loan Parties shall not permit at any time Consolidated Tangible
Net Worth to be less than the following amounts for the indicated period:
Minimum Consolidated
Period Tangible Net Worth
---------------------------- ------------------------------------
On the Closing Date $20,000,000
Each fiscal quarter The sum of $20,000,000 plus seventy-
subsequent to the fiscal five percent (75%) of Cumulative
quarter ended July 31, 1996 Consolidated Net Income since July
31, 1996 plus 100% of all net
proceeds received by the Borrower
after August 9, 1996 in respect of
capital contributions and in respect
of the issuance of of shares of its
capital stock of any class.
7.2.19 Amendments to Certain Documents.
-------------------------------
The Loan Parties shall not permit, without the prior written consent
of the Required Banks, any material amendment, waiver or modification to any
document, indenture, agreement or instrument evidencing any Indebtedness set
forth on Schedule 7.2.1 except for amendments, waivers or modifications to
provisions which do not change or otherwise affect the terms of such agreements
or instruments in a material manner.
7.2.20 No Prepayment of Existing Indebtedness.
--------------------------------------
The Loan Parties shall not permit the prepayment, directly or
indirectly (including without limitation on the foregoing any purchase of one or
more of the notes issued thereunder or any interest or participation in any such
notes), prior to the stated maturity thereof of any principal of any
Indebtedness set forth on section 1 of Schedule 7.2.1.
-69-
7.3 Reporting Requirements.
The Borrower covenants and agrees that until payment in full of the Loans
and Reimbursement Obligations and interest thereon, expiration or termination of
all Letters of Credit, satisfaction of all of the Loan Parties' other
Obligations hereunder and under the other Loan Documents and termination of the
Commitments, the Loan Parties will furnish or cause to be furnished to the Agent
and each of the Banks (wherever referenced in Section 7.3, the term
"consolidating" is limited to consolidating information on a basis consistent
with current accounting practices of the Borrower):
7.3.1 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45) calendar
days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrower, consisting of a
consolidated and consolidating balance sheet as of the end of such fiscal
quarter and related consolidated and consolidating statements of income,
stockholders' equity and cash flows for the fiscal quarter then ended and
the fiscal year through that date, all in reasonable detail and certified
(subject to normal year-end audit adjustments) by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower as having
been prepared in accordance with GAAP and as to fairness of presentation,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.
7.3.2 Annual Financial Statements.
As soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Borrower, consolidated and consolidating
financial statements of the Borrower consisting of a consolidated and
consolidating balance sheet as of the end of such fiscal year, and related
consolidated and consolidating statements of income, stockholders' equity
and cash flows for the fiscal year then ended, all in reasonable detail and
setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and with respect to the consolidated
statements, certified by independent certified public accountants of
nationally recognized standing reasonably satisfactory to the Agent. The
certificate or report of accountants shall be free of qualifications (other
than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such
accountants concur) and shall not indicate the occurrence or existence of
any event, condition or contingency which would materially impair the
prospect of payment or performance of any covenant, agreement or duty of
any Loan Party under any of the Loan Documents, together with a letter of
such accountants substantially to the effect that, based upon their
ordinary and customary examination of the affairs of the Borrower,
performed in connection with the preparation of such consolidated financial
statements, and in accordance with generally accepted auditing standards,
they are not aware of the existence of any condition or event which
constitutes an Event of Default or Potential Default or, if they are aware
of such condition or
-70-
event, stating the nature thereof and confirming the Borrower's
calculations with respect to the certificate to be delivered pursuant to
Section 7.3.3 with respect to such financial statements.
7.3.3 Certificate of the Borrower.
Concurrently with the financial statements of the Borrower furnished
to the Agent and to the Banks pursuant to Sections 7.3.1 and 7.3.2, a
certificate of the Borrower signed by the Chief Executive Officer,
President or Chief Financial Officer of the Borrower, in the form of
Exhibit 7.3.3, to the effect that, except as described pursuant to Section
7.3.4, (i) the representations and warranties contained in Article 5 and in
the other Loan Documents are true on and as of the date of such certificate
with the same effect as though such representations and warranties had been
made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time) and the Loan Parties
have performed and complied with all covenants and conditions hereof, (ii)
no Event of Default or Potential Default exists and is continuing on the
date of such certificate and (iii) containing calculations in sufficient
detail to demonstrate compliance as of the date of such financial
statements with all financial covenants contained in Section 7.2.
7.3.4 Notice of Default.
Promptly after any Executive Officer of any Loan Party has learned of
the occurrence of an Event of Default or Potential Default, a certificate
signed by the Chief Executive Officer, President or Chief Financial Officer
of such Loan Party setting forth the details of such Event of Default or
Potential Default and the action which the such Loan Party proposes to take
with respect thereto.
7.3.5 Notice of Litigation.
Promptly after the commencement thereof, notice of all actions, suits,
proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party which involve
a claim or series of uninsured claims (provided that a claim shall be
deemed to be uninsured unless the insurance company is a reputable
insurance company and has acknowledged that the claim is covered by the
applicable insurance policy without any reservation to challenge the
applicability thereof) in excess of $5,000,000 or which if adversely
determined would reasonably be expected to constitute a Material Adverse
Change.
7.3.6 Certain Events.
Written notice:
(i) at least ten (10) Business Days prior thereto, with respect
to any proposed sale or transfer of assets pursuant to
Section 7.2.7(v) which exceed $1,000,000, and
-71-
(ii) within the time limits set forth in Section 7.2.14, any
amendment to the organizational documents of any Loan Party.
7.3.7 Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to any Loan Party:
(i) the consolidated annual budget of the Borrower, to be
supplied not later than the earlier of (i) thirty (30) days
following the end of each fiscal year with respect to the
budget for the next fiscal year, or (ii) two (2) Business
Days following the date on which the Board of Directors of
the Borrower approves such annual budget;
(ii) any reports including management letters submitted to the
Borrower by independent accountants in connection with any
annual, interim or special audit;
(iii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no
later than the date supplied to such stockholders;
(iv) regular or periodic reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses, as may be
filed by the Borrower with the Securities and Exchange
Commission;
(v) a copy of any material order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any
Official Body; and
(vi) such other reports and information as any of the Banks may
from time to time reasonably request. The Loan Parties shall
also notify the Banks promptly of the enactment or adoption
of any Law which reasonably would be expected to result in a
Material Adverse Change.
-72-
7.3.8 Notices Regarding Plans and Benefit Arrangements.
7.3.8.1 Certain Events.
Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken
or threatened by the Internal Revenue Service or the PBGC with respect
thereto) of:
(i) any Reportable Event with respect to the Borrower or any
other member of the ERISA Group (regardless of whether the
obligation to report said Reportable Event to the PBGC has
been waived),
(ii) any Prohibited Transaction which could subject the Borrower
or any other member of the ERISA Group to a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Internal Revenue Code in
connection with any Plan, any Benefit Arrangement or any
trust created thereunder,
(iii) any assertion of material withdrawal liability with respect
to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer Plan
by the Borrower or any other member of the ERISA Group under
Title IV of ERISA (or assertion thereof), where such
withdrawal is likely to result in material withdrawal
liability,
(v) any cessation of operations (by the Borrower or any other
member of the ERISA Group) at a facility in the
circumstances described in Section 4063(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the ERISA
Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of the ERISA
Group to make a payment to a Plan required to avoid
imposition of a Lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307
of ERISA, or
-73-
(ix) any change in the actuarial assumptions or funding methods
used for any Plan, where the effect of such change is to
materially increase or materially reduce the unfunded
benefit liability or obligation to make periodic
contributions.
7.3.8.2 Notices of Involuntary Termination and Annual Reports.
Promptly after receipt thereof, copies of (a) all notices
received by the Borrower or any other member of the ERISA Group of the
PBGC's intent to terminate any Plan administered or maintained by the
Borrower or any member of the ERISA Group, or to have a trustee
appointed to administer any such Plan; and (b) at the request of the
Agent or any Bank each annual report (IRS Form 5500 series) and all
accompanying schedules, the most recent actuarial reports, the most
recent financial information concerning the financial status of each
Plan administered or maintained by the Borrower or any other member of
the ERISA Group, and schedules showing the amounts contributed to each
such Plan by or on behalf of the Borrower or any other member of the
ERISA Group in which any of their personnel participate or from which
such personnel may derive a benefit, and each Schedule B (Actuarial
Information) to the annual report filed by the Borrower or any other
member of the ERISA Group with the Internal Revenue Service with
respect to each such Plan.
7.3.8.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
8. DEFAULT
8.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any one or
more of the following events or conditions (whatever the reason therefor and
whether voluntary, involuntary or effected by operation of Law):
8.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay when due any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due
at maturity) or any Reimbursement Obligations or shall fail to pay within
two (2) Business Days when due any interest on any Loan or on any
Reimbursement Obligations or any other amount owing hereunder
-74-
or under the other Loan Documents after such principal, interest or other amount
becomes due in accordance with the terms hereof or thereof;
8.1.2 Breach of Warranty.
Any representation or warranty made or deemed made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or deemed made or
furnished;
8.1.3 Breach of Negative Covenants and Section 7.1.13.
Any of the Loan Parties shall default in the observance or performance
of any covenant contained in Section 7.2 or the covenant contained in Section
7.1.13;
8.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or performance
of any other covenant, condition or provision hereof or of any other Loan
Document and such default shall continue unremedied for a period of thirty (30)
Business Days after any Executive Officer of the Borrower becomes aware of the
occurrence thereof (such grace period to be applicable only in the event such
default can be remedied by corrective action of the Loan Parties as determined
by the Agent in its sole discretion);
8.1.5 Defaults in Other Agreements or Indebtedness.
If a breach, default or event of default shall occur at any time under
the terms of any other agreement involving borrowed money or the extension of
credit or any other Indebtedness under which any Loan Party or Subsidiary of any
Loan Party may be obligated as a borrower or guarantor in excess of $5,000,000
in the aggregate and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
8.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in excess of
$5,000,000 in the aggregate shall be entered against any Loan Party by a court
having jurisdiction in the premises, which judgment either (i) is not
discharged, vacated, bonded or stayed pending appeal within a period of sixty
(60) days from the date of entry, or (ii) is not fully insured (provided that a
judgment shall be deemed to be uninsured unless the insurance company
-75-
is a reputable insurance company and has acknowledged that the judgment is
covered by the applicable insurance policy without any reservation to challenge
the applicability thereof) or any Loan Parties' or any of their Subsidiaries'
assets having a value on the Borrower's books in excess of $5,000,000 are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not cured within sixty (60) days
thereafter;
8.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and binding
agreements enforceable against the party executing the same or such party's
successors and assigns (as permitted under the Loan Documents) in accordance
with the respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged or contested;
8.1.8 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $5,000,000 which is not a
Permitted Lien is filed of record with respect to all or any part of any of the
Loan Parties' or any of their Subsidiaries' assets by the United States, or any
department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, or if any taxes or
debts owing at any time or times hereafter to any one of these becomes payable
and the same is not paid within sixty (60) days after the same becomes payable
(unless the validity or amount thereof is being contested in good faith by
appropriate and lawful proceedings diligently conducted so long as levy and
execution thereon have been stayed and continue to be stayed);
8.1.9 Insolvency.
The Borrower, any Material Subsidiary, or one or more other
Subsidiaries of the Borrower which individually or in the aggregate represent
more than five percent (5%) of the book value of the consolidated assets of the
Borrower and its Subsidiaries, ceases to be able to pay its debts as they become
due, admits in writing its inability to pay its debts as they mature or is no
longer Solvent;
8.1.10 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which the Agent
and the Required Banks determine in good faith constitutes grounds for the
termination of any Plan by the PBGC or the appointment of a trustee to
administer or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Plan, or a termination notice shall have been filed with respect to any Plan;
(iii) a trustee shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to terminate any
Plan or Plans or to appoint a trustee to
-76-
administer or liquidate any Plan; and, in the case of the occurrence of (i),
(ii), (iii) or (iv) above, the Agent determines in good faith that the amount of
the Borrower's liability is likely to exceed 10% of its Consolidated Tangible
Net Worth; (v) the Borrower or any member of the ERISA Group shall fail to make
any contributions when due to a Plan or a Multiemployer Plan; (vi) the Borrower
or any other member of the ERISA Group shall make any amendment to a Plan with
respect to which security is required under Section 307 of ERISA; (vii) the
Borrower or any other member of the ERISA Group shall withdraw completely or
partially from a Multiemployer Plan; (viii) the Borrower or any other member of
the ERISA Group shall withdraw (or shall be deemed under Section 4062(e) of
ERISA to withdraw) from a Multiple Employer Plan; or (ix) any applicable Law is
adopted, changed or interpreted by any Official Body with respect to or
otherwise affecting one or more Plans, Multiemployer Plans or Benefit
Arrangements and, with respect to any of the events specified in (v), (vi),
(vii), (viii) or (ix), the Agent and the Required Banks determine in good faith
that any such occurrence would be reasonably likely to materially and adversely
affect the total enterprise represented by the Borrower and the other members of
the ERISA Group;
8.1.11 Cessation of Business.
The Borrower, (except as permitted by Section 7.2.6 or Section
7.2.7) any Material Subsidiary, or (except as permitted by Section 7.2.6 or
Section 7.2.7) one or more other Subsidiaries of the Borrower which
individually or in the aggregate represent more than five percent (5%) of the
book value of the consolidated assets of the Borrower and its Subsidiaries,
ceases to conduct its business as contemplated or such Loan Party is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of its business and such injunction, restraint or other preventive
order is not dismissed within thirty (30) days after the entry thereof;
8.1.12 Change of Control.
(i) Any person or group of persons (within the meaning of Section
13(a) or 14(a) of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership of (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) 20% or more of the
voting capital stock of the Borrower; or (ii) within a period of twelve (12)
consecutive calendar months, individuals who were directors on the board of
directors of the Borrower on the first day of such period together with any
directors whose election by such board of directors or whose nomination for
election by the shareholders was approved by a vote of the majority of the
directors then in office shall cease to constitute a majority of the board of
directors of the Borrower;
8.1.13 Involuntary Proceedings.
A proceeding shall have been instituted in a court having jurisdiction
in the premises seeking a decree or order for relief in respect of the Borrower,
any Material Subsidiary, or any other Subsidiary the result of which proceeding
against the Borrower, any
-77-
Material Subsidiary or any other Subsidiary would be a Material Adverse Change,
in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or any
Subsidiary of any Loan Party for any substantial part of its property, or for
the winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding; or
8.1.14 Voluntary Proceedings.
The Borrower, any Material Subsidiary or any other Subsidiary the
result of which voluntary case by the Borrower, any Material Subsidiary or such
other Subsidiary would be a Material Adverse Change, shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the
appointment or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or other similar official) of itself or for
any substantial part of its property or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.
8.2 Consequences of Event of Default.
8.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 8.1.1 through 8.1.12
shall occur and be continuing, the Banks and the Agent shall be under no further
obligation to make Loans or issue Letters of Credit, as the case may be, and the
Agent may, and upon the request of the Required Banks, shall (i) by written
notice to the Borrower, terminate the Commitments, declare the unpaid principal
amount of the Notes and all Reimbursement Obligations then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of the
Borrower to the Banks hereunder and thereunder to be forthwith due and payable,
and the same shall thereupon become and be immediately due and payable to the
Agent for the benefit of each Bank without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, and (ii)
require the Borrower to, and the Borrower shall thereupon, deposit in a non-
interest bearing account with the Agent, as cash collateral for its Obligations
under the Loan Documents, an amount equal to the maximum amount currently or at
any time thereafter available to be drawn on all outstanding Letters of Credit,
and the Borrower hereby pledges to the Agent and the Banks, and grants to the
Agent and the Banks a security interest in, all such cash as security for such
Obligations. Upon the curing of all existing Events of Default
-78-
to the satisfaction of the Required Banks, the Agent shall return such cash
collateral to the Borrower;
8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 8.1.13 or 8.1.14 shall
occur, the Commitments shall automatically terminate, the Banks shall make no
Loans hereunder and the unpaid principal amount of the Notes, and all
Reimbursement Obligations then outstanding and all interest accrued thereon, any
unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
and thereunder shall be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
8.2.3 Set-off.
If an Event of Default shall occur and be continuing, any Bank to whom
any Obligation is owed by any Loan Party hereunder or under any other Loan
Document or any participant of such Bank which has agreed in writing to be bound
by the provisions of Section 9.13 and any branch, Subsidiary or Affiliate of
such Bank or participant anywhere in the world shall have the right, subject to
the approval of the Required Banks, in addition to all other rights and remedies
available to it, without notice to such Loan Party, to set off against and apply
to the then unpaid balance of all the Loans and all other Obligations of the
Borrower and the other Loan Parties hereunder or under any other Loan Document
any debt owing to, and any other funds held in any manner for the account of,
the Borrower or such other Loan Party by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit accounts
(whether time or demand, general or special, provisionally credited or finally
credited, or otherwise) now or hereafter maintained by the Borrower or such
other Loan Party for its own account (but not including funds held in custodian
or trust accounts) with such Bank or participant or such branch, Subsidiary or
Affiliate. Such right shall exist whether or not any Bank or the Agent shall
have made any demand under this Agreement or any other Loan Document, whether or
not such debt owing to or funds held for the account of the Borrower or such
other Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any collateral, any Guaranty or any other security, right or
remedy available to any Bank or the Agent;
8.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and whether or
not the Agent shall have accelerated the maturity of Loans pursuant to any of
the foregoing provisions of this Section 8.2, the Agent or any Bank, with the
approval of the Required Banks, if owed any amount with respect to the Notes,
may proceed to protect and enforce its rights by suit in equity, action at law
and/or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement or the Notes, including as
permitted by applicable Law the obtaining of the ex parte appointment of a
receiver, and, if
-79-
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Agent
or such Bank;
8.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any action
pursuant to this Section 8.2 and until all Obligations of the Loan Parties have
been paid in full, any and all proceeds received by the Agent from any sale or
other disposition of any collateral, or any part thereof, the exercise of any
other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for out-of-pocket
costs, expenses and disbursements, including reasonable attorneys' and
paralegals' fees and legal expenses, incurred by the Agent or the
Banks in connection with realizing on any collateral or collection of
any Obligations of any of the Loan Parties under any of the Loan
Documents, including advances made by the Banks or any one of them or
the Agent for the reasonable maintenance, preservation, protection or
enforcement of, or realization upon, any collateral, including
advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale
or other realization on, any of any collateral;
(ii) second, to the repayment of all Indebtedness then due and
unpaid of the Loan Parties to the Banks incurred under this Agreement
or any of the other Loan Documents, whether of principal, interest,
fees, expenses or otherwise, in such manner as the Agents may
determine in their discretion; and
(iii) the balance, if any, to the Borrower or as required by Law;
and
8.2.6 Other Rights and Remedies.
The Agent may, and upon the request of the Required Banks shall,
exercise all post-default rights granted to the Agent and the Banks under the
Loan Documents or applicable Law.
8.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease, or
other disposition of the any collateral or any intended action by the Agent, if
given ten (10) days prior to such
-80-
proposed action, shall constitute commercially reasonable and fair notice
thereof to the Borrower.
9. THE AGENT
9.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes
Mellon Bank, N.A. to act as Agent for such Bank under this Agreement and to
execute and deliver or accept on behalf of each of the Banks the other Loan
Documents. Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and any other instruments and agreements referred to
herein, and to exercise such powers and to perform such duties hereunder as are
specifically delegated to or required of the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. Mellon Bank, N.A. agrees
to act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
9.2 Delegation of Duties.
The Agent may perform any of its respective duties hereunder by or
through agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 9.5 and 9.6,
shall be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
9.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature. Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Each Bank expressly acknowledges (i) that the Agent
has not made any representations or warranties to it and that no act by the
Agent hereafter taken, including any review of the affairs of any of the Loan
Parties, shall be deemed to constitute any representation or warranty by the
Agent to any Bank; (ii) that it has made and will continue to make, without
reliance upon the Agent, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of each of
the Loan Parties in connection with this Agreement and the making and
continuance of the Loans hereunder; and (iii) except as expressly provided
herein, that the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any
-81-
credit or other information with respect thereto, whether coming into its
possession before the making of any Loan or at any time or times thereafter.
9.4 Actions in Discretion of Agent; Instructions from the Banks.
The Agent agrees, upon the written request of the Required Banks, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
9.6. Subject to the provisions of Section 9.6, no Bank shall have any right
of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
9.5 Reimbursement and Indemnification of Agent by the Borrower.
The Borrower agrees unconditionally upon demand to pay or reimburse
the Agent and to save the Agent harmless against (i) liability for the payment
of all reasonable out-of-pocket costs, expenses and disbursements, including
fees and expenses of counsel, appraisers and environmental consultants, incurred
by the Agent (a) in connection with the development, negotiation, preparation,
printing, execution, syndication, administration, performance and interpretation
of this Agreement and the other Loan Documents, and other instruments and
documents to be delivered hereunder, (b) relating to any amendments, waivers or
consents pursuant to provisions hereof, (c) in connection with the enforcement
of this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings; (ii) all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted by or asserted against the Agent, in its
capacity as such, as a result of the use of the proceeds of the Loans, including
without limitation, as a result of a Change of Control; and (iii) all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, in its capacity as such,
in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Agent hereunder or thereunder,
provided that the Borrower shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties,
-82-
actions, judgments, suits, costs, expenses or disbursements (A) if the same
results from the Agent's gross negligence or willful misconduct, or (B) if the
Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the Borrower
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or (C) if the same results from a compromise or
settlement agreement entered into without the consent of the Borrower, which
shall not be unreasonably withheld. In addition, the Borrower agrees to
reimburse and pay all reasonable out-of-pocket expenses of the Agent's regular
employees and agents engaged to perform audits of the books, records and
properties of the Loan Parties and their Subsidiaries.
9.6 Exculpatory Provisions.
None of the Agent or any of its respective directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to any Bank for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any Loan Document, unless caused by
its or its respective directors, officers, employees, agents, attorneys or
Affiliates own gross negligence or willful misconduct, (b) be responsible in any
manner to any of the Banks for the effectiveness, enforceability, genuineness,
validity or due execution of this Agreement or any other Loan Documents or for
any recital, representation, warranty, document, certificate, report or
statement herein or made or furnished under or in connection with this Agreement
or any other Loan Documents, or (c) be under any obligation to any of the Banks
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Loan
Parties, or the financial condition of the Loan Parties, or the existence or
possible existence of any Event of Default or Potential Default. None of the
Agent or any Bank or any of their respective directors, officers, employees,
agents, attorneys or Affiliates shall be liable to any of the Loan Parties for
any consequential, special or indirect damages, losses or expenses (including
without limitation, counsel fees) resulting from any breach of contract, tort or
other wrong in connection with the negotiation, documentation, administration or
collection of the Loans or any of the Loan Documents.
9.7 Reimbursement and Indemnification by Banks of the Agent.
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrower and without limiting the Obligation of the
Borrower to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in its capacity as such or
in its capacity of issuing Letters of Credit, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) if the same
results from the Agent's gross negligence or willful misconduct, or (b) if such
Bank was not given notice of the subject claim and the opportunity to
participate in
-83-
the defense thereof, at its expense (except that such Bank shall remain liable
to the extent such failure to give notice does not result in a loss to the
Bank), or (c) if the same results from a compromise and settlement agreement
entered into without the consent of such Bank, which shall not be unreasonably
withheld. In addition, each Bank agrees promptly upon demand to reimburse the
Agent (to the extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share for all
amounts due and payable by the Borrower to the Agent in connection with the
Agent's periodic audit of the Loan Parties' books, records and business
properties.
9.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense (other than a liability or expense relating to gross
negligence or willful misconduct) which may be incurred by it by reason of
taking or continuing to take any such action.
9.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
9.10 Notices.
The Agent shall promptly send to each Bank a copy of all notices and
other documents received from the Borrower pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof. The Agent
shall promptly notify the Borrower and the other Banks of each change in the
Base Rate and the effective date thereof.
9.11 Banks in Their Individual Capacities.
With respect to the Commitments and the Loans made by it, the Agent
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates and each of the Banks and their
respective Affiliates may, without liability to account, except as prohibited
herein, make loans to, accept deposits from, discount drafts for, act as trustee
under indentures of, and generally engage in any kind of banking or trust
business with, the Loan Parties and their Affiliates, in the case of
-84-
the Agent, as though it were not acting as Agent hereunder and in the case of
each Bank, as though such Bank were not a Bank hereunder.
9.12 Holders of Notes.
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
9.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Sections 3.4.2 or 4.6.1. The Banks or any such holder
receiving any such amount shall purchase for cash from each of the other Banks
an interest in such Bank's Loans in such amount as shall result in a ratable
participation by the Banks and each such holder in the aggregate unpaid amount
under the Notes, provided that if all or any portion of such excess amount is
thereafter recovered from the Bank or the holder making such purchase, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, together with interest or other amounts, if any, required by law
(including court order) to be paid by the Bank or the holder making such
purchase.
9.14 Successor Agent.
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank, the
Agent's Loans and its Commitment shall be considered in determining whether the
Required Banks have requested such resignation), in either case of (i) or (ii)
by giving not less than thirty (30) days' prior written notice to the borrower.
if the Agent shall resign under this Agreement, then subject to the consent of
the Borrower (which consent shall not be unreasonably withheld and which consent
shall not be required during any period in which an Event of Default exists)
either (a) the Required Banks shall appoint from among the Banks a successor
agent for the Banks, or (b) if a successor agent shall not be so appointed and
approved within the thirty (30) day period following the Agent's notice to the
Banks of its resignation, then the Agent shall appoint a successor agent who
shall serve as Agent until such time as the Required Banks appoint a successor
agent. Upon its appointment, such successor agent shall succeed to the rights,
powers and duties of the Agent
-85-
and the term "Agent" shall mean such successor effective upon its appointment,
and the former Agent's rights, powers and duties as Agent shall be terminated
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement. After the resignation of any Agent hereunder,
the provisions of this Article 9 shall inure to the benefit of such former
Agent and such former Agent shall not by reason of such resignation be deemed to
be released from liability for any actions taken or not taken by it while it was
an Agent under this Agreement.
9.15 Other Fees.
The Borrower shall pay to the Agent the administrative fees due
pursuant to that certain commitment letter dated July 11, 1996 and any other
fees due pursuant to that certain fee letter dated July 30, 1996 among the
Borrower and the Agent at the times set forth in such letters.
9.16 Availability of Funds.
Unless the Agent shall have been notified by a Bank prior to the date
upon which a Loan is to be made that such Bank does not intend to make available
to the Agent such Bank's portion of such Loan, the Agent may assume that such
Bank has made or will make such proceeds available to the Agent on such date and
the Agent may, in reliance upon such assumption (but shall not be required to),
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank, the Agent shall
be entitled to recover such amount on demand from such Bank (or, if such Bank
fails to pay such amount forthwith upon such demand from the Borrower) together
with interest thereon, in respect of each day during the period commencing on
the date such amount was made available to the Borrower and ending on the date
the Agent recovers such amount, at a rate per annum equal to the Federal Funds
Effective Rate.
9.17 Calculations.
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Bank
whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrower and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
9.18 Beneficiaries.
Except as expressly provided herein, the provisions of this Article 9
are solely for the benefit of the Agent and the Banks, and the Loan Parties
shall not have any rights to rely on or enforce any of the provisions hereof.
In performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be
-86-
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any of the Loan Parties.
10. MISCELLANEOUS
10.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder; provided, however, that the written
consent of the Required Banks shall not be required with respect to the joinder
of additional Loan Parties pursuant to Section 10.18. Any such agreement,
waiver or consent made with such written consent shall be effective to bind all
the Banks and the Loan Parties; provided, that, without the written consent of
all the Banks, no such agreement, waiver or consent may be made which will:
10.1.1 Increase of Commitments; Extension or Expiration Date.
Increase the amount of the Commitment of any Bank hereunder or
extend the Expiration Date;
10.1.2 Extension of Payment; Reduction of Principal Interest or
Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan, the Commitment Fee or any other
fee payable to any Bank, or reduce the principal amount of or the rate of
interest borne by any Loan or reduce the Commitment Fee or any other fee payable
to any Bank, or otherwise affect the terms of payment of the principal of or
interest of any Loan, the Commitment Fee or any other fee payable to any Bank;
10.1.3 Release of Guarantor; Release of Security.
Release any Material Subsidiary from its Obligations under the
Master Guaranty Agreement, release any security of the Borrower or any
Subsidiary or any other security for any of the Loan Parties' Obligations except
for sales or dispositions of assets permitted by Section 7.2.7; or
10.1.4 Miscellaneous
Amend Sections 4.2 [Pro Rata Treatment of Banks], 9.6
[Exculpatory Provisions] or 9.13 [Equalization of Banks] or this Section 10.1,
alter any provision regarding the
-87-
pro rata treatment of the Banks, change the definition of Required Banks, or
change any requirement providing for the Banks or the Required Banks to
authorize the taking of any action hereunder.
No agreement, waiver or consent which would modify the interests,
rights or obligations of the Agent in its capacity as Agent, or its capacity as
the issuer of Letters of Credit shall be effective without the written consent
of the Agent.
10.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof, nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
10.3 Reimbursement and Indemnification of Banks by the Borrower;
Taxes.
The Borrower agrees unconditionally upon demand to pay or reimburse to
each Bank and to save each Bank harmless against (i) liability for the payment
of all reasonable out-of-pocket costs, expenses and disbursements (including
fees and expenses of counsel for each Bank except with respect to (A), (B) and
(C) below), incurred by such Bank (a) in connection with the administration and
interpretation of this Agreement, the other Loan Documents, and the other
instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to provisions hereof, (c) in connection
with the enforcement of this Agreement or any other Loan Document, or collection
of amounts due hereunder or thereunder or the proof and allowability of any
claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any workout,
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings; (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted by or
asserted against such Bank as a result of the use of the proceeds of the Loans,
including without limitation, as a result of a Change of Control; and (iii) all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or
-88-
asserted against such Bank, in its capacity as such, in any way relating to or
arising out of this Agreement or any other Loan Documents or any action taken or
omitted by such Bank hereunder or thereunder, provided that the Borrower shall
not be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (A) if
the same results from such Bank's gross negligence or willful misconduct, or (B)
if the Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the Borrower
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or (C) if the same results from a compromise or
settlement agreement entered into without the consent of the Borrower, which
shall not be unreasonably withheld. The Banks will attempt to minimize the fees
and expenses of legal counsel for the Banks which are subject to reimbursement
by the Borrower hereunder by considering the usage of one law firm to represent
the Banks and the Agent if appropriate under the circumstances. The Borrower
agrees unconditionally to pay all stamp, document, transfer, recording or filing
taxes or fees and similar impositions now or hereafter determined by the Agent
or any Bank to be payable in connection with this Agreement or any other Loan
Document, and the Borrower agrees unconditionally to save the Agent and the
Banks harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
10.4 Holidays.
Whenever any payment or action to be made or taken hereunder shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day (except as provided in
Section 3.2.1 with respect to Interest Periods under the Euro-Rate Option), and
such extension of time shall be included in computing interest or fees, if any,
in connection with such payment or action.
10.5 Funding by Branch, Subsidiary or Affiliate.
10.5.1 Notional Funding.
Each Bank shall have the right from time to time, without notice
to the Borrower, to deem any branch, Subsidiary or Affiliate (which for the
purposes of this Section 10.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect common
control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrower to
such other office), and as a result of such change, the Borrower would not be
under any greater financial obligation pursuant to Section 4.6 than it would
have been in the absence of such change. Notional funding offices may be
selected by each Bank without regard to such Bank's actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or
available to such Bank; and
-89-
10.5.2 Actual Funding.
--------------
Each Bank shall have the right from time to time to make or maintain
any Loan by arranging for a branch, Subsidiary or Affiliate of such Bank to make
or maintain such Loan subject to the last sentence of this Section 10.5.2. If
any Bank causes a branch, Subsidiary or Affiliate to make or maintain any part
of the Loans hereunder, all terms and conditions of this Agreement shall, except
where the context clearly requires otherwise, be applicable to such part of the
Loans to the same extent as if such Loans were made or maintained by such Bank,
but in no event shall any Bank's use of such a branch, Subsidiary or Affiliate
to make or maintain any part of the Loans hereunder cause such Bank or such
branch, Subsidiary or Affiliate to incur any cost or expenses payable by the
Borrower hereunder or require the Borrower to pay any other compensation to any
Bank (including any expenses incurred or payable pursuant to Section 4.6) which
would otherwise not be incurred.
10.5.3 Changes to Other Branches, Subsidiaries or Affiliates.
-----------------------------------------------------
If a Bank claims any additional amounts payable pursuant to Section
4.6 or that it is unable to make Loans to which a Euro-Rate Option applies, it
shall use its reasonable efforts (consistent with legal and regulatory
restrictions) to avoid the need for paying such additional amounts or such
inability, including changing the jurisdiction of its applicable lending office
or moving the Loan to a Subsidiary or Affiliate; provided, however, that the
taking of any such action would not, in the reasonable judgment of such Bank, be
disadvantageous to such Bank.
10.6 Notices.
-------
All notices, requests, demands, directions and other communications (as
used in this Section 10.6, collectively referred to as "notices") given to or
made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on the signature pages hereof or in accordance with
any subsequent unrevoked written direction from any party to the others. All
notices shall, except as otherwise expressly herein provided, be effective (a)
in the case of telex or facsimile, when received, (b) in the case of hand-
delivered notice, when hand-delivered, (c) in the case of telephone, when
telephoned, provided, however, that in order to be effective, telephonic notices
must be confirmed in writing no later than the next day by letter, facsimile or
telex, (d) if given by mail, four (4) days after such communication is deposited
in the mail with first-class postage prepaid, return receipt requested, and (e)
if given by any other means (including by air courier), when delivered;
provided, that notices to the Agent shall not be effective until received. Any
Bank giving any notice to any Loan Party shall simultaneously send a copy
thereof to the Agent, and the Agent shall promptly notify the other Banks of the
receipt by it of any such notice.
-90-
10.7 Severability.
------------
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
10.8 Governing Law.
-------------
Each Letter of Credit and Section 2.9 shall be subject to the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be revised or amended
from time to time, and to the extent not inconsistent therewith, the internal
laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles and the balance of this Agreement shall be deemed to be a contract
under the Laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.
10.9 Prior Understanding.
-------------------
This Agreement and the other documents and instruments executed in
connection herewith supersede all prior understandings and agreements, whether
written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.
10.10 Duration; Survival.
------------------
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Banks, the
making of Loans, issuance of Letters of Credit, or payment in full of the Loans.
All covenants and agreements of the Loan Parties contained in Sections 7.1, 7.2
and 7.3 shall continue in full force and effect from and after the date hereof
so long as the Borrower may borrow or request Letters of Credit hereunder and
until termination of the Commitments, repayment of all Loans and expiration or
termination of all Letters of Credit. All covenants and agreements of the
Borrower contained herein relating to the payment of principal, interest,
premiums, additional compensation or expenses and indemnification, including
those set forth in the Notes, Article 4 and Sections 9.5, 9.7 and 10.3, shall
survive payment in full of the Loans, expiration or termination of the Letters
of Credit and termination of the Commitments.
-91-
10.11 Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the benefit of
the Banks, the Agent, the Loan Parties and their respective successors and
assigns, except that none of the Loan Parties may assign or transfer any of its
rights and Obligations hereunder or any interest herein without consent of all
Banks. Each Bank may, at its own cost, make assignments of all or any part of
its Commitment and Loans and its Ratable Share of Letter of Credit Outstandings
to one or more banks or other entities, subject to the consent of the Borrower
(which consent shall not be required during any period in which an Event of
Default exists), the Issuing Letter of Credit Banks and the Agent with respect
to any assignee, such consents not to be unreasonably withheld, and provided
that assignments may not be made in amounts less than $5,000,000. No Bank shall
grant participations in all or any part of its Commitments and the Loans made by
it and of its Ratable Share of Letter of Credit Outstandings, except that each
Bank may, without the consent of any party hereto, at its own cost, grant
participations in all or any part of its Commitments and the Loans made by it
and of its Ratable Share of Letter of Credit Outstandings to one or more
affiliated banks or entities. In the case of an assignment, upon receipt by the
Agent of the Assignment and Assumption Agreement, the assignee shall have, to
the extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a signatory
Bank hereunder, the Commitments in Section 2.1 shall be adjusted accordingly,
and upon surrender of any Notes subject to such assignment, the Borrower shall
execute and deliver new Notes to the assignee in an amount equal to the amount
of the Commitments assumed by it and new Notes to the assigning Bank in an
amount equal to the Commitments retained by it hereunder. Any assigning Bank
shall pay to the Agent a service fee in the amount of $3,500 for each
assignment, which amount shall not be subject to reimbursement or
indemnification by the Borrower. In the case of a participation, the participant
shall only have the rights specified in Section 8.2.3 (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto and
not to include any voting rights), all of such Bank's obligations under this
Agreement or any other Loan Document shall remain unchanged, and all amounts
payable by any Loan Party hereunder or thereunder shall be determined as if such
Bank had not sold such participation. Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrower and the Agent the form of certificate described in
Section 10.17 relating to federal income tax withholding. Each Bank may furnish
any publicly available information concerning any Loan Party or its Subsidiaries
and any other information concerning any Loan Party or its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants), provided that such assignees
and participants agree to be bound by the provisions of Section 10.12.
Notwithstanding any other language in this Agreement, any Bank may at any time
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank as collateral in accordance with Regulation A and the
applicable Operating Circular of such Federal Reserve Bank.
-92-
10.12 Confidentiality.
----------------
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information the
Borrower specifically designates as confidential), except as provided below, and
to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and the
Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement and who are notified that the information is to be treated as
confidential, (ii) to assignees and participants as contemplated by Section
10.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower if not prohibited, as otherwise required by applicable
Law or by any subpoena or similar legal process, or in connection with any
investigation or proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a result of a
breach of this Agreement or becomes available from a source not known to be
subject to confidentiality restrictions, (v) if the Borrower shall have
consented to such disclosure, or (vi) after notice to the Borrower unless the
Borrower is an adverse party in such litigation, in connection with any
litigation to which any Bank is a party the subject matter of which involves
this Agreement or is deemed necessary upon the advice of legal counsel of such
Bank by such Bank in any defense of such litigation.
10.13 Counterparts.
-------------
This Agreement may be executed by different parties hereto on any
number of separate counterparts, including facsimiles, each of which, when so
executed and delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
10.14 Agent's or Bank's Consent.
--------------------------
Whenever the Agent's or any Bank's consent is required to be obtained
under this Agreement or any of the other Loan Documents as a condition to any
action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole discretion and to
condition its consent upon the giving of additional collateral, the payment of
money or any other matter.
10.15 Exceptions.
-----------
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
-93-
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
---------------------------------------
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 10.6 AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES
ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR INCONVENIENT FORUM. EACH LOAN PARTY, THE AGENT AND THE
BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT
OR THE COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
10.17 Tax Withholding Clause.
-----------------------
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrower hereunder for the account of such
Bank; (B) each assignee or participant shall deliver such form or certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Agent in its sole discretion shall permit such
assignee or participant to deliver such form or certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower and the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it,
-94-
and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrower or the Agent, either certifying that such
Bank, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced rate
is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
10.18 Joinder of Subsidiaries.
------------------------
Any Subsidiary of the Borrower which is required to join the Master
Guaranty Agreement pursuant to Section 7.2.9 shall execute and deliver to the
Agent a signature page to the Master Guaranty Agreement and to the Master
Intercompany Subordination Agreement. The Loan Parties shall deliver such
Guarantor Joinder and the other documents required by this Section 10.18 to the
Agent within five (5) Business Days after the date of the filing of such
Subsidiary's articles of incorporation if the Subsidiary is a corporation, the
date of the filing of its certificate of limited partnership if it is a limited
partnership or the date of its organization if it is an entity other than a
limited partnership or corporation or, if acquired, the date of acquisition. In
addition, each such Subsidiary shall execute and deliver to the Agent, for the
benefit of the Banks, such Security Agreements, Pledge Agreements, Mortgages and
Patent, Trademark and Copyright Security Agreements, together with such other
documents requested to create a Prior Security Interest in the assets of such
Subsidiary (other than Property) and a perfected Lien on the Property of such
Subsidiary. Each Person owning equity interests of a Domestic Subsidiary shall
have duly executed Pledge Agreements and taken all action necessary to create a
Prior Security Interest in and Lien upon all equity interests of such Domestic
Subsidiary, in each case in favor of the Agent for the benefit of the Banks. The
Borrower and each Domestic Subsidiary which directly owns equity interests in a
Foreign Subsidiary shall have duly executed a Pledge Agreement and taken all
action necessary to create a Prior Security Interest and Lien upon 65 percent of
the equity interests of such Foreign Subsidiary, in each case in favor of the
Agent for the benefit of the Banks. The Agent shall have received, for its
benefit and the benefit of the Banks opinions of the Loan Parties legal counsel
in form and substance satisfactory to the Agent together with such other
documents, certificates and agreements as the Agent may request to effectuate
the provisions of this Section 10.18.
-95-
[SIGNATURE PAGE 1 OF 2 TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
BORROWER:
ATTEST: CUNO INCORPORATED.
By: /s/ Ronald C. Drabik
--------------------------
Title: CFO
----------------------
[Seal]
Address for Notices:
400 Research Parkway
Meriden CT 06450
Telecopier No. (203) 238-8912
Attention: Ronald C. Drabik
Telephone No. (203) 237-5541
[SIGNATURE PAGE 2 OF 2 TO CREDIT AGREEMENT]
MELLON BANK, N.A., Individually as a
Bank and as Agent
By: /s/ Charles ????
-------------------------------
Title: First Vice President
----------------------------
Address for Notices:
Legal Documents:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258-001
Telecopier No. (412) 236-1914
Attention: Mark F. Johnston
Telephone No. (412) 234-7366
Administrative Notices:
Mellon Bank, N.A.
Loan Administration
Three Mellon Bank Center
Pittsburgh, PA 15259
Telecopier No. (412) 236-2027
Mellon's Wiring Instructions:
MELLON BANK
PITTSBURGH, PA
ABA #043000261
ATTN: LOAN ADMINISTRATION
CREDIT ACCOUNT #___________
REF: CUNO Incorporated