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Execution Form EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of January 30, 1998
by and among
SPECIALTY TRANSPORTATION SERVICES, INC.,
as Borrower,
THE LENDERS PARTIES HERETO FROM TIME TO TIME,
and
MELLON BANK, N.A.,
as Agent
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TABLE OF CONTENTS
SECTION TITLE PAGE
ARTICLE I DEFINITIONS; CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.01 Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.02 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.03 Making of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.04 Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.05 Conversion or Renewal of Interest Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.06 Prepayments Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.07 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.08 Mandatory Prepayments and Mandatory Reductions of Committed Amounts . . . . . . . . . . . . 8
2.09 Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.10 Pro Rata Treatment; Payments Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.11 Additional Compensation in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . 11
2.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.13 Change of Applicable Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.14 Borrowing Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.01 Letter of Credit Subfacility
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.02 Corporate Power and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.03 Execution and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.04 Governmental Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.05 Absence of Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.06 Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.07 Interim Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.08 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.09 Absence of Material Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.10 Accurate and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.11 Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.12 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.13 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.15 Partnerships, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.16 Ownership and Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.17 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.18 Regulatory Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.19 Absence of Other Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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4.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.21 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.22 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.23 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.24 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.25 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.26 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.27 Contract Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.28 Acquisition Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.29 Subordinated Debt Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.01 Conditions to Extensions of Credit on the Closing Date . . . . . . . . . . . . . . . . . . . . 29
5.02 Conditions to Extensions of Credit after the Closing Date . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VI AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.01 Basic Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.02 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.03 Payment of Taxes and Other Potential Charges and Priority Claims . . . . . . . . . . . . . . . . 38
6.04 Preservation of Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.05 Governmental Approvals and Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.06 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.07 Avoidance of Other Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.08 Financial Accounting Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.09 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.10 Continuation of or Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.11 Consolidated Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.12 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.13 Plan and Multiemployer Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.14 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15 Appraisal of Qualified Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.16 Post-Closing Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.01 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.02 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.03 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.04 Guaranties, Indemnities, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.05 Loans, Advances and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.06 Dividends and Related Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.07 Sale-Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.08 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.09 Mergers, Acquisitions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.10 Dispositions of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.12 Dealings with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.13 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.14 Issuance of Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.15 Limitations on Modification of Certain Agreements and Instruments . . . . . . . . . . . . . . . . 45
7.16 Limitation on Payments and Modification of Restricted Indebtedness . . . . . . . . . . . . . . . . 45
7.17 Limitation on Other Restrictions on Liens, Transfers or Other Dispositions . . . . . . . . . . . 45
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7.18 Limitation on Other Restrictions on Amendment of the Loan Documents, etc. . . . . . . . . . . . 46
ARTICLE VIII DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.02 Consequences of an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.03 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.02 General Nature of Agent's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.03 Exercise of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.04 General Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.05 Administration by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
9.06 Lender Not Relying on Agent or Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . 52
9.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.08 Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.09 Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
9.10 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.11 Additional Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.12 Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.13 Funding by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.14 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE X MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.01 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.02 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.03 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
10.04 No Implied Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.06 Expenses; Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.07 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.08 Prior Understandings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.09 Duration; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.11 Limitation on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.12 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.13 Sharing of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.14 Successors and Assigns; Participations; Assignments . . . . . . . . . . . . . . . . . . . . 58
10.15 Governing Law; Submission to Jurisdiction: Waiver of Jury Trial; Limitation of Liability . . . 60
ANNEXES
Annex A Definitions
Annex B Pricing Grid
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Term Loan Note
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Exhibit C Form of Borrowing Base Certificate
Exhibit D Form of Security Agreement
Exhibit E-1 Forms of Fee Deed of Trust
Exhibit E-2 Forms of Fee Mortgage
Exhibit F-1 Forms of Leasehold Deed of Trust
Exhibit F-2 Forms of Leasehold Mortgage
Exhibit G Form of Compliance Certificate
Exhibit H Form of Transfer Supplement
SCHEDULES
Schedule 4.01 Corporate Status
Schedule 4.04 Governmental Approvals
Schedule 4.05 Absence of Conflicts
Schedule 4.08 Undisclosed Liabilities
Schedule 4.17 Litigation
Schedule 4.19 Absence of Other Conflicts
Schedule 4.20 Insurance
Schedule 4.24 Employee Benefits
Schedule 4.25 Environmental Matters
Schedule 4.26 Labor Matters
Schedule 4.27 Contract Matters
Schedule 5.01(b) Security Documents
Schedule 6.09 Use of Proceeds
Schedule 6.16 Post-Closing Matters
Schedule 7.02 Liens
Schedule 7.04 Guaranty Equivalents
Schedule 7.05 Loans, Advances and Investments
Schedule 7.08 Leases
Schedule 7.12 Affiliate Transactions
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CREDIT AGREEMENT
THIS AGREEMENT, dated as of January 30, 1998, by and among
SPECIALTY TRANSPORTATION SERVICES, INC., an Illinois corporation (the
"Borrower"), the lenders parties hereto from time to time (the "Lenders") and
MELLON BANK, N.A., a national banking association, as agent for the Lenders
hereunder (in such capacity, together with its successors in such capacity, the
"Agent").
RECITALS:
WHEREAS, the Borrower has requested the Agent and the Lenders
to enter into this Agreement and extend credit as provided for herein;
WHEREAS, the Lenders have agreed to enter into this Agreement
and extend credit to the Borrower on the terms and conditions set forth herein;
and
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. CERTAIN DEFINITIONS. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the words and terms
defined in Annex A shall have the meanings given them in Annex A, unless the
context hereof otherwise clearly requires.
1.02. CONSTRUCTION. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole; "or" has the inclusive meaning
represented by the phrase "and/or"; and "property" includes all properties and
assets of any kind or nature, tangible or intangible, real, personal or mixed.
References in this Agreement to "determination" (and similar terms) by the
Agent or by any Lender include good faith estimates by the Agent or by any
Lender (in the case of quantitative determinations) and good faith beliefs by
the Agent or by any Lender (in the case of qualitative determinations). The
words "hereof," "herein," "hereunder" and similar terms in this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References herein to "out-of-pocket expenses" of a Person (and
similar terms) include, but are not limited to, the fees of in-house counsel
and other in-house professionals of such Person to the extent that such fees
are routinely identified and specifically charged under such Person's normal
cost accounting system. The section and other headings contained in this
Agreement and the Table of Contents preceding this Agreement are for reference
purposes only and shall not control or affect the construction of this
Agreement or the interpretation thereof in any respect. Section, subsection
and exhibit references are to this Agreement unless otherwise specified.
1.03. ACCOUNTING PRINCIPLES.
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles as such principles shall be in effect at the Relevant
Date, consistently applied from and after the Closing Date, subject to the
provisions of this Section 1.03. As used herein, "Relevant Date" shall mean
the date a relevant computation or determination is to be made or the date of
relevant financial statements, as the case may be. The Borrower will promptly
notify the Agent of any proposed change in GAAP which, if enacted, could result
in a material change (whether positive or negative) in the Borrower financial
statements.
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(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be 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.
(c) If any proposed change in GAAP after the date of this
Agreement would be required to be applied to transactions then or thereafter in
existence, and a violation of one or more provisions of Section 7.01 hereof
would, in the opinion of the Borrower, likely occur upon the enactment of such
proposed change which would not occur if no change in accounting principles
were to take place,
(i) The parties agree in such event to negotiate in
good faith an amendment of this Agreement which shall approximate to
the extent possible the economic effect of the original provisions of
Section 7.01 after taking into account such change in GAAP; and
(ii) If the parties are unable to negotiate such an
amendment within 60 days, the Borrower shall have the option of (A)
prepaying the Loan (pursuant to applicable provisions hereof) or (B)
submitting the drafting of such an amendment to a firm of independent
certified public accountants of nationally recognized standing
acceptable to the parties, which shall complete its draft of such
amendment within 60 days of submission; if the Borrower and the
Required Lenders cannot agree, the firm shall be selected by binding
arbitration in the City of Pittsburgh, Pennsylvania in accordance with
the rules then obtaining of the American Arbitration Association. If
the Borrower does not exercise either such option within said period,
then as used in this Agreement, "GAAP" shall continue to have the
meaning set forth in subsection (a) of this Section.
(d) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter in
existence, and the Agent shall assert that the effect of such change is or
shall likely be to distort materially the effect of any of the definitions of
financial terms in Annex A hereto or any of the covenants of the Borrower in
Section 7.01 hereof (the "Financial Provisions"), so that the intended economic
effect of any of the Financial Provisions will not in fact be accomplished,
(i) The Agent shall notify the Borrower of such
assertion, specifying the change in GAAP which is objected to, and
until otherwise determined as provided below, the specified change in
GAAP shall not be made by the Borrower in its financial statements for
the purpose of applying the Financial Provisions; and
(ii) The parties shall follow the procedures set
forth in paragraph (i) and the first sentence of paragraph (ii) of
subsection (c) of this Section. If the parties are unable to agree on
an amendment as provided in said paragraph (ii) and if the Borrower
does not exercise either option set forth in the first sentence of
said paragraph (iii) within the specified period, then as used in this
Agreement "GAAP" shall continue to have the meaning set forth in
subsection (a) of this Section, except that the specified change in
GAAP which is objected to by the Agent shall not be made in applying
the Financial Provisions. The parties agree that if the Borrower
elects the option in clause (B) of the first sentence of said
paragraph (iii), until such independent firm has been selected and
completes drafting such amendment, the specified change in GAAP shall
not be made in applying the Financial Provisions.
(e) All expenses of compliance with this Section 1.03 shall
be paid for by the Borrower.
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ARTICLE II
THE LOANS
2.01. REVOLVING CREDIT LOANS.
(a) REVOLVING CREDIT COMMITMENTS. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender, severally and not jointly, agrees (such agreement being
herein called such Lender's "Revolving Credit Commitment") to make loans (the
"Revolving Credit Loans") to the Borrower at any time or from time to time on
or after the date hereof and to but not including the Revolving Credit Maturity
Date. A Lender shall have no obligation to make any Revolving Credit Loan to
the extent that such Lender's Revolving Credit Exposure at any time would
exceed such Lender's Revolving Credit Committed Amount at such time. Each
Lender's "Revolving Credit Committed Amount" at any time shall be equal to the
amount set forth as its "Initial Revolving Credit Committed Amount" below its
name on the signature pages hereof (which amount is $5,000,000 for Mellon Bank,
N.A.), as such amount may have been reduced under Section 2.01 at such time,
and subject to transfer to another Lender as provided in Section 10.14. The
sum of the Credit Facility Exposures of the Lenders shall not at any time
exceed the Borrowing Base at such time.
(b) NATURE OF CREDIT. Within the limits of time and amount
set forth in this Section 2.01, and subject to the provisions of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Credit Loans
hereunder.
(c) REVOLVING CREDIT NOTES. The obligation of the Borrower
to repay the unpaid principal amount of the Revolving Credit Loans made to it
by each Lender and to pay interest thereon shall be evidenced in part by
promissory notes of the Borrower, one to each Lender, dated the Closing Date
(the "Revolving Credit Notes") in substantially the form attached hereto as
Exhibit A, with the blanks appropriately filled, payable to the order of such
Lender in a face amount equal to such Lender's Initial Revolving Credit
Committed Amount.
(d) MATURITY. To the extent not due and payable earlier, the
Revolving Credit Loans shall be due and payable on the Revolving Credit
Maturity Date.
(e) REVOLVING CREDIT COMMITMENT FEE. The Borrower shall pay
to the Agent for the account of each Lender a commitment fee (the "Revolving
Credit Commitment Fee"), for each day from and including the date hereof to but
not including the Revolving Credit Maturity Date, equal to the Revolving Credit
Commitment Fee Percentage times an amount (not less than zero) equal to (i)
such Lender's Revolving Credit Committed Amount on such day, minus (ii) such
Lender's Revolving Credit Exposure on such day. The "Revolving Credit
Commitment Fee Percentage" for any day shall mean the applicable rate per annum
(based on a year of 360 days and actual days elapsed) set forth in the Pricing
Grid opposite the Level in effect for such day. Such Revolving Credit
Commitment Fee shall be due and payable for the preceding period for which such
fee has not been paid: (x) on each Quarterly Payment Date, (y) on the date of
each reduction of the Revolving Credit Committed Amounts (whether optional or
mandatory) on the amount so reduced and (z) on the Revolving Credit Maturity
Date.
(f) REDUCTION OF THE REVOLVING CREDIT COMMITTED AMOUNTS. The
Borrower may at any time or from time to time reduce Pro Rata the Revolving
Credit Committed Amounts of the Lenders to an aggregate amount (which may be
zero) not less than the sum of the Revolving Credit Exposures of the Lenders
plus the Revolving Credit Exposures of the Lender not yet outstanding as to
which notice has been given by the Borrower under Sections 2.03 and 3.01. Any
reduction of the Revolving Credit Committed Amounts shall be in an aggregate
amount which is an integral multiple of $500,000 not less than $500,000.
Reduction of the Revolving Credit Committed Amounts shall be made by providing
not less than three Business Days' notice (which notice shall be irrevocable)
to such effect to the Agent. After the date specified in such notice the
Revolving Credit Commitment Fee shall be calculated upon the Revolving Credit
Committed Amounts as so reduced.
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2.02. TERM LOAN.
(a) TERM LOAN COMMITMENTS. Subject to the terms and
conditions and relying upon the representations and warranties herein set
forth, each Lender, severally and not jointly, agrees (such agreement being
herein called such Lender's "Term Loan Commitment") to make a loan (a "Term
Loan") to the Borrower on the Closing Date in such principal amount as may be
requested by the Borrower but not exceeding such Lender's Term Loan Committed
Amount. Each Lender's "Term Loan Committed Amount" at any time shall be equal
to the amount set forth as its "Term Loan Committed Amount" below its name on
the signature pages hereof (which amount is $18,000,000 for Mellon Bank, N.A.),
subject to transfer to another Lender as provided in Section 10.14.
(b) NATURE OF CREDIT. The Borrower may not reborrow amounts
repaid with respect to Term Loans.
(c) TERM LOAN NOTE. The obligation of the Borrower to repay
the unpaid principal amount of the Term Loans made to it by each Lender and to
pay interest thereon shall be evidenced in part by promissory notes of the
Borrower, one to each Lender, dated the Closing Date (the "Term Loan Notes") in
substantially the form attached hereto as Exhibit B, with the blanks
appropriately filled, payable to the order of such Lender in a face amount
equal to the principal amount of such Lender's Term Loan.
(d) SCHEDULED AMORTIZATION; MATURITY. The Term Loans shall
be due and payable on the dates and in the aggregate principal amounts set
forth below:
DATE AGGREGATE PRINCIPAL AMOUNT
September 30, 1998 $643,000
December 31, 1998 $643,000
Each Quarterly Payment Date in the
years 1999 through 2002 (inclusive of the
Term Loan Maturity Date) $643,000
Term Loan Maturity Date $6,426,000
To the extent not due and payable earlier, the Term Loans shall be due and
payable on the Term Loan Maturity Date.
2.03. MAKING OF LOANS. Whenever the Borrower desires that
the Lenders make Loans, the Borrower shall provide Standard Notice to the Agent
setting forth the following information:
(a) The date, which shall be a Business Day, on which such
proposed Loans are to be made;
(b) The aggregate principal amount of such proposed Loans,
which shall be the sum of the principal amounts selected pursuant to
clause (c) of this Section 2.03, and which, in the case of proposed
Revolving Credit Loans, shall be an integral multiple of $500,000 not
less than $500,000; provided, that such requirement with respect to an
integral multiple shall not apply to Revolving Credit Loans made
pursuant to Section 3.01(d)(i);
(c) The interest rate Option or Options selected in
accordance with Section 2.04(a) and the principal amounts selected in
accordance with Section 2.04(d) of the Base Rate Portion and each
Funding Segment of the Euro-Rate Portion, as the case may be, of such
proposed Loans; and
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(d) With respect to each such Funding Segment of such
proposed Loans, the Funding Period to apply to such Funding Segment,
selected in accordance with Section 2.04(c).
Standard Notice having been so provided, the Agent shall
promptly notify each Lender of the information contained therein and of the
amount of such Lender's Loan. Unless any applicable condition specified in
Article V has not been satisfied, on the date specified in such Standard Notice
each Lender shall make the proceeds of its Loan available to the Agent at the
Agent's Office, no later than 11:00 a.m., Pittsburgh time, in funds immediately
available at such Office. The Agent will make the funds so received available
to the Borrower in funds immediately available at the Agent's Office.
2.04. INTEREST RATES.
(a) OPTIONAL BASES OF BORROWING. The unpaid principal amount
of the Loans shall bear interest for each day until due on one or more bases
selected by the Borrower from among the interest rate Options set forth below.
Subject to the provisions of this Agreement the Borrower may select different
Options to apply simultaneously to different Portions of the Loans and may
select different Funding Segments to apply simultaneously to different parts of
the Euro-Rate Portion of the Loans. Each selection of an interest rate Option
shall apply separately and without overlap to the Revolving Credit Loans, as a
class, and the Term Loans, as a class. The aggregate number of Funding
Segments applicable to the Euro-Rate Portion of the Loans at any time shall not
exceed six.
(i) BASE RATE OPTION: A rate per annum (computed on the
basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed) for each day equal to the Base Rate for such day plus
the Applicable Margin for such day.
(ii) EURO-RATE OPTION: A rate per annum (based on a year of
360 days and actual days elapsed) for each day equal to the Euro-Rate
for such day plus the Applicable Margin for such day.
(b) APPLICABLE MARGINS. The "Applicable Margin" for each
interest rate Option for each day shall mean the applicable percentage set
forth in the Pricing Grid opposite the Level in effect for such day.
(c) FUNDING PERIODS. At any time when the Borrower shall select,
convert to or renew the Euro-Rate Option to apply to any part of the Revolving
Credit Loans or the Term Loans, the Borrower shall specify one or more Funding
Periods during which such Option shall apply, such Funding Periods being either
one, two, three or six months ("Euro- Rate Funding Period"); provided, that:
(i) Each Euro-Rate Funding Period shall begin on a London
Business Day, and the term "month," when used in connection with a
Euro-Rate Funding Period, shall be construed in accordance with
prevailing practices in the interbank eurodollar market at the
commencement of such Euro-Rate Funding Period, as determined by the
Agent (which determination shall be conclusive absent manifest error);
(ii) The Borrower may not select a Euro-Rate Funding Period
that would, (A) in the case of the Revolving Credit Loans, end after
the Revolving Credit Maturity Date, or (B) in the case of the Term
Loans, end after the Term Loan Maturity Date; and
(iii) The Borrower shall, in selecting any Funding Period,
allow for scheduled mandatory prepayments and foreseeable mandatory
prepayments of the Loans.
(d) TRANSACTIONAL AMOUNTS. Each selection of, conversion from,
conversion to or renewal of an interest rate Option in respect of any Loan, and
each payment or prepayment of any Loan,
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shall be in a principal amount such that after giving effect thereto the
aggregate principal amount of the Base Rate Portion of the Revolving Credit
Loans and of the Term Loans, and the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion of the Revolving Credit Loans and of the Term
Loans, respectively, shall be:
(i) for the Base Rate Portion, any aggregate principal amount; and
(ii) for each Funding Segment of the Euro-Rate Portion, $500,000 or
an integral multiple thereof.
(e) EURO-RATE UNASCERTAINABLE; IMPRACTICABILITY. If
(i) on any date on which a Euro-Rate would otherwise be set
the Agent shall have determined in good faith with respect to its
borrowers generally (which determination shall be conclusive absent
manifest error) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the interbank eurodollar market; or
(C) the effective cost of funding a proposed Funding
Segment of the Euro-Rate Portion from a Corresponding Source
of Funds shall exceed the Euro-Rate applicable to such Funding
Segment, or
(ii) at any time any Lender shall have determined in good
faith , with respect to its borrowers generally, (which determination
shall be conclusive absent manifest error) that the making,
maintenance or funding of any part of the Euro-Rate Portion has been
made impracticable or unlawful by compliance by such Lender or its
Euro-Rate Lending Office in good faith with any Law or guideline or
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof or with any
request or directive of any such Governmental Authority (whether or
not having the force of law);
then, and in any such event, the Agent or such Lender, as the case may be, may
notify the Borrower of such determination (and any Lender giving such notice
shall notify the Agent). 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 each of the Lenders to allow the Borrower to select, convert to or renew the
Euro-Rate Option shall be suspended until the Agent or such Lender, as the case
may be, shall have later notified the Borrower (and any Lender giving such
notice shall notify the Agent) of the Agent's or such Lender's determination
(which determination shall be conclusive absent manifest error) that the
circumstance giving rise to such previous determination no longer exists. If
any Lender notifies the Borrower of a determination under clause (ii) of this
Section 2.04(e), the Euro-Rate Portions of the Loans of such Lender (the
"Affected Lender") shall automatically be converted to the Base Rate Option as
of the date specified in such notice (and accrued interest thereon shall be due
and payable on such date). If at the time the Agent or a Lender makes a
determination under clause (i) or (ii) of this Section 2.04(e) the Borrower
previously has notified the Agent that it wishes to select, convert to or renew
the Euro-Rate Option with respect to any proposed Loans but such Loans have not
yet been made, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option instead of the Euro-Rate
Option with respect to such Loans or, in the case of a determination by a
Lender, such Loans of such Lender.
2.05. CONVERSION OR RENEWAL OF INTEREST RATE OPTIONS.
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(a) CONVERSION OR RENEWAL. Subject to the provisions of
Section 2.11(b), and if no Event of Default or Potential Default shall have
occurred and be continuing or shall exist, the Borrower may convert any part of
its Loans from any interest rate Option or Options to one or more different
interest rate Options and may renew the Euro- Rate Option as to any Funding
Segment of the Euro-Rate Portion:
(i) At any time with respect to conversion from the Base
Rate Option; or
(ii) At the expiration of any Funding Period with respect to
conversions from or renewals of the Euro- Rate Option as to the
Funding Segment corresponding to such expiring Funding Period.
If an Event of Default or Potential Default has occurred and is continuing at
the expiration of a Funding Period, conversions from the Euro-Rate Option to
the Base Rate Option shall be automatic as to the Funding Segment corresponding
to such expiring Funding Period. Whenever the Borrower desires to convert or
renew any interest rate Option or Options, the Borrower shall provide to the
Agent Standard Notice setting forth the following information:
(v) Whether such conversion or renewal is to apply to
Revolving Credit Loans or Term Loans;
(w) The date, which shall be a Business Day, on which the
proposed conversion or renewal is to be made;
(x) The principal amounts selected in accordance with Section
2.04(d) of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed;
(y) The interest rate Option or Options selected in
accordance with Section 2.04(a) and the principal amounts selected in
accordance with Section 2.04(d) of the Base Rate Portion and each
Funding Segment of the Euro-Rate Portion to be converted to; and
(z) With respect to each Funding Segment to be converted to
or renewed, the Funding Period selected in accordance with Section
2.04(c) to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Loans as so converted or renewed. Interest on the principal amount of any part
of the Loans converted or renewed (automatically or otherwise) shall be due and
payable on the conversion or renewal date.
(b) FAILURE TO CONVERT OR RENEW. Absent due notice from the
Borrower of conversion or renewal in the circumstances described in Section
2.05(a)(ii), any part of the Euro-Rate Portion for which such notice is not
received shall be converted automatically to the Base Rate Option on the last
day of the expiring Funding Period.
2.06. PREPAYMENTS GENERALLY. Whenever the Borrower desires
or is required to prepay any part of its Loans, it shall provide Standard
Notice to the Agent setting forth the following information:
(a) Whether such prepayment is to be applied to the Revolving
Credit Loans or the Term Loans;
(b) The date, which shall be a Business Day, on which the
proposed prepayment is to be made;
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(c) The total principal amount of such prepayment, which
shall be the sum of the principal amounts selected pursuant to clause
(d) of this Section 2.06; and
(d) The principal amounts selected in accordance with Section
2.04(d) of the Base Rate Portion and each part of each Funding Segment
of the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice the principal amounts of the Base Rate Portion and each part of the
Euro-Rate Portion specified in such notice, together with interest on each such
principal amount to such date, shall be due and payable; provided, that the
Borrower may revoke such Standard Notice in the case of an optional prepayment.
Mandatory prepayments of the Term Loans shall be applied to reduce scheduled
payments of the Term Loans set forth in Section 2.02(d) in the inverse order of
their scheduled maturity. Optional prepayments of the Term Loans shall be
applied first to the next scheduled maturity of Term Loans as set forth in
Section 2.02(d) (so long as such scheduled maturity is with 90 days of such
optional prepayment) and then to reduce scheduled payments of the Term Loans
set forth in Section 2.02(d) in the inverse order of their scheduled maturity.
For avoidance of doubt, scheduled amortization payment of the Term Loans are
not "prepayments" as that term is used in this Section.
2.07. OPTIONAL PREPAYMENTS. The Borrower shall have the
right at its option from time to time to prepay its Loans in whole or part
without premium or penalty (subject, however, to Section 2.11(b)):
(a) At any time with respect to any part of the Base Rate
Portion; or
(b) At the expiration of any Funding Period with respect to
prepayment of the Euro-Rate Portion with respect to any part of the
Funding Segment corresponding to such expiring Funding Period.
Any such prepayment shall be made in accordance with Section 2.06.
2.08. MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF THE COMMITTED
AMOUNTS.
(a) REVOLVING CREDIT COMMITTED AMOUNTS. If on any date the
aggregate Revolving Credit Exposures of the Lenders exceeds the aggregate
Revolving Credit Committed Amounts, the Borrower shall prepay (and, to the
extent required by Section 3.01(g), provide cash collateral with respect to)
the Revolving Credit Exposures in an aggregate principal amount not less than
the amount of such excess. Such amount shall be applied first to the principal
amount of outstanding Letter of Credit Unreimbursed Draws, then to the
principal amount of outstanding Revolving Credit Loans, and the balance shall
be deposited into the Letter of Credit Collateral Account. Any such
prepayments of (and cash collateralization with respect to) the Revolving
Credit Exposures shall be immediately due and payable on such day, without
presentment, demand, protest or notice of any kind. Subject to the foregoing
provision on priority of application, such prepayments shall be allocated among
the Portions of the Revolving Credit Loans and among Funding Segments of the
Euro-Rate Portion of the Revolving Credit Loans, as the Borrower may designate
or, absent such designation, as determined by the Agent.
(b) BORROWING BASE. If on any date any Borrowing Base Certificate
is required to be furnished pursuant to Section 2.14(e), the aggregate Credit
Facility Exposures of the Lenders exceeds the Borrowing Base , the Borrower
shall prepay (and, to the extent required by Section 3.01(g), provide cash
collateral with respect to) the Credit Facility Exposures in an aggregate
principal amount not less than the amount of such excess. Such amount shall be
applied first to the unpaid principal amount of outstanding Letter of Credit
Unreimbursed Draws, then to the unpaid principal amount of outstanding
Revolving Credit Loans, then to the unpaid principal amount of outstanding Term
Loans, and the balance shall be deposited into the Letter of Credit Collateral
Account. Any such prepayments of the
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Term Loans shall be made in accordance with Section 2.06. Any such prepayments
of (and cash collateralization with respect to) the Revolving Credit Exposures
shall be made in accordance with Section 2.08(a).
(c) REDUCTION EVENTS.
(i) GENERALLY. "Reduction Event" shall mean any of the events
defined as such in Section 2.08(c)(ii), (iii), (iv), (v) or (vi). If a
Reduction Event shall occur, an amount not less than the corresponding
Reduction Event Application Amount shall be applied first, to prepayment of the
unpaid principal amount of outstanding Term Loans, if any, and then the
balance, if any, shall be applied to reduction of the aggregate Revolving
Credit Committed Amounts; provided, that the Borrower shall not be obligated to
make any application pursuant to the foregoing clause in the event that (A)
such Reduction Event is under Section 2.08(c)(vi) (relating to Excess Cash
Flow) and (B) the Total Leverage Ratio is less than 3.0 at the end of the
applicable fiscal quarter. Any such prepayment of the Term Loans shall be made
in accordance with Section 2.06. Any such reduction of the Revolving Credit
Committed Amounts shall be made in accordance with Section 2.01(f), and if such
reduction causes the aggregate Revolving Credit Exposures of the Lenders to
exceed the aggregate Revolving Credit Committed Amounts, the Borrower shall
prepay (and, to the extent required by Section 3.01(g), provide cash collateral
with respect to) such excess in accordance with Section 2.08(a), and to the
extent possible, the Borrower shall make prepayment in accordance with Sections
2.06 and 3.02 not later than the effective date of such reduction so as to
avoid such excess. Such prepayments of the Term Loans and reductions of the
Revolving Credit Committed Amounts shall be made not later than the Reduction
Event Date corresponding to such Reduction Event; provided, that
(A) if the Reduction Event Application Amount in respect of such
Reduction Event is less than $100,000, such prepayment and reduction
shall not be required until the aggregate amount of all Reduction
Event Application Amounts not applied are equal to at least $100,000;
and
(B) if application of this Section 2.08(c) would otherwise
require prepayment of any Funding Segment of any Euro-Rate Portion on
a day other than the last day of the corresponding Funding Period,
then the Borrower shall not be required to make such prepayment until
such last day, unless the Agent otherwise notifies the Borrower upon
the instructions of the Required Lenders; provided, that (x) in no
event may prepayments be deferred pursuant to this clause (B) for
longer than six months, and (y) deferral of prepayments under this
clause (B) shall not apply to Reduction Events described in Section
2.08(c)(vi) (relating to Excess Cash Flow).
The Borrower shall give the Agent at least three Business Days' notice of each
prepayment or reduction required to be made pursuant to this Section 2.08(c),
and of each event which would give rise to such a prepayment or reduction but
for application of the foregoing clauses (A) or (B). For purposes of Section
2.08(c)(vi) (relating to Excess Cash Flow), such notice of prepayment or
reduction shall be accompanied by a certificate signed by a Responsible Officer
of the Borrower setting forth in reasonable detail the calculation of Excess
Cash Flow for such fiscal quarter.
(ii) ASSET SALES. "Reduction Event" shall include the following
(each, a "Reduction Event Asset Sale"): any sale, transfer, lease or other
disposition by the Borrower of any property (including without limitation any
capital stock or other equity interest held by the Borrower), but excluding
sales, transfers, and other dispositions by the Borrower of property pursuant
to Section 7.10, the gross cash proceeds received by the Borrower in respect of
which, in the aggregate, do not exceed $100,000 in any fiscal year; provided;
that any sale, transfer or other disposition of any property shall not be
considered as giving rise to a Reduction Event if the Borrower notifies the
Agent promptly after the receipt of the Net Proceeds thereof that such proceeds
will be used by the Borrower to purchase similar property within three months
after the Reduction Event, but only to the extent such proceeds are actually so
used. The "Reduction Event Application Amount" corresponding to the foregoing
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Reduction Event shall be 100% of the Net Proceeds thereof. The "Reduction
Event Date" corresponding to the foregoing Reduction Event shall be five
Business Days after the Borrower receives the Net Proceeds from such event.
(iii) EXTRAORDINARY INSURANCE PROCEEDS. "Reduction Event" shall
include the following: receipt of (i) insurance proceeds in connection with one
or more related events by the Borrower under any insurance policy covering
losses with respect to tangible real or personal property or improvements, or
(ii) any award or other compensation in connection with one or more related
events of condemnation of property (or transfer or disposition in lieu of
condemnation) of the Borrower; provided, that receipt of such proceeds, award
or other compensation shall not be considered as giving rise to a Reduction
Event if the Borrower notifies the Agent promptly after such receipt thereof
that such proceeds, award or other compensation will be used by the Borrower to
repair or replace the asset so affected within three months after the Reduction
Event if such asset is personal property and within six months after the
Reduction Event if such asset is real property, but only to the extent that
such proceeds, award or other compensation are actually so used. The
"Reduction Event Application Amount" corresponding to the foregoing Reduction
Event shall be 100% of the Net Proceeds thereof. The "Reduction Event Date"
corresponding to the foregoing Reduction Event shall be five Business Days
after the Borrower receives the Net Proceeds from such event.
(iv) EQUITY ISSUANCE. "Reduction Event" shall include the
following: issuance of any equity securities by the Borrower. The "Reduction
Event Application Amount" corresponding to the foregoing Reduction Event shall
be 100% of the Net Proceeds thereof. The "Reduction Event Date" corresponding
to the foregoing Reduction Event shall be five Business Days after the Borrower
receives the Net Proceeds from such event.
(v) DEBT INCURRENCE. "Reduction Event" shall include the
following: incurrence of Indebtedness by the Borrower. The "Reduction Event
Application Amount" corresponding to the foregoing Reduction Event shall be
100% of the Net Proceeds thereof. The "Reduction Event Date" corresponding to
the foregoing Reduction Event shall be five Business Days after the Borrower
receives the Net Proceeds from such event.
(vi) EXCESS CASH FLOW. "Reduction Event" shall include the
following: the Borrower having Excess Cash Flow during any fiscal quarter,
commencing with and including the fiscal quarter ending June 30, 1998. The
"Reduction Event Application Amount" corresponding to the foregoing Reduction
Event shall be 50% of the Excess Cash Flow for such fiscal quarter. The
"Reduction Event Date" corresponding to the foregoing Reduction Event shall be
the earlier of (A) 5 days after the Borrower provides its financial statements
for such fiscal quarter and (B) 35 days after the end of such fiscal quarter.
2.09. INTEREST PAYMENT DATES. Interest on the Base Rate
Portion of any Loans shall be due and payable monthly in arrears on each Base
Rate Payment Date. Interest on each Funding Segment of the Euro-Rate Portion
of any Loans shall be due and payable on each Euro-Rate Payment Date. After
maturity of any part of the Loans (by acceleration or otherwise), interest on
such part of the Loans shall be due and payable on demand.
2.10. PRO RATA TREATMENT; PAYMENTS GENERALLY.
(a) PRO RATA TREATMENT. Each borrowing and conversion and
renewal of interest rate Options hereunder shall be made, and all payments made
in respect of principal, interest and Revolving Credit Commitment Fees due from
the Borrower hereunder or under the Notes shall be applied, Pro Rata from and
to each Lender, except for (i) payments of interest involving an Affected
Lender as provided in Section 2.04(e), and (ii) payments to a Lender subject to
a withholding deduction under Section 2.12(c). The failure of any Lender to
make a Loan shall not relieve any other Lender of its
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obligation to lend hereunder, but neither the Agent nor any Lender shall be
responsible for the failure of any other Lender to make a Loan.
(b) PAYMENTS GENERALLY. All payments and prepayments to be
made by the Borrower in respect of principal, interest, fees, indemnity,
expenses or other amounts due from the Borrower hereunder or under any Loan
Document shall be payable in Dollars at 11:00 a.m., Pittsburgh time, on the day
when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall immediately
accrue, without setoff, counterclaim, withholding or other deduction of any
kind or nature, except for payments to a Lender subject to a withholding
deduction under Section 2.12(c). Except for payments under Sections 2.11 and
10.06, such payments shall be made to the Agent at its Office in Dollars in
funds immediately available at such Office, and payments under Sections 2.11
and 10.06 shall be made to the applicable Lender at such domestic account as it
shall specify to the Borrower from time to time in funds immediately available
at such account. Any payment or prepayment received by the Agent or such
Lender after 11:00 a.m., Pittsburgh time, on any day shall be deemed to have
been received on the next succeeding Business Day. The Agent shall distribute
to the Lenders all such payments received by it from the Borrower as promptly
as practicable after receipt by the Agent.
(c) INTEREST ON OVERDUE AMOUNTS. To the extent permitted by
law, after there shall have become due (by acceleration or otherwise)
principal, interest, fees, indemnity, expenses or any other amounts due from
the Borrower hereunder or under any other Loan Document, such amounts shall
bear interest for each day until paid (before and after judgment), payable on
demand, at a rate per annum which for each day shall be equal to the following:
(i) In the case of any part of the Euro-Rate Portion of any
Loans, (A) until the end of the applicable then-current Funding Period
at a rate per annum (based on a year of 360 days and actual days
elapsed) 2% above the then-current Euro-Rate Option (increasing,
however, the Applicable Margin for such Euro-Rate Option to the
applicable percentage set forth in the Pricing Grid for Level I), and
(B) thereafter, in accordance with the following clause (ii); and
(ii) In the case of any other amount due from the Borrower
hereunder or under any Loan Document, at a rate per annum (based on a
year of 365 or 366 days, as the case may be, and actual days elapsed)
2% above the Base Rate Option (increasing, however, the Applicable
Margin for such Base Rate Option to the applicable percentage set
forth in the Pricing Grid for Level I).
To the extent permitted by law, interest accrued on any amount which has become
due hereunder or under any Loan Document shall compound on a day-by-day basis,
and hence shall be added daily to the overdue amount to which such interest
relates.
2.11. ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.
(a) INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC. If any Law or
guideline or interpretation or application thereof by any Governmental
Authority charged with the interpretation or administration thereof or
compliance with any request or directive of any Governmental Authority (whether
or not having the force of law), adopted on or after the date hereof,
(i) imposes, modifies or deems applicable any reserve,
special deposit, insurance assessment or any other requirement against
credits or commitments to extend credit extended by, assets (funded or
contingent) of, deposits with or for the account of, or other
acquisitions of funds by, any Lender or its Applicable Lending Office
(other than requirements expressly included herein in the
determination of the Euro-Rate hereunder),
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(ii) imposes, modifies or deems applicable any capital
adequacy or similar requirement against assets (funded or contingent)
of, or credits or commitments to extend credit extended by, any Lender
or its Applicable Lending Office, or applicable to the obligations of
any Lender or its Applicable Lending Office under or in connection
with any Loan Document, or
(iii) imposes upon any Lender or its Applicable Lending
Office any other condition or expense with respect to any Loan
Document or its making, maintenance or funding of any Loan, Letter of
Credit or Letter of Credit Participating Interest,
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
Lender or its Applicable Lending Office or, in the case of clause (ii), any
Person controlling a Lender, with respect to any Loan Document or the making,
maintenance or funding of any Loan, Letter of Credit, or Letter of Credit
Participating Interest (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on capital of
such Lender, Applicable Lending Office or controlling Person's capital, taking
into consideration the policies of such Lender, Applicable Lending Office or
controlling Person with respect to capital adequacy) by an amount which such
Lender deems to be material (such Lender being deemed for this purpose to have
made, maintained or funded each Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds), such Lender may from time to time notify the
Borrower of the amount (determined in good faith by such Lender) necessary to
compensate such Lender, Applicable Lending Office or controlling Person for
such increase, reduction or imposition. A certificate of a Lender claiming
compensation under this Section 2.11(a) and setting forth the additional amount
to be paid to it and indicating in reasonable detail the computation thereof
shall be conclusive absent manifest error. In making any such computation such
Lender may take into account any special, supplemental or other nonrecurring
items, may apply any reasonable averaging or attribution methods, and may make
such computation prospectively or retrospectively. Such amount shall be due
and payable by the Borrower to such Lender 10 Business Days after such
certificate is given. The Borrower shall not be liable under this Section
2.11(a) to any Lender to compensate it or any controlling Person of such Lender
for any cost, reduction or imposition incurred or suffered more than 90 days
before receipt by the Borrower of a notice from such Lender referring to the
event that gave rise to such cost, reduction or imposition.
(b) FUNDING BREAKAGE. In the event that for any reason (i)
the Borrower fails to borrow, convert or renew any part of any Loan which
would, after such borrowing, conversion or renewal, have a Euro-Rate Portion
after notice requesting such borrowing, conversion or renewal has been given by
the Borrower (whether such failure results from failure to satisfy applicable
conditions to such borrowing, conversion or renewal or otherwise), or (ii) any
part of any Funding Segment of any Euro-Rate Portion becomes due (by
acceleration or otherwise), or is paid, prepaid or converted to another
interest rate Option (whether or not such payment, prepayment or conversion is
mandatory or automatic and whether or not such payment or prepayment is then
due), on a day other than the last day of the corresponding Funding Period, the
Borrower shall indemnify each Lender on demand (following delivery by such
Lender to the Borrower of the certificate referred to below) against any loss,
liability, cost or expense of any kind or nature which such Lender may sustain
or incur in connection with or as a result of such event. Such indemnification
in any event shall include an amount equal to the excess, if any, of (x) the
aggregate amount of interest which would have accrued on the amount of the
Euro-Rate Portion not so borrowed, converted or renewed, or which so becomes
due, or which is so paid, prepaid or converted, as the case may be, from and
including the date on which such borrowing, conversion or renewal would have
been made pursuant to such notice, or on which such part of such Funding
Segment so becomes due, or on which such part of such Funding Segment is so
paid, prepaid or converted, as the case may be, to the last day of the Funding
Period applicable to such amount (or, in the case of a failure to borrow,
convert or renew, the Funding Period that would have been applicable to such
amount but for such failure), in each case at the applicable rate of interest
for such Euro-Rate Portion provided for herein (excluding, however, the
Applicable Margin included therein, if any), over (y) the aggregate amount of
interest (as determined in good faith by such Lender) which would have accrued
to such
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Lender on such amount for such period by placing such amount on deposit for
such period with leading banks in the interbank market. A certificate of a
Lender claiming compensation under this Section 2.11(b) and setting forth the
additional amount to be paid to it and indicating in reasonable detail the
computation thereof shall be conclusive absent manifest error.
2.12. TAXES.
(a) PAYMENTS NET OF TAXES. All payments made by the
Borrower under this Agreement or any other Loan Document shall be made free and
clear of, and without reduction or withholding for, any and all present or
future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, and all liabilities with respect thereto, excluding (x) in the
case of the Agent and each Lender, income taxes imposed on the Agent or such
Lender by the United States, and income taxes and franchise taxes imposed on
the Lender or such Lender by the jurisdiction under the laws of which the Agent
or such Lender is organized or by any political subdivision thereof, and (y) in
the case of each Lender, net income taxes and franchise taxes imposed on such
Lender by the jurisdiction in which the Lender's Applicable Lending Office is
located or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges or withholdings being hereinafter called
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any Loan Document to the
Agent or any Lender, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including without limitation
deductions applicable to additional sums payable under this Section 2.12) the
Agent or such Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(b) OTHER TAXES. The Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution, delivery of, or
otherwise with respect to , this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) INDEMNITY. The Borrower hereby indemnifies the Agent
and each Lender for the full amount of all Taxes and Other Taxes (including
without limitation any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.12 paid by the Agent or such Lender and
any liability (including without limitation penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Such indemnification shall be made
within 15 days after the date the Agent or such Lender makes demand therefor
(which demand shall identify in reasonable detail the nature and the amount of
Taxes and Other Taxes for which indemnification is being sought).
(d) RECEIPTS, ETC. Within 30 days after the date of any
payment of Taxes or Other Taxes, the Borrower will furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(e) SURVIVAL, ETC. Without prejudice to the survival of
any other obligation of the Borrower under this Agreement or the other Loan
Documents, the obligations of the Borrower contained in this Section 2.12 shall
survive the payment in full of all other obligations of the Borrower under this
Agreement and the other Loan Documents, termination of all commitments to
extend credit under, and all Letters of Credit issued under, the Loan
Documents, termination of this Agreement, and all other events and
circumstances whatsoever. Nothing in this Section 2.12 or otherwise in this
Agreement shall require the Agent or any Lender to disclose to the Borrower any
of its tax returns (or any other information that it deems to be confidential
or proprietary).
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(f) WITHHOLDING TAX EXEMPTION.
(i) PROVISION OF FORMS. Each Lender organized under the
laws of a jurisdiction outside the United States shall, on or prior to the date
it becomes party to this Agreement, and from time to time thereafter if
requested in writing by the Borrower or the Agent, provide the Borrower and the
Agent each with an original Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying such Lender's status for purposes of determining exemption from, or
reduced rate applicable to, United States withholding taxes with respect to
such Lender under this Agreement and the other Loan Documents; provided, that a
Lender shall not be obligated to provide any such form after the date such
Lender becomes party to this Agreement if such Lender is not legally able to do
so.
(ii) INDEMNIFICATION LIMITED IN CERTAIN CIRCUMSTANCES. The
Borrower shall not be required to indemnify any Lender, or to pay any
additional amounts to any Lender, in respect of United States withholding taxes
(or any withholding tax imposed by a state of the United States that applies
only when such United States withholding tax is imposed), pursuant to Section
2.12(a) or 2.12(c), to the extent that (A) the obligation to withhold amount
with respect to United States withholding tax existed on the date such Lender
became a party to this Agreement; provided, that this clause (A) shall not
apply to a Lender that became a Lender as an result of an assignment made or
other action taken at the request of the Borrower, or (B) the obligation to
make such indemnification or to pay such additional amount would not have
arisen but for a failure of such Lender to comply with the provisions of
Section 2.12(f)(i).
2.13. CHANGE OF APPLICABLE LENDING OFFICE. In the event that
a Lender becomes an Affected Lender under Section 2.04(e), or in the event that
a Lender requests compensation from the Borrower pursuant to Section 2.11(a) or
2.12, then, at the request of the Borrower, such Lender will change the
jurisdiction of its Applicable Lending Office if, in the judgment of such
Lender, such change will eliminate or mitigate a similar event which may
thereafter accrue and is not otherwise materially disadvantageous to such
Lender.
2.14. BORROWING BASE.
(a) BORROWING BASE. The "Borrowing Base" at any time shall
mean the sum, at the date of the most recent Borrowing Base Certificate
required to be furnished pursuant to Section 2.14(e), of
(i) 90% of the Net Value of Eligible Receivables, plus
(ii) 80% of the Deemed Value of the New Qualified Collateral;
plus
(iii) 100% of the Orderly Liquidation Value of the Existing
Qualified Collateral; plus
(iv) for the 90 day period following the Closing Date,
$3,500,000.
(b) ELIGIBLE RECEIVABLES. "Eligible Receivable" at any time
shall mean all rights to payments due and to become due to the Borrower which
meet each of the following requirements at such time:
(i) The account is not more than 90 days from the date of the
invoice therefor;
(ii) The account arose from the performance of services by
the Borrower in the ordinary course of the Borrower's business and
such services have been provided to the account debtor and the
Borrower has possession of, or, if reasonably requested by the Agent,
has made
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available to the Agent for review at the Borrower's office, invoices
or other evidence satisfactory to the Agent that such services have
been provided;
(iii) The account is not subject to any prior assignment,
claim, lien, or security interest, and the Borrower will not make any
further assignment of the account or create any further security
interest in the account, nor permit its rights in the account to be
reached by attachment, levy, garnishment or other judicial process;
(iv) The account is not subject to set-off (other than rights
of set-off) accorded account debtors generally in the Code, which
rights have not been exercised or threatened by the account debtor),
credit, allowance or adjustment by the account debtor, except
discounts allowed for prompt payment, and the account debtor has not
complained as to his liability on the account and has not returned, or
retained the right to return, any of the goods from the sale of which
the account arose;
(v) The account arose in the ordinary course of the
Borrower's business and did not arise from the performance of services
to a supplier, an employee or an Affiliate of the Borrower;
(vi) The account is not due from an account debtor from whom
50% or more of the accounts have not been paid within 90 days from the
date of the invoice therefor;
(vii) The account does not constitute a finance charge or
lease receivable;
(viii) The account does not arise out of contracts with the
United States or any department, agency, or instrumentality of the
United States, unless the Borrower has executed any instruments and
taken any steps required by the Agent in order that all monies due and
to become due under such contracts shall be assigned to the Agent and
notice thereof given to the government under the Federal Assignment of
Claims Act or any similar State or local law (in addition, with
respect to any account which arose out of any State or political
subdivision thereof, department, agency, or instrumentality of the
State or political subdivision (a "Local Government Account"), such
Local Government Account shall not constitute a Qualified Account
unless the Borrower shall have executed any instruments and taken any
steps required by Agent in order that all monies due and to become due
under such contracts shall be assigned to the Agent and any required
notice thereof given to the local government under any applicable
State or local law);
(ix) The account does not arise with respect to an account
debtor located in New Jersey or Minnesota (or any other state which
enacts a similar filing requirement) if such Borrower has not filed a
Notice of Business Activities Report with the New Jersey Division of
Taxation or made the requisite filings with the appropriate
authorities in Minnesota (or any other state), for the current year;
(x) No notice of bankruptcy, insolvency or material adverse
change in the business or financial condition of the account debtor
has been received by or is known to the Borrower; and
(xi) The Agent has not notified the Borrower that the Agent
has determined, in its reasonable discretion, the account or account
debtor is unsatisfactory.
The Agent may require, in its reasonable discretion, that certain reserves be
established against certain accounts receivable from time to time or to cover
other contingencies; provided, that the Agent, upon the direction of the
Required Lenders, from time to time may exclude any otherwise Eligible
Receivables from the class of Eligible Receivables based on determinations as
to the creditworthiness of the obligor, as to the aggregate amount of
receivables owing by such obligor and its affiliates at the time
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of determination, or as to such other and further eligibility standards as the
Required Lenders may elect to impose from time to time. The Agent shall give
notice to the Borrower of the terms of any such exclusion. Except as otherwise
expressly stated in such notice, all such exclusions shall be continuing and
cumulative, and an exclusion as to any obligor shall apply in the aggregate to
all receivables of such obligor and its affiliates. The Borrower shall, not
later than one Business Day after the Agent effects any such exclusion, deliver
to the Agent a revised Borrowing Base Certificate reflecting the Borrowing Base
as redetermined in accordance with such exclusion. The making of a Revolving
Credit Loan in reliance on a Borrowing Base Certificate shall not affect the
Lenders' right later to exclude any receivables in accordance with this Section
2.14(b). No Eligible Receivable excluded under this Section 2.14(b) shall be
included by the Borrower in any later Borrowing Base Certificate without
written permission by the Agent.
The "Net Value" of an Eligible Receivable shall be its face amount, net of any
discount for prompt payment, net of any other amount representing payment of
finance charges, late charges, or interest (however denominated), and net of
any portion thereof which constitutes payment of sales, use or other taxes.
(c) NEW QUALIFIED COLLATERAL. "New Qualified Collateral" at
any time shall mean the Qualified Collateral of the Borrower that has not been
appraised, and has not been included in the most recent appraisal report
delivered by the Borrower to the Agent, pursuant to Section 6.15 at such time.
The "Deemed Value" of any New Qualified Collateral shall mean the lesser of (a)
the purchase price paid by the Borrower for such New Qualified Collateral or
(b) the fair market value (as reasonably determined by the Agent) of such New
Qualified Collateral.
(d) EXISTING QUALIFIED COLLATERAL. "Existing Qualified
Collateral" at any time shall mean the Qualified Collateral of the Borrower
that has been appraised, and has been included in the most recent appraisal
report delivered by the Borrower to the Agent, pursuant to Section 6.15 at such
time.
The "Orderly Liquidation Value" of any Existing Qualified Collateral at any
time shall mean the orderly liquidation value of such Existing Qualified
Collateral set forth in the most recent appraisal report delivered by the
Borrower to the Agent pursuant to Section 6.15 at such time.
(e) BORROWING BASE CERTIFICATES. On the Closing Date and
from time to time thereafter as specified herein the Borrower shall furnish to
the Agent a certificate ("Borrowing Base Certificate"), substantially in the
form attached hereto as Exhibit C, appropriately completed, signed by a
Responsible Officer of the Borrower and setting forth the Borrowing Base and
the other information required therein. Borrowing Base Certificates shall be
delivered to the Agent:
(i) on the same Business Day that financial statements are
delivered by the Borrower to the Agent pursuant to Section 6.01(b);
and
(ii) not later than two Business Days after request therefor
by the Agent from time to time.
To the extent the Borrower is required to deliver a Borrowing Base Certificate
on a particular day, the Eligible Receivables, New Qualified Collateral and
Existing Qualified Collateral reflected on such Borrowing Base Certificate; the
Net Values, Deemed Value and Orderly Liquidation Value applicable thereto, as
the case may be; and the calculation of the Borrowing Base thereunder, shall be
determined as of a day (which shall be specified in the Borrowing Base
Certificate) not earlier than the Business Day before the day the Borrower is
required to deliver such Borrowing Base Certificate. The Borrowing Base set
forth in any such Borrowing Base Certificate shall be effective until delivery
of a subsequent Borrowing Base Certificate.
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ARTICLE III
THE LETTERS OF CREDIT
3.01. LETTER OF CREDIT SUBFACILITY.
(a) THE LETTER OF CREDIT SUBFACILITY.
(i) GENERAL. Subject to the terms and conditions of this
Agreement, and relying upon the representations and warranties herein set forth
and upon the agreements of the Lenders set forth in Sections 3.01(c) and
3.01(d), the Issuing Bank agrees (such agreement being herein called the
"Letter of Credit Commitment") to issue for the account of the Borrower letters
of credit (each, as amended, modified or supplemented from time to time, a
"Letter of Credit") at any time or from time to time on or after the date
hereof. The Borrower shall not request any Letter of Credit to be issued
except within the following limitations: (i) no Letter of Credit shall be
issued later than 90 days before the Revolving Credit Maturity Date, (ii) no
Letter of Credit shall be issued if the Agent shall have received the notice
from the Required Lenders referred to in Section 3.01(b)(iii)(C), (iii) at the
time any Letter of Credit is issued (and after giving effect to issuance of the
requested Letter of Credit), the aggregate Revolving Credit Exposures of the
Lenders shall not exceed the sum of the Revolving Credit Committed Amounts of
the Lenders at such time, and (iv) on the date of issuance of any Letter of
Credit (and after giving effect to such issuance) the aggregate Letter of
Credit Exposure shall not exceed $3,000,000.
(ii) TERMS OF LETTERS OF CREDIT. The Borrower shall not
request any Letter of Credit to be issued except within the following
limitations: each Letter of Credit (i) shall have an expiration date no later
than the earlier of (A) 12 months after the date of issuance thereof, and (B)
10 days before the Revolving Credit Maturity Date, (ii) shall be denominated in
Dollars, and (iii) shall be payable only against sight drafts (and not time
drafts).
(iii) PURPOSES OF LETTERS OF CREDIT. Each Letter of Credit
shall be satisfactory in form and substance to the Issuing Bank. Each Letter
of Credit shall be a trade or standby letter of credit used to support trade or
financial obligations of the Borrower. The provisions of this Section
3.01(a)(iii) represent only an obligation of the Borrower to the Issuing Bank
and the Lenders; the Issuing Bank shall not have any obligation to the Lenders
to ascertain the purpose of any Letter of Credit, and the rights and
obligations of the Lenders and the Issuing Bank among themselves shall not be
impaired or affected by a breach of this Section 3.01(a)(iii).
(iv) LETTER OF CREDIT FEE. The Borrower shall pay to the
Agent for the account of each Lender a fee (the "Letter of Credit Fee") for
each Letter of Credit for each day from and including the date of issuance
thereof to and including the date of expiration or termination thereof, equal
to (x) the Letter of Credit Undrawn Availability on such day, times (y) the
Letter of Credit Fee Rate applicable to such Letter of Credit on such day,
times (z) 1/360. Such Letter of Credit Fee shall be due and payable for the
preceding period for which such fee has not been paid on each of the following
dates: (i) each Quarterly Payment Date, and (ii) the Revolving Credit Maturity
Date. The "Letter of Credit Fee Rate" applicable to a Letter of Credit on any
day means 2% per annum.
(v) ADMINISTRATION FEES. The Borrower shall pay to the
Agent, for the sole account of the Issuing Bank, such other administration,
maintenance, amendment, drawing and negotiation fees as may be customarily
charged by the Issuing Bank from time to time in connection with letters of
credit.
(b) PROCEDURE FOR ISSUANCE AND AMENDMENT OF LETTERS OF
CREDIT.
(i) REQUEST FOR ISSUANCE. The Borrower may from time to time
request, upon at least three Business Days' notice, the Issuing Bank to issue a
Letter of Credit by (i) delivering to the Issuing Bank and the Agent a written
request to such effect, specifying the date on which such Letter of Credit is
to be issued, the expiration date thereof, and the stated amount thereof, and
(ii) delivering to the
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Issuing Bank an application, in such form as the Issuing Bank may from time to
time require (each, a "Letter of Credit Application"), completed to the
satisfaction of the Issuing Bank, together with such other certificates,
documents and other items as such Issuing Bank may request. If the Issuing
Bank desires to issue such Letter of Credit, the Issuing Bank shall promptly
notify the Agent (by telephone or otherwise), and furnish the Agent with the
proposed form of Letter of Credit to be issued. The Agent shall determine, as
of the close of business on the day before such proposed issuance, whether such
proposed Letter of Credit complies with the limitations set forth in Sections
3.01(a)(i) and 3.01(a)(ii). Unless such limitations are not satisfied, or
unless the Required Lenders have given notice to the Agent to cease issuing
Letters of Credit pursuant to Section 3.01(b)(iii)(C), the Agent shall notify
the relevant Issuing Bank (in writing or by telephone promptly confirmed in
writing) that such Issuing Bank is authorized to issue such Letter of Credit.
If the Issuing Bank issues a Letter of Credit, it shall deliver the original of
such Letter of Credit to the beneficiary thereof or as the Borrower shall
otherwise direct, and shall promptly notify the Agent thereof, and if the Agent
so requests shall furnish a copy thereof to the Agent.
(ii) EXTENSION OR INCREASE. The Borrower may from time to
time request an Issuing Bank to extend the expiration date of an outstanding
Letter of Credit issued by such Issuing Bank or to increase the Letter of
Credit Undrawn Availability of such Letter of Credit. Such extension or
increase shall for all purposes hereunder (including Sections 3.01(a),
3.01(b)(i) and 5.02) be treated as though the Borrower had requested issuance
of a replacement Letter of Credit; provided, that the Issuing Bank may, if it
elects, issue an amendment to the Letter of Credit providing for such an
extension or increase in lieu of issuing a new Letter of Credit in substitution
therefor.
(iii) LIMITATIONS ON ISSUANCE, EXTENSION AND AMENDMENT.
(A) As between the Borrower, on the one hand, and the Agent
and the Lenders, on the other hand, the issuance or extension of any
Letter of Credit (including any deemed issuance arising from increase
or extension of a Letter of Credit as provided in Section 3.01(b)(ii))
is subject to the applicable conditions precedent set forth or
referred to in this Section 3.01 and Articles V and VIII. In
addition, each Issuing Bank shall be justified and fully protected in
declining to issue or extend any Letter of Credit (including any
deemed issuance) if the Issuing Bank has not received authorization to
do so from the Agent as provided in Section 3.01(b)(i).
(B) As between each Issuing Bank, on the one hand, and the
Agent and the Lenders, on the other hand, such Issuing Bank shall be
justified and fully protected in issuing any Letter of Credit
(including any deemed issuance arising from increase or extension of a
Letter of Credit as provided in Section 3.01(b)(ii)) after receiving
authorization from the Agent as provided in Section 3.01(b)(i),
notwithstanding any subsequent notices to the Issuing Bank, any
knowledge of an Event of Default or Potential Default, any knowledge
of failure of any applicable condition set forth or referred to in
this Section 3.01 or Articles V or VIII to be satisfied, any other
knowledge of the Issuing Bank, or any other event, condition or
circumstance whatever.
(C) As between the Agent, on the one hand, and the Lenders,
on the other hand, the Agent shall not authorize issuance of any
Letter of Credit pursuant to Section 3.01(b)(i) (including any deemed
issuance arising from increase or extension of a Letter of Credit as
provided in Section 3.01(b)(ii)) if the Agent shall have received, at
least two Business Days before authorizing such issuance, from the
Required Lenders an unrevoked written notice that any applicable
condition set forth or referred to in this Section 3.01 or Article V
or VIII will not be satisfied and expressly requesting that the Agent
direct the Issuing Banks to cease to issue Letters of Credit. Unless
the Agent has received such notice or has determined that the
applicable limitations set forth in Sections 3.01(a)(i) and
3.01(a)(ii) are not satisfied, the Agent shall be justified and fully
protected, as against the Lenders, in authorizing the Issuing Bank to
issue such Letter of Credit, notwithstanding any subsequent notices to
the Agent, any knowledge of an Event of Default or Potential Default,
any knowledge of failure of any
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applicable condition set forth or referred to in this Section 3.01 or
Article V or VIII to be satisfied, any other knowledge of the Agent,
or any other event, condition or circumstance whatever.
(iv) AMENDMENTS. The Borrower may from time to time, upon at
least three Business Days' notice, request the Issuing Bank to amend, modify or
supplement Letters of Credit. At the request of the Borrower, and subject to
satisfaction of such conditions as the Issuing Bank may require, the Issuing
Bank may amend, modify or supplement Letters of Credit, or waive compliance
with any condition of issuance or payment, without the consent of, and without
liability to, the Agent or any Lender; provided, that any such amendment,
modification or supplement that extends the expiration date or increases the
Letter of Credit Undrawn Availability of an outstanding Letter of Credit shall
be subject to Section 3.01(b)(ii).
(c) LETTER OF CREDIT PARTICIPATING INTERESTS.
(i) GENERALLY. Concurrently with the issuance of each Letter
of Credit, the Issuing Bank automatically shall be deemed, irrevocably and
unconditionally, to have sold, assigned, transferred and conveyed to each other
Lender, and each other Lender automatically shall be deemed, irrevocably and
unconditionally, severally to have purchased, acquired, accepted and assumed
from the Issuing Bank, without recourse to, or representation or warranty by,
the Issuing Bank, an undivided interest, in a proportion equal to such Lender's
Pro Rata share, in all of the Issuing Bank's rights and obligations in, to or
under such Letter of Credit, the Letter of Credit Application, the Letter of
Credit Reimbursement Obligations, and all collateral, guarantees and other
rights from time to time directly or indirectly securing the foregoing (such
interest of each Lender being referred to herein as a "Letter of Credit
Participating Interest"). Amounts other than Letter of Credit Reimbursement
Obligations and Letter of Credit Fees payable from time to time under or in
connection with a Letter of Credit or a Letter of Credit Application shall be
for the sole account of the Issuing Bank. On the date that any Purchasing
Lender becomes a party to this Agreement in accordance with Section 10.14,
Letter of Credit Participating Interests in any outstanding Letters of Credit
held by the Lender from which such Purchasing Lender acquired its interest
hereunder shall be proportionately reallocated between such Purchasing Lender
and such transferor Lender (and, to the extent such transferor Lender is an
Issuing Bank, the Purchasing Lender shall be deemed to have acquired a Letter
of Credit Participating Interest from such transferor Lender to such extent).
(ii) OBLIGATIONS ABSOLUTE. Notwithstanding any other
provision hereof, each Lender hereby agrees that its obligation to participate
in each Letter of Credit issued in accordance herewith, and its obligation to
make the payments specified in Section 3.01(d), are each absolute, irrevocable
and unconditional and shall not be affected by any event, condition or
circumstance whatever. The failure of any Lender to make any such payment
shall not relieve any other Lender of its funding obligation hereunder on the
date due, but no Lender shall be responsible for the failure of any other
Lender to meet its funding obligations hereunder.
(d) LETTER OF CREDIT DRAWINGS AND REIMBURSEMENTS.
(i) BORROWER'S REIMBURSEMENT OBLIGATION. The Borrower hereby
agrees to reimburse the Issuing Bank, by making payment to the Agent for the
account of the Issuing Bank in accordance with Section 2.10(b), on the date and
in the amount of each payment made by the Issuing Bank under any Letter of
Credit, upon notice (which may be by telephone) by the Issuing Bank to the
Borrower of such payment, without further notice, protest or demand, all of
which are hereby waived, and an action therefor shall thereupon immediately
accrue. To the extent such payment is not timely made, the Borrower hereby
agrees to pay to the Agent, for the account of the Issuing Bank, on demand,
interest on any Letter of Credit Unreimbursed Draws for each day from and
including the date of such payment by the Issuing Bank until reimbursed in full
(before and after judgment), in accordance with Section 2.10(c), at the rate
per annum set forth in Section 2.10(c)(ii). Unless the Borrower notifies the
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Agent that the Borrower intends to make immediate payment to the Agent, for the
account of the Issuing Bank, in accordance with the preceding sentence, a
notice of drawing by a beneficiary under a Letter of Credit shall be deemed to
be a notice by the Borrower for Revolving Credit Loans under the Base Rate
Option in an aggregate amount equal to the amount of such drawing.
(ii) PAYMENT BY LENDERS ON ACCOUNT OF UNREIMBURSED DRAWS. If
an Issuing Bank makes a payment under any Letter of Credit and is not
reimbursed in full therefor on such payment date in accordance with Section
3.01(d)(i), such Issuing Bank will promptly notify the Agent thereof (which
notice may be by telephone), and the Agent shall forthwith notify each Lender
(which notice may be by telephone promptly confirmed in writing) thereof. No
later than the Agent's close of business on the date such notice is given, each
such Lender will pay to the Agent, for the account of such Issuing Bank, in
immediately available funds, an amount equal to such Lender's Pro Rata share of
the unreimbursed portion of such payment by such Issuing Bank. If and to the
extent that any Lender fails to make such payment to the Agent for the account
of such Issuing Bank on such date, such Lender shall pay such amount on demand,
together with interest, for such Issuing Bank's own account, for each day from
and including the date of such Issuing Bank's payment to and including the date
of payment to the Issuing Bank (before and after judgment) at the following
rates per annum: (x) for each day from and including the date of such payment
by the Issuing Bank to and including the second Business Day thereafter, at the
Federal Funds Effective Rate for such day, and (y) for each day thereafter, at
the rate applicable to Letter of Credit Unreimbursed Draws under Section
3.01(d)(i) for such day.
(iii) DISTRIBUTIONS TO PARTICIPANTS. If, at any time, after
an Issuing Bank has made a Letter of Credit Unreimbursed Draw and has received
from any Lender such Lender's share of such Letter of Credit Unreimbursed Draw,
such Issuing Bank receives any payment or makes any application of funds on
account of the Letter of Credit Reimbursement Obligation arising from such
Letter of Credit Unreimbursed Draw, such Issuing Bank will pay to the Agent,
for the account of such Lender, such Lender's Pro Rata share of such payment or
application.
(iv) RESCISSION. If any amount received by an Issuing Bank
on account of any Letter of Credit Reimbursement Obligation shall be avoided,
rescinded or otherwise returned or paid over by such Issuing Bank for any
reason at any time, whether before or after the termination of this Agreement
(or such Issuing Bank believes in good faith that such avoidance, rescission,
return or payment is required, whether or not such matter has been
adjudicated), each such Lender will, promptly upon notice from the Agent or
such Issuing Bank, pay over to the Agent for the account of such Issuing Bank
its Pro Rata share of such amount, together with its Pro Rata share of any
interest or penalties payable with respect thereto.
(v) EQUALIZATION. If any Lender receives any payment or
makes any application on account of its Letter of Credit Participating
Interest, such Lender shall forthwith pay over to the relevant Issuing Bank, in
Dollars and in like kind of funds received or applied by it the amount in
excess of such Lender's ratable share of the amount so received or applied.
(e) OBLIGATIONS ABSOLUTE. The payment obligations of the
Borrower under Section 3.01(d)(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any Letter of Credit, any other Loan Document or any documents,
instruments or agreements evidencing or otherwise relating to any
obligation of the Borrower secured or supported by any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower or any other Person may have at any time
against any beneficiary or transferee of any Letter of Credit (or any
Persons for whom any such beneficiary or transferee may be acting),
the relevant Issuing
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Bank, any Lender, or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or any unrelated
transaction;
(iii) any draft, certificate, statement 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;
(iv) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit, or payment by the Issuing
Bank under the Letter of Credit in any other circumstances in which
conditions to payment are not met, except any such payment resulting
solely from the gross negligence or willful misconduct of the Issuing
Bank; or
(v) any other event, condition or circumstance whatever,
whether or not similar to any of the foregoing.
The Borrower bears the risk of, and neither the Issuing Bank, any of its
directors, officers, employees or agents, nor any Lender, shall be liable or
responsible for the use which may be made of any Letter of Credit, or acts or
omissions of the beneficiary or any transferee in connection therewith.
(f) FURTHER ASSURANCES. The Borrower hereby agrees, from
time to time, to do and perform any and all acts and to execute any and all
further instruments reasonably requested by any Issuing Bank more fully to
effect the purposes of this Agreement and the issuance of the Letters of Credit
hereunder. The representations, warranties and covenants by the Borrower under,
and rights and remedies of the Issuing Bank under, any Letter of Credit
Application relating to any Letter of Credit are in addition to, and not in
limitation or derogation of, representations, warranties and covenants by the
Borrower under, and rights and remedies of the Issuing Bank and the Lenders
under, this Agreement, the other Loan Documents, and applicable Law. In the
event of any inconsistency between the terms of this Agreement and any Letter
of Credit Application, this Agreement shall prevail. The terms of this
Agreement shall be deemed to be incorporated by reference into each such
agreement or instrument (whether or not such agreement or instrument so
states).
(g) CASH COLLATERAL FOR LETTERS OF CREDIT. To the extent
that any provision of this Agreement or any other Loan Document requires a
payment, prepayment or other application of funds to be made with respect to
the Revolving Credit Loans, such provision shall be applied as follows: after
payment in full of the outstanding Revolving Credit Loans (whether or not such
payment would require the Borrower to pay any amount under Section 2.11(b)),
and the payment in full of all outstanding Letter of Credit Unreimbursed Draws,
then, to the extent of the excess, if any, of the aggregate Letter of Credit
Exposure at such time over the balance in the Letter of Credit Collateral
Account, an amount equal to the remainder of the amount so required to be paid
by the Borrower shall immediately be paid by the Borrower to the Agent for
deposit in the Letter of Credit Collateral Account. In addition, the Borrower
agrees that, without limitation of the foregoing or of any other provisions of
this Agreement or the Loan Documents requiring collateral for the Letters of
Credit or other Obligations in whole or in part, and without limitation of
other rights and remedies under this Agreement or the Loan Documents or at law
or in equity, if the Revolving Credit Loans become due and payable pursuant to
Section 8.02, the Borrower shall immediately pay to the Agent, for deposit in
the Letter of Credit Collateral Account, an amount equal to the excess, if any,
of the aggregate Letter of Credit Exposure at such time over the balance in the
Letter of Credit Collateral Account. The Agent shall release funds in the
Letter of Credit Collateral Account to the Issuing Bank for payment of Letter
of Credit Reimbursement Obligations constituting Letter of Credit Unreimbursed
Draws, as and when the same become due and payable if and to the extent the
Borrower fails to pay the same.
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(h) CERTAIN PROVISIONS RELATING TO THE ISSUING BANK.
(i) GENERAL. The Issuing Bank shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Issuing Bank shall be read into this Agreement or any Loan Document or
shall otherwise exist. The duties and responsibilities of the Issuing Bank to
the Agent or the other Lenders under this Agreement and the other Loan
Documents shall be mechanical and administrative in nature, and the Issuing
Bank shall have no fiduciary relationship in respect of the Agent or any Lender
or any other Person. The Issuing Bank shall not be liable for any action taken
or omitted to be taken by it under or in connection with this Agreement or any
other Loan Document, unless caused by its own gross negligence or willful
misconduct. The Issuing Bank shall not be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or observance of any
of the terms or conditions of this Agreement or any other Loan Document on the
part of the Borrower, (ii) the business, operations, condition (financial or
other) or prospects of the Borrower or any other Person, or (iii) the existence
of any Event of Default or Potential Default. The Issuing Bank shall not be
under any obligation, either initially or on a continuing basis, to provide the
Agent or any Lender with any notices, reports or information of any nature,
whether in its possession presently or hereafter, except for such notices,
reports and other information expressly required by this Agreement to be so
furnished.
(ii) ADMINISTRATION. The Issuing Bank may rely upon any
notice or other communication of any nature (written or oral, including but not
limited to telephone conversations, whether or not such notice or other
communication is made in a manner permitted or required by this Agreement or
any Loan Document) purportedly made by or on behalf of the proper party or
parties, and the Issuing Bank shall not have any duty to verify the identity or
authority of any Person giving such notice or other communication. The Issuing
Bank may consult with legal counsel (including, without limitation, in-house
counsel for the Issuing Bank or in-house or other counsel for the Borrower),
independent public accountants and any other experts selected by it from time
to time, and the Issuing Bank shall not be liable for any action taken or
omitted to be taken in good faith in accordance with the advice of such
counsel, accountants or experts. Whenever the Issuing Bank shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrower or the Agent or any Lender, such matter may be established by a
certificate of the Borrower or the Agent or such Lender, as the case may be,
and such Issuing Bank may conclusively rely upon such certificate.
(iii) INDEMNIFICATION OF ISSUING BANK BY LENDERS. Each
Lender hereby agrees to reimburse and indemnify the Issuing Bank and each of
its respective directors, officers, employees and agents (to the extent not
reimbursed by the Borrower and without limitation of the obligations of the
Borrower to do so), Pro Rata, from and against any and all amounts, losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature (including,
without limitation, the fees and disbursements of counsel (other than in-house
counsel) for the Issuing Bank or such other Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Issuing Bank or such other Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against the Issuing Bank, in its capacity as such, or such other Person, as a
result of, or arising out of, or in any way related to or by reason of, this
Agreement, any other Loan Document, any transaction from time to time
contemplated hereby or thereby, or any transaction secured or financed in whole
or in part, directly or indirectly, with any Letter of Credit or the proceeds
thereof, provided, that no Lender shall be liable for any portion of such
amounts, losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements resulting from the
gross negligence or willful misconduct of the Issuing Bank or such other
Person.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Agent and
each Lender as follows:
4.01. CORPORATE STATUS. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Borrower has corporate power and authority
to own its property and to transact the business in which it is engaged or
presently proposes to engage. The Borrower is duly qualified to do business as
a foreign corporation and is in good standing in all jurisdictions listed on
Schedule 4.01(which schedule lists all jurisdictions in which the Borrower has
operations or owns property) and in all other jurisdictions in which the
failure to be so qualified could have a Material Adverse Effect. Schedule 4.01
states as of the date hereof the jurisdiction of incorporation of the Borrower,
and the jurisdictions in which the Borrower is qualified to do business as a
foreign corporation.
4.02. CORPORATE POWER AND AUTHORIZATION. The Borrower has
corporate power and authority to execute, deliver, perform, and take all
actions contemplated by, each Loan Document to which it is a party, and all
such action has been duly and validly authorized by all necessary corporate
proceedings on its part. Without limitation of the foregoing, the Borrower has
the corporate power and authority to borrow pursuant to the Loan Documents to
the fullest extent permitted hereby and thereby from time to time, and has
taken all necessary corporate action to authorize such borrowings.
4.03. EXECUTION AND BINDING EFFECT. This Agreement and each
other Loan Document to which the Borrower is a party and which is executed and
delivered or required to be executed and delivered on or before the date of
which this representation and warranty is made, or deemed made, has been duly
and validly executed and delivered by the Borrower. This Agreement and each
such other Loan Document constitutes, and each other Loan Document when
executed and delivered by the Borrower will constitute, the legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.
4.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval,
order, consent, authorization, certificate, license, permit or validation of,
or exemption or other action by, or filing, recording or registration with, or
notice to, any Governmental Authority (collectively, "Governmental Action") is
or will be necessary in connection with execution and delivery of any Loan
Document, consummation of the transactions herein or therein contemplated
(including but not limited to the Acquisition), performance of or compliance
with the terms and conditions hereof or thereof, or to ensure the legality,
validity, binding effect, enforceability or admissibility in evidence hereof or
thereof, for (x) filings and recordings in respect of the Liens in favor of the
Agent for the benefit of the Lenders and the Agent securing the Obligations,
and (y) matters set forth in Schedule 4.04. Each Governmental Action referred
to in such Schedule 4.04 has been duly obtained or made, as the case may be,
and is in full force and effect, and there is no action, suit, proceeding or
investigation pending or (to the Borrower's knowledge after due inquiry)
threatened which seeks or may result in the reversal, rescission, termination,
modification or suspension of any such Governmental Action. No Governmental
Action referred to in such Schedule 4.04 requires any further act to be
performed or condition to be satisfied by any Person as a condition to
continued effectiveness thereof, except as set forth in such Schedule 4.04.
With respect to the each of the matters set forth in such Schedule 4.04, the
Agent and each Lender has received a true, correct and complete copy of such
Governmental Action (including each amendment, modification or supplement
thereto).
4.05. ABSENCE OF CONFLICTS. Neither the execution and
delivery of any Loan Document, nor consummation of the transactions herein or
therein contemplated (including but not limited to the Acquisition), nor
performance of or compliance with the terms and conditions hereof or thereof,
does or will
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(a) violate or conflict with any Law, or
(b) violate, conflict with or result in a breach of any term
or condition of, or constitute a default under, or result in (or give
rise to any right, contingent or otherwise, of any Person to cause)
any termination, cancellation, prepayment or acceleration of
performance of, or result in the creation or imposition of (or give
rise to any obligation, contingent or otherwise, to create or impose)
any Lien upon any of property of the Borrower (except for any Lien in
favor of the Agent for the benefit of the Lenders and the Agent
securing the Obligations) pursuant to, or otherwise result in (or give
rise to any right, contingent or otherwise, of any Person to cause)
any change in any right, power, privilege, duty or obligation of the
Borrower under or in connection with,
(i) the articles of incorporation or by-laws (or
other constituent documents) of the Borrower,
(ii) any agreement or instrument creating,
evidencing or securing any Indebtedness or Guaranty Equivalent
to which the Borrower is a party or by which any of them or
any of its properties (now owned or hereafter acquired) may be
subject or bound, or
(iii) any other agreement or instrument or
arrangement to which the Borrower is a party or by which any
of them or any of its properties (now owned or hereafter
acquired) may be subject or bound,
except, in the case of the foregoing clause (b)(iii), for (x) matters as to
which a consent, waiver, amendment or agreement has been duly obtained and is
in full force and effect, and (y) matters that, individually or in the
aggregate, could not have a Material Adverse Effect. Schedule 4.05 sets forth
each consent, waiver, amendment or agreement which has been obtained by or on
behalf of the Borrower in respect of any matter which would, absent such
consent, waiver, amendment or agreement, be within the scope of the foregoing
clause (y), and the Agent has received a true, correct and complete copy of
each such consent, waiver, amendment or agreement and of each of the underlying
agreements or instruments to which it relates.
4.06. AUDITED FISCAL YEAR FINANCIAL STATEMENTS. The Borrower
has heretofore furnished to the Agent balance sheets of the Target Business as
of December 31, 1995 and December 31, 1996, and the related statements of
income, cash flow and changes in stockholders' equity for the fiscal years then
ended, as examined and reported on by Ernst & Young, LLP, independent certified
public accountants retained by Investor in connection with this transaction and
the Acquisition, who delivered an unqualified opinion in respect thereof. Such
financial statements (including the notes thereto) present fairly in all
material respects the financial condition of the Target Business as of the end
of each such fiscal year and the results of its operations and its cash flow
for the fiscal years then ended, all in conformity with GAAP.
4.07. AUDITED INTERIM FINANCIAL STATEMENTS. The Borrower has
heretofore furnished to the Agent balance sheets of the Target Business as of
the end of the nine month period ending September 30, 1997, together with the
related statements of income, cash flow and changes in stockholders' equity for
the period then ended, as examined and reported on by Ernst & Young, LLP,
independent certified public accountants retained by Investor in connection
with this transaction and the Acquisition, who delivered an unqualified opinion
in respect thereof ("September 1997 Financial Statements"). Such financial
statements (including the notes thereto) present fairly in all material
respects the financial condition of the Target Business as of the end of the
period then ended and the results of its operations and its cash flow for the
period then ended, all in conformity with GAAP.
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4.08. ABSENCE OF UNDISCLOSED LIABILITIES. The Borrower has
no liability or obligation of any nature whatsoever (whether absolute, accrued,
contingent or otherwise, whether or not due), forward or long-term commitments
or unrealized or anticipated losses from unfavorable commitments, except (a) as
disclosed in the financial statements referred to in Sections 4.06 and 4.07,
(b) matters that, individually or in the aggregate, could not have a Material
Adverse Effect, (c) as disclosed in Schedule 4.08, and (d) liabilities,
obligations, commitments and losses incurred after September 30, 1997 in the
ordinary course of business and consistent with past practices.
4.09. ABSENCE OF MATERIAL ADVERSE CHANGES. Since September
30, 1997, there has been no material adverse change in the business,
operations, condition (financial or otherwise), or prospects of the Borrower or
the Target Business.
4.10. ACCURATE AND COMPLETE DISCLOSURE. All information
heretofore, contemporaneously or hereafter provided by or on behalf of the
Borrower to the Agent or any Lender pursuant to or in connection with any Loan
Document or any transaction contemplated hereby or thereby (including but not
limited to the Acquisition) is or will be (as the case may be) true and
accurate in all material respects on the date as of which such information is
dated (or, if not dated, when received by the Agent or such Lender, as the case
may be) and does not or will not (as the case may be) omit to state any
material fact necessary to make such information not misleading at such time in
light of the circumstances in which it was provided. The Borrower has
disclosed to the Agent and each Lender in writing every fact or circumstance
known to the Borrower which has, or which could have, a Material Adverse
Effect.
4.11. PROJECTIONS. The Borrower has furnished to the Agent
and each Lender projections prepared by the Borrower demonstrating the
projected financial condition and results of operations of the Borrower after
giving effect to the transactions contemplated by the Loan Documents (including
but not limited to the Acquisition), for the period commencing on January 1,
1998 and ending on December 31, 2007, which projections are accompanied by a
written statement of the assumptions and estimates underlying such projections.
Such projections were prepared on the basis of such assumptions and estimates.
Such projections, assumptions and estimates, as of the date of preparation
thereof and as of the date hereof, are reasonable, are made in good faith, are
consistent with the Loan Documents, and represent the Borrower's best judgment
as to such matters. Nothing has come to the attention to the Borrower which
would lead the Borrower to believe that such projections will not be attained
or exceeded. Nothing contained in this Section shall constitute a
representation or warranty that such future financial performance or results of
operations will in fact be achieved.
4.12. SOLVENCY. On and as of the Closing Date, after
consummation of the transactions contemplated by the Loan Documents (including
but not limited to the Acquisition) and after giving effect to all Loans and
other obligations and liabilities being incurred on such date in connection
herewith and therewith, and on the date of each subsequent Loan, Letter of
Credit or other extension of credit hereunder and after giving effect to
application of the proceeds hereof in accordance with the terms of the Loan
Documents, the Borrower is and will be Solvent.
4.13. MARGIN REGULATIONS. No part of the proceeds of any
Loan hereunder will be used for the purpose of buying or carrying any "margin
stock," as such term is used in Regulations G and U of the Board of Governors
of the Federal Reserve System, as amended from time to time, or to extend
credit to others for the purpose of buying or carrying any "margin stock". The
Borrower is not engaged in the business of extending credit to others for the
purpose of buying or carrying "margin stock". The Borrower does not own
"margin stock." Neither the making of any Loan nor any use of proceeds of any
such Loan will violate or conflict with the provisions of Regulation G, T, U or
X of the Board of Governors of the Federal Reserve System, as amended from time
to time.
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4.14. SUBSIDIARIES. The Borrower has never had a Subsidiary.
The Borrower does not own or hold any rights to acquire any shares of stock or
any other security or equity interest in any other Person.
4.15. PARTNERSHIPS, ETC. The Borrower is not a partner
(general or limited) of any partnership, a party to any joint venture or owns
(beneficially or of record) any equity or similar interest in any Person
(including but not limited to any interest pursuant to which the Borrower has
or may in any circumstance have an obligation to make capital contributions to,
or be generally liable for or on account of the liabilities, acts or omissions
of such other Person).
4.16. OWNERSHIP AND CONTROL. As of the Closing Date and
immediately thereafter, the authorized capital stock of the Borrower will
consist of 10,000,000 shares of Common Stock, 5,000,000 shares of which shall
be issued and outstanding and 2,000,000 shares of which shall be reserved for
issuance upon exercise of the Warrants under the Subordinated Debt Agreement.
As of the Closing Date, the Borrower will not have outstanding any stock or
securities convertible or exchangeable for any shares of its capital stock, nor
will it have outstanding any rights or options to subscribe for or to purchase
its capital stock, except as specifically contemplated by Subordinated Debt
Agreement. As of the Closing Date, the Borrower will not be subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital stock, except as set forth in Subordinated
Debt Agreement. As of the Closing Date, all of the outstanding shares of the
Borrower's capital stock will be validly issued, fully paid and nonassessable.
There are no statutory or contractual stockholders' preemptive rights with
respect to the issuance of the Purchased Securities under the Subordinated Debt
Agreement. The Borrower has not violated any applicable federal or state
securities laws in connection with the offer, sale and issuance of any of its
capital stock, and the offer, sale and issuance of the Purchased Securities and
Purchased Notes under the Subordinated Debt Agreement do not require
registration under the Securities Act or any applicable state securities laws.
There are no agreements between the Borrower's stockholders with respect to the
voting or transfer of the Borrower's capital stock, except for the Voting Trust
Agreement.
4.17. LITIGATION. There is no pending or (to the Borrower's
knowledge after due inquiry) threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or affecting the
Borrower or, insofar as the Target Business is concerned, JGT, except for (a)
matters set forth in Schedule 4.17, (b) matters described in the financial
statements referred to in Section 4.06, and (c) matters that, if adversely
decided, individually or in the aggregate, could not have a Material Adverse
Effect.
4.18. REGULATORY RESTRICTIONS. The Borrower is not (a) an
"investment company" or a company "controlled" by an investment company within
the meaning of the Investment Company Act of 1940, as amended, (b) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (c) subject to any
other Law which purports to restrict or regulate the ability to borrow money or
obtain credit.
4.19. ABSENCE OF OTHER CONFLICTS. The Borrower or, insofar
as the Target Business is concerned, JGT is not in violation of or conflict
with, or is subject to any contingent liability on account of any violation of
or conflict with:
(a) any Law,
(b) its articles of incorporation or by-laws (or other
constituent documents), or
(c) any agreement or instrument or arrangement to which it is
party or by which it or any of its properties (now owned or hereafter
acquired) may be subject or bound,
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except for (i) matters set forth in Schedule 4.19 and (ii) matters that,
individually or in the aggregate, could not have a Material Adverse Effect.
4.20. INSURANCE. The Borrower maintains with financially
sound and reputable insurers acceptable to the Agent and not related to or
affiliated with the Borrower insurance with respect to its properties and
business and against at least such liabilities, casualties and contingencies
and in at least such types and amounts as is customary in the case of
corporations engaged in the same or a similar business or having similar
properties similarly situated. Schedule 4.20 sets forth a list of all
insurance currently maintained by or in respect of the Borrower, setting forth
the identity of the insurance carrier, the type of coverage, the amount of
coverage and the deductible.
4.21. TITLE TO PROPERTY. The Borrower has good and
marketable title in fee simple to all real property owned or purported to be
owned by it and good title to all other property of whatever nature owned or
purported to be owned by it, including but not limited to all property
reflected in the most recent audited balance sheet referred to in Section 4.06
or submitted pursuant to Section 6.01(a), as the case may be (except as sold or
otherwise disposed of in the ordinary course of business after the date of such
balance sheet or, after the Closing Date, as otherwise permitted by the Loan
Documents), in each case free and clear of all Liens, other than Permitted
Liens.
4.22. INTELLECTUAL PROPERTY. The Borrower owns, or is
licensed or otherwise has the right to use, all the patents, trademarks,
service marks, names (trade, service, fictitious or otherwise), copyrights,
technology (including but not limited to computer programs and software),
processes, data bases and other rights, free from burdensome restrictions,
necessary to own and operate its properties and to carry on its business as
presently conducted and presently planned to be conducted without conflict with
the rights of others.
4.23. TAXES. All tax and information returns required to be
filed by or on behalf of either of the Borrower and, insofar as the Target
Business is concerned, JGT have been properly prepared, executed and filed.
All taxes, assessments, fees and other governmental charges upon the Borrower
or JGT, insofar as the Target Business is concerned, or upon any of their
properties, incomes, sales or franchises which are due and payable have been
paid other than those not yet delinquent and payable without premium or
penalty, and except for those being diligently contested in good faith by
appropriate proceedings, and in each case adequate reserves and provisions for
taxes have been made on the books of the Borrower. The reserves and provisions
for taxes on the books of the Borrower are adequate for all open years and for
its current fiscal period. The Borrower does not know of any proposed
additional assessment or basis for any material assessment for additional taxes
(whether or not reserved against). The federal, state and local income tax
liabilities of the Borrower and, insofar as the Target Business is concerned,
JGT have been finally determined by the Internal Revenue Service and other
relevant taxing authorities, or the time for audit has expired, for all fiscal
periods ending on or prior to December 31, 1996 and all such liabilities
(including all deficiencies assessed following audit) have been satisfied.
4.24. EMPLOYEE BENEFITS. A copy of the most recent Annual
Report (5500 Series Form) including all attachments thereto as filed with the
Internal Revenue Service for each Plan has been provided to the Agent and each
Lender and fairly presents the funding status of each Plan. There has been no
material deterioration in any Plan's funding status since the date of such
Annual Report. Schedule 4.24 sets forth as of the date hereof a list of all
Plans and Multiemployer Plans, and all information available to the Borrower
with respect to the direct, indirect or potential withdrawal liability to any
Multiemployer Plan of the Borrower, JGT or any Controlled Group Member. Except
as set forth in Schedule 4.24, the Borrower has no liability (contingent or
otherwise) for or in connection with, and none of its respective properties is
subject to a Lien in connection with, any Pension-Related Event. The Borrower
has no liability (contingent or otherwise) for or in connection with, any
Postretirement Benefits. The amount of unfunded benefit liabilities (as
defined in Section 4001(a)(16) of ERISA), as certified to by the Plan's
actuary, for all Plans do not exceed $100,000 in the aggregate.
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4.25. ENVIRONMENTAL MATTERS.
(a) The Borrower and its Environmental Affiliates (including
with respect to the Target Business, JGT) is and has been in full compliance
with all applicable Environmental Laws, except for (i) matters set forth in
Schedule 4.25 and (ii) matters which, individually or in the aggregate, could
not have a Material Adverse Effect. There are (to the Borrower's knowledge
after due inquiry) no circumstances that may prevent or interfere with such
full compliance in the future.
(b) The Borrower and its Environmental Affiliates (including
with respect to the Target Business, JGT) have all Environmental Approvals
necessary or desirable for the ownership and operation of their respective
properties, facilities and businesses as presently owned and operated and as
presently proposed to be owned and operated, except for (i) matters set forth
in Schedule 4.25 and (ii) matters which, individually or in the aggregate,
could not have a Material Adverse Effect.
(c) There is no Environmental Claim pending or (to the
knowledge of the Borrower after due inquiry) threatened, and there are no past
or present acts, omissions, events or circumstances (including but not limited
to any dumping, leaching, deposition, removal, abandonment, escape, emission,
discharge or release of any Environmental Concern Material at, on or under any
facility or property now or previously owned, operated or leased by the
Borrower or its Environmental Affiliates (including with respect to the Target
Business, JGT)) that could form the basis of any Environmental Claim, against
the Borrower or its Environmental Affiliates (including with respect to the
Target Business, JGT), except for (i) matters set forth in Schedule 4.25, and
(ii) matters which, if adversely decided, individually or in the aggregate,
could not have a Material Adverse Effect.
(d) No facility or property now or previously owned, operated
or leased by the Borrower or its Environmental Affiliates (including with
respect to the Target Business, JGT) is an Environmental Cleanup Site. The
Borrower and its Environmental Affiliates (including with respect to the Target
Business, JGT) have not directly transported or directly arranged for the
transportation of any Environmental Concern Materials to any Environmental
Cleanup Site. No Lien exists, and no condition exists which could result in
the filing of a Lien, against any property of the Borrower or its Environmental
Affiliates (including with respect to the Target Business, JGT), under any
Environmental Law.
4.26. LABOR MATTERS. The Target, insofar as the Target
Business is concerned, has been, and the Borrower is, in compliance in all
material respects with those provisions of National Labor Relations Act, the
Code, ERISA, the Age Discrimination in Employment Act and all other labor and
employment laws, and the regulations and published interpretations thereunder
which are applicable to the Target Business. There are no controversies, labor
disputes, work stoppages or strikes pending or threatened or anticipated,
between the Borrower and any of its employees, other than employee grievances
arising in the ordinary course of business which, if adversely decided,
individually or in the aggregate, could not have a Material Adverse Effect.
Schedule 4.26 sets forth a complete list of all collective bargaining
agreements to which JGT, insofar as the Target Business is concerned, or the
Borrower was or is a party. Other than as set forth in Schedule 4.26, JGT,
insofar as the Target Business is concerned, and the Borrower are in full
compliance with the terms and conditions of each collective bargaining
agreement. Other than as set forth in Schedule 4.26, there are no efforts
underway by any union to organize any of the employees of JGT, insofar as the
Target Business is concerned, or the Borrower.
4.27. CONTRACT MATTERS.
(a) CONTRACTS, AGREEMENTS ARRANGEMENTS, ETC. Schedule 4.27
contains a list of the following material contracts to which the Borrower is a
party which are not described in any other Schedule:
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(i) contracts for the employment of any officer,
employee, director or consultant;
(ii) contracts for the purchase, sale, production or
supply by the Company, whether on a continuing basis or
otherwise, of goods or services of any type which have a
pay-out of $25,000 or more per year; and
(iii) agreement, contract or commitment for any
charitable or political contribution;
Except as may be disclosed on Schedule 4.27, each of the
agreements, contracts, commitments, leases and other instruments, documents and
undertakings listed on Schedule 4.27 is valid and enforceable in accordance
with its terms and, as applicable, has been validly assigned by JGT to the
Borrower, the parties thereto are in compliance with the provisions thereof, no
party is in default in the performance, observance or fulfillment of any
material obligation, covenant or condition contained therein, the written forms
thereof contain the entire agreement of the parties with regard to the subject
matter thereof and no event has occurred which with or without the giving of
notice or lapse of time, or both, would constitute a default thereunder;
furthermore, except as may be disclosed on the Schedule 4.27, no such
agreement, contract, commitment, lease or other instrument, document or
undertaking, in the reasonable opinion of the Borrower, contains any
contractual requirement with which there is a reasonable likelihood the
Borrower or any other party thereto will be unable to comply.
4.28. ACQUISITION DOCUMENTS. The Borrower has provided or
caused to be provided to the Agent a true, correct and complete copy of the
Acquisition Agreement and the other Acquisition Documents. The Acquisition
Documents have not been amended, modified or supplemented, nor have any of the
provisions thereof been waived. The Acquisition Agreement has been duly
executed and delivered by the Executive and, by mesne conveyances, duly
assigned and assumed by the Borrower and is in full force and effect. Each of
the representations and warranties of each party to the Acquisition Agreement,
contained in the Acquisition Agreement and the other Acquisition Documents, is
true and correct, and, to the extent made by the Borrower, the Agent and each
Lender shall be entitled to rely on such representations and warranties with
the same force and effect as if they were set forth in this Agreement in full
and made to the Agent and each Lender directly. The provisions of the
Acquisition Documents, including but not limited to all representations,
warranties and covenants of the parties thereto, are legal, valid and binding
obligations of the Borrower and all such other parties, respectively,
enforceable in accordance with the terms thereof.
4.29. SUBORDINATED DEBT DOCUMENTS. The Borrower has provided
or caused to be provided to the Agent a true, correct and complete copy of the
Subordinated Debt Agreement and the other Subordinated Debt Documents. The
Subordinated Debt Documents have not been amended, modified or supplemented,
nor have any of the provisions thereof been waived. The Subordinated Debt
Agreement has been duly executed and delivered by the Borrower and is in full
force and effect. Each of the representations and warranties of the Borrower
and each other party thereto, contained in the Subordinated Debt Agreement and
the other Subordinated Debt Documents, is true and correct, and, to the extent
made by the Borrower, the Agent and each Lender shall be entitled to rely on
such representations and warranties with the same force and effect as if they
were set forth in this Agreement in full and made to the Agent and each Lender
directly. The provisions of the Subordinated Debt Documents, including but not
limited to all representations, warranties and covenants of the parties
thereto, are legal, valid and binding obligations of the Borrower and all such
other parties, respectively, enforceable in accordance with the terms thereof.
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ARTICLE V
CONDITIONS OF LENDING
5.01. CONDITIONS TO EXTENSIONS OF CREDIT ON THE CLOSING DATE.
The obligation of each Lender to make any Loan and the obligation of the
Issuing Bank to issue any Letter of Credit on the Closing Date is subject to
performance by the Borrower of its obligations to be performed under the Loan
Documents on or before the date such Loan is made or such Letter of Credit is
issued, to satisfaction of any conditions precedent set forth elsewhere in the
Loan Documents and to satisfaction of the following further conditions
precedent:
(a) AGREEMENT; NOTES. The Agent shall have received this
Agreement, a Revolving Credit Note and a Term Loan Note, duly executed on
behalf of the Borrower, each conforming to the requirements hereof.
(b) SECURITY DOCUMENTS. The Agent shall have received:
(i) a Security Agreement, duly executed by the Borrower, in
substantially the form attached hereto as Exhibit D (as amended,
modified or supplemented from time to time, the "Security Agreement");
(ii) Fee Deeds of Trust and Fee Mortgages, identified as such
in Schedule 5.01(b), each duly executed by the Borrower, in
substantially the form attached hereto as Exhibit E-1 and Exhibit E-2,
respectively (as amended, modified or supplemented from time to time,
the "Fee Deeds of Trust" and the "Fee Mortgages," respectively);
(iii) [Intentionally Omitted]
(iv) with respect to the Collateral referred to in the
Security Agreement, financing statements in proper form for filing
under the Uniform Commercial Code in all jurisdictions listed on
Schedule 3.03 of the Security Agreement;
(v) search reports from contemporaneous searches of the
Uniform Commercial Code, real property, tax, judgment and litigation
dockets and records and other appropriate registers for such
jurisdictions as shall have been requested by the Agent, which reports
shall have revealed no filings or recordings in effect with respect to
the Collateral purported to be covered by the Security Documents,
except Permitted Liens;
(vi) with respect to the Collateral referred to in the Fee
Mortgages and the Fee Deeds of Trust, (A) one or more mortgagee's
title insurance policies (or marked up unconditional binders for such
insurance) dated the Closing Date, (B) an as-built survey of the site
of each property or estate constituting Collateral thereunder,
certified to the Agent and such title insurance company in a manner
satisfactory to the Agent, each Lender and such title insurance
company, dated a date satisfactory to each of them by an independent
professional licensed land surveyor and (C) fixture filings in proper
form for filing under the Uniform Commercial Code in all jurisdictions
listed on Schedule 5.01(b);
(vii) [Intentionally Omitted]
(viii) with respect to the assignment of each Contract listed
on Schedule 3.07 to the Security Agreement, consents from each Person
listed on such Schedule 3.07 to the assignment of the Contracts with
the Borrower to which such Person is a party;
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(ix) with respect to the deposit accounts listed on Schedule
3.10 to the Security Agreement, Deposit Account Letter Agreements,
each duly executed by the Borrower and the lending institution party
thereto;
(x) with respect to the Motor Vehicles listed on Schedule
3.08 to the Security Agreement and not listed or referred to on
Schedule 6.16 hereto, the certificates of title to such Motor
Vehicles, each duly noted with the security interest in favor of the
Agent; and
(xi). evidence that all other action necessary or, in the
opinion of the Agent or any Lender, desirable to create, perfect and
protect the Liens created or purported to be created by the above
Security Documents have been taken.
(c) CAPITALIZATION; ACQUISITION. The corporate and capital
structure of the Borrower, and the terms, conditions, amounts and holders of
all equity, debt and other indebtedness, obligations and liabilities of the
Borrower, shall be satisfactory to the Agent and each Lender. The Agent shall
have received true and correct copies (in each case certified as to
authenticity on such date on behalf of the Borrower) of the following:
(i) a Purchase Agreement, in form and substance satisfactory
to the Agent and each Lender, duly executed by the Borrower and JGT
(the "Acquisition Agreement"), together with all material documents
executed and delivered in connection therewith (collectively, the
"Acquisition Documents");
(ii) a Subordinated Note and Equity Purchase Agreement, in
form and substance satisfactory to the Agent and each Lender, duly
executed by the Borrower and the Subordinated Debt Lender (the
"Subordinated Debt Agreement"), together with all material documents
executed and delivered in connection therewith (collectively, the
"Subordinated Debt Documents");
(iii) a Stockholders' Agreement, in form and substance
satisfactory to the Agent and each Lender, duly executed by the
Borrower and the Investor (the "Stockholders' Agreement");
(iv) a Voting Trust Agreement, in form and substance
satisfactory to the Agent and each Lender, duly executed by the
Borrower, the Investor, the Executive and a voting trustee
satisfactory to the Agent (the "Voting Trust Agreement"), under which,
among other things, the Executive irrevocably (subject only to pledge
arrangements with the Investor satisfactory to the Agent) obtains the
sole and exclusive right and power to direct such voting trustee how
to vote at least a majority of all outstanding capital stock of the
Borrower in any and all instances in which a vote of holders of such
stock is taken (or is required by law or the Borrower's charter to be
taken), including, without limitation, the right to designate, elect
and remove at least a majority of the members of the Borrower's Board
of Directors;
(v) a Tax Sharing Agreement, in form and substance
satisfactory to the Agent, duly executed by the Borrower and the
Investor (the "Tax Sharing Agreement");
(vi) a Management Agreement, in form and substance
satisfactory to the Agent, duly executed by the Borrower and the
Investor ("Management Agreement");
(vii) a Subordination Agreement, in form and substance
satisfactory to the Agent, duly executed by the Borrower, the
Investor, the Subordinated Debt Lender and the Lenders (the
"Subordination Agreement"); and
(viii) an Employment Agreement, in form and substance
satisfactory to the Agent, duly executed by the Borrower and the
Executive (the "Employment Agreement").
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All of the conditions precedent specified in the Acquisition Documents and the
Subordinated Debt Documents shall have been and shall continue to be satisfied
in all material respects.
(d) GOVERNMENTAL APPROVALS AND FILINGS. The Agent shall have
received true and correct copies (in each case certified as to authenticity on
such date on behalf of the Borrower) of all items referred to in Schedule 4.04
and such items shall be satisfactory in form and substance to the Agent and
each Lender and shall be in full force and effect.
(e) CORPORATE PROCEEDINGS. The Agent shall have received
certificates by the Secretary or Assistant Secretary of the Borrower dated as
of the Closing Date as to (i) true copies of the articles of incorporation and
by- laws (or other constituent documents) of the Borrower in effect on such
date, (ii) true copies of all corporate action taken by the Borrower relative
to this Agreement and the other Loan Documents, and (iii) the incumbency and
signature of the respective officers of the Borrower executing this Agreement
and the other Loan Documents to which the Borrower is a party thereto, together
with satisfactory evidence of the incumbency of such Secretary or Assistant
Secretary. The Agent shall have received certificates from the appropriate
Secretaries of State or other applicable Governmental Authorities dated not
more than 30 days before the Closing Date showing the good standing of the
Borrower in its state of incorporation and each state in which the Borrower
does business.
(f) INSURANCE.
(i) The Agent shall have received a report, addressed to the
Agent, satisfactory in form and substance to the Agent, as to insurance matters
pertaining to the Borrower. The Agent shall have received evidence
satisfactory to it that the insurance policies required by this Agreement and
the other Loan Documents have been obtained, containing the endorsements
required hereby and thereby.
(ii) The Agent shall have received satisfactory evidence of a
life insurance policy with a financially sound and reputable insurer acceptable
to the Agent insuring the life of the Executive in the amount of $5,000,000 and
naming the Borrower as the beneficiary, together with satisfactory evidence of
the assignment of such policy to the Agent as Collateral.
(g) ENVIRONMENTAL MATTERS. The Agent shall have received a
report, addressed to the Agent, satisfactory in form and substance to the
Agent, as to such environmental matters pertaining to the Borrower and its
respective Environmental Affiliates as any Lender may request (including but
not limited to a Phase I environmental risk report for all real property
constituting Collateral).
(h) CONTRACT MATTERS. The Agent shall have received copies
of each contract under which the Target Business has received more than $25,000
in revenue in either of the prior two fiscal years. Each of the contracts
listed on Schedule 3.07 of the Security Agreement shall be in full force and
effect. The Employment Contract between the Borrower and the Company shall be
in form and substance satisfactory to the Agent and shall be in full force and
effect.
(i) FINANCIAL STATEMENTS, PROJECTIONS. The Agent shall have
received copies of the financial statements and projections referred to in
Article IV.
(j) LEGAL OPINION OF COUNSEL. The Agent shall have received
an opinion addressed to the Agent and each Lender, dated the Closing Date, of
Sachnoff & Weaver, Ltd., counsel to the Borrower, in form and substance
satisfactory to the Agent.
(k) OFFICERS' CERTIFICATES. The Agent shall have received
certificates from such officers of the Borrower as to such matters as the Agent
may request.
(l) FEES, EXPENSES, ETC. All fees and other compensation
required to be paid to the Agent or the Lenders pursuant hereto or pursuant to
any other written agreement on or prior to the
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Closing Date shall have been paid or received, including but not limited to
those referred to in the Commitment Letter and the Fee Letter, each dated
December 31, 1997.
(m) EXISTING INDEBTEDNESS. JGT shall have paid and
discharged all of the existing Indebtedness, including but not limited to all
principal, interest, fees and other amounts outstanding or otherwise payable
and all commitments to lend, under the Existing Credit Agreement or any "Loan
Document" referred to therein, other than three letters of credit acceptable to
the Agent.
(n) EXISTING LIENS. The Agent shall have received for filing
UCC termination statements, mortgage satisfactions or other appropriate
documents for each Lien that is an encumbrance on the assets acquired pursuant
to the Acquisition Agreement (other than Permitted Liens). The Agent shall
have received a general release of Liens from Mellon Bank, N.A., as agent under
the Existing Credit Agreement.
(o) BORROWING BASE. The Agent shall have received a
Borrowing Base Certificate, signed by a Responsible Officer of the Borrower,
dated as of the Closing Date.
(p) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in this Agreement and in
each other Loan Document shall be true and correct in all material respects on
and as of the Closing Date as if made on and as of such date.
(q) NO DEFAULTS. No Event of Default or Potential Default
shall have occurred and be continuing on the Closing Date or after giving
effect to the Acquisition and the Loans requested to be made, and the Letters
of Credit requested to be issued, on the Closing Date.
(r) NO VIOLATIONS OF LAW, ETC. Neither the making or use of
the Loans, nor the issuing or use of the Letters of Credit, shall cause any
Lender to violate or conflict with any Law.
(s) NO MATERIAL ADVERSE CHANGE. There shall not have
occurred, or be threatened, a material adverse change in the business,
operations, assets or condition (financial or otherwise) or prospects of the
Borrower since September 30, 1997. There shall not have occurred, or be
threatened, any other event, act or condition which could have a Material
Adverse Effect.
(t) LITIGATION. There shall not be pending or (to the
knowledge of the Borrower after due inquiry, threatened) any action, suit,
proceeding or investigation by or before any Governmental Authority which, if
adversely decided, could have a Material Adverse Effect or which seeks to
challenge, prevent or declare illegal any of the transactions contemplated by
this Agreement or any other Loan Document.
(u) ACQUISITION CLOSING; SUBORDINATED DEBT CLOSING.
Contemporaneously with the making of the first Loans hereunder, the closings
under the Acquisition Agreement and the Subordinated Debt Agreement shall
occur, and the Borrower shall acquire the Target Business.
(v) METRO CONTRACT AMENDMENT. Change Order No. 23 to Metro
Contract No. 900848 shall have been entered into by JGT (or to Borrower) and
Metro, it being understood by the Agent and the Lenders that the provisions of
Section 4 of such Change Order No. 23 would be applicable to the Agent and the
Lenders in connection with the exercise of remedies with respect to Collateral
and that such provisions will limit the Agent's and the Lenders' ability to
remove the equipment referred to in such Section 4 during the 180 day period
referred to therein and shall entitle the Agent and the Lenders to the payments
referred to therein during such period.
(w) ADDITIONAL MATTERS. The Agent shall have received such
other certificates, opinions, documents and instruments as may be requested by
any Lender. All corporate and other proceedings, and all documents,
instruments and other matters in connection with the transactions
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contemplated by this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Agent and each Lender.
5.02. CONDITIONS TO EXTENSIONS OF CREDIT AFTER THE CLOSING
DATE. The obligation of each Lender to make any Loan and the obligation of the
Issuing Bank to issue any Letter of Credit after the Closing Date is subject to
performance by the Borrower of its obligations to be performed under the other
Loan Documents on or before the date such Loan is made or such Letter of Credit
is issued, to satisfaction of any conditions precedent set forth elsewhere in
the Loan Documents and to satisfaction of the following further conditions
precedent:
(a) NOTICE. The Agent shall have received an appropriate
notice of such Loan or Letter of Credit given by the Borrower as provided in
Article II or III.
(b) BORROWING BASE. The Agent shall have received a
Borrowing Base Certificate, signed by a Responsible Officer of the Borrower,
dated as of such date.
(c) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower in this Agreement (other
than in the penultimate sentence of Section 4.11) and in each other Loan
Document shall be true and correct in all material respects on and as of such
date as if made on and as of such date, both before and after giving effect to
the Loans requested to be made, and the Letters of Credit requested to be
issued, on such date.
(d) NO DEFAULTS. No Event of Default or Potential Default
shall have occurred and be continuing on such date or after giving effect to
the Loans requested to be made, and the Letters of Credit requested to be
issued, on such date.
(e) NO VIOLATIONS OF LAW, ETC. Neither the making or use of
the Loans, nor the issuing or use of the Letters of Credit, shall cause any
Lender to violate or conflict with any Law.
(f) NO MATERIAL ADVERSE CHANGE. There shall not have
occurred, or be threatened, a material adverse change in the business,
operations, assets or condition (financial or otherwise) or prospects of the
Borrower since September 30, 1997. There shall not have occurred, or be
threatened, any other event, act or condition which could have a Material
Adverse Effect.
Each request by the Borrower for any Loan or any Letter of Credit shall
constitute a representation and warranty by the Borrower that the conditions
set forth in this Section 5.02 have been satisfied as of the date of such
request. Failure of the Agent to receive notice from the Borrower to the
contrary before such Loan is made shall constitute a further representation and
warranty by the Borrower that the conditions referred to in this Section 5.02
have been satisfied as of the date such Loan is made or such Letter of Credit
is issued.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower hereby covenants to the Agent and each Lender as
follows:
6.01. BASIC REPORTING REQUIREMENTS.
(a) ANNUAL AUDIT REPORTS. As soon as practicable, and in any
event within 90 days after the close of each fiscal year of the Borrower, the
Borrower shall furnish to the Agent, statements of income, cash flow and
changes in stockholders' equity of the Borrower for such fiscal year and a
balance sheet of the Borrower as of the close of such fiscal year, and notes to
each, all in reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year. Such
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financial statements shall be accompanied by an opinion of independent
certified public accountants of recognized national standing selected by the
Borrower and reasonably satisfactory to the Required Lenders. Such opinion
shall be free of exceptions or qualifications not acceptable to the Required
Lenders and, in any event, shall be free of any exception or qualification
which is of "going concern" or like nature or which relates to a limited scope
of examination. Such opinion, in any event, shall contain a written statement
of such accountants substantially to the effect that (i) such accountants
examined such financial statements in accordance with generally accepted
auditing standards and accordingly made such tests of accounting records and
such other auditing procedures as such accountants considered necessary in the
circumstances and (ii) in the opinion of such accountants such financial
statements present fairly the financial position of the Borrower as of the end
of such fiscal year and the results of its operations and its cash flow and
changes in stockholders' equity for such fiscal year, in conformity with GAAP.
(b) MONTHLY UNAUDITED REPORTS. As soon as practicable, and
in any event within 30 days after the close of each calendar month of each
fiscal year of the Borrower, the Borrower shall furnish to the Agent unaudited
statements of income, cash flow and changes in stockholders' equity of the
Borrower for such calendar month and for the period from the beginning of such
fiscal year to the end of such calendar month and an unaudited balance sheet of
the Borrower as of the close of such calendar month, all in reasonable detail,
setting forth in comparative form the corresponding figures for the same
periods or as of the same date during the preceding fiscal year (except for the
balance sheet, which shall set forth in comparative form the corresponding
balance sheet as of the prior fiscal year end); provided, that no monthly
unaudited financial statements shall be required pursuant to this Section
6.01(b) for the last month in any fiscal year. Such financial statements shall
be certified by a Responsible Officer of the Borrower as presenting fairly the
financial position of the Borrower as of the end of such calendar month and the
results of its operations and its cash flow and changes in stockholders' equity
for such fiscal year, in conformity with GAAP, subject to normal and recurring
year-end audit adjustments.
(c) ACCOUNTANTS' CERTIFICATE. Each set of financial
statements delivered pursuant to Section 6.01(a) shall be accompanied by (i) a
certificate or report dated the date of such statements and balance sheet by
the independent certified public accountants who opined on such financial
statements stating in substance that they have reviewed this Agreement and that
in making the examination necessary for their certification of such statements
and balance sheet they did not become aware of any Event of Default or
Potential Default, or if they did become so aware, such certificate or report
shall state the nature and period of existence thereof, and (ii) a certificate
or report dated as of the date of such financial statements by such accountants
stating in reasonable detail the information and calculations necessary to
establish compliance with the financial covenants set forth in Section 6.01 as
of the end of such fiscal year.
(d) COMPLIANCE CERTIFICATES. The Borrower shall deliver to
the Agent a Compliance Certificate, in substantially the form attached hereto
as Exhibit G, duly completed and signed by a Responsible Officer of the
Borrower concurrently with the delivery of the financial statements referred to
in subsection (b) of this Section 6.01.
(e) PROJECTIONS.
(i) On the Closing Date (with respect to the then-current
fiscal year of the Borrower), and as soon as practicable and in any
event within 30 days after the close of each subsequent fiscal year of
the Borrower, the Borrower shall furnish to the Agent a certificate
signed by a Responsible Officer on behalf of the Borrower containing a
projection of the revenues, expenditures (capital or otherwise) and
results of operations and cash position of the Borrower as of the end
of each month in the forthcoming fiscal year, together with a
statement of the assumptions and estimates upon which such projections
are based. Such projections, estimates and assumptions, as of the
date of preparation thereof, shall be reasonable, made in good faith,
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shall be consistent with the Loan Documents, and shall represent the
Borrower's best judgment as to such matters.
(ii) As soon as practicable, and in any event within 30 days
after the end of each month after the Closing Date, the Borrower shall
furnish to the Agent a certificate signed by a Responsible Officer of
the Borrower containing the unaudited statements of revenues,
expenditures (capital or otherwise) and results of operations and cash
position of the Borrower for such month and for the period from the
beginning of the Borrower's fiscal year to the end of such month,
together with management commentary thereon, all in reasonable detail,
setting forth in comparative form the corresponding figures projected
for the same period or as of the same date as set forth in the most
recent projections referred to in subsection (i) of this Section
6.01(e), and shall contain an analysis of significant variances from
such projections. Such report shall be certified by a Responsible
Officer of the Borrower as presenting fairly the financial position of
the Borrower as of the end of such month and the results of its
operations and its cash flow for the periods covered thereby, in
conformity with GAAP, subject to normal and recurring year-end audit
adjustments.
(f) [Intentionally Omitted]
(g) COMMERCIAL FINANCE REPORTS. At such times as the Agent
shall specify from time to time the Borrower shall furnish to the Agent a
report of a Responsible Officer of the Borrower setting forth such matters
pertaining to the working capital of the Borrower and in such detail as the
Agent may specify from time to time, which may include, among other things,
information as to receivables (which may include, among other things, a
breakout of aging and collections, identification of each receivable, obligor,
due date and original invoice date, identification of write-offs and changes
made in reserves for bad debts, and identification of any extension of the
maturity of, refinancing or other material change in the terms of any
receivables), payables (which may include, among other things, a breakout of
aging and payments), sales, credits collections, backlog, and forecasts.
(h) CERTAIN OTHER REPORTS AND INFORMATION. Promptly upon
their becoming available to the Borrower, the Borrower shall deliver to the
Agent a copy of (i) all regular or special reports, registration statements and
amendments to the foregoing which the Borrower or the Investor shall file with
the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) all reports, proxy statements, financial statements
and other information distributed by the Borrower or the Investor to its
stockholders, bondholders or the financial community generally, and (iii) all
accountants' management letters pertaining to, all other reports submitted by
accountants in connection with any audit of, and all other material reports
from outside accountants with respect to, the Borrower.
(i) FURTHER INFORMATION. The Borrower will promptly furnish
to the Agent such other information and in such form as the Agent may
reasonably request from time to time, including but not limited to financial
and operating information of the Borrower prepared on a terminal by terminal or
a contract by contract basis.
(j) NOTICE OF CERTAIN EVENTS. Promptly upon becoming aware
of any of the following, the Borrower shall give the Agent notice thereof,
together with a written statement of a Responsible Officer of the Borrower
setting forth the details thereof and any action with respect thereto taken or
proposed to be taken by the Borrower:
(i) Any Event of Default or Potential Default.
(ii) Any material adverse change in the business, operations
or condition (financial or otherwise) or prospects of the Borrower.
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(iii) Any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or
affecting the Borrower, involving an amount of $250,000 or more or
seeking specific performance or injunctive relief.
(iv) Any material violation, breach or default by the
Borrower of or under any agreement or instrument material to the
business, operations, condition (financial or otherwise) or prospects
of the Borrower.
(v) Any amendment or supplement to, or extension, renewal,
refinancing, or refunding of, or waiver by any other party thereto of
any right under or conditions of any agreement or instrument creating,
evidencing or securing any Indebtedness or Guaranty Equivalent of the
Borrower (including but not limited to Subordinated Debt Documents,
and any negotiations pertaining to any of the foregoing).
(vi) Any Pension-Related Event. Such notice shall be
accompanied by: (A) a copy of any notice, request, return, petition or
other document received by the Borrower or any Controlled Group Member
from any Person, or which has been or is to be filed with or provided
to any Person (including without limitation the Internal Revenue
Service, PBGC or any Plan participant, beneficiary, alternate payee or
employer representative), in connection with such Pension-Related
Event, and (B) in the case of any Pension-Related Event with respect
to a Plan, the most recent Annual Report (5500 Series), with
attachments thereto, and the most recent actuarial valuation report,
for such Plan.
(vii) Any Environmental Claim pending or threatened against
the Borrower or any of its Environmental Affiliates, or any past or
present acts, omissions, events or circumstances (including but not
limited to any dumping, leaching, deposition, removal, abandonment,
escape, emission, discharge or release of any Environmental Concern
Material at, on or under any facility or property now or previously
owned, operated or leased the Borrower or any of its Environmental
Affiliates) that could form the basis of such Environmental Claim,
which Environmental Claim, if adversely resolved, individually or in
the aggregate, could have a Material Adverse Effect.
(k) NOTICES UNDER OTHER AGREEMENTS. Concurrently with the
Borrower's delivery or receipt thereof, the Borrower shall provide the Agent
with copies of any reports, certificates or notices furnished by the Borrower
to any other party to any agreement or instrument material to the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any agreement or instrument creating, evidencing or securing any Indebtedness
or Guaranty Equivalent of the Borrower (including but not limited to the
Subordinated Debt Documents).
(l) VISITATION; VERIFICATION. The Borrower shall permit such
Persons as the Agent or any Lender may designate from time to time to visit and
inspect any of the properties of the Borrower, to examine their respective
books and records and take copies and extracts therefrom and to discuss their
respective affairs with their respective directors, officers, employees and
independent accountants at such times and as often as the Agent or any Lender
may reasonably request. The Borrower hereby authorizes such officers,
employees and independent accountants to discuss with the Agent or any Lender
the affairs of the Borrower. The Agent and the Lenders shall have the right to
examine and verify accounts, inventory and other properties and liabilities of
the Borrower from time to time, and the Borrower shall cooperate with the Agent
and the Lenders in such verification.
(m) ENVIRONMENTAL AUDIT. The Agent shall have the right from
time to time to designate such Persons ("Environmental Auditors") as the Agent
may select to visit, inspect and have access to any of the properties, products
or wastes of the Borrower and, to the extent possible, its respective
Environmental Affiliates, for the purpose of investigating whether there may be
a basis for any Environmental Claim or any condition which could result in any
liability, cost or expense to the
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Agent or any Lender. Such investigation may include, among other things, above
and below ground testing for the presence of Environmental Concern Materials
and such other tests as may be necessary or advisable in the opinion of the
Agent. With respect to any such investigation, Agent shall use reasonable
efforts to attempt to minimize to the extent practicable the disruption of the
business and operations of the Borrower or any Environmental Affiliates. The
Agent shall generally advise the Borrower in advance as to the method, means
and timing of such investigation. The Agent will use reasonable efforts to
have any invasive testing performed by professional believed by the Agent to be
properly qualified and to have customary insurance coverage. The Borrower will
supply to the Environmental Auditors such historical and operational
information, including the results of all samples sent for analysis,
correspondence with Governmental Authorities and environmental audits or
reviews regarding properties, products and wastes of the Borrower or its
respective Environmental Affiliates as are within its possession, custody or
control, or which are available to it, and will make available for meetings
with the Environmental Auditors appropriate personnel employed by or
consultants retained by the Borrower having knowledge of such matters.
6.02. INSURANCE.
(a) The Borrower shall (i) maintain with financially sound
and reputable insurers acceptable to the Agent insurance with respect to its
properties and business and against such liabilities, casualties and
contingencies and of such types and in such amounts as is customary in the case
of Persons engaged in the same or similar businesses or having similar
properties similarly situated (including but not limited to business
interruption, product and other liability, casualty, workers' compensation and
umbrella insurance), which insurance, in any event, shall be reasonably
satisfactory from time to time to the Required Lenders, (ii) provide that such
insurance cannot terminate, expire, be canceled or amended in any material
respect without 30 days' prior notice to the Agent, (iii) furnish to each
Lender from time to time upon request the policies under which such insurance
is issued, certificates of insurance and such other information relating to
such insurance as such Lender may request, and (iv) provide such other
insurance and endorsements as are required by this Agreement and the other Loan
Documents.
(b) The Borrower shall provide a life insurance policy with a
financially sound and reputable insurer acceptable to the Agent insuring the
life of the Executive in the amount of $5,000,000 and naming the Borrower as
the beneficiary, which policy shall be effectively assigned to the Agent as
Collateral for payment of the obligations. The proceeds of such policy will,
unless the maturity of the Loans has been accelerated, be applied to payment of
the Term Loans in the inverse order of their scheduled maturities, any excess
to be applied to permanently reduce the Revolving Credit Committed Amount.
6.03. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND
PRIORITY CLAIMS. The Borrower shall pay or discharge
(a) on or prior to the date on which penalties attach
thereto, all taxes, assessments and other governmental charges imposed
upon it or any of its properties;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons which, if unpaid, might result in the creation of a Lien
upon any such property; and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property or which, if unpaid, might give rise to a claim entitled to
priority over general creditors of the Borrower in a case under Title
11 (Bankruptcy) of the United States Code, as amended;
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provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced the Borrower need not pay or discharge
any such tax, assessment, charge or claim so long as (x) the validity thereof
is contested in good faith and by appropriate proceedings diligently conducted,
(y) such reserves or other appropriate provisions as may be required by GAAP
shall have been made therefor, and (z) such failure to pay or discharge,
individually or in the aggregate, could not have a material Adverse Effect.
6.04. PRESERVATION OF CORPORATE STATUS. The Borrower shall
maintain its status as a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and to be
duly qualified to do business as a foreign corporation and in good standing in
all jurisdictions in which the ownership of its properties or the nature of its
business or both make such qualification necessary or advisable , except for
matters that, individually or in the aggregate, could not have a Material
Adverse Effect.
6.05. GOVERNMENTAL APPROVALS AND FILINGS. The Borrower shall
keep and maintain in full force and effect all Governmental Actions necessary
in connection with execution and delivery of any Loan Document, consummation of
the transactions hereon or therein contemplated, performance of or compliance
with the terms and conditions hereof or thereof or to ensure the legality,
validity, binding effect, enforceability or admissibility in evidence hereof or
thereof.
6.06. MAINTENANCE OF PROPERTIES. The Borrower shall maintain
or cause to be maintained in good repair, working order and condition the
properties now or hereafter owned, leased or otherwise possessed by it and
shall make or cause to be made all needful and proper repairs, renewals,
replacements and improvements thereto so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
6.07. AVOIDANCE OF OTHER CONFLICTS. The Borrower shall not
violate or conflict with, be in violation of or conflict with, or be or remain
subject to any liability (contingent or otherwise) on account of any violation
or conflict with
(a) any Law,
(b) its articles of incorporation of by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which it or any of its properties (now owned or hereafter acquired)
may be subject or bound,
except for matters that could not, individually or in the aggregate, have a
Material Adverse Effect.
6.08. FINANCIAL ACCOUNTING PRACTICES. The Borrower shall
make and keep books, records and accounts which, in reasonable detail,
accurately and fairly reflect its transactions and dispositions of its assets
and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions are recorded
as necessary (i) to permit preparation of financial statements in conformity
with GAAP and (ii) to maintain accountability for assets, (c) access to assets
is permitted only in accordance with management's general or specific
authorization and (d) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
6.09. USE OF PROCEEDS. The Borrower shall apply the proceeds
of (a) the Revolving Credit Loans, only for working capital, general corporate
purposes and reimbursement of costs set forth in Schedule 6.09 incurred by the
Investor in connection with the transactions contemplated by the Acquisition
Agreement, the Subordinated Debt Agreement and this Agreement; and (b) the Term
Loans, to finance the Acquisition. The Borrower shall not use the proceeds of
any Loans hereunder directly or
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indirectly for any unlawful purpose, in any manner inconsistent with Section
4.13, or inconsistent with any other provision of any Loan Document.
6.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Borrower
shall continue to engage in the Target Business substantially as conducted and
operated during the present and preceding fiscal year, and the Borrower shall
not engage in any other business, other than the dry bulk commodity freight
business.
6.11. CONSOLIDATED TAX RETURN. The Borrower shall not file
or consent to the filing of any consolidated income tax return with any Person,
except as permitted under the Tax Sharing Agreement. The Borrower shall not
amend, or consent to an amendment of, the Tax Sharing Agreement.
6.12. FISCAL YEAR. The Borrower shall not change its fiscal
year or fiscal quarter.
6.13. PLAN AND MULTIEMPLOYER PLANS.
(a) REQUIRED CONTRIBUTIONS. The Borrower shall, and shall
cause each of its Controlled Group Members to, make contributions to each Plan
maintained by the Borrower and its Controlled Group Members, respectively, when
due in accordance with the minimum funding requirements under ERISA and the
Code applicable to such Plan and pay PBGC premiums as and when due for such
Plan.
(b) CERTIFICATE AS TO UNFUNDED BENEFITS FOR TITLE IV PLANS
AND CERTIFICATE OF POSTRETIREMENT BENEFIT OBLIGATIONS. As soon as such
liability has been determined, or within 65 days after Borrower receives a
request for such liability determination from the Agent, the Borrower shall
deliver or cause to be delivered to the Agent (i) with respect to each Plan
subject to Title IV of ERISA and maintained by the Borrower or any Controlled
Group Member, the "amount of unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA), as certified by the actuary for each such Plan,
and (ii) the aggregate amount of Postretirement Benefit Obligations, as
certified by an actuary satisfactory to the Agent and each Lender. The
Borrower shall notify the Agent within 30 days of the occurrence of any event
that would materially affect the "amount of unfunded benefit liabilities" (as
defined in Section 4001(a)(18) of ERISA) for any such Plan or materially affect
Postretirement Benefit Obligations.
(c) NOTICE OF PLAN. Within not more than 60 days after the
earlier of implementation, or corporate authorization to implement, a Plan
(other than one described in subparagraph (b) of the definition thereof
herein), the Borrower shall give written notice to the Agent of such action.
Upon receipt of such notice, Schedule 4.24 shall be deemed to be automatically
amended to include such Plan.
(d) NOTICE OF MULTIEMPLOYER PLAN. Within not more than 60
days after the Borrower or any Controlled Group Member becomes obligated to
contribute to any Multiemployer Plan, the Borrower shall give written notice
thereof to the Agent. Upon receipt of such notice, Schedule 4.24 shall be
deemed to be automatically amended to include such Multiemployer Plan.
(e) REQUIRED CONTRIBUTIONS TO MULTIEMPLOYER PLANS. The
Borrower shall, and shall cause each of its Controlled Group Members to, make
contributions required to be made by it, or any of them, to each Multiemployer
Plan when due in accordance with its, or any of their, obligations under any
collective bargaining agreement related to such Multiemployer Plan or
participation agreements applicable to such Multiemployer Plan; provided,
however nothing herein shall be interpreted as preventing the Borrower from
contesting in good faith any said obligation and/or the contributions required
thereunder.
6.14. INTEREST RATE PROTECTION. Within 60 days after the
Closing Date, the Borrower shall enter into one or more Interest Rate Hedging
Agreements on such terms as shall be reasonably satisfactory to the Agent and
which (when taken together with the Borrower's obligations under the Term Loan)
have the economic effect of fixing the Borrower's effective interest cost on at
least 50% of the scheduled outstanding principal amount of Term Loans for a
period of at least three years following
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the Closing Date. The Borrower shall thereafter select interest rate Options
with respect to the Term Loans that match, in time and amount, as closely as
may be the terms of the rate hedge represented by such Interest Rate Hedging
Agreements.
6.15. APPRAISAL OF QUALIFIED COLLATERAL. As soon as
practicable, and in any event within 120 days after the close of each fiscal
year of the Borrower, the Borrower shall furnish to the Agent an appraisal
report satisfactory to the Agent, which report shall set forth the value
(including but not limited to the orderly liquidation value) of the Qualified
Collateral of the Borrower as of the last day of such fiscal year as determined
by an appraisal firm acceptable to the Agent.
6.16. POST-CLOSING MATTERS. The Borrower will take all
actions set forth on Schedule 6.16 within the time period and in the manner set
forth in Section 6.16.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower hereby covenants to the Agent and each Lender as
follows:
7.01. FINANCIAL COVENANTS.
(a) TOTAL LEVERAGE RATIO. As of the last day of each fiscal
quarter, beginning June 30, 1998, the Total Leverage Ratio for the applicable
Calculation Period shall not exceed: (i) 4.0 for June 30, 1998 and September
30, 1998; (ii) 3.5 from and including December 31, 1998 to and including
September 30, 1999; and (iii) 3.0 thereafter.
(b) TANGIBLE NET WORTH. Tangible Net Worth shall not at any
time from and after June 30, 1998 be less than an amount equal to (i) the
greater of $1 and 90% of the Borrower's Tangible Net Worth on June 30, 1998
plus (ii) 80% of the sum of the Net Income (not to be reduced by losses) for
each fiscal quarter during the period from July 1, 1998 through and including
the date (the "Interim Date") which is the earlier to occur of the last day of
the then most recently completed fiscal quarter and the last day of the fiscal
quarter in which the Tangible Net Worth of the Borrower first reaches $650,000
plus (iii) if the Interim Date has occurred, 50% of the sum of the Net Income
(not to be reduced by losses) for each fiscal quarter during the period from
the day after the Interim Date through and including the last day of the then
most recently completed fiscal quarter.
(c) FIXED CHARGE COVERAGE RATIO. As of the last day of each
fiscal quarter, beginning June 30, 1998, the Fixed Charge Coverage Ratio for
the applicable Calculation Period shall not be less than 1.25.
(d) INTEREST COVERAGE RATIO. As of the last day of each
fiscal quarter, beginning June 30, 1998, the Interest Coverage Ratio for the
applicable Calculation Period shall not be less than: 3.0 to and including
September 30, 1999; (ii) 3.5 from and including December 31, 1999 to and
including September 30, 2000; (iii) 4.0 from and including December 31, 2000 to
and including September 30, 2001; and (iv) 4.5 thereafter.
7.02. LIENS. The Borrower shall not at any time create,
incur, assume or suffer to exist any Lien on any of its property (now owned or
hereafter acquired), or agree, become or remain liable (contingently or
otherwise) to do any of the foregoing, except for the following ("Permitted
Liens"):
(a) Liens pursuant to the Security Documents in favor of the
Agent for the benefit of the Lenders and the Agent to secure the
Obligations;
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(b) Liens pursuant to the Subordinated Debt Documents (as in
effect on the Closing Date) in favor of the Subordinated Debt Lender
to secure the Subordinated Debt, subject to the Subordination
Agreement.
(c) Liens existing on the date hereof securing obligations
existing on the date hereof, as such Liens and obligations are listed
in Schedule 7.02 (and Liens securing successor obligations incurred to
refinance predecessor obligations allowed under this subsection (b);
provided that in each case the successor obligation is an obligation
of the same Person subject to the predecessor Indebtedness and is not
greater than (and is not otherwise on terms less advantageous than)
the predecessor obligation immediately before such refinancing, and
the Lien securing the successor obligation does not extend to any
property other than that subject to the Lien securing the predecessor
obligation immediately before such refinancing);
(d) Liens (whether or not assumed) existing on property at
the time of purchase thereof by the Borrower or to secure payment of
the purchase price thereof, provided, that:
(i) such Lien is created before or substantially
simultaneously with the purchase of such property in the
ordinary course of business by the Borrower;
(ii) such Lien is confined solely to the property so
purchased, improvements thereto and proceeds thereof;
(iii) the aggregate amount secured by all such Liens
on any particular property at the time purchased by the
Borrower, as the case may be, shall not exceed the lesser of
the purchase price of such property or the fair market value
of such property at the time of purchase thereof ("purchase
price" for this purpose including the amount secured by each
such Lien thereon whether or not assumed); and
(iv) the obligation secured by such Lien is
Indebtedness permitted under Section 7.03(c);
(e) Liens arising from taxes, assessments, charges or claims
described in Section 6.03 that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the
proviso to such Section 6.03;
(f) Deposits or pledges of cash or securities in the ordinary
course of business to secure (i) workmen's compensation, unemployment
insurance or other social security obligations, (ii) performance of
bids, tenders, trade contracts (other than for payment of money) or
leases, (iii) stay, surety or appeal bonds, or (iv) other obligations
of a like nature incurred in the ordinary course of business;
(g) Zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in title thereto and other
minor Liens that do not secure the payment of money or the performance
of an obligation and that do not in the aggregate materially detract
from the value of a property or asset to, or materially impair its use
in the business of, the Borrower; and
(h) With respect to the real property owned by the Borrower,
(i) those matters set forth in the title insurance policies insuring
the lien of the Fee Mortgages, the Fee Deeds of Trust, the Leasehold
Mortgages (if any) and the Leasehold Deeds of Trust (if any); (ii)
mechanics', materialmen's, carriers', landlords' or other like liens
arising by operation of law and in the ordinary course of business and
securing obligations of a Person that are not overdue for a period of
more than 30 days or are being contested in good faith and, in the
case of any such lien on the real property, in accordance with the
terms of the Fee Mortgages, the Feed Deeds of Trust, Leasehold
Mortgages or Leasehold Deeds of Trust applicable thereto, if any; and
(iii)
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easements, rights-of-way, zoning and similar restrictions and other
charges or encroachments or encumbrances not interfering with the
ordinary conduct of the business of the Borrower and which do not
detract materially from the value of the property to which they attach
or impair materially the use thereof by the Borrower.
"Permitted Lien" shall in no event include any Lien imposed by, or required to
be granted pursuant to, ERISA or any Environmental Law. Nothing in this
Section 7.02 shall be construed to limit any other restriction on Liens imposed
by the Security Documents or otherwise in the Loan Documents.
7.03. INDEBTEDNESS. The Borrower shall not at any time
create, incur, assume or suffer to exist any Indebtedness, or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing, except:
(a) Indebtedness to the Lenders and the Agent pursuant to
this Agreement and the other Loan Documents;
(b) Indebtedness to the Subordinated Debt Lender incurred on
the Closing Date pursuant to the Subordinated Debt Documents (as in
effect on the Closing Date); provided; that the aggregate principal
amount of the notes constituting Subordinated Debt shall not exceed
$8,000,000;
(c) Indebtedness secured by Liens permitted by Section
7.02(d); provided, that the aggregate principal amount of such
Indebtedness shall not exceed $250,000;
(d) Accounts payable to trade creditors arising out of
purchases of goods or services in the ordinary course of business;
provided that (i) such account payable is payable not later than 90
days after the original invoice date according to the original terms
of sale, and (ii) such account payable is not overdue by more than 90
days according to the original terms of sale (except to the extent
such account payable is being contested in good faith and by
appropriate proceedings diligently conducted and so long as such
reserves or other appropriate provisions as may be required by GAAP
shall have been made with respect therefor);
(e) Indebtedness under Interest Rate Hedging Agreements;
(f) Capitalized Lease Obligations, to the extent permitted by
Sections 7.08(b) and 7.13 hereof;
(g) Permitted Aasche Subordinated Debt Refinancing
Indebtedness, but only if at the time of incurrence thereof (i) the
Voting Trust Agreement has been amended in a manner satisfactory to
the Agent to remove the rights of the Subordinated Debt Lender
thereunder and replace such right with rights of the Agent or another
party satisfactory to the Agent, (ii) all Liens granted under the
Subordinated Debt Documents are released and (iii) all shares of
capital stock of the Borrower held by the Subordinated Debt Lender or
otherwise subject to any "Put" rights under the Subordinated Debt
Documents or any similar right (x) have been purchased by Aasche or
(y) are the subject of an irrevocable waiver of the rights of the
holders of such shares to put or otherwise require purchase or
redemption of such shares by the Borrower or (z) in the case of the
Purchased Shares (as defined in the Subordinated Debt Agreement) only,
are the subject of arrangements reasonably satisfactory in form and
substance to the Agent under which the Investor arranges for and
provides, at its expense and for the benefit of the Agent, a letter of
credit or comparable assurance from a financial institution reasonably
satisfactory to the Agent that the Investor will, and will have access
to sufficient funds to, under any circumstance make common equity
contributions to the Borrower at such times and in such amounts as
will be sufficient to enable the Borrower to comply with all "Put"
rights applicable any Purchased Shares; and.
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(h) the Asche Tractor Debt.
7.04. GUARANTIES, INDEMNITIES, ETC The Borrower shall not be
or become subject to or bound by any Guaranty Equivalent, or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing, except:
(a) Guaranty Equivalents existing on the date hereof and
listed in Schedule 7.04 hereto (and extensions, renewals and
refinancings thereof and of the associated Assured Obligations on
terms no more burdensome to the Borrower than those existing
immediately before such extension, renewal or refinancing);
(b) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business; and
(c) Indemnities by the Borrower of the liabilities of its
directors or officers, in their capacities as such, pursuant to
provisions presently contained in their articles of incorporation or
by-laws (or other constituent documents) or as permitted by Law.
7.05. LOANS, ADVANCES AND INVESTMENTS. The Borrower shall
not at any time make or suffer to exist or remain outstanding any loan or
advance to, or purchase, acquire or own (beneficially or of record) any stock,
bonds, notes or securities of, or any partnership interest (whether general or
limited) in, or any other interest in, or make any capital contribution to or
other investment in, any other Person, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except:
(a) Loans and investments existing on the date hereof and
listed in Schedule 7.05 (and extensions, renewals and refinancings
thereof on terms no less favorable than those existing immediately
before such extension, renewal or refinancing);
(b) Receivables owing to the Borrower arising from sales of
inventory under usual and customary terms in the ordinary course of
business; and loans and advances extended by the Borrower to
subcontractors or suppliers (excluding subcontractors or suppliers who
are Affiliates of the Borrower) under usual and customary terms in the
ordinary course of business;
(c) Advances to officers and employees of the Borrower to
meet expenses incurred by such officers and employees in the ordinary
course of business and in aggregate amounts at any time outstanding
not exceeding $250,000; and
(d) Cash Equivalent Investments.
7.06. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower
shall not declare or make any Stock Payment, or agree, become or remain liable
(contingently or otherwise) to do so.
7.07. SALE-LEASEBACKS. The Borrower shall not at any time
enter into or suffer to remain in effect any transaction to which the Borrower
is a party involving the sale, transfer or other disposition by the Borrower of
any property (now owned or hereafter acquired), with a view directly or
indirectly to the leasing back of any part of the same property or any other
property used for the same or a similar purpose or purposes, or agree, become
or remain liable (contingently or otherwise) to do any of the foregoing.
7.08. LEASES. The Borrower shall not at any time enter into
or suffer to remain in effect any lease, as lessee, of any property, or agree,
become or remain liable (contingently or otherwise) to do any of the foregoing,
except:
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(a) Leases of the Borrower existing on the date hereof and
listed in Schedule 7.08; and
(b) Leases, each of which may be either an operating lease or
a Capitalized Lease, of equipment used by the lessee in the ordinary
course of business, provided, that such leases are on an Approved
Lease Form and provided, further, that such leases, in the aggregate,
will not and do not result in the payment or accrual (whether on
account of Rental Expense, Interest Expense, principal component of
Capitalized Leases or otherwise) by the Borrower during any fiscal
year of more than an amount equal to (i) $1,500,000 for 1998,
$2,500,000 for 1999, $3,750,000 for 2000, $4,500,000 for 2001 and
$5,500,000 for 2002 minus (ii) the positive difference, if any,
between (x) the aggregate net amount of residual value "guaranteed" by
the Borrower under all equipment leases which terminate in such fiscal
year minus (y) the aggregate net amount of the fair market value at
lease termination of all equipment covered by such terminating leases.
7.09. MERGERS, ACQUISITIONS, ETC. The Borrower shall not (v)
merge with or into or consolidate with any other Person, (w) liquidate,
wind-up, dissolve or divide, (x) acquire all or any substantial portion of the
properties of any going concern or going line of business, or (y) acquire all
or any substantial portion of the properties of any other Person other than in
the ordinary course of business,, or (z) agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except as set forth in
the Acquisition Documents.
7.10. DISPOSITIONS OF PROPERTIES. The Borrower shall not
sell, convey, assign, lease, transfer, abandon or otherwise dispose of,
voluntarily or involuntarily, any of its properties, or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except the
Borrower may, for no consideration other than cash, dispose of equipment in the
ordinary course of business which is obsolete or no longer useful in the
business of the Borrower; provided, that the Borrower will report such
disposition to the Agent in writing, subject to mandatory prepayment in
accordance with Section 2.08(c).
7.11. SUBSIDIARIES. The Borrower shall not establish or
acquire any Subsidiary.
7.12. DEALINGS WITH AFFILIATES. The Borrower shall not enter
into or carry out any transaction with (including, without limitation, purchase
or lease property or services from, sell or lease property or services to, loan
or advance to, or enter into, suffer to remain in existence or amend any
contract, agreement or arrangement with) any Affiliate of the Borrower,
directly or indirectly, or agree, become or remain liable (contingently or
otherwise) to do any of the foregoing, except:
(a) Existence and performance of contracts, agreements and
arrangements in existence as of the date hereof or proposed as of the
date hereof and in any event set forth in Schedule 7.12; and
(b) Officers and employees of the Borrower may be compensated
for services rendered in such capacity to the Borrower, provided that
(i) such compensation is in good faith and on terms no less favorable
to the Borrower than those that could have been obtained in a
comparable transaction on an arm's-length basis from an unrelated
Person (ii) the board of directors of such Borrower (including a
majority of the directors having no direct or indirect interest in
such transaction) approve such compensation and (iii) such
compensation to any officer or employee in any fiscal year shall not
exceed $175,000.
7.13. CAPITAL EXPENDITURES. The Borrower shall not make any
Capital Expenditures on or after the date hereof, except for Capital
Expenditures not in excess of $2,000,000 in any fiscal year and except for
Capital Expenditures funded entirely with the proceeds of the sale or other
disposition of equipment in accordance with Section 7.10 hereof.
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7.14. ISSUANCE OF EQUITY. The Borrower shall not issue any
equity securities to the extent that such issuance would result in a Change of
Control.
7.15. LIMITATIONS ON MODIFICATION OF CERTAIN AGREEMENTS AND
INSTRUMENTS. The Borrower shall not amend, modify or supplement its articles
of incorporation or by-laws (or similar constituent documents).
7.16. LIMITATION ON PAYMENTS AND MODIFICATION OF RESTRICTED
INDEBTEDNESS. The Borrower shall not directly or indirectly, pay, prepay,
purchase, redeem, retire, defease or acquire, or make any payment (on account
of principal, interest, premium or otherwise) of, or grant, or amend, modify or
supplement any of the terms and conditions of, any Restricted Indebtedness, or,
or agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except as follows:
(a) The Borrower may pay principal of Subordinated Debt at
the regularly scheduled maturity thereof, and may pay interest thereon
when due, all to the extent consistent with the subordination
provisions of such Subordinated Debt and the Subordination Agreement;
(b) The Borrower may amend, modify or supplement the terms of
Restricted Indebtedness to extend the maturity or reduce the amount of
any payment of principal thereof, or to reduce the rate or extend the
date for payment of interest thereon, or to reduce the amount or
extend the date for payment by the Borrower of any other amount
payable in connection therewith, or to release any Lien provided or
required to be provided by the Borrower to secure such Restricted
Indebtedness, or to eliminate, waive or render less restrictive on the
Borrower any covenant, term or condition (other than the subordination
provisions) applicable to the Borrower; and
(c) The Borrower may use the proceeds of Permitted Aasche
Subordinated Debt Refinancing Indebtedness to make the payments
contemplated by the definition of that term.
7.17. LIMITATION ON OTHER RESTRICTIONS ON LIENS, TRANSFERS OR
DISPOSITIONS. The Borrower shall not enter into, become or remain subject to
any agreement or instrument to which the Borrower is a party or by which it or
any of its properties (now owned or hereafter acquired) may be subject or bound
containing provisions that would (i) prohibit, restrict or limit the grant or
continuance of any Lien upon any of its properties (now owed or hereafter
acquired) or (ii) prohibit, restrict or limit its ability to transfer or
dispose of any of its properties (now owned or hereafter acquired), to require
it to apply the proceeds of any such transfer disposition in a specified
manner, except:
(a) The Loan Documents:
(b) The Subordinated Debt Documents; and
(c) (i) Restrictions pursuant to non-assignment provisions of
any executory contract or of any lease by the Borrower as lessee, and
(ii) restrictions on granting Liens on property subject to a Permitted
Lien for the benefit of the holder of such Permitted Lien to the
extent in existence on the date hereof.
7.18. LIMITATION ON OTHER RESTRICTIONS ON AMENDMENT OF THE
LOAN DOCUMENTS, ETC. The Borrower shall not enter into, become or remain
subject to any agreement or instrument to which the Borrower is a party or by
which it or any of its properties (now owned or hereafter acquired) may be
subject or bound that would prohibit or require the consent of any Person to
any amendment, modification or supplement to any of the Loan Documents, except
for the Loan Documents.
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ARTICLE VIII
DEFAULTS
8.01. EVENTS OF DEFAULT. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(for any reason, whether voluntary, involuntary or effected or required by
Law):
(a) The Borrower shall fail to pay when due principal of any
Loan.
(b) The Borrower shall fail to pay when due interest on any
Loan, any fees, indemnity or expenses, or any other amount due
hereunder or under any other Loan Document and such failure shall have
continued for a period of five Business Days.
(c) Any representation or warranty made or deemed made by the
Borrower in or pursuant to or in connection with any Loan Document, or
any statement made by the Borrower in any financial statement,
certificate, report, exhibit or document furnished by any the Borrower
to the Agent or any Lender pursuant to or in connection with any Loan
Document, shall prove to have been false or misleading in any material
respect as of the time when made or deemed made (including by omission
of material information necessary to make such representation,
warranty or statement not misleading).
(d) The Borrower shall default in the performance or
observance of any covenant contained in Article VII or any of the
covenants contained in Sections 2.08, 2.14, 6.01(j)(i), 6.09, 6.10,
6.12 or 6.14.
(e) The Borrower shall default in the performance or
observance of any other covenant, agreement or duty under this
Agreement or any other Loan Document and (i) in the case of a default
under Section 6.01 (other than as referred to in subsection (j)(i)
thereof) such default shall have continued for a period of 10 days and
(ii) in the case of any other default such default shall have
continued for a period of 30 days.
(f) A Cross-Default Event shall occur with respect to a
Cross-Default Obligation; provided, that if such an event would have
occurred with respect to a Cross-Default Obligation but for the grant
of a waiver or similar indulgence, a Cross-Default Event shall
nevertheless be deemed to have occurred if the Borrower directly or
indirectly gave or agreed to give any consideration for such waiver or
indulgence (including but not limited to a reduction in maturity, an
increase in rates or the granting of collateral, but excluding
reimbursement of out-of-pocket expenses and counsel fees). As used
herein,
(i) "Cross-Default Event" means (A) the Borrower
shall fail to make any payment when due under any
Cross-Default Obligation and such failure shall have continued
beyond any period of grace with respect thereto, or (B) a
default, event of default, termination event or other similar
event or condition (however described) shall occur or exist in
respect of the Borrower under any agreement or instrument
relating to any Cross-Default Obligation which has resulted in
such Cross-Default Obligation becoming, or being capable of
being declared, due and payable under such agreement or
instrument before it would otherwise have been due and payable
(or, in the case of an Interest Rate Hedging Agreement, which
has resulted in such transaction becoming, or becoming capable
of being, subject to early termination), or (C) an Event of
Default under, and as defined in, the Subordinated Debt
Agreement; and
(ii) "Cross-Default Obligation" means (A) any
obligation (or set of related obligations), as principal or as
guarantor or other surety, in respect of Indebtedness
(including but not limited to obligations in respect of
Indebtedness pursuant to the
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Subordinated Debt Documents) in excess of $100,000 in the
aggregate at any one time, and (B) any obligation under or in
connection with any Interest Rate Hedging Agreement;
(g) One or more judgments for the payment of money shall have
been entered against the Borrower, which judgment or judgments exceed
$250,000 in the aggregate at any one time, and such judgment or
judgments shall have remained undischarged and unstayed for a period
of 30 consecutive days.
(h) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the
aggregate amount of $250,000 shall have been issued against the
Borrower or any of its properties and shall have remained undischarged
and unstayed for a period of 30 consecutive days.
(i) Any Governmental Action now or hereafter made by or with
any Governmental Authority in connection with any Loan Document is not
obtained or shall have ceased to be in full force and effect or shall
have been modified or amended or shall have been held to be illegal or
invalid, and such event or condition could have a Material Adverse
Effect.
(j) Any Security Document shall cease to be in full force and
effect, or any Lien created or purported to be created in any
Collateral pursuant to any Security Document shall fail to be valid,
enforceable and, with respect to any portion of the Collateral with an
aggregate value at any one time in excess of $50,000, perfected Lien
in favor of the Agent for the benefit of the Lenders and the Agent
securing the Obligations, having the priority purported to be given
such Lien under such Security Document.
(k) Any Loan Document or term or provision thereof shall
cease to be in full force and effect (except in accordance with the
express terms of such Loan Document), or the Borrower shall, or shall
purport to, terminate (except in accordance with the terms of such
Loan Document), repudiate, declare voidable or void or otherwise
contest, any Loan Document or term or provision thereof or any
obligation or liability of the Borrower thereunder.
(l) Any term or provision of the subordination provisions
contained in the Subordinated Debt Documents shall cease to be in full
force and effect, or the Borrower, any holder of any Subordinated Debt
(or any trustee or agent on behalf of such holders) shall, or shall
purport to, terminate, repudiate, declare voidable or void or
otherwise contest any term or provision of such subordination
provisions.
(m) The Required Lenders shall have determined in good faith
(which determination shall be conclusive) that an event or condition
has occurred which could have a Material Adverse Effect.
(n) Any one or more Pension-Related Events referred to in
subsection (a)(ii), (b) or (e) of the definition of "Pension-Related
Event" shall have occurred; or any one or more other one or more other
Pension- Related Events shall have occurred and the Required Lenders
shall determine in good faith (which determination shall be
conclusive) that such other Pension-Related Events, individually or in
the aggregate, could have a Material Adverse Effect.
(o) Any one or more of the events or conditions set forth in
the following clauses (i) or (ii) shall have occurred in respect of
the Borrower or any of its Environmental Affiliates, and the Required
Lenders shall determine in good faith (which determination shall be
conclusive) that such events or conditions, individually or in the
aggregate, could have a Material Adverse Effect: (i) any past or
present violation of any Environmental Law by such Person, (ii)
existence of any pending or threatened Environmental Claim against
any such Person, or existence of any
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past or present acts, omissions, events or circumstances that could
form the basis of any Environmental Claim against any such Person.
(p) A Change of Control or a Change of Management shall have
occurred.
(q) There shall occur a violation or termination of the
Voting Trust Agreement, or any party to the Voting Trust Agreement
shall attempt to repudiate or otherwise contest its obligations, or
the rights of the Executive, thereunder.
(r) A proceeding shall have been instituted in respect of the
Borrower
(i) seeking to have an order for relief entered in
respect of such Person, or seeking a declaration or entailing
a finding that such Person is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up,
charter revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief
with respect to such Person, its assets or its debts under any
Law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entities or any
other similar Law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee,
liquidator, assignee, sequestrator or other custodian for such
Person or for all or any substantial part of its property
and such proceeding shall result in the entry, making or grant of any
such order for relief, declaration, finding, relief or appointment, or
such proceeding shall remain undismissed and unstayed for a period of
45 consecutive days.
(s) The Borrower shall become insolvent; shall fail to pay,
become unable to pay, or state that it is or will be unable to pay,
its debts as they become due; shall voluntarily suspend transaction of
its or his business; shall make a general assignment for the benefit
of creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 8.01(r)(i), or
(whether or not any such proceeding has been instituted) shall consent
to or acquiesce in any such order for relief, declaration, finding or
relief described therein; shall institute (or fail to controvert in a
timely and appropriate manner) a proceeding described in Section
8.01(r)(ii), or (whether or not any such proceeding has been
instituted) shall consent to or acquiesce in any such appointment or
to the taking of possession by any such custodian of all or any
substantial part of its or his property; shall dissolve, wind-up,
revoke or forfeit its charter (or other constituent documents) or
liquidate itself or any substantial part of its property; or shall
take any action in furtherance of any of the foregoing.
8.02. CONSEQUENCES OF AN EVENT OF DEFAULT.
(a) If an Event of Default specified in subsections (a)
through (q) of Section 8.01 shall occur and be continuing or shall exist, then,
in addition to all other rights and remedies which the Agent or any Lender may
have hereunder or under any other Loan Document, at law, in equity or
otherwise, the Lenders shall be under no further obligation to make Loans
hereunder, the Issuing Bank may cease to issue Letters of Credit hereunder, and
the Agent may, and upon the written request of the Required Lenders shall, by
notice to the Borrower, from time to time do any or all of the following:
(i) Declare the Commitments terminated, whereupon the
Commitments will terminate and any fees hereunder shall be immediately
due and payable without presentment, demand, protest or further notice
of any kind, all of which are hereby waived, and an action therefor
shall immediately accrue.
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(ii) Declare the unpaid principal amount of the Loans,
interest accrued thereon and all other Obligations (including the
obligation to cash collateralize outstanding Letters of Credit) to be
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue.
(b) If an Event of Default specified in subsection (r) or (s)
of Section 8.01 shall occur or exist, then, in addition to all other rights and
remedies which the Agent or any Lender may have hereunder or under any other
Loan Document, at law, in equity or otherwise, the Commitments shall
automatically terminate and the Lenders shall be under no further obligation to
make Loans, the Issuing Bank may cease to issue Letters of Credit hereunder and
the unpaid principal amount of the Loans, interest accrued thereon and all
other Obligations (including the obligation to cash collateralize outstanding
Letters of Credit) shall become immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
waived, and an action therefor shall immediately accrue.
8.03. APPLICATION OF PROCEEDS. Subject to Section 3.01(g), after
the occurrence of an Event of Default and acceleration of the Loans, any
distributions made on account of Obligations under the Security Agreement and
all other payments received on account of Obligations shall be applied by the
Agent to payment of the Obligations in the following order:
First, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts due to the Agent in
its capacity as such under the Loan Documents;
Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts due to the Issuing
Bank in its capacities as such, other than principal of and interest
on Letter of Credit Reimbursement Obligations and accrued and unpaid
Letter of Credit Fees;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on Loans, accrued and unpaid interest on
Letter of Credit Unreimbursed Draws, and accrued and unpaid Letter of
Credit Fees and Revolving Credit Commitment Fees, ratably amongst the
Lenders and the Issuing Bank in proportion to the respective amounts
described in this clause "Third" due to them;
Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans and Letter of Credit
Unreimbursed Draws, ratably amongst the Lenders and the Issuing Bank
in proportion to the respective amounts described in this clause
"Fourth" due to them;
Fifth, to payment of all other Obligations, ratably amongst the
Agent and the Lenders in proportion to the respective amounts
described in this clause "Fifth" due to them; and
Finally, the balance, if any, after all of the Obligations have
been paid in full in cash, all Commitments have terminated, and all
Letters of Credit shall have terminated, to the Borrower or as
otherwise required by law.
ARTICLE IX
THE AGENT
9.01. APPOINTMENT. Each Lender hereby irrevocably appoints
Mellon Bank, N.A. to act as Agent for such Lender under this Agreement and the
other Loan Documents. Each Lender hereby irrevocably authorizes the Agent to
take such action on behalf of such Lender under the provisions of this
Agreement and the other Loan Documents, and to exercise such powers and to
perform such duties,
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as are expressly delegated to or required of the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto.
Mellon Bank, N.A., hereby agrees to act as Agent on behalf of the Lenders on
the terms and conditions set forth in this Agreement and the other Loan
Documents, subject to its right to resign as provided in Section 9.10. Each
Lender hereby irrevocably authorizes the Agent to execute and deliver each of
the Loan Documents and to accept delivery of such of the other Loan Documents
as may not require execution by the Agent. Each Lender hereby agrees that the
rights and remedies granted to the Agent under the Loan Documents shall be
exercised exclusively by the Agent, and that no Lender shall have any right
individually to exercise any such right or remedy, except to the extent
expressly provided herein or therein.
9.02. GENERAL NATURE OF AGENT'S DUTIES. Notwithstanding
anything to the contrary elsewhere in this Agreement or in any other Loan
Document:
(a) The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the other Loan
Documents, and no implied duties or responsibilities on the part of
the Agent shall be read into this Agreement or any Loan Document or
shall otherwise exist.
(b) The duties and responsibilities of the Agent under this
Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Agent shall not have a fiduciary
relationship in respect of any Lender.
(c) The Agent is and shall be solely the agent of the
Lenders. The Agent does not assume, and shall not at any time be
deemed to have, any relationship of agency or trust with or for, or
any other duty or responsibility to, the Borrower or any other Person
(except only for its relationship as agent for, and its express duties
and responsibilities to, the Lenders as provided in this Agreement and
the other Loan Documents).
(d) The Agent shall be under no obligation to take any action
hereunder or under any other Loan Document if the Agent believes in
good faith that taking such action may conflict with any Law or any
provision of this Agreement or any other Loan Document, or may require
the Agent to qualify to do business in any jurisdiction where it is
not then so qualified.
9.03. EXERCISE OF POWERS. The Agent shall take any action of
the type specified in this Agreement or any other Loan Document as being within
the Agent's rights, powers or discretion in accordance with directions from the
Required Lenders (or, to the extent this Agreement or such Loan Document
expressly requires the direction or consent of some other Person or set of
Persons, then instead in accordance with the directions of such other Person or
set of Persons). In the absence of such directions, the Agent shall have the
authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent this Agreement or
such Loan Document expressly requires the direction or consent of the Required
Lenders (or some other Person or set of Persons), in which case the Agent shall
not take such action absent such direction or consent. Any action or inaction
pursuant to such direction, discretion or consent shall be binding on all the
Lenders. The Agent shall not have any liability to any Person as a result of
(x) the Agent acting or refraining from acting in accordance with the
directions of the Required Lenders (or other applicable Person or set of
Persons), (y) the Agent refraining from acting in the absence of instructions
to act from the Required Lenders (or other applicable Person or set of
Persons), whether or not the Agent has discretionary power to take such action,
or (z) the Agent taking discretionary action it is authorized to take under
this Section (subject, in the case of this clause (z), to the provisions of
Section 9.04(a)).
9.04. GENERAL EXCULPATORY PROVISIONS. Notwithstanding
anything to the contrary elsewhere in this Agreement or any other Loan
Document:
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(a) The Agent shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement
or any other Loan Document, unless caused by its own gross negligence
or willful misconduct.
(b) The Agent shall not be responsible for (i) the execution,
delivery, effectiveness, enforceability, genuineness, validity or
adequacy of this Agreement or any other Loan Document, (ii) any
recital, representation, warranty, document, certificate, report or
statement in, provided for in, or received under or in connection
with, this Agreement or any other Loan Document, (iii) any failure of
the Borrower or any Lender to perform any of its respective
obligations under this Agreement or any other Loan Document, (iv) the
existence, validity, enforceability, perfection, recordation,
priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by
any of the Loan Documents or otherwise from time to time, or (v)
caring for, protecting, insuring, or paying any taxes, charges or
assessments with respect to any Collateral.
(c) The Agent shall not be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or
observance of any of the terms or conditions of this Agreement or any
other Loan Document on the part of the Borrower, (ii) the business,
operations, condition (financial or otherwise) or prospects of the
Borrower or any other Person, or (iii) except to the extent set forth
in Section 9.05(f), the existence of any Event of Default or Potential
Default.
(d) The Agent shall not be under any obligation, either
initially or on a continuing basis, to provide any Lender with any
notices, reports or information of any nature, whether in its
possession presently or hereafter, except for such notices, reports
and other information expressly required by this Agreement or any
other Loan Document to be furnished by the Agent to such Lender.
9.05. ADMINISTRATION BY THE AGENT.
(a) The Agent may rely upon any notice or other communication
of any nature (written or oral, including but not limited to telephone
conversations, whether or not such notice or other communication is made in a
manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties, and the Agent
shall not have any duty to verify the identity or authority of any Person
giving such notice or other communication.
(b) The Agent may consult with legal counsel (including,
without limitation, in-house counsel for the Agent or in-house or other counsel
for the Borrower), independent public accountants and any other experts
selected by it from time to time, and the Agent shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts.
(c) The Agent may conclusively rely upon the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the Agent in accordance with the requirements of this
Agreement or any other Loan Document. Whenever the Agent shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrower or any Lender, such matter may be established by a certificate of
the Borrower or such Lender, as the case may be, and the Agent may conclusively
rely upon such certificate (unless other evidence with respect to such matter
is specifically prescribed in this Agreement or another Loan Document).
(d) The Agent may fail or refuse to take any action unless it
shall be indemnified to its satisfaction from time to time against any and all
amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of
taking or continuing to take any such action.
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(e) The Agent may perform any of its duties under this
Agreement or any other Loan Document by or through agents or attorneys-in-fact.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in fact selected by it with reasonable care.
(f) The Agent shall not be deemed to have any knowledge or
notice of the occurrence of any Event of Default or Potential Default unless
the Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Event of Default or Potential Default, and stating
that such notice is a "notice of default". If the Agent receives such a
notice, the Agent shall give prompt notice thereof to each Lender.
9.06. LENDER NOT RELYING ON AGENT OR OTHER LENDERS. Each
Lender acknowledges as follows: (a) Neither the Agent nor any other Lender has
made any representations or warranties to it, and no act taken hereafter by the
Agent or any other Lender shall be deemed to constitute any representation or
warranty by the Agent or such other Lender to it. (b) It has, independently
and without reliance upon the Agent or any other Lender, and based upon such
documents and information as it has deemed appropriate, made its own credit and
legal analysis and decision to enter into this Agreement and the other Loan
Documents. (c) It will, independently and without reliance upon the Agent or
any other Lender, and based upon such documents and information as it shall
deem appropriate at the time, make its own decisions to take or not take action
under or in connection with this Agreement and the other Loan Documents.
9.07. INDEMNIFICATION. Each Lender agrees to reimburse and
indemnify the Agent and its directors, officers, employees and agents (to the
extent not reimbursed by the Borrower and without limitation of the obligations
of the Borrower to do so), Pro Rata, from and against any and all amounts,
losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
(including, without limitation, the fees and disbursements of counsel for the
Agent or such other Person in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not the Agent or
such other Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Agent or such other Person as a
result of, or arising out of, or in any way related to or by reason of, this
Agreement, any other Loan Document, any transaction from time to time
contemplated hereby or thereby, or any transaction financed in whole or in part
or directly or indirectly with the proceeds of any Loan, provided that no
Lender shall be liable for any portion of such amounts, losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements resulting solely from the gross negligence or willful
misconduct of the Agent or such other Person, as finally determined by a court
of competent jurisdiction.
9.08. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
Commitments and the Obligations owing to it, the Agent shall have the same
rights and powers under this Agreement and each other Loan Document as any
other Lender and may exercise the same as though it were not the Agent, and the
terms "Lenders," "Issuing Bank," "holders of Notes" and like terms shall
include the Agent in its individual capacity as such. The Agent and its
affiliates may, without liability to account, make Loans to, issue Letters of
Credit to, accept deposits from, acquire debt or equity interests in, enter
into Interest Rate Hedging Agreements with, act as trustee under indentures of,
and engage in any other business with, the Borrower and any stockholder,
subsidiary or affiliate of the Borrower, as though the Agent were not the Agent
hereunder.
9.09. HOLDERS OF NOTES. The Agent may deem and treat the
Lender which is payee of a Note as the owner and holder of such Note for all
purposes hereof unless and until a Transfer Supplement with respect to the
assignment or transfer thereof shall have been filed with the Agent in
accordance with Section 10.14. Any authority, direction or consent of any
Person who at the time of giving such authority, direction or consent is shown
in the Register as being a Lender shall be conclusive and binding on each
present and subsequent holder, transferee or assignee of any Note or Notes
payable to such Lender or of any Note or Notes issued in exchange therefor.
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9.10. SUCCESSOR AGENT. The Agent may resign at any time by
giving 10 days' prior written notice thereof to the Lenders and the Borrower.
The Agent may be removed by the Required Lenders at any time by giving 10 days'
prior written notice thereof to the Agent, the other Lenders and the Borrower.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed and consented to, and shall have accepted such appointment, within 30
days after such notice of resignation or removal, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent. Each successor Agent
shall be a commercial bank or trust company organized under the laws of the
United States of America or any State thereof and having a combined capital and
surplus of at least $1,000,000,000. Upon the acceptance by a successor Agent
of its appointment as Agent hereunder, such successor Agent shall thereupon
succeed to and become vested with all the properties, rights, powers,
privileges and duties of the former Agent, without further act, deed or
conveyance. Upon the effective date of resignation or removal of a retiring
Agent, such Agent shall be discharged from its duties under this Agreement and
the other Loan Documents, but the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted by it while it was Agent under
this Agreement. If and so long as no successor Agent shall have been
appointed, then any notice or other communication required or permitted to be
given by the Agent shall be sufficiently given if given by the Required
Lenders, all notices or other communications required or permitted to be given
to the Agent shall be given to each Lender, and all payments to be made to the
Agent shall be made directly to the Borrower or Lender for whose account such
payment is made.
9.11. ADDITIONAL AGENTS. If the Agent shall from time to
time deem it necessary or advisable, for its own protection in the performance
of its duties hereunder or in the interest of the Lenders, the Agent and the
Borrower shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable, in the opinion of the Agent,
to constitute another commercial bank or trust company, or one or more other
Persons approved by the Agent, to act as co-Agent or agent with respect to any
part of the Collateral, with such powers of the Agent as may be provided in
such supplemental agreement, and to vest in such bank, trust company or Person
as such co-Agent or separate agent, as the case may be, any properties, rights,
powers, privileges and duties of the Agent under this Agreement or any other
Loan Document.
9.12. CALCULATIONS. The Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good
faith. If such calculation, apportionment or distribution is subsequently
determined to have been made in error, the sole recourse of any Lender to whom
payment was due but not made shall be to recover from the other Lenders any
payment in excess of the amount to which they are determined to be entitled or,
if the amount due was not paid by the Borrower, to recover such amount from the
Borrower.
9.13. FUNDING BY AGENT. Unless the Agent shall have been
notified in writing by any Lender not later than the close of business on the
day before the day on which Loans are requested by the Borrower to be made that
such Lender will not make its ratable share of such Loans, the Agent may assume
that such Lender will make its ratable share of the Loans, and in reliance upon
such assumption the Agent may (but in no circumstances shall be required to)
make available to the Borrower a corresponding amount. If and to the extent
that any Lender fails to make such payment to the Agent on such date, such
Lender shall pay such amount on demand (or, if such Lender fails to pay such
amount on demand, the Borrower shall pay such amount on demand), together with
interest, for the Agent's own account, for each day from and including the date
of the Agent's payment to and including the date of repayment to the Agent
(before and after judgment) at the rate or rates per annum applicable to such
Loans. All payments to the Agent under this Section shall be made to the Agent
at its Office in Dollars in funds immediately available at such Office, without
set-off, withholding, counterclaim or other deduction of any nature.
9.14. AGENT'S FEE. In the event that Mellon Bank, N.A. shall
assign a portion of it Loans or commitments hereunder to any Person which is
not an Affiliate of Mellon Bank, N.A., the
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Borrower agrees to pay to the Agent, for its individual account, an Agent's fee
of $25,000 per year, payable in advance beginning on the date of such
assignment.
ARTICLE X
MISCELLANEOUS
10.01. HOLIDAYS. Whenever any payment or action to be made
or taken hereunder or under any other Loan Document 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 and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
10.02. RECORDS. The unpaid principal amount of the Loans
owing to each Lender, the unpaid interest accrued thereon, the interest rate or
rates applicable to such unpaid principal amount, the duration of such
applicability, each Lender's Revolving Credit Committed Amount and Term Loan
Committed Amount, and the accrued and unpaid fees owing to the Agent and any
Lender shall at all times be ascertained from the records of the Agent, which
shall be conclusive absent manifest error. The unpaid Letter of Credit
Reimbursement Obligations, the unpaid interest accrued thereon, and the
interest rate or rates applicable thereto shall at all times be ascertained
from the records of the Issuing Bank, which shall be conclusive absent manifest
error.
10.03. AMENDMENTS AND WAIVERS. Neither this Agreement nor
any Loan Document may be amended, modified or supplemented except in accordance
with the provisions of this Section. The Agent and the Borrower may from time
to time amend, modify or supplement the provisions of this Agreement or any
other Loan Document for the purpose of amending, adding to, or waiving any
provisions, releasing any Collateral, or changing in any manner the rights and
duties of the Borrower, the Agent or any Lender. Any such amendment,
modification or supplement made by Borrower and the Agent in accordance with
the provisions of this Section shall be binding upon the Borrower, each Lender
and the Agent. The Agent shall enter into such amendments, modifications or
supplements from time to time as directed by the Required Lenders, and only as
so directed, provided, that no such_amendment, modification_or supplement may
be made which will:
(a) Increase the Revolving Credit Committed Amount or the
Term Loan Committed Amount of any Lender over the amount thereof then
in effect, or extend the Revolving Credit Maturity Date or the Term
Loan Maturity Date, without the written consent of each Lender
affected thereby;
(b) Reduce the principal amount of or extend the time for any
scheduled payment of principal of any Loan, or reduce the rate of
interest or extent the time for payment of interest borne by any Loan
or Letter of Credit Reimbursement Obligation (other than as a result
of waiving the applicability of any increase in interest rates
applicable to overdue amounts), or extend the time for payment of or
reduce the amount of any Revolving Credit Commitment Fee or Letter of
Credit Fee, without the written consent of each Lender affected
thereby;
(c) Reduce any Letter of Credit Unreimbursed Draw, or extend
the time for repayment by the Borrower or any Letter of Credit
Unreimbursed Draw, without the written consent of each Lender;
(d) Change the definition of "Required Lenders" or amend this
Section 10.03, without the written consent of all the Lenders;
(e) Amend or waive any of the provisions of Article IX, or
impose additional duties upon the Agent or otherwise adversely affect
the rights, interests or obligations of the Agent, without the written
consent of the Agent;
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(f) Amend or waive any of the provisions of Section 3.01, or
impose any additional duties upon the Issuing Bank, or otherwise
adversely affect the rights, interests or obligations of the Issuing
Bank without the written consent of the Issuing Bank;
(g) Alter the priority of distributions set forth in Section
8.03, without the written consent of each Lender affected thereby; or
(h) Release any material portion of the Collateral, without
the written consent of Supermajority Lenders;
and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 10.14. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
10.04. NO IMPLIED WAIVER; CUMULATIVE REMEDIES. No course of
dealing and no delay or failure of the Agent or any Lender in exercising any
right, power or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or exercise of any other right,
power or privilege; nor shall any single or partial exercise of any such right,
power or privilege or any abandonment or discontinuance of steps to enforce
such a right, power or privilege preclude any further exercise thereof or of
any other right, power or privilege. The rights and remedies of the Agent and
the Lenders under this Agreement and any other Loan Document are cumulative and
not exclusive of any rights or remedies which the Agent or any Lender would
otherwise have hereunder or thereunder, at law, in equity or otherwise.
10.05. NOTICES.
(a) Except to the extent otherwise expressly permitted
hereunder or thereunder, all notices, requests, demands, directions and other
communications (collectively "notices") under this Agreement or any Loan
Document shall be in writing and shall be sent by nationally-recognized
overnight courier, by telex or facsimile on a Business Day (with confirmation
in writing sent by overnight courier for delivery the next Business Day), or by
personal hand-delivery. All notices shall be sent to the applicable party at
the address stated on the signature pages hereof or in accordance with the last
unrevoked written direction from such party to the other parties hereto, in all
cases with postage or other charges prepaid. Any such properly given notice to
the Agent or any Lender shall be effective when received. Any such properly
given notice to the Borrower shall be effective on the earliest to occur of
receipt, telephone confirmation of receipt of telex or facsimile communication,
or one Business Day after delivery to a nationally- recognized overnight
courier.
(b) Any Lender giving any notice to the Borrower or any other
party to a Loan Document shall simultaneously send a copy thereof to the Agent,
and the Agent shall promptly notify the other Lenders of the receipt by it of
any such notice.
(c) The Agent and each Lender may rely on any notice (whether
or not such notice is made in a manner permitted or required by this Agreement
or any Loan Document) purportedly made by or on behalf of the Borrower, and
neither the Agent nor any Lender shall have any duty to verify the identity or
authority of any Person giving such notice.
10.06. EXPENSES; INDEMNITY.
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(a) EXPENSES. The Borrower agrees to pay or cause to be paid
and to save the Agent and each of the Lenders harmless against liability for
the payment of all reasonable out-of-pocket costs and expenses (including but
not limited to reasonable fees and expenses of counsel, including local
counsel, auditors, consulting engineers, appraisers, and all other
professional, accounting, evaluation and consulting costs) incurred by the
Agent or any Lender from time to time arising from or relating to (i) the
negotiation, preparation, execution, delivery, administration and performance
of this Agreement and the other Loan Documents, (ii) any requested amendments,
modifications, supplements, waivers or consents (whether or not ultimately
entered into or granted) to this Agreement or any Loan Document, and (iii) the
enforcement or preservation of rights under this Agreement or any Loan Document
(including but not limited to any such costs or expenses arising from or
relating to (A) the creation, perfection or protection of the Agent's Lien on
any Collateral, (B) the protection, collection, lease, sale, taking possession
of, preservation of, or realization on, any Collateral, including without
limitation advances for storage, insurance premiums, transportation charges,
taxes, filing fees and the like, (C) collection or enforcement of an
outstanding Loan or any other amount owing hereunder or thereunder by the Agent
or any Lender, and (D) any litigation, proceeding, dispute, work-out,
restructuring or rescheduling related in any way to this Agreement or the Loan
Documents).
(b) INDEMNITY. The Borrower hereby agrees to reimburse and
indemnify each of the Indemnified Parties from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel for such
Indemnified Party in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnified
Party shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, this Agreement or any
other Loan Document, any transaction from time to time contemplated hereby or
thereby, or any transaction financed in whole or in part or directly or
indirectly with the proceeds of any Loan (and without in any way limiting the
generality of the foregoing, including any violation or breach of any
Environmental Law or any other Law by the Borrower or any Environmental
Affiliate of the Borrower; any Environmental Claim arising out of the
management, use, control, ownership or operation of property by any of such
Persons, including all on-site and off-site activities involving Environmental
Concern Materials; any grant of Collateral; or any exercise by the Agent or any
Lender of any of its rights or remedies under this Agreement or any other Loan
Document); but excluding any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements resulting solely from the gross negligence or willful misconduct
of such Indemnified Party, as finally determined by a court of competent
jurisdiction. If and to the extent that the foregoing obligations of the
Borrower under this subsection (b), or any other indemnification obligation of
the Borrower hereunder or under any other Loan Document, are unenforceable for
any reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable Law.
10.07. 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.
10.08. PRIOR UNDERSTANDINGS. This Agreement and the other
Loan Documents supersede all prior and contemporaneous understandings and
agreements, whether written or oral, among the parties hereto and thereto
relating to the transactions provided for herein and therein, including the
Commitment Letter dated December 31, 1997; provided, however, that the
Borrower's obligations to make the payments contemplated by the Fee Letter
referred to in such commitment letter shall survive execution of this Agreement.
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10.09. DURATION; SURVIVAL. All representations and
warranties of the Borrower contained herein or in any other in the Loan
Document or made in connection herewith or therewith shall survive the making
of, and shall not be waived by the execution and delivery, of this Agreement or
any other Loan Document, any investigation by or knowledge of the Agent or any
Lender, the making of any Loan, or any other event or condition whatever. All
covenants and agreements of the Borrower contained herein or in any other Loan
Document shall continue in full force and effect from and after the date hereof
so long as the Borrower may borrow hereunder and until payment in full of all
Obligations. Without limitation, all obligations of the Borrower hereunder or
under any other Loan Document to make payments to or indemnify the Agent or any
Lender shall survive the payment in full of all other Obligations, termination
of the Borrower's right to borrow hereunder, and all other events and
conditions whatever. In addition, all obligations of each Lender to make
payments to or indemnify the Agent shall survive the payment in full by the
Borrower of all Obligations, termination of the Borrower's right to borrow
hereunder, and all other events or conditions whatever.
10.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
10.11. LIMITATION ON PAYMENTS. The parties hereto intend to
conform to all applicable Laws in effect from time to time limiting the maximum
rate of interest that may be charged or collected. Accordingly,
notwithstanding any other provision hereof or of any other Loan Document, the
Borrower shall not be required to make any payment to or for the account of any
Lender, and each Lender shall refund any payment made by the Borrower, to the
extent that such requirement or such failure to refund would violate or
conflict with nonwaivable provisions of applicable Laws limiting the maximum
amount of interest which may be charged or collected by such Lender.
10.12. SET-OFF. The Borrower hereby agrees that if any
Obligation of the Borrower shall be due and payable (by acceleration or
otherwise), the Agent and each Lender shall have the right, without notice to
the Borrower, to set-off against and to appropriate and apply to such Obligation
any obligation of any nature owing to the Borrower by the Agent or such Lender,
including but not limited to all deposits (whether time or demand, general or
special, provisionally credited or finally credited, whether or not evidenced by
a certificate of deposit) now or hereafter maintained by the Borrower with the
Agent or such Lender. Such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not the Agent or
such Lender or any other Person shall have given notice or made any demand to
the Borrower or any other Person, whether such obligation owed to the Borrower
is contingent, absolute, matured or unmatured (it being agreed that the Agent or
such Lender may deem such obligation to be then due and payable at the time of
such setoff), and regardless of the existence or adequacy of any collateral,
guaranty or any other security, right or remedy available to the Agent or any
Lender or any other Person. The Borrower hereby agrees that, to the fullest
extent permitted by law, any Participant and any branch, subsidiary or affiliate
of the Agent or any Lender or any Participant shall have the same rights of
set-off as a Lender as provided in this Section 10.12 (regardless of whether
such Participant, branch, subsidiary or affiliate would otherwise be deemed in
privity with or a direct creditor of the Borrower). The rights provided by this
Section 10.12 are in addition to all other rights of set-off and banker's lien
and all other rights and remedies which the Agent or any Lender (or any such
Participant, branch, subsidiary or affiliate) may otherwise have under this
Agreement, any other Loan Document, at law or in equity, or otherwise, and
nothing in this Agreement or any Loan Document shall be deemed a waiver or
prohibition of or restriction on the rights of set-off or bankers' lien of any
such Person.
10.13. SHARING OF COLLECTIONS. The Lenders hereby agree among
themselves that if any Lender shall receive (by voluntary payment, realization
upon security, set-off or from any other source) any amount on account of the
Loans, interest thereon, or any other Obligation contemplated by this Agreement
or the other Loan Documents to be made by the Borrower ratably to all Lenders
in greater proportion than any such amount received by any other Lender, then
the Lender receiving such
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proportionately greater payment shall notify each other Lender and the Agent of
such receipt, and equitable adjustment will be made in the manner stated in
this Section so that, in effect, all such excess amounts will be shared ratably
among all of the Lenders. The Lender receiving such excess amount shall
purchase (which it shall be deemed to have done simultaneously upon the receipt
of such excess amount) for cash from the other Lenders a participation in the
applicable Obligations owed to such other Lenders in such amount as shall
result in a ratable sharing by all Lenders of such excess amount (and to such
extent the receiving Lender shall be a Participant). If all or any portion of
such excess amount is thereafter recovered from the Lender 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 to be paid by the Lender making such purchase. The Borrower
hereby consents to and confirms the foregoing arrangements. Each Participant
shall be bound by this Section as fully as if it were a Lender hereunder.
10.14. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lenders, all future holders
of the Notes, the Agent and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights hereunder or
interests herein without the prior written consent of all the Lenders and the
Agent, and any purported assignment without such consent shall be void.
(b) PARTICIPATIONS. Any Lender may, in the ordinary course
of its commercial banking business and in accordance with applicable Law, at
any time sell participations to one or more commercial banks or other Persons
(each a "Participant") in all or a portion of its rights and obligations under
this Agreement and the other Loan Documents (including, without limitation, all
or a portion of its Commitments and the Loans owing to it and any Note held by
it); provided, that
(i) any such Lender's obligations under this Agreement and
the other Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iii) the parties hereto shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
and
(iv) such Participant shall by accepting such Participation
be bound by the provisions of Section 10.13.
The Borrower agrees that any such Participant shall be entitled to the benefits
of Sections 2.11, 2.12, 10.06 and 10.12 with respect to its participation in
the Commitments and the Loans outstanding from time to time; provided, that no
such Participant shall be entitled to receive any greater amount pursuant to
such Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred to such Participant had
no such transfer occurred.
(c) ASSIGNMENTS. Any Lender may, in the ordinary course of
its commercial banking business and in accordance with applicable Law, at any
time assign all or a portion of its rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, all or any portion
of its Commitments and Loans owing to it and any Note held by it) to any
Lender, any affiliate of a Lender or to one or more additional commercial banks
or other Persons (each a "Purchasing Lender"); provided, that
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(i) if a Lender makes such an assignment of less than all of
its then remaining rights and obligations under this Agreement and the
other Loan Documents, such transferor Lender shall retain, after such
assignment, a minimum principal amount of $5,000,000 of the
Commitments and Loans then outstanding, and such assignment shall be
in a minimum aggregate principal amount of $5,000,000 of the
Commitments and Loans then outstanding,
(ii) each such assignment shall be of a constant, and not a
varying, percentage of each Commitment of the transferor Lender and of
all of the transferor Lender's rights and obligations under this
Agreement and the other Loan Documents, and
(iii) each such assignment shall be made pursuant to a
Transfer Supplement in substantially the form attached hereto as
Exhibit H, duly completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Lender and the
Purchasing Lender shall execute and deliver to the Agent a duly completed
Transfer Supplement (including the consents required by clause (i) of the
preceding sentence) with respect to such assignment, together with any Note or
Notes subject to such assignment (the "Transferor Lender Notes") and a
processing and recording fee of $3,500; and, upon receipt thereof, the Agent
shall accept such Transfer Supplement. Upon receipt of the Purchase Price
Receipt Notice pursuant to such Transfer Supplement, the Agent shall record
such acceptance in the Register. Upon such execution, delivery, acceptance and
recording, from and after the close of business at the Agent's Office on the
Transfer Effective Date specified in such Transfer Supplement
(x) the Purchasing Lender shall be a party hereto and, to the
extent provided in such Transfer Supplement, shall have the rights and
obligations of a Lender hereunder, and
(y) the transferor Lender thereunder shall be released from
its obligations under this Agreement to the extent so transferred
(and, in the case of an Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations
under this Agreement, such transferor Lender shall cease to be a party
to this Agreement) from and after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in an Transfer Supplement,
the Borrower, at its expense, shall execute and deliver to the Agent (for
delivery to the Purchasing Lender) new Notes evidencing such Purchasing
Lender's assigned Commitments or Loans and (for delivery to the transferor
Lender) replacement Notes in the principal amount of the Loans or Commitments
retained by the transferor Lender (such Notes to be in exchange for, but not in
payment of, those Notes then held by such transferor Lender). Each such Note
shall be dated the date and be substantially in the form of the predecessor
Note. The Agent shall mark the predecessor Notes "exchanged" and deliver them
to the Borrower. Accrued interest and accrued fees shall be paid to the
Purchasing Lender at the same time or times provided in the predecessor Notes
and this Agreement.
(d) REGISTER. The Agent shall maintain at its office a copy
of each Transfer Supplement delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to time.
The entries in the Register shall be conclusive absent manifest error and the
Borrower, the Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of the
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) FINANCIAL AND OTHER INFORMATION. The Borrower authorizes
the Agent and each Lender to disclose to any Participant or Purchasing Lender
(each, a "transferee") and any prospective transferee any and all financial and
other information in such Person's possession concerning the Borrower and
affiliates which has been or may be delivered to such Person by or on behalf of
the
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Borrower in connection with this Agreement or any other Loan Document or such
Person's credit evaluation of the Borrower and affiliates. At the request of
any Lender, the Borrower, at the Borrower's expense, shall provide to each
prospective transferee the conformed copies of documents referred to in Section
4 of the form of Transfer Supplement.
(f) ASSIGNMENTS TO FEDERAL RESERVE BANK. Any Lender may at
any time assign all or any portion of its rights under this Agreement,
including without limitation any Loans owing to it, and any Note held by it to
a Federal Reserve Bank. No such assignment shall relieve the transferor Lender
from its obligations hereunder.
10.15. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; LIMITATION OF LIABILITY.
(a) GOVERNING LAW. THIS AGREEMENT AND ALL OTHER LOAN
DOCUMENTS (EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH
OTHER LOAN DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO
CHOICE OF LAW PRINCIPLES.
(b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING
IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY
LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER
FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH
COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH
COURT DOES NOT HAVE JURISDICTION OVER THE BORROWER;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY
REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT
THE ADDRESS FOR NOTICES DESCRIBED IN SECTION 10.05, AND CONSENTS AND
AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND
EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW);
AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
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(c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED
BY LAW, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE AGENT, ANY LENDER OR
ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM
FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN
RESPECT OF ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT,
TORT OR ANY OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES
AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM
PRESENTLY EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
ATTEST: SPECIALTY TRANSPORTATION
SERVICES, INC., as Borrower
By /s/ Leon Monachos By /s/ Gary I. Goldberg
------------------------------------------------- -----------------------------------------------------------
Title: VP-Finance Title: President
Address for Notices:
5979 McCasland Avenue
Portage, IN 46367
Attn: Gary I. Goldberg
Telephone: (219) 764-3636
Facsimile: (219) 771-4929
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MELLON BANK, N.A., individually and as Agent
By /s/ David A. George
---------------------
Name:
Title:
Initial Revolving Credit
Committed Amount: $5,000,000
Term Loan
Committed Amount: $18,000,000
Commitment Percentage: 100%
Address for Notices:
Three Mellon Bank Center
Pittsburgh, PA 15259
Attn: Loan Administration
Telephone:
Telecopier:
cc: Mellon Bank, N.A.
Middle Market Banking Department
Two Mellon Bank Center
Pittsburgh, PA 15259
Domestic Lending Office:
Three Mellon Bank Center
Pittsburgh, PA 15259
Euro-Rate Lending Office:
Three Mellon Bank Center
Pittsburgh, PA 15259
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ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
"Acquisition" shall mean the acquisition by the Borrower of
the Target Business from JGT pursuant to the Acquisition Agreement.
"Acquisition Agreement" shall have the meaning set forth in
Section 5.01(c).
"Acquisition Documents" shall have the meaning set forth in
Section 5.01(c).
"Affected Lender" shall have the meaning set forth in Section
2.04(e).
"Affiliate" of a Person (the "Specified Person") shall mean
(a) any Person which directly or indirectly controls, or is controlled
by, or is under common control with, the Specified Person, (b) any
director or officer (or, in the case of a Person which is not a
corporation, any individual having analogous powers) of the Specified
Person or of a Person who is an Affiliate of the Specified Person
within the meaning of the preceding clause (a), and (c) for each
individual who is an Affiliate of the Specified Person within the
meaning of the foregoing clauses (a) or (b), any other individual
related to such Affiliate by consanguinity within the third degree or
in a step or adoptive relationship within such third degree or related
by affinity with such Affiliate or any such individual. For purposes
of the preceding sentence, "control" of a Person means (a) the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether
through the ownership of voting securities, by contract or otherwise
and (b) in any case shall include direct or indirect ownership
(beneficially or of record) of, or direct or indirect power to vote,
5% or more of the outstanding shares of any class of capital stock of
such Person (or in the case of a Person that is not a corporation, 5%
or more of any class of equity interest).
"Applicable Lending Office" means, with respect to any Lender,
(i) in the case of the Base Rate Portion of its Loans, its Domestic
Lending Office and (ii) in the case of the Euro-Rate Portion of its
Loans, its Euro- Rate Lending Office.
"Applicable Margin" shall have the meaning set forth in
Section 2.04(b).
"Approved Lease Form" shall mean a form of lease which is
satisfactory to the Agent and which, in any event, (i) does not
provide for any obligation of the Borrower with respect to residual
value (or the equivalent) of greater than 40% of original cost for
tractors, 25% of original cost for trailers, a percentage of original
cost reasonably satisfactory to the Agent in the case of tippers or
20% of original cost for other equipment and (ii) which has no event
of default comprising a cross default (as opposed to a cross
acceleration) and which has no representations, warranties, covenants
or events of default or prepayment that relate to any other Person or
that relate to the Borrower's operations or condition (financial or
otherwise) generally (as opposed to those that relate solely to leased
equipment). For avoidance of doubt, (x) defaults with respect to
particular equipment under a master equipment lease agreement to which
the Borrower is a party shall not be deemed to be cross defaults with
respect to other equipment under the same master lease agreement and
(y) adding additional schedules in form theretofore approved by the
Agent to a master lease agreement theretofore approved by the Agent
shall not require separate approval of the Agent.
"Asche Tractor Debt" shall mean a non-interest bearing payable
of the Borrower to Asche Transfer, Inc. in an amount not exceeding
$408,250 on account of the deferred purchase price in the Asche
Tractor Debt Transaction, as to which no payments will or may be made
to Asche Transfer, Inc. or any other Person until such time as the
Borrower's Tangible Net Worth is equal to an amount equal to $650,000
plus 50% of the sum of Net Income (not to be reduced by
70
losses) for each fiscal quarter during the period from the Closing
Date through and including the last day of the then most recently
completed fiscal quarter, and as to which no such payment will or may
be made if the making of such payment would result in an Event of
Default or would reduce the Borrower's Tangible Net Worth below an
amount equal to $650,000 plus 50% of the sum of Net Income (not to be
reduced by losses) for each fiscal quarter (or, in the case of the
first quarter of 1998, part thereof) during the period from the
Closing Date through and including the last day of the then most
recently completed fiscal quarter.
"Asche Tractor Debt Transaction" shall mean the purchase by
the Borrower from Asche Transfer, Inc., of 12 power units (tractors)
for an aggregate purchase price not exceeding $408,250 and the
assumption by the Borrower of purchase money indebtedness of Asche
Transfer, Inc. relating thereto in an amount not exceeding $11,775,
which purchase price shall be deferred in full by incurrence of the
Asche Tractor Debt.
"Assured Obligation" shall have the meaning set forth in the
definition of "Guaranty Equivalent."
"Base Rate" for any day shall mean the greater of (a) the
Prime Rate for such day or (b) .50% plus the Federal Funds Effective
Rate for such day.
"Base Rate Option" shall have the meaning set forth in Section
2.04(a).
"Base Rate Payment Date" shall mean the first day of each
calendar month.
"Base Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at such time (i) under the Base Rate Option or (ii) in
accordance with Section 2.10(c)(ii). If no Loan or Loans is
specified, "Base Rate Portion" shall refer to the Base Rate Portion of
all Loans outstanding at such time.
"Borrowing Base" shall have the meaning set forth in Section
2.14.
"Borrowing Base Certificate" shall have the meaning set forth
in Section 2.14(e).
"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of
Pennsylvania or other day on which banking institutions are authorized
or obligated to close in the city in which is located the Agent's
Office.
"Calculation Period" for the last day of any fiscal quarter
shall mean (a) for June 30, 1998, September 30, 1998 and December 31,
1998, the period from the Closing Date through such date and (b) for
each last day of a fiscal quarter thereafter, the period of four
consecutive fiscal quarters ending on such last day.
"Capital Expenditures" of any Person shall mean, for any
period, all expenditures (whether paid in cash or accrued as
liabilities during such period) of such Person during such period
which would be classified as capital expenditures in accordance with
GAAP (including, without limitation, expenditures for maintenance and
repairs which are capitalized, and Capitalized Leases to the extent an
asset is recorded in connection therewith in accordance with GAAP).
"Capitalized Lease" shall mean at any time any lease which is,
or is required under GAAP to be, capitalized on the balance sheet of
the lessee at such time, and "Capitalized Lease Obligation" of any
Person at any time shall mean the aggregate amount which is, or is
required under GAAP to be, reported as a liability on the balance
sheet of such Person at such time as lessee under a Capitalized Lease.
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"Cash Equivalent Investments" shall mean any of the following,
to the extent acquired for investment and not with a view to achieving
trading profits: (a) obligations fully backed by the full faith and
credit of the United States of America maturing not in excess of six
months from the date of acquisition, (b) commercial paper maturing not
in excess of six months from the date of acquisition and rated "P-1"
by Moody's Investors Service or "A-1" by Standard & Poor's Corporation
on the date of acquisition, and (c) the following obligations of any
domestic commercial bank having capital and surplus in excess of
$1,000,000,000, which has, or the holding company of which has, a
commercial paper rating meeting the requirements specified in clause
(b) above: (i) time deposits, certificates of deposit and acceptances
maturing not in excess of six months from the date of acquisition, or
(ii) repurchase obligations with a term of not more than seven days
for underlying securities of the type referred to in clause (a) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute
of similar import, and regulations thereunder, in each case as in
effect from time to time.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be
amended from time to time.
"Change of Control" shall mean that at any time the Executive
shall not have the sole right to vote, pursuant to the Voting Trust
Agreement, at least 51% of the shares of the capital stock of the
Borrower (assuming for purposes of such calculation that all
then-outstanding options, warrants, conversion rights or other rights
held by any Person other than the Executive which may in any
circumstances give such other Person the right to acquire shares of
capital stock are exercised at such time by such other Person (so that
all shares of capital stock potentially issuable pursuant to such
rights shall be deemed outstanding and held by such other Person for
purposes of such calculation), regardless of whether such rights are
in fact then exercisable or whether any conditions to such exercise
are then met). Notwithstanding the foregoing, a "Change of Control"
shall not have occurred if, after a "Voting Change Event" (as defined
in the Voting Trust Agreement) has occurred, the Subordinated Debt
Lender shall have the right to vote all shares of the capital stock of
the Borrower.
"Change of Management" shall mean at any time the Executive
shall, for any reason (voluntarily or involuntarily, including without
limitation death, disability or termination from employment with the
Borrower) cease to serve as chief executive officer and chief
operating officer of the Borrower, having duties and responsibilities
substantially similar to those held by him on the date hereof.
"Closing Date" shall mean January 30, 1998.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any
successor sections.
"Collateral" shall have the meaning set forth in the Security
Agreement.
"Commitments" of a Lender shall mean the Revolving Credit
Commitment and the Term Loan Commitment of such Lender.
"Commitment Percentage" of a Lender at any time shall mean the
Commitment Percentage for such Lender set forth below its name on the
signature page hereof, subject to transfer to another Lender as
provided in Section 10.14.
"Compliance Certificate" shall have the meaning set forth in
Section 6.01(d).
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"Controlled Group Member" shall mean each trade or business
(whether or not incorporated) which together with the Borrower is
treated as a single employer under Sections 4001(a)(14) or 4001(b)(1)
of ERISA or Sections 414(b), (c), (m) or (o) of the Code.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Euro-Rate Lending Office or by a Lender through a
Euro-Rate Lending Office of one or more Dollar deposits in the
interbank eurodollar market at the beginning of the Euro-Rate Funding
Period corresponding to such Funding Segment having maturities
approximately equal to such Euro-Rate Funding Period and in an
aggregate amount approximately equal to such Lender's Pro Rata share
of such Funding Segment.
"Credit Facility Exposure" for any Lender at any time shall
mean the sum at such time of the aggregate outstanding principal
amount of such Lender's Term Loans plus such Lender's Revolving Credit
Exposure.
"Cross Default Event" shall have the meaning set forth in
Section 8.01(f)(i).
"Cross Default Obligation" shall have the meaning set forth in
Section 8.01(f)(ii).
"Deemed Value" shall have the meaning set forth in Section
2.14(c).
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Domestic Lending Office" shall mean, as to each Lender, its
office located at its address set forth on the signature pages hereto,
or such other office as such Lender may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Agent.
"EBIT" for any period, with respect to the Borrower, shall
mean (a) Net Income for such period, plus (b) Interest Expense for
such period, plus (c) charges against income for foreign, federal,
state and local income taxes for such period, minus (d) extraordinary
gains to the extent included in determining such Net Income for such
period, all as determined in accordance with GAAP.
"EBITDA" for any period, with respect to the Borrower, shall
mean (a) EBIT for such period, plus (b) depreciation expense for such
period, plus (c) amortization expense for such period, all as
determined in accordance with GAAP.
"Eligible Receivables" shall have the meaning set forth in
Section 2.14(b).
"Employment Agreement" shall have the meaning set forth in
Section 5.01(c)(viii).
"Environmental Affiliate" shall mean, with respect to any
Person, any other Person whose liability (contingent or otherwise) for
any Environmental Claim such Person has retained, assumed or otherwise
is liable for (by Law, agreement or otherwise).
"Environmental Approvals" shall mean any Governmental Action
pursuant to or required under any Environmental Law.
"Environmental Claim" shall mean, with respect to any Person,
any action, suit, proceeding, investigation, notice, claim, complaint,
demand, request for information or other communication (written or
oral) by any other Person (including but not limited to any
Governmental Authority, citizens' group or present or former employee
of such Person) alleging,
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asserting or claiming any actual or potential (a) violation of any
Environmental Law, (b) liability under any Environmental Law or (c)
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, fines or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any
Environmental Concern Materials at any location, whether or not owned
by such Person.
"Environmental Cleanup Site" shall mean any location which is
listed or proposed for listing on the National Priorities List, on
CERCLIS or on any similar state list of sites requiring investigation
or cleanup, or which is the subject of any pending or threatened
action, suit, proceeding or investigation related to or arising from
any alleged violation of any Environmental Law.
"Environmental Concern Materials" shall mean (a) any flammable
substance, explosive, radioactive material, hazardous material,
hazardous waste, toxic substance, solid waste, pollutant, contaminant
or any related material, raw material, substance, product or
by-product of any substance specified in or regulated or otherwise
affected by any Environmental Law (including but not limited to any
"hazardous substance" as defined in CERCLA or any similar state Law),
(b) any toxic chemical or other substance from or related to
industrial, commercial or institutional activities, and (c) asbestos,
gasoline, diesel fuel, motor oil, waste and used oil, heating oil and
other petroleum products or compounds, polychlorinated biphenyls,
radon and urea formaldehyde.
"Environmental Law" shall mean any Law, whether now existing
or subsequently enacted or amended, relating to (a) pollution or
protection of the environment, including natural resources, (b)
exposure of Persons, including but not limited to employees, to
Environmental Concern Materials, (c) protection of the public health
or welfare from the effects of products, by-products, wastes,
emissions, discharges or releases of Environmental Concern Materials
or (d) regulation of the manufacture, use or introduction into
commerce of Environmental Concern Materials including their
manufacture, formulation, packaging, labeling, distribution,
transportation, handling, storage or disposal. Without limitation,
"Environmental Law" shall also include any Environmental Approval and
the terms and conditions thereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed also to refer to
any successor sections.
"Euro-Rate" for any day, as used herein, shall mean for each
Funding Segment of the Euro-Rate Portion corresponding to a proposed
or existing Euro-Rate Funding Period the rate per annum determined by
the Agent by dividing (the resulting quotient to be rounded upward to
the nearest 1/100 of 1%) (a) the rate of interest (which shall be the
same for each day in such Euro-Rate Funding Period) determined in good
faith by the Agent in accordance with its usual procedures (which
determination shall be conclusive) to be the average of the rates per
annum for deposits in Dollars offered to major money center banks in
the London interbank market at approximately 11:00 a.m., London time,
two London Business Days prior to the first day of such Euro-Rate
Funding Period for delivery on the first day of such Euro-Rate Funding
Period in amounts comparable to such Funding Segment and having
maturities comparable to such Funding Period by (b) a number equal to
1.00 minus the Euro-Rate Reserve Percentage.
"Euro-Rate Funding Period" shall have the meaning set forth in
Section 2.04(c).
"Euro-Rate Lending Office" shall mean, as to each Lender, its
office, branch or affiliate located at its address set forth on the
signature pages hereto, or such other office, branch or
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affiliate of such Lender as it may hereafter designate as its
Euro-Rate Lending Office by notice to the Borrower and the Agent.
"Euro-Rate Option" shall have the meaning set forth in Section
2.04(a).
"Euro-Rate Payment Date" shall mean (a) the last day of the
applicable Funding Period and (b) if the applicable Funding Period
exceeds 30 days, also at intervals of 30 days after the first day of
such Funding Period.
"Euro-Rate Portion" of any Loan or Loans shall mean at any
time the portion, including the whole, of such Loan or Loans bearing
interest at any time under the Euro-Rate Option or at a rate
calculated by reference to the Euro-Rate under Section 2.10(c)(i). If
no Loan or Loans is specified, "Euro-Rate Portion" shall refer to the
Euro-Rate Portion of all Loans outstanding at such time.
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest
1/100 of 1%), as determined in good faith by the Agent (which
determination shall be conclusive), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) representing the maximum reserve requirement
(including, without limitation, supplemental, marginal and emergency
reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities") of a member bank in such
System. The Euro-Rate shall be adjusted automatically as of the
effective date of each change in the Euro-Rate Reserve Percentage.
The Euro-Rate Option shall be calculated in accordance with the
foregoing whether or not any Lender is actually required to hold
reserves in connection with its eurocurrency funding or, if required
to hold such reserves, is required to hold reserves at the "Euro-Rate
Reserve Percentage" as herein defined.
"Event of Default" shall mean any of the Events of Default
described in Section 8.01.
"Excess Cash Flow" for any period, with respect to the
Borrower, shall mean (a) EBITDA for such period, minus (b) Interest
Expense for such period, minus (c) charges against income for foreign,
federal, state and local taxes for such period, minus (d) the
aggregate principal amount of the Term Loans paid during such period,
minus (e) Capital Expenditures for such period, all as determined in
accordance with GAAP.
"Executive" shall mean Gary I. Goldberg, an individual
currently residing at 7418 Oak Avenue, Gary IN 46403.
"Existing Credit Agreement" shall mean that certain Loan
Agreement, dated December 1, 1995, between Mellon Bank, N.A. and Jack
Gray Transport, Inc.
"Existing Qualified Collateral" shall have the meaning set
forth in Section 2.14(d).
"Federal Funds Effective Rate" for any day shall mean the rate
per annum (rounded upward to the nearest 1/100 of 1%) determined by
the Agent (which determination shall be conclusive) to be the rate per
annum 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, that if such Federal Reserve Bank (or its
successor) does not announce such rate on any day, the "Federal Funds
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Effective Rate" for such day shall be the Federal Funds Effective Rate
for the last day on which such rate was announced.
"Fee Deeds of Trust" shall have the meaning set forth in
Section 5.01(b).
"Fee Mortgages" shall have the meaning set forth in Section
5.01(b).
"Fixed Charges" for any period, with respect to the Borrower,
shall mean the (a) Interest Expense for such period, plus (b)
scheduled principal payments with respect to any outstanding
Indebtedness for such period, plus (c) charges against income for
foreign, federal, state and local taxes for such period, plus (or
minus) (d) any net increase (or decrease) in deferred taxes for such
period, plus (e) dividends paid in respect of preferred stock or
common stock during such period, plus (f) Rental Expense for such
period, plus (g) management fees paid to the Investor and to the
Subordinated Debt Lender for such period, all as determined in
accordance with GAAP.
"Fixed Charges Coverage Ratio" for any period shall mean (a)
(i) EBITDA for such period, plus (ii) Rental Expense for such period,
minus (iii) Capital Expenditures for such period, divided by (b) Fixed
Charges for such period, all as determined in accordance with GAAP.
"Funding Periods" shall have the meaning set forth in Section
2.04(c).
"Funding Segment" of the Euro-Rate Portion of the Revolving
Credit Loans or the Term Loans at any time shall mean the entire
principal amount of such Portion to which at the time in question
there is applicable a particular Funding Period beginning on a
particular day and ending on a particular day. (By definition, each
such Portion is at all times composed of an integral number of
discrete Funding Segments and the sum of the principal amounts of all
Funding Segments of any such Portion at any time equals the principal
amount of such Portion at such time.)
"GAAP" shall have the meaning set forth in Section 1.03.
"Governmental Action" shall have the meaning set forth in
Section 4.04.
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Guaranty Equivalent": A Person (the "Deemed Guarantor")
shall be deemed to subject to a Guaranty Equivalent in respect of any
indebtedness, obligation or liability (the "Assured Obligation") of
another Person (the "Deemed Obligor") if the Deemed Guarantor directly
or indirectly guarantees, becomes surety for, endorses, assumes,
agrees to indemnify the Deemed Obligor against, or otherwise agrees,
becomes or remains liable (contingently or otherwise) for, such
Assured Obligation other than endorsements of instruments in the
ordinary course of business. Without limitation, a Guaranty
Equivalent shall be deemed to exist if a Deemed Guarantor agrees,
becomes or remains liable (contingently or otherwise), directly or
indirectly: (a) to purchase or assume, or to supply funds for the
payment, purchase or satisfaction of, an Assured Obligation, (b) to
make any loan, advance, capital contribution or other investment in,
or to purchase or lease any property or services from, a Deemed
Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to
enable the Deemed Obligor to meet any other financial condition, (iii)
to enable the Deemed Principal to satisfy any Assured Obligation or to
make any Stock Payment or any other payment, or (iv) to assure the
holder of such Assured Obligation against loss, (c) to purchase or
lease property or services from the Deemed Obligor regardless of the
non-delivery of or failure to furnish of such property or services,
(d) in a transaction having the characteristics of a take- or-pay or
throughput contract or as described in paragraph 6 of
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FASB Statement of Financial Accounting Standards No. 47, or (e) in
respect of any other transaction the effect of which is to assure the
payment or performance (or payment of damages or other remedy in the
event of nonpayment or nonperformance) of any Assured Obligation.
"Indebtedness" of a Person shall mean the following (without
duplication): (a) all obligations on account of money borrowed by, or
credit extended to or on behalf of, or for or on account of deposits
with or advances to, such Person; (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments; (c) all
obligations of such Person for the deferred purchase price of property
or services other than trade payables incurred in the ordinary course
of business and on terms customary in the trade; (d) all obligations
secured by a Lien on property owned by such Person (whether or not
assumed); and all obligations of such Person under Capitalized Leases
(without regard to any limitation of the rights and remedies of the
holder of such Lien or the lessor under such Capitalized Lease to
repossession or sale of such property); (e) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, the unreimbursed amount of all drafts drawn thereunder,
and all other obligations of such Person associated with such letters
of credit or draws thereon; (f) all obligations of such Person in
respect of acceptances or similar obligations issued for the account
of such Person; (g) all obligations of such Person under a product
financing or similar arrangement described in paragraph 8 of FASB
Statement of Accounting Standards No. 49 or any similar requirement of
GAAP; and (h) all obligations of such Person under any interest rate
or currency protection agreement, interest rate or currency future,
interest rate or currency option, interest rate or currency swap or
cap or other interest rate or currency hedge agreement; provided,
however, that for purposes of Section 7.01 hereof the Asche Tractor
Debt shall be deemed not to be Indebtedness.
"Indemnified Parties" shall mean the Agent, the Lenders, their
respective affiliates, and the directors, officer, employees,
attorneys and agents of each of the foregoing.
"Initial Revolving Credit Committed Amount" shall have the
meaning set forth in Section 2.01(a).
"Interest Coverage Ratio" for any period shall mean (a) EBITDA
for such period, divided by (b) Interest Expense for such period.
"Interest Expense" for any period shall mean the total
interest expense of the Borrower for such period which the Borrower
was obligated to pay determined in accordance with GAAP.
"Interest Rate Hedging Agreement" shall mean an interest rate
swap, cap or collar agreement.
"Investor" shall mean Aasche Transportation Services, Inc.
"Issuing Bank" shall mean Mellon Bank, N.A.
"JGT" shall mean Jack Gray Transport, Inc.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Leasehold Mortgages," if any, shall have the meaning set
forth in Section 6.16.
"Leasehold Deeds of Trust," if any, shall have the meaning set
forth in Section 6.16.
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"Lender" shall mean any of the Lenders listed on the signature
pages hereof, subject to the provisions of Section 10.14 pertaining to
Persons becoming or ceasing to be Lenders.
"Letter of Credit" shall mean any letter of credit outstanding
under this Agreement from time to time.
"Letter of Credit Application" shall have the meaning given
that term in Section 3.01(b)(i).
"Letter of Credit Collateral Account" shall have the meaning
given that term in the Security Agreement.
"Letter of Credit Commitment" shall have the meaning given
that term in Section 3.01(a)(i).
"Letter of Credit Exposure" at any time shall mean the sum of
(a) the aggregate Letter of Credit Unreimbursed Draws at such time and
(b) the aggregate Letter of Credit Undrawn Availability at such time.
"Letter of Credit Fee" shall have the meaning given that term
in Section 3.01(a)(iv).
"Letter of Credit Fee Rate" shall have the meaning given that
term in Section 3.01(a)(iv).
"Letter of Credit Participating Interest" shall have the
meaning given that term in Section 3.01(c)(i).
"Letter of Credit Reimbursement Obligation" with respect to a
Letter of Credit means the obligation of the Borrower to reimburse the
Issuing Bank for Letter of Credit Unreimbursed Draws, together with
interest thereon.
"Letter of Credit Undrawn Availability" with respect to a
Letter of Credit at any time shall mean the maximum amount available
to be drawn under such Letter of Credit at such time or thereafter,
regardless of the existence or satisfaction of any conditions or
limitations on drawing.
"Letter of Credit Unreimbursed Draws" with respect to a Letter
of Credit at any time shall mean the aggregate amount at such time of
all payments made by the issuer under such Letter of Credit, to the
extent not repaid by the Borrower.
"Level," "Level I," "Level II," and "Level III" shall have the
meanings set forth in Annex B.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement
of any nature whatsoever, including but not limited to any conditional
sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Loan" shall mean any loan by a Lender to the Borrower under
this Agreement, and "Loans" shall mean all Loans made by the Lenders
under this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Transfer Supplements and the Security Documents, and all other
agreements and instruments extending, renewing, refinancing or
refunding any indebtedness, obligation or liability arising under any
of the
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foregoing, in each case as the same may be amended, modified or
supplemented from time to time hereafter.
"London Business Day" shall mean a day for dealing in deposits
in Dollars by and among banks in the London interbank market and which
is a Business Day.
"Management Agreement" shall have the meaning set forth in
Section 5.01(c).
"Material Adverse Effect" shall mean: (a) a material adverse
effect on the business, operations, condition (financial or otherwise)
or prospects of the Borrower, (b) a material adverse effect on the
ability of the Borrower to perform or comply with any of the terms and
conditions of any Loan Document, or (c) an adverse effect on the
legality, validity, binding effect, enforceability or admissibility
into evidence of any Loan Document, or the ability of the Agent or any
Lender to enforce any rights or remedies under or in connection with
any Loan Document.
"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 Controlled Group
Member has or had an obligation to contribute.
"Net Income" for any period shall mean the net earnings (or
loss) after taxes of the Borrower for such period determined in
accordance with GAAP.
"Net Proceeds" shall mean, with respect to any Reduction
Event, an amount equal to the gross cash proceeds received by the
Borrower in respect of such Reduction Event, less (a) any fees, costs
and expenses reasonably incurred by such Person in respect of such
Reduction Event and (b) if such Reduction Event is a Reduction Event
Asset Sale, (i) payments made to retire obligations (other than to the
Borrower) that are secured by the properties that are the subject of
such Reduction Event Asset Sale, and (ii) any taxes actually paid or
estimated in good faith by a senior financial officer of the Borrower
(giving effect to the overall tax position of the Borrower) by such
Person in respect of such Reduction Event Asset Sale.
"Net Value" shall have the meaning set forth in Section
2.14(b).
"New Qualified Collateral" shall have the meaning set forth in
Section 2.14(c).
"Note" or "Notes" shall mean the Revolving Credit Note(s) or
the Term Loan Note(s), as the case may be, of the Borrower executed
and delivered under this Agreement, together with all extensions,
renewals, refinancings or refundings of any thereof in whole or part.
"Obligations" shall mean all indebtedness, obligations and
liabilities of the Borrower to any Lender or the Agent from time to
time arising under or in connection with or related to or evidenced by
or secured by or under color of this Agreement or any other Loan
Document, and all extensions, renewals or refinancings thereof,
whether such indebtedness, obligations or liabilities are direct or
indirect, otherwise secured or unsecured, joint or several, absolute
or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising. Without limitation of
the foregoing, such indebtedness, obligations and liabilities include
the principal amount of Loans, interest, fees, indemnities or expenses
under this Agreement or any other Loan Document, and all extensions,
renewals and refinancings thereof, whether or not such Loans were made
in compliance with the terms and conditions of this Agreement or in
excess of the obligation of the Lenders to lend. Obligations shall
remain Obligations notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any
interest therein.
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"Office," when used in connection with the Agent, shall mean
its office located at Three Mellon Bank Center, Pittsburgh,
Pennsylvania 15259, or at such other office or offices of the Agent or
any branch, subsidiary or affiliate thereof as may be designated in
writing from time to time by the Agent to the Borrower.
"Option" shall mean the Base Rate Option or the Euro-Rate
Option, as the case may be.
"Orderly Liquidation Value" shall have the meaning set forth
in Section 2.14(d).
"Other Taxes" shall have the meaning set forth in Section
2.12(b).
"Participants" shall have the meaning set forth in Section
10.14(b).
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency,
department or instrumentality succeeding to the functions of said
corporation.
"Pension-Related Event" shall mean any of the following events
or conditions:
(a) Any action is taken by any Person (i) to
terminate, or which would result in the termination of, a
Plan, either pursuant to its terms or by operation of law
(including, without limitation, any amendment of a Plan which
would result in a termination under Section 4041(e) of ERISA),
or (ii) to have a trustee appointed for a Plan pursuant to
Section 4042 of ERISA;
(b) PBGC notifies any Person of its determination
that an event described in Section 4042 of ERISA has occurred
with respect to a Plan, that a Plan should be terminated, or
that a trustee should be appointed for a Plan;
(c) Any Reportable Event occurs with respect to a
Plan;
(d) Any action occurs or is taken which could result
in the Borrower becoming subject to liability for a complete
or partial withdrawal by any Person from a Multiemployer Plan
(including, without limitation, seller liability incurred
under Section 4204(a)(2) of ERISA), or the Borrower or any
Controlled Group Member receives from any Person a notice or
demand for payment on account of any such alleged or asserted
liability; or
(e) (i) There occurs any failure to meet the minimum
funding standard under Section 302 of ERISA or Section 412 of
the Code with respect to a Plan, or any tax return is filed
showing any tax payable under Section 4971(a) of the Code with
respect to any such failure, or the Borrower or any Controlled
Group Member receives a notice of deficiency from the Internal
Revenue Service with respect to any alleged or asserted such
failure, or (ii) any request is made by any Person for a
variance from the minimum funding standard, or an extension of
the period for amortizing unfunded liabilities, with respect
to a Plan.
"Permitted Aasche Subordinated Debt Refinancing Indebtedness"
shall mean Indebtedness payable to Aasche (and to no other Person)
which meets, to the satisfaction of the Agent, all of the following
requirements: (i) all of the proceeds of the issuance of such
Indebtedness are cash in an amount not less than the principal amount
of such Indebtedness and are used to pay in full (including any
premium and accrued interest) all Subordinated Debt and to
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purchase all warrants granted to the Subordinated Debt Lender on the
Closing Date and all shares of stock, if any, which shall have been
theretofore issued upon exercise of such warrants and all shares of
stock which have been or are being "put" to the Borrower at the time
of such payment; (ii) no pledge of any of the Borrower's capital stock
may be made to any Person after the incurrence of such Indebtedness;
(iii) neither the final maturity nor any interim maturity of any
portion of such Indebtedness shall be earlier than June 30, 2003; (iv)
such Indebtedness shall be unsecured, shall be evidenced solely by a
promissory note and shall not have the benefit of any covenants or
events of default; (v) such Indebtedness shall be subordinated to the
Obligations to the same extent that the Subordinated Indebtedness is
as of the Closing Date; (v) the interest rate on such Indebtedness for
each day shall not exceed the interest rate payable on the
Subordinated Debt, and interest on such Indebtedness shall accrue, but
not be payable or paid, until the Obligations shall have been paid in
full; and (vi) all documentation with respect to such Indebtedness
shall be in form and substance reasonably satisfactory to the Agent.
"Permitted Liens" shall have the meaning set forth in Section
7.02.
"Person" shall mean an individual, corporation, partnership,
trust, limited liability company, unincorporated association, joint
venture, joint-stock company, Governmental Authority or any other
entity.
"Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (other than a Multiemployer Plan)
covered by Title IV of ERISA by reason of Section 4021 of ERISA, of
which the Borrower or any Controlled Group Member is or has been
within the preceding five years a "contributing sponsor" within the
meaning of Section 4001(a)(13) of ERISA, or which is or has been
within the preceding five years maintained for employees of the
Borrower or any Controlled Group Member.
"Portion" shall mean the Base Rate Portion or the Euro-Rate
Portion, as the case may be.
"Postretirement Benefits" shall mean any benefits, other than
retirement income, provided by the Borrower to retired employees, or
to their spouses, dependents or beneficiaries, including, without
limitation, group medical insurance or benefits, or group life
insurance or death benefits.
"Postretirement Benefit Obligation" shall mean that portion of
the actuarial present value of all Postretirement Benefits expected to
be provided by the Borrower which is attributable to employees'
service rendered to the date of determination (assuming that such
liability accrues ratably over an employee's working life to the
earlier of his date of retirement or the date on which the employee
would first become eligible for full benefits), reduced by the fair
market value as of the date of determination of any assets which are
segregated from the assets of the Borrower and which have been
restricted so that they cannot be used for any purpose other than to
provide Postretirement Benefits or to defray related expenses.
"Potential Default" shall mean any event or condition which
with notice, passage of time (as such) or a determination by the
Lender, or any combination of the foregoing, would constitute an Event
of Default.
"Pricing Grid" shall mean the pricing grid set forth in Annex
B.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime
rate, such rate to change automatically effective as of the
effectiveness of each announced change in such prime rate.
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"Pro Rata" shall mean from or to each Lender in proportion to
its Commitment Percentage.
"Purchasing Lender" shall have the meaning set forth in
Section 10.14(c).
"Qualified Collateral" shall mean trucks, tractors, trailers,
tippers and loaders owned by the Borrower and used in the Borrower's
business, and other equipment owned by the Borrower and used in the
Borrower's business, which meet the specifications established by the
Agent in its reasonable discretion from time to time. In no event,
however, shall the Qualified Collateral be deemed to include any of
the Borrower's (a) motor vehicles or equipment that is not in good
condition or usable in the ordinary course of the Borrower's business;
(b) motor vehicles or equipment with respect to which the Agent (on
behalf of itself and the Lenders) does not have a first and valid,
fully perfected security interest and possession of the motor vehicle
certificates of title therefor; or (c) motor vehicles or equipment
which is not, at the time it is submitted by the Borrower for advances
of Loans, listed and described on the most recent Borrowing Base
Certificate.
"Quarterly Payment Date" shall mean the last day of each
March, June, September and December after the date hereof.
"Reduction Event," "Reduction Event Application Amount,"
"Reduction Event Date" and "Reduction Event Asset Sale" shall have the
meanings given those terms in Section 2.08(b).
"Register" shall have the meaning set forth in Section
10.14(d).
"Relevant Date" shall have the meaning set forth in Section
1.03(a).
"Rental Expense" for any period shall mean aggregate rent and
lease payments made by the Borrower pursuant to operating leases for
such period determined in accordance with GAAP.
"Reportable Event" means (i) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by
a substantial employer from a Plan to which more than one employer
contributes, as referred to in Section 4063(b) of ERISA, (iii) a
cessation of operations at a facility causing more than 20% of Plan
participants to be separated from employment, as referred to in
Section 4068(f) of ERISA, or (iv) a failure to make a required
installment or other payment with respect to a Plan when due in
accordance with Section 412 of the Code or Section 302 of ERISA which
causes the total unpaid balance of missed installments and payments
(including unpaid interest) to exceed $750,000.
"Required Lenders" shall mean, as of any date, Lenders which
have made Loans constituting, in the aggregate, at least 51% in
principal amount of Loans outstanding on such date or, if no Loans are
outstanding on such date, Lenders which have Commitments constituting,
in the aggregate, at least 51% of the total Commitments of all the
Lenders.
"Responsible Officer" of any Person shall mean the President,
Chief Financial Officer, Treasurer or any Vice President of such
Person.
"Restricted Indebtedness" shall mean Indebtedness incurred by
the Borrower pursuant to the Subordinated Debt Agreement and the other
Subordinated Debt Documents.
"Revolving Credit Commitment" shall have the meaning set forth
in Section 2.01(a).
"Revolving Credit Commitment Fee" shall have the meaning set
forth in Section 2.01(e).
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"Revolving Credit Commitment Fee Percentage" shall have the
meaning set forth in Section 2.01(a).
"Revolving Credit Committed Amount" shall have the meaning set
forth in Section 2.01(a).
"Revolving Credit Exposure" of any Lender at any time shall
mean the sum at such time of the aggregate outstanding principal
amount of such Lender's Revolving Credit Loans plus such Lender's Pro
Rata share of the aggregate Letter of Credit Exposure.
"Revolving Credit Loans" shall have the meaning set forth in
Section 2.01(a).
"Revolving Credit Maturity Date" shall mean December 31, 2000.
"Revolving Credit Note" shall mean the promissory note of the
Borrower executed and delivered under Section 2.01(c), any promissory
note issued in substitution therefor pursuant to Sections 2.11(b) or
10.14(c), together with all extensions, renewals, refinancings or
refundings thereof in whole or part.
"Security Agreement" shall have the meaning set forth in
Section 5.01(b).
"Security Documents" shall mean the Security Agreement, the
Fee Mortgages, the Fee Deeds of Trust, the Leasehold Mortgages, the
Leasehold Deeds of Trust and any other agreements or instruments from
time to time to time granting or purporting to grant the Agent a Lien
in any property for the benefit of the Lenders and the Agent to secure
the Obligations, or constituting a Guaranty Equivalent for the
Obligations, or subordinating to the Obligations, in each case as the
same may be amended from time to time.
"September 1997 Financial Statements" shall have the meaning
set forth in Section 4.07.
"Solvent" means, with respect to any Person at any time, that
at such time (a) the sum of the debts and liabilities (including,
without limitation, contingent liabilities) of such Person is not
greater than all of the assets of such Person at a fair valuation, (b)
the present fair salable 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, (c) such Person has not incurred, will not incur, does not
intend to incur, and does not believe that it will incur, debts or
liabilities (including, without limitation, contingent liabilities)
beyond such person's ability to pay as such debts and liabilities
mature, (d) such Person is not engaged in, and is not about to engage
in, a business or a transaction for which such person's property
constitutes or would constitute unreasonably small capital, and (e)
such Person is not otherwise insolvent as defined in, or otherwise in
a condition which could in any circumstances then or subsequently
render any transfer, conveyance, obligation or act then made, incurred
or performed by it avoidable or fraudulent pursuant to, any Law that
may be applicable to such Person pertaining to bankruptcy, insolvency
or creditors' rights (including but not limited to the Bankruptcy Code
of 1978, as amended, and, to the extent applicable to such Person, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act, or any other applicable Law pertaining to fraudulent conveyances
or fraudulent transfers or preferences).
"Standard Notice" shall mean an irrevocable notice provided to
the Agent on a Business Day which is
(a) On the same Business Day in the case of
selection of, conversion to or renewal of the Base Rate Option
or prepayment of any Base Rate Portion; and
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(b) At least three London Business Days in advance
in the case of selection of the Euro-Rate Option or prepayment
of any Euro-Rate Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh
time, on the last day permitted for such notice.
"Stock Payment" by any Person shall mean any dividend,
distribution or payment of any nature (whether in cash, securities, or
other property) on account of or in respect of any shares of the
capital stock (or warrants, options or rights therefor) of such
Person, including but not limited to any payment on account of the
purchase, redemption, retirement, defeasance or acquisition of any
shares of the capital stock (or warrants, options or rights therefor)
of such Person, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any
other agreement or instrument.
"Stockholders' Agreement" shall have the meaning set forth in
Section 5.01(c).
"Subordinated Debt" shall mean Indebtedness of the Borrower
pursuant to the Subordinated Debt Agreement and the other Subordinated
Debt Documents.
"Subordinated Debt Agreement" shall have the meaning set forth
in Section 5.01(c).
"Subordinated Debt Documents" shall have the meaning set forth
in Section 5.01(c).
"Subordinated Debt Lender" shall mean American Capital
Strategies, Ltd.
"Subordination Agreement" shall have the meaning set forth in
Section 5.01(c).
"Subsidiary" of a Person at any time shall mean any
corporation of which a majority (by number of shares or number of
votes) of any class of outstanding capital stock normally entitled to
vote for the election of one or more directors (regardless of any
contingency which does or may suspend or dilute the voting rights of
such class) is at such time owned directly or indirectly, beneficially
or of record, by such Person or one or more Subsidiaries of such
Person, and any trust of which a majority of the beneficial interest
is at such time owned directly or indirectly, beneficially or of
record, by such Person or one or more Subsidiaries of such Person.
"Supermajority Lenders" shall mean, as of any date, Lenders
which have made Loans constituting, in the aggregate, at least 75% in
principal amount of Loans outstanding on such date or, if no Loans are
outstanding on such date, Lenders which have Commitments constituting,
in the aggregate, at least 75% of the total Commitments of all the
Lenders.
"Tangible Net Worth" at any time shall mean the total amount
of stockholders' equity of the Borrower at such time determined in
accordance with GAAP, except that there shall be deducted therefrom
the book value of all intangible assets and deferred charges of the
Borrower at such time determined in accordance with GAAP and except
that there shall be added thereto the outstanding amount of the Asche
Tractor Debt.
"Target Business" shall mean the municipal and solid waste
transport business of JGT to be acquired by the Borrower pursuant to
the Acquisition Agreement.
"Taxes" shall have the meaning set forth in Section 2.12.
"Term Loan" shall have the meaning set forth in Section 2.02,
and "Term Loans" shall mean the Term Loans of the Lenders
collectively.
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"Term Loan Commitment" shall have the meaning set forth in
Section 2.04(a).
"Term Loan Committed Amount" shall have the meaning set forth
in Section 2.02(a).
"Term Loan Maturity Date" shall mean December 31, 2002.
"Term Loan Note" shall mean the promissory note of the
Borrower executed and delivered under Section 2.02(c), or any
promissory note issued in substitution therefor pursuant to Sections
2.11(b) or 10.14(c), together with all extensions, renewals,
refinancings or refundings thereof in whole or part.
"Total Leverage Ratio" for any period shall mean (a) the sum
of (i) aggregate Indebtedness of the Borrower on the last day of such
period plus (ii) an amount equal to Rental Expense for such period
multiplied by four, divided by (b) the sum of EBITDA for such period
plus Rental Expense for such period, all as determined in accordance
with GAAP; provided, that in calculating the Total Leverage Ratio as
of June 30, 1998, September 30, 1998 and December 31, 1998, EBITDA and
Rental Expense for the applicable Calculation Period shall be
multiplied by the reciprocal of a fraction, the numerator of which
fraction is the number of months then completed after the Closing Date
and the denominator of which fraction is 12..
"Transfer Effective Date" shall have the meaning set forth in
the applicable Transfer Supplement.
"Transfer Supplement" shall have the meaning set forth in
Section 10.14(c).
"Voting Trust Agreement" shall have the meaning set forth in
Section 5.01(c).
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ANNEX B TO
CREDIT AGREEMENT
PRICING GRID
- -----------------------------------------------------------------------------------------------------------------------------
REVOLVING CREDIT REVOLVING CREDIT TERM LOAN EURO- TERM LOAN BASE REVOLVING CREDIT LOAN
LEVEL LOAN EURO-RATE LOAN BASE RATE RATE RATE COMMITMENT FEE PERCENTAGE
- -----------------------------------------------------------------------------------------------------------------------------
Level I 2.75 0 3.00 0.25 0.500
- -----------------------------------------------------------------------------------------------------------------------------
Level II 2.25 0 2.50 0 0.375
- -----------------------------------------------------------------------------------------------------------------------------
Level III 1.75 0 2.00 0 0.250
- -----------------------------------------------------------------------------------------------------------------------------
"Level" shall mean, on any date, whichever of Level 1, Level
II or Level III applies on such date. For the period from the Closing Date to
and including the date which is one year after the Closing Date, the Borrower
shall be deemed to be in Level I Status. Thereafter, subject to the other
provisions of this definition, (i) following the end of each fiscal quarter of
the Borrower, the Borrower shall prepare and deliver to the Agent in accordance
with Section 6.01(d) a Compliance Certificate, duly completed and signed by a
Responsible Officer, computing the Total Leverage Ratio as of the last day of
such fiscal quarter, and (ii) the Level corresponding to the Total Leverage
Ratio shall take effect on the first day of the month following the month in
which the Agent receives such Compliance Certificate, and such Level shall
continue in effect until reset (in accordance with this definition). In the
event that a Compliance Certificate is not received when it is required to be
delivered under Section 6.01(d), then, without limiting any other rights and
remedies of the Agent and the Lenders, the Borrower shall be deemed to be in
Level I for the period from and including the first day of the month following
the month in which such Compliance Certificate was required to be delivered to
and including the fifth day after the date on which such Compliance Certificate
is received by the Agent. Notwithstanding anything to the contrary in this
definition, the Borrower shall be deemed to be in Level I each day on which an
Event of Default has occurred and is continuing.
"Level I" shall mean, on any date, the Total Leverage Ratio
for such date is greater than 2.75.
"Level II" shall mean, on any date, the Total Leverage Ratio
for such date is less than or equal to 2.75, but greater than or equal to 2.00.
"Level III" shall mean, on any date, the Total Leverage Ratio
for such date is less than 2.00.