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CREDIT AGREEMENT
DATED AS OF NOVEMBER 29, 1995
AMONG
PIONEER-STANDARD ELECTRONICS, INC., AND
PIONEER-STANDARD OF MARYLAND, INC.,
AS BORROWERS,
AND
THE BANKS IDENTIFIED ON THE SIGNATURE PAGES HERETO,
AS LENDERS,
AND
NATIONAL CITY BANK,
AS AGENT
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TABLE OF CONTENTS
Page
----
RECITALS ................................................................. 1
ARTICLE I DEFINITIONS ................................................ 1
ARTICLE II THE CREDIT ................................................. 17
2.1 Commitment ..................................................... 17
2.2 Final Principal Payment ........................................ 17
2.3 Ratable Loans .................................................. 17
2.4 Applicable Margins ............................................. 17
2.5 Commitment Fee; Closing Fee; Interim Letter of
Credit Fee ..................................................... 18
2.6 Other Fees ..................................................... 19
2.7 Minimum Amount of Loans ........................................ 19
2.8 Interest Payable on the Loans .................................. 19
(a) Initial Interest ........................................... 19
(b) Method of Selecting Rate Options and Interest
Periods .................................................... 19
(c) Determination of Adjusted Base Rate ........................ 20
(d) Monthly Installments ....................................... 20
(e) Interest on Overdue Payments; Default
Interest Rate .............................................. 21
2.9 Repayments and Prepayments of Principal ........................ 22
(a) Optional Prepayments ....................................... 22
(b) Mandatory Prepayments ...................................... 22
(c) Application of Prepayments ................................. 22
(d) Maturity ................................................... 22
(e) Notice of Prepayments of Principal ......................... 23
(f) Reduction in Commitment .................................... 23
2.10 Payments and Computations ...................................... 23
(a) Time and Place of Payments ................................. 23
(b) Application of Funds ....................................... 24
(c) Payments on Business Days .................................. 24
(d) Computation of Interest .................................... 25
2.11 Payments to be Free of Deductions .............................. 25
2.12 Use of Proceeds ................................................ 25
2.13 LIBOR Break Funding Cost; CD Break Funding Cost ................ 26
2.14 Additional Costs ............................................... 26
2.15 Indemnification of Losses ...................................... 29
2.16 Statements by Agent or any Lender .............................. 29
2.17 Borrowing Notices; Telephonic Notices........................... 29
2.18 Notes; Telephonic Notices....................................... 30
2.19 Lending Installations........................................... 31
2.20 Non-Receipt of Funds by Agent................................... 31
2.21 Withholding Tax Exemption....................................... 31
2.22 The Interim Letter of Credit.................................... 32
ARTICLE III CONDITIONS PRECEDENT........................................ 35
3.1 Initial Advance................................................. 35
3.2 Each Advance.................................................... 37
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ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................. 38
4.1 Existence....................................................... 38
4.2 Authorization and Validity...................................... 38
4.3 No Conflict, Government Consent................................. 38
4.4 Financial Statements-- Material Adverse Change.................. 39
4.5 Tax............................................................. 39
4.6 Litigation and Contingent Obligations........................... 39
4.7 Subsidiaries.................................................... 39
4.8 ERISA........................................................... 39
4.9 Accuracy of Information......................................... 40
4.10 Regulation U.................................................... 40
4.11 Material Agreements............................................. 40
4.12 Compliance with Laws............................................ 40
4.13 Ownership of Properties......................................... 41
4.14 Investment Company Act.......................................... 41
4.15 Public Utility Holding Company Act.............................. 41
4.16 Solvency........................................................ 41
4.17 Insurance....................................................... 41
4.18 Environmental Matters........................................... 42
ARTICLE V COVENANTS................................................... 43
5.1 Financial Reporting............................................. 43
5.2 Prohibited Uses of Proceeds..................................... 45
5.3 Notice of Default............................................... 45
5.4 Conduct of Business............................................. 45
5.5 Taxes........................................................... 46
5.6 Insurance....................................................... 46
5.7 Compliance with Laws............................................ 46
5.8 Maintenance of Properties....................................... 46
5.9 Inspection...................................................... 46
5.10 Maintenance of Status........................................... 47
5.11 Merger; Sale of Assets.......................................... 47
5.12 Delivery of Subsidiary Guaranties............................... 47
5.13 Sale and Leaseback.............................................. 47
5.14 Acquisitions and Investments.................................... 47
5.15 Liens........................................................... 48
5.16 Affiliates...................................................... 49
5.17 Additional Indebtedness and Financial
Undertakings.................................................... 50
5.18 Litigation...................................................... 50
5.19 Further Assurances.............................................. 50
5.20 Current Ratio................................................... 50
5.21 Consolidated Tangible Net Worth................................. 50
5.22 Working Capital................................................. 51
5.23 Capital Expenditures............................................ 51
5.24 Leverage Ratio.................................................. 51
5.25 Fixed Charge Coverage Ratio..................................... 51
5.26 Investment and Loan Limit....................................... 51
5.27 Acquisition Limit............................................... 51
5.28 Environmental Matters........................................... 51
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ARTICLE VI DEFAULTS.................................................... 52
6.1 Nonpayment of Principal......................................... 52
6.2 Nonpayment of Other Obligations................................. 52
6.3 Certain Breaches................................................ 52
6.4 Representations and Warranties.................................. 53
6.5 Other Breaches.................................................. 53
6.6 Defaults on Indebtedness........................................ 53
6.7 Bankruptcy, etc................................................. 53
6.8 Appointment of Receiver......................................... 53
6.9 Condemnation.................................................... 54
6.10 Judgments....................................................... 54
6.11 ERISA Withdrawal................................................ 54
6.12 ERISA Reorganization............................................ 54
6.13 Other Defaults.................................................. 54
ARTICLE VII ACCELERATION, WAIVERS, AMENDMENTS AND
REMEDIES.................................................... 55
7.1 Acceleration.................................................... 55
7.2 Amendments & Waivers............................................ 55
7.3 Preservation of Rights.......................................... 56
ARTICLE VIII GENERAL PROVISIONS.......................................... 56
8.1 Survival of Representations..................................... 56
8.2 Governmental Regulation......................................... 56
8.3 Tax............................................................. 56
8.4 Heading......................................................... 56
8.5 Entire Agreement................................................ 56
8.6 Several Obligations Benefits of This Agreement.................. 57
8.7 Expenses; Indemnification....................................... 57
8.8 Numbers......................................................... 57
8.9 Accounting...................................................... 57
8.10 Severability of Provisions...................................... 57
8.11 Nonliability of Lenders......................................... 58
8.12 CHOICE OF LAW................................................... 58
8.13 CONSENT TO JURISDICTION......................................... 58
8.14 WAIVER OF JURY TRIAL............................................ 58
ARTICLE IX AGENT....................................................... 58
9.1 Appointment..................................................... 58
9.2 Powers.......................................................... 59
9.3 General Immunity................................................ 59
9.4 No Responsibility for Loans, Recitals, etc...................... 59
9.5 Action on Instructions of Lenders............................... 59
9.6 Employment of Agents and Counsel................................ 59
9.7 Reliance on Documents; Counsel.................................. 60
9.8 Agent's Reimbursement and Indemnification....................... 60
9.9 Rights as a Lender............................................... 60
9.10 Lender Credit Decision.......................................... 60
9.11 Successor Agent................................................. 61
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ARTICLE X SETOFF; RATABLE PAYMENTS.................................... 61
10.1 Setoff.......................................................... 61
10.2 Ratable Payments................................................ 62
ARTICLE XI BENEFIT OF AGREEMENT; ASSIGNMENT;
PARTICIPATIONS.............................................. 62
11.1 Successors and Assigns.......................................... 62
11.2 Participations.................................................. 62
11.2.1 Permitted Participants; Effect......................... 62
11.2.2 Voting Rights.......................................... 63
11.2.3 Benefit of Setoff...................................... 63
11.3 Assignments..................................................... 63
11.3.1 Permitted Assignments.................................. 63
11.3.2 Prior Consent.......................................... 64
11.3.3 Effective Date......................................... 64
11.4 Dissemination of Information.................................... 65
11.5 Tax Treatment................................................... 65
ARTICLE XII NOTICES; NATURE OF OBLIGATIONS.............................. 65
12.1 Giving Notice................................................... 65
12.2 Change of Address............................................... 65
12.3 Nature of Borrower's Obligations and Modification
Thereof......................................................... 65
ARTICLE XIII COUNTERPARTS................................................ 67
SCHEDULES
Schedule 1 Subsidiaries of Borrowers
Schedule 2 Permitted Liens
EXHIBITS
EXHIBIT A Form of Promissory Note
EXHIBIT B Form of Subsidiary Guaranty
EXHIBIT C Form of Borrowing Notice
EXHIBIT D Form of Borrowers Counsel Opinion
EXHIBIT E Form of Guarantor's Counsel Opinion
EXHIBIT F Form of Written Money Transfer Instructions
EXHIBIT G Form of Financial Compliance Certificate
EXHIBIT H Form of Notice of Assignment
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CREDIT AGREEMENT
This Agreement, dated as of November 29, 1995, is among Pioneer-Standard
Electronics, Inc., an Ohio corporation, Pioneer-Standard of Maryland, Inc., a
Maryland corporation, and their respective successors and assigns (sometimes
collectively, "Borrowers" and sometimes individually, a "Borrower"), National
City Bank, a national banking association, and the several banks, financial
institutions and other entities from time to time parties to this Agreement
(sometimes collectively, "Lenders" and sometimes individually, a "Lender"), and
National City Bank, not individually, but as "Agent".
RECITALS
A. Borrowers are primarily engaged in the business of distributing
industrial and consumer electronic products.
B. Pioneer-Standard Electronics, Inc., is listed on the National
Association of Securities Dealers Incorporated stock exchange ("NASDAQ").
C. Borrowers have requested that Lenders make loans available to
Borrowers pursuant to the terms of this Agreement, and that Agent act as
administrative agent for Lenders. Agent and Lenders have agreed to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which any Borrower (i)
acquires any business as a going concern or all or substantially all of the
assets of any firm, corporation or division thereof, whether through purchase of
assets or stock, merger or otherwise or (ii) directly or indirectly acquires (in
one transaction or as the most recent transaction in a series of transactions)
at least a majority (in number of votes) of the securities of a corporation
which have ordinary voting power for the election of directors (other than
securities having such power only by reason of the happening of a contingency)
or a majority (by percentage or voting power) of the outstanding partnership
interests of a partnership.
"Additional Facilities" means (a) a short-term money market line of credit
in the maximum principal amount of $40,000,000 to be
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loaned to Borrowers by Lenders, to be used by Borrowers for short-term overnight
borrowing needs, (b) a $10,000,000 line of credit facility for foreign exchange
purchases/sales, made available by any Lender to the Company and (c) a
$10,000,000 line of credit facility for foreign exchange purchases/sales, made
available by any Lender to Canada.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by Lenders to Borrowers of the same Type, including any
draws made under the Interim Letter of Credit.
"Affected Lender" is defined in Section 2.14(d).
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person
whether through ownership of stock, by contract or otherwise.
"Agent" means National City Bank in its capacity as agent for Lenders
pursuant to Article IX, and not in its individual capacity as a Lender, and any
successor Agent appointed pursuant to Article IX.
"Aggregate Measured Credit Risk" means, as at any time during the pendency
of this Agreement that an interest rate exchange agreement or interest rate
option agreement is in effect, the amount determined by the Agent in accordance
with the terms of such interest rate exchange agreement or interest rate option
agreement as being Borrower's measured credit risk thereunder at such time.
"Aggregate Commitment" means the aggregate of the Commitments of all
Lenders.
"Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.
"Applicable Margin" means the applicable margin determined by reference to
the table in Section 2.4 used in calculating the interest rate applicable to the
various Types of Advances, which shall vary from time to time in accordance with
Section 2.4.
"Applicable Law" means collectively, all federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting the Borrowers, whether now or
hereafter enacted and in force.
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"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Financial Officer" means any vice president or treasurer of
either of the Borrowers, acting singly.
"Authorized Officer" means the Vice President/Treasurer or Internal Auditor
of the Company, acting singly.
"Base Rate Applicable Margin" means, as of any date, the Applicable Margin
in effect on such date with respect to Base Rate Loans.
"Base Rate" or "Prime Rate" means the fluctuating rate of interest which is
publicly announced from time to time by Agent at its Head Office as being its
"prime rate" or "base rate" thereafter in effect, with each change in the Base
Rate automatically, immediately and without notice being reflected in the
fluctuating interest rate thereafter applicable hereunder, it being
specifically acknowledged that the Base Rate is not necessarily the lowest rate
of interest then available from Agent on fluctuating-rate loans.
"Base Rate Loan" means a Loan which bears interest at the Base Rate.
"Borrowers", or individually, a "Borrower" means Pioneer-Standard
Electronics, Inc. (the "Company"), an Ohio corporation, Pioneer-Standard of
Maryland, Inc. ("Maryland"), a Maryland corporation, and the Company's and
Maryland's respective successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8(b).
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Advances a day (other than a Saturday or Sunday) on which banks
generally are open in Cleveland, Ohio.
"Canada" means Pioneer-Standard Canada Inc., a Canadian corporation.
"Capital Expenditures" means any and all amounts invested, expended or
incurred (including by reason of Capitalized Lease Obligations) incurred by a
Borrower in respect of the purchase, acquisition, improvement, renovation or
expansion of any properties or assets of Borrowers, including, without
limitation, expenditures required to be capitalized in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital
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stock of a corporation, any and all equivalent ownership interests in a Person
which is not a corporation and any and all warrants or options to purchase any
of the foregoing.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Cash Equivalents" means, as of any date, (i) securities issued or directly
and fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than one year from such
date, (ii) time deposits and certificates of deposit having maturities of not
more than one year from such date and issued by any domestic commercial bank
having (A) senior long-term unsecured debt rated at least A or the equivalent
thereof by S&P or A2 or the equivalent thereof by Moody's and (B) capital and
surplus in excess of $500,000,000, and (iii) commercial paper rated at least A-1
or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's and
in either case maturing within 90 days from such date.
"CD Applicable Margin" means, as of any date with respect to any CD
Interest Period, the Applicable Margin in effect for such CD Interest Period as
determined in accordance with Section 2.4 hereof.
"CD Break Funding Costs" means an amount sufficient to reimburse each
Lender for any and all loss, cost or expense actually incurred by the Lender as
the result of the occurrence of any CD Break Funding Event, determined by
multiplying the amount of the principal prepayment hereunder by the difference,
if any, between, (x) NCB's Certificate of Deposit Rate for a term then available
closest to the remaining duration of the Interest Period for the principal sum
being prepaid, and for an amount comparable to such principal sum, and (y) the
CD Rate (less the CD Applicable Margin) in effect for the principal sum being so
prepaid, immediately prior to the prepayment of such sum, all as determined as
of the date of occurrence of the CD Break Funding Event.
"CD Break Funding Event" means any of the events or occurrences set forth
in Sections 2.13(a) or 2.13(b).
"CD Interest Period" means, with respect to a CD Rate Loan, a period of
between 30 to 180 days, inclusive, selected by Borrowers commencing on a
Business Day selected by Borrowers pursuant to this Agreement. Such CD Interest
Period shall end on (but exclude) the last day of the period. If a CD Interest
Period would otherwise end on a day which is not a Business Day, such CD
Interest Period shall end on the next succeeding Business Day.
"CD Rate" means NCB's Certificate of Deposit Rate for the applicable CD
Interest Period, as determined on the first day of
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such CD Interest Period, plus for each fiscal quarter, the CD Applicable Margin.
"CD Rate Loan" means a Loan which bears interest at the CD Rate.
"Change In Control" means, with respect to any Person, the transfer of the
ownership or control (in one transaction or as the most recent transaction in a
series of transactions) of (i) 10% or more of any class of voting securities (or
other ownership interests) of the controlled Person or (ii) such number of
voting securities (or other ownership interests) of the controlled Person that
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person whether through ownership of
stock, by contract or otherwise a majority, or (iii) with respect to any company
whose stock is publicly traded on a securities exchange, the solicitation for
proxies in connection with the election of the board of directors at a meeting
of shareholders.
"Closing Date" means the date of this Agreement.
"Closing Fee" is defined in Section 2.5(b).
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment Fee" is defined in Section 2.5(a).
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 11.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Condemnation" is defined in Section 6.9.
"Consolidated Debt Service" means, for any period, (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of scheduled
principal payments of Indebtedness (excluding any unaccelerated Indebtedness
arising under this Facility) required to be made during such period by Borrowers
or any of their Subsidiaries.
"Consolidated Funded Debt" means as of any date of determination, all
Indebtedness for Borrowed Money of Borrowers and their Subsidiaries outstanding
at such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the amount of
interest expense of Borrowers and their Subsidiaries for such period on the
aggregate principal amount of their
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Indebtedness, determined on a consolidated basis in accordance with GAAP plus
any capitalized interest which accrued during such period.
"Consolidated Net Income" means, for any period, consolidated net income
(or loss) of Borrowers and their Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any other Person accrued prior to the
date it becomes a Subsidiary of Borrowers or is merged into or consolidated with
the Borrowers or any of its Subsidiaries and (b) the undistributed earnings of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary.
"Consolidated Outstanding Indebtedness" means, as of any date of
determination, all Indebtedness of Borrowers and their Subsidiaries outstanding
at such date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Stockholder's Equity" means, as of any date of determination,
an amount equal to the sum of the following amounts appearing on the
consolidated balance sheet of Borrowers and their Subsidiaries: (i) all equity
as calculated in accordance with GAAP, and (ii) all indebtedness which is
subordinate (to the satisfaction of the Agent) to Indebtedness arising under
this Agreement.
"Consolidated Tangible Net Worth" means, as of any date of determination,
an amount equal to Consolidated Stockholder's Equity minus the sum of (i) any
surplus resulting from any write-up of assets subsequent to September 30, 1995,
(ii) goodwill, including any amounts, however designated on a consolidated
balance sheet of Borrowers, representing the excess of the purchase price paid
for assets or stock over the value assigned to them on the books of Borrowers,
(iii) patents, trademarks, trade names and copyrights, (iv) any amount at which
shares of capital stock of a Borrower appear as an asset on such Borrowers'
consolidated balance sheet, and (v) any other amount in respect of an intangible
that should be classified as an asset on Borrowers' consolidated balance sheet
in accordance with GAAP.
"Contingent Obligation" means any direct or indirect liability, contingent
or otherwise, with respect to any indebtedness, lease, dividend, letter of
credit, banker's acceptance or other obligation of another Person incurred to
provide assurance to the obligee of such obligation that such obligation will be
paid or discharged, that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations shall include, without
limitation, (i) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of
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business), co-making, discounting with recourse or sale with recourse by any
Person of the obligation of another Person; (ii) any liability for the
obligations of another Person through any agreement (contingent or otherwise)
(A) to purchase, repurchase, or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions, or otherwise), (B) to maintain the solvency of any balance sheet
item, level of income or financial condition of another, or (C) to make
take-or-pay, pay-or-play, or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, if in the case of
any agreement described under subclauses (A), (B) or (C) of this sentence the
purpose or intent thereof is to provide the assurance described above. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with Borrowers or any of their Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Current Assets" means, as of any date of determination, all current assets
of Borrowers and their Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Current Liabilities" means, as of any date of determination, all current
liabilities of Borrowers and their Subsidiaries determined on a consolidated
basis in accordance with GAAP; provided, however, that Current Liabilities shall
not include the principal amount of Loans made hereunder unless and until the
earlier to occur of (a) the Facility Termination Date, and (b) a Default.
"Current Portion of Long Term Debt" means, for each fiscal year of
Borrowers, scheduled principal payments (excluding any unaccelerated
Indebtedness arising under this Facility), on Indebtedness for Borrowed Money.
"Current Ratio" means the ratio of Current Assets to Current Liabilities.
"Default" means an event of Default described in Article VI.
"Default Interest Rate" means an annual rate of interest equal to the
lesser of (i) two percent (2.0%) above the Base Rate; or (2) the maximum rate of
interest which may be lawfully charged in respect of the Obligations.
"Deferred lnterest" means an amount equal to the difference, if any,
between interest payable pursuant to Sections 2.4, 2.8(a), and 2.8(d) and
interest actually paid, for the period following
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expiration of the Initial Interest Period during which financial statements for
the quarter ending March 31, 1996, were unavailable, and includes interest on
such difference.
"EBITDA" means, for any period, the sum of Borrowers' and their
Subsidiaries' Consolidated Net Income, increased by the sum for such period of
interest expense, income and franchise tax expense, amortization and
depreciation, non-recurring extraordinary expenses (in each case as determined
in accordance with GAAP) which was deducted in determining Consolidated Net
Income for such period.
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to Borrowers or any of their Subsidiaries or any of
their respective assets or Properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Existing Facilities" means the $100,000,000 revolving loan facility for
which NCB is agent, and any other existing facility between Technologies and any
Lender.
"Facility Termination Date" means November 29, 1997; provided, however,
that if the initial Borrowing Notice is not delivered to Agent as provided in
Section 2.8(b) prior to November 14, 1995, the Facility Termination Date shall
be November 15, 1995.
"Financial Undertaking" of a Person means (i) any repurchase obligation or
liability of such Person or any of its Subsidiaries with respect to accounts or
notes receivable sold by such Person or any of its Subsidiaries, (ii) any sale
and leaseback transactions which do not create a liability on the consolidated
balance sheet of such Person, (iii) any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person, or (iv)
interest rate exchange agreements and interest rate options; provided, however,
Financial Undertaking shall not include any agreement, device or arrangement
(not otherwise described in (iv), above), that is designed to protect a Borrower
from the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange transactions,
including, forward currency exchange agreements, interest rate cap or collar
protection agreements, or forward rate currency options.
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"Fixed Charge Coverage Ratio" means, as of any date of determination, the
ratio of (a) the sum of Consolidated Net Income (after taxes) plus Consolidated
Interest Expense, to (b) Consolidated Debt Service. All components of the Fixed
Charge Coverage Ratio Shall be annualized for the following three periods: (i)
July 1, 1995, through September 30, 1995; (2) July 1, 1995, through December 31,
1995; and (iii) July 1, 1995, through March 31, 1996; provided, however, Current
Portion of Long Term Debt (a component of Consolidated Debt Service), shall be a
fixed annual amount. "Annualized" as used herein shall mean: (A) for one quarter
the ratio of (i) the product of (y) the sum of Consolidated Net Income plus
Consolidated Interest Expense times (z) four (4) divided by (ii) the sum of (y)
the product of Consolidated Interest Expense multiplied by four (4) plus (z) the
Current Portion of Long Term Debt; (B) for two cumulative quarters the ratio of
(i) the product of (y) the sum of Consolidated Net Income plus Consolidated
Interest Expense times (z) two (2) divided by (ii) the sum of (y) the product of
Consolidated Interest Expense multiplied by two (2) plus (z) the Current Portion
of Long Term Debt; and (C) for three cumulative quarters the ratio of (i) the
quotient of (y) the sum of Consolidated Net Income plus Consolidated Interest
Expense divided by (z) three (3) times (ii) four (4) divided by the sum of the
quotient of the sum of Consolidated Interest Expense divided by three (3) times
four (4) plus the Current Portion of Long Term Debt.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.1;
provided, however, that if there shall be any change in accounting principles
from GAAP as in effect at the Closing Date, then the Required Lenders and the
Borrowers shall make such adjustments to the financial covenants affected
thereby by reference to the official interpretations of GAAP by The Financial
Accounting Standards Board, its predecessors and successors or as are mutually
determined in good faith to be appropriate to reflect such changes so that the
criteria for evaluating the financial condition and operations of the Borrowers
shall be the same after such changes as if such changes had not been made.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Head Office" means, in relation to Agent, the head office of National City
Bank, located at 1900 East Ninth Street, Cleveland, Ohio, 44114, or such other
office as may be designated as such by written notice to Borrowers and Lenders
by National City Bank or any successor Agent.
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15
"Indebtedness" means, in relation to any Person, at any time, all of the
obligations of such Person which, in accordance with GAAP, would be classified
as indebtedness upon a balance sheet (including any footnote thereto) of such
Person prepared at such time, and in any event shall include, without
limitation:
(i) all indebtedness of such Person arising or incurred under or in
respect of (A) any guaranties (whether direct or indirect) by such Person
of the indebtedness, obligations or liabilities of any other Person, or (B)
any endorsement by such Person of any of the indebtedness, obligations or
liabilities of any other Person (otherwise than as an endorser of
negotiable instruments received in the ordinary course of business and
presented to commercial banks for collection of deposit), or (C) the
discount by such Person, with recourse to such Person, of any of the
indebtedness, obligations or liabilities of any other Person;
(ii) all indebtedness of such Person arising or incurred under or in
respect of any agreement, contingent or otherwise made by such Person (A)
to purchase any indebtedness of any other Person or to advance or supply
funds for the payment or purchase of any indebtedness of any other Person
or (B) to purchase, sell or lease (as lessee or lessor) any property,
products, materials or supplies or to purchase or sell transportation or
services, in each such case if primarily for the purpose of enabling any
other Person to make payment of any indebtedness of such other Person or to
assure the owner or holder of such other Person's indebtedness against
loss, regardless of the delivery or non-delivery of the property, products,
materials or supplies or the furnishing or non-furnishing of the
transportation or services, or (C) to make any loan, advance, capital
contribution or other investment in any other Person for the purpose of
assuring a minimum equity, asset base, working capital or other balance
sheet condition for or as at any date, or to provide funds for the payment
of any liability, dividend or stock liquidation payment, or otherwise to
supply funds to or in any manner invest in any other Person;
(iii) all indebtedness, obligations and liabilities secured by or arising
under or in respect of any Lien, upon or in Property owned by such Person,
even though such Person has not assumed or become liable for the payment of
such indebtedness, obligations and liabilities;
(iv) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to Property acquired by
such Person, even though the rights and remedies of the seller or lender
(or lessor) under such agreement in the event of default are limited to
repossession or sale of such Property; and
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(v) all indebtedness arising or incurred under or in respect of any
Contingent Obligation.
"Indebtedness for Borrowed Money" means at any time, all Indebtedness
required by GAAP to be reflected as such on each Borrower's balance sheet,
including as appropriate, all Indebtedness (i) in respect of any money borrowed
(including pursuant to this Agreement, and any money borrowed under the
Additional Facilities); (ii) under or in respect of any Contingent Obligation
(whether direct or indirect) of any money borrowed; (iii) evidenced by any loan
or credit agreement, promissory note, debenture, bond, guaranty or other similar
written obligation to pay money; or (iv) arising under Capitalized Leases.
"Initial Advance" means the first Advance made hereunder.
"Initial Borrowing Date" means the date on which the first Advance is
made hereunder.
"Initial Interest Period" means the six month period following the Initial
Borrowing Date.
"Interest Period" means a CD Interest Period or a LIBOR Interest Period.
"Interim Letter of Credit" means an irrevocable standby letter of credit
and the Reimbursement Agreement executed in connection therewith, issued by
Agent and participated in by Lenders in accordance with their respective Pro
Rata Shares and expires January 12, 1996. The face amount of the Interim Letter
of Credit shall reduce the available Aggregate Commitment.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade),
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, partnership interests, notes,
debentures, or other securities of any other Person made by such Person.
"Late Charge" means with respect to any delinquent payment of principal or
interest hereunder, a fee that is equal to the greater of Five Hundred and
00/100 Dollars ($500.00) or three percent (3%) of the delinquent payment,
charged to Borrowers or added to the unpaid balance of the Notes whenever any
payment of principal or interest is not paid when due.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement.
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"Lending Installations" means with respect to a Lender, any office branch
subsidiary or affiliate of such Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Fee" is defined in Section 2.5(c).
"Leverage Ratio" means Consolidated Outstanding Indebtedness divided by
Consolidated Tangible Net Worth.
"LIBOR Applicable Margin" means, as of any date with respect to any LIBOR
Interest Period, the Applicable Margin in effect for such LIBOR Interest Period
as determined in accordance with Section 2.4 hereof.
"LIBOR Break Funding Costs" means an amount sufficient to reimburse each
Lender for any and all loss, cost or expense actually incurred by the Lender as
the result of the occurrence of any LIBOR Break Funding Event, determined by
multiplying the amount of the principal prepayment hereunder by the deficiency,
if any, between, (x) LIBOR for a term then available closest to the remaining
duration of the Interest Period for the principal sum being prepaid, and for an
amount comparable to such principal sum, and (y) the LIBOR Rate in effect for
the principal sum being so prepaid, immediately prior to the prepayment of such
sum, all as determined as of the date of occurrence of the LIBOR Break Funding
Event.
"LIBOR Break Funding Event" means any of the events or occurrences set for
forth in Sections 2.13(a) or 2.13(b).
"LIBOR Interest Period" means a period of one, two, three or six months
commencing on a Business Day selected by Borrowers pursuant to this Agreement.
Such LIBOR Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such LIBOR Interest Period shall end on
the last Business Day of such next, second, third or sixth succeeding month. If
a LIBOR Interest Period would otherwise end on a day which is not a Business
Day, such LIBOR Interest Period shall end on the next succeeding Business Day;
provided, however, that if said next succeeding Business Day falls in a new
calendar month, such LIBOR Interest Period shall end on the immediately
preceding Business Day.
"LIBOR Rate Loan" means a Loan which bears interest at a LIBOR Rate.
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"LIBOR Rate" means one, two, three or six-month London InterBank Offered
Rate (for dollars), adjusted for statutory reserves, if applicable ("LIBOR")
plus for each fiscal quarter, the LIBOR Applicable Margin.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Notes, and any other document
from time to time evidencing or securing indebtedness incurred by Borrowers
under this Agreement, as any of the foregoing may be amended or modified from
time to time.
"Material Adverse Change" means a material adverse change with respect to
(i) the business, Property, condition (financial or otherwise), results of
operations, or prospects of Borrowers and their Subsidiaries taken as a whole,
(ii) the ability of Borrowers to perform their obligations under the Loan
Documents, or (iii) the validity or enforceability of any of the Loan Documents
or the rights or remedies of Agent or Lenders thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and ureaformaldehyde insulation.
"Merger Documents" is defined in Section 3.1.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which Borrowers or any member
of the Controlled Group is a party to which more than one employer is obligated
to make contributions.
"NCB" means National City Bank, a national banking association.
"Note" means a promissory note, in substantially the form of Exhibit A
hereto, duly executed by Borrowers and payable to the order of a Lender in the
amount of its Commitment, including any
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amendment, modification, renewal or replacement of such promissory note.
"Notice of Assignment" is defined in Section 11.3.3.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of Borrowers to Lenders or to any Lender,
Agent or any indemnified party hereunder arising under the Loan Documents.
"Participant" means a participant under Section 11.2.1.
"Payment Date" means, with respect to the payment of interest accrued on
any Base Rate Loan, the last day of each calendar month, and, with respect to
the payment of interest accrued on any CD Rate Loan or LIBOR Rate Loan, the last
day of the CD Interest Period or LIBOR Interest Period, as the case may be,
except that for any CD Interest Period in excess of 90 days and any LIBOR
Interest Period in excess of three months, interim payments shall be made every
ninetieth day and the last day of every third month, respectively.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Liens" are defined in Section 5.15.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrowers or any member of the Controlled Group may have any
liability.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, in relation to any particular item, the share of
any Lender in such item, which shall be in the same proportion which the
Commitment of a Lender bears to the Aggregate Commitment, net of any and all
charges or fees due and payable to Agent under the Loan Documents.
"Purchasers" is defined in Section 11.3.1.
"Purchase Money Security Interest" is defined in Section 5.15(iv).
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"Rate Option" means the CD Rate, the Base Rate or the LIBOR Rate.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means those Lenders whose aggregate Pro Rata Shares of
the outstanding Advances equal or exceed sixty-six and two-thirds percent
(66-2/3%) of the aggregate amount of the outstanding Advances, or, in the event
that there are no Advances outstanding, those Lenders having sixty-six and two
thirds percent (66-2/3%) of the Aggregate Commitment.
"Reserve Requirement" means, with respect to a CD Interest Period or a
LIBOR Interest Period, the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed under
Regulation D on new non-personal time deposits of $100,000 or more with a
maturity equal to that of such CD Interest Period or on Eurocurrency liabilities
(in the case of LIBOR Rate Loans).
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by Borrowers or any member
of the Controlled Group for employees of Borrowers or any member of the
Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or
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by such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of any Borrower.
"Subsidiary Guarantor" means each Subsidiary of any Borrower party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty to be executed and delivered by
each Substantial Subsidiary of each Borrower including, but not limited to,
Canada, substantially in the form of Exhibit B, as the same may be amended,
supplemented or otherwise modified from time to time.
"Substantial Portion" means, with respect to the Property of the Borrowers
and their Subsidiaries, Property which (i) represents more than 2% of the
consolidated assets of the Borrowers and their Subsidiaries as would be shown in
the consolidated financial statements of the Borrowers and their Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made.
"Substantial Subsidiary" means any Subsidiary (other than Technologies and
Canada) that has received funding from a Borrower in excess of $100,000 or any
Subsidiary which receives funding from the Company such that the Borrower's
aggregate funding to all Subsidiaries (other than Technologies and Canada) after
the Closing Date exceeds $500,000.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Technologies" means Pioneer/Technologies Group, Inc., a Maryland
corporation.
"Technologies Acquisition" means the merger whereby Maryland will acquire
Technologies via a reverse cash-out merger. Technologies will be the survivor
and will immediately change its name to Maryland.
"Transferee" is defined in Section 11.4.
"Type" means, with respect to any Loan, its nature as a LIBOR Rate Loan,
Base Rate Loan or CD Rate Loan.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date, for such Plans.
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"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
"Working Capital" means Current Assets minus Current Liabilities.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1 Commitment. From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to Borrowers from time to
time in amounts not to exceed in the aggregate at any one time outstanding the
amount of its Commitment, and on the Closing Date, the Agent agrees to issue the
Interim Letter of Credit; provided, however, that in no event shall the
Aggregate Commitment hereunder exceed $200,000,000; and in no event shall Loans
made to or for the benefit of Maryland and Technologies, together, or
individually, exceed $75,000,000. Subject to the terms of this Agreement,
Borrowers may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.
2.2 Final Principal Payment. Any outstanding Loans and all other unpaid
Obligations shall be paid in full by Borrowers on the Facility Termination Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in accordance with their Pro Rata Share of the
Aggregate Commitment.
2.4 Applicable Margins. The CD Applicable Margin, Base Rate Applicable
Margin and LIBOR Applicable Margin shall be calculated based on the following
performance grid (pricing is based on the higher of the rates resulting from
independent application of the first two columns and is adjusted on the day
following the last day of the Initial Interest Period, and
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thereafter on the first day of each calendar quarter, based on annualized
results (i.e., the ratio of (a) the product of (i) the sum of Consolidated Net
Income plus Consolidated Interest Expense for such quarter multiplied by four
(4) divided by (b) the sum of (i) the product of Consolidated Interest Expense
multiplied by four plus (ii) the Current Portion of Long Term Debt) for the
immediately preceding quarter; provided, however, that in the case of the
adjustment following the Initial Interest Period, the Applicable Margin shall be
determined using annualized results for the quarter ending March 31, 1996. If
upon the expiration of the Initial Interest Period financial statements are not
yet available for the quarter ending March 31, 1996, Borrowers shall continue to
pay interest at the interest rate in effect at the expiration of the Initial
Interest Period and, upon delivery of such statements, an amount equal to
Deferred Interest, if any, shall be immediately due and payable). To the extent
that, as of an adjustment date, Borrowers have not provided to Agent information
necessary to apply the performance grid, interest shall be payable retroactively
upon receipt of such information and calculation by Agent. In such event,
Borrowers shall continue to pay interest at the interest rate and on the Payment
Dates in effect for the preceding quarter and the parties shall adjust for the
difference between interest payable and interest actually paid, when information
to apply the performance grid is available.
===============================================================================
Fixed Charge Consolidated LIBOR + CD + Prime +
Coverage Funded
Debt/EBITDA
- -------------------------------------------------------------------------------
less than 2.0x greater than 112.5 bps 125 bps 0 bps
4.0x
- -------------------------------------------------------------------------------
greater than or less than or 100.0 bps 112.5 bps 0 bps
equal to 2.0x but equal to 4.0x
less than 3.0x but greater than
3.5x
- -------------------------------------------------------------------------------
greater than or less than or 87.5 bps 100 bps 0 bps
equal to 2.5x but equal to 3.5x
less than 3.0x but greater than
3.0x
- -------------------------------------------------------------------------------
greater than or less than or 75.0 bps 87.5 bps 0 bps
equal to 3.0x but equal to 3.0x
less than 3.5x but greater than
2.5x
- -------------------------------------------------------------------------------
greater than or less than or 62.5 bps 75 bps 0 bps
equal to 3.5x equal to 2.5x
===============================================================================
* bps = basis points
2.5 Commitment Fee; Closing Fee; Interim Letter of Credit Fee. (a)
Borrowers agree to pay to Agent for the account of
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each Lender a commitment fee (the "Commitment Fee") calculated at the rate of
0.25% per annum on the daily unborrowed portion of such Lender's Commitment from
the Closing Date to and including the Facility Termination Date, payable
quarterly in arrears on the first day of each calendar quarter hereafter
beginning January 2, 1996, and on the Facility Termination Date.
(b) Borrowers further agree to pay to Agent for the account of each
Lender a closing fee (the "Closing Fee") in the aggregate amount of $125,000.
Borrowers have heretofore paid to Agent for the account of each Lender one-half
of the Closing Fee ($62,500), and Borrowers shall pay the remaining one-half of
the Closing Fee ($62,500), to Agent for the account of each Lender on the
Closing Date.
(c) Borrowers further agree to pay to Agent for the account of each
Lender a letter of credit fee (the "Letter of Credit Fee") in the aggregate
amount of $44,792.00, payable on the Closing Date.
2.6 Other Fees. Borrowers agree to pay all fees payable to Agent pursuant
to the Interim Letter of Credit or a separate letter agreement.
2.7 Minimum Amount of Loans. Base Rate Loans and CD Rate Loans shall be
in the minimum amount of $5,000,000, and in multiples of $1,000,000 if in excess
thereof. LIBOR Rate Loans shall be in the minimum amount of $10,000,000, and in
multiples of $1,000,000 if in excess thereof.
2.8 Interest Payable on the Loans.
(a) Initial Interest. Notwithstanding any other provision hereof,
all Advances hereunder made pursuant to a Borrowing Notice delivered by
Borrowers on or before May 29, 1996, and all Advances made pursuant to a draw on
the Interim Letter of Credit shall consist of Loans bearing interest until and
including the last day of the Initial Interest Period, at a deemed Applicable
Margin as follows, as selected by Borrowers:.
(i) For LIBOR Rate Loans: .625%; or
(ii) For CD Rate Loans: .75%; or
(iii) For Base Rate Loans: 0%.
As of the day following the last day of the Initial Interest Period, and
notwithstanding any Interest Period then in effect, Applicable Margins shall be
determined by reference to the table in Section 2.4 hereof.
(b) Method of Selecting Rate Options and Interest Periods.
(i) Borrowers shall select the Rate Option for each
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Advance and shall select the Interest Period applicable to each CD Rate Loan and
LIBOR Rate Loan from time to time, by delivery to Agent of an irrevocable notice
in the form of Exhibit C hereto (a "Borrowing Notice"), or by telephonic notice
to Agent ("Telephonic Notice"), followed by a same day (which shall mean prior
to 5:00 p.m. Cleveland, Ohio, time) written Borrowing Notice delivered to Agent
via facsimile. Such Borrowing Notice shall indicate the name of the particular
Borrower to or for the benefit of which such Advance shall be made.
(ii) Each CD Rate Loan and LIBOR Rate Loan shall bear interest from and
including the first day of the Interest Period applicable thereto until (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such Loan. Borrowers shall select Interest Periods with respect
to CD Rate Loans and LIBOR Rate Loans so that it is not necessary to pay such
Loan prior to the last day of the applicable Interest Period in order to repay
the Loans on the Facility Termination Date. Provided that no Default shall have
occurred and be continuing, Borrowers may elect to continue a Loan as a CD Rate
Loan or LIBOR Rate Loan, as the case may be, by giving irrevocable written,
telephonic or telegraphic notice thereof to Agent not more than ten (10) nor
less than three (3) Business Days prior to the last day of the then-current
Interest Period for such Loan, specifying the duration of the succeeding
Interest Period therefor. If Agent does not receive timely notice of such
election, Borrowers shall be deemed to have elected to convert such Loan to a
Base Rate Loan at the end of the then-current Interest Period. Provided that no
Default shall have occurred and be continuing, Borrowers may, on any Business
Day, convert any outstanding Base Rate Loan, or portion thereof, into a CD Rate
Loan or a LIBOR Rate Loan in the same aggregate principal amount. If Borrowers
desire to convert a Base Rate Loan, it shall give Agent prior written or
telephonic notice not more than ten (10) nor less than three (3) Business Days
prior to the requested conversion date, which notice shall specify the duration
of the Interest Period applicable thereto.
(c) Determination of Adjusted Base Rate. Agent shall determine the
Base Rate in effect from time to time. Any change in the Base Rate shall, for
all purposes of this Agreement and the other Loan Documents, become effective on
the effective date of such change in the Base Rate as announced by Agent in
accordance with Agent's customary practices.
(d) Monthly Installments.
(i) Borrowers shall pay to Agent, for the account of Lenders in
accordance with their respective Pro Rata Share, monthly in
arrears on the last Business Day of each month beginning with
the month following the month in which the Closing Date occurs,
interest on the outstanding principal amount of the Base Rate
Loans at the
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annual rate equal to the Base Rate plus the Base Rate
Applicable Margin; provided, however, that if Borrowers elect,
pursuant to the final paragraph of Section 2.4(a), to convert a
Base Rate Loan, or any portion thereof, to a CD Rate Loan or a
LIBOR Rate Loan, Borrowers shall pay to Agent, for the account
of Lenders in proportion to their respective Commitments, all
accrued but unpaid interest on such Base Rate Loan, or that
portion thereof which is being so converted, for the period
commencing on the date of the last payment date under this
paragraph 2.8(d)(i) and concluding on the day immediately
preceding the first day of the Interest Period for the CD Rate
Loan or the LIBOR Rate Loan into which such Base Rate Loan is
converted.
(ii) Borrowers shall pay to Agent, for the account of Lenders in
accordance with their Pro Rata Share, in arrears, interest on
the outstanding principal amount of the CD Rate Loans and the
LIBOR Rate Loans at the annual rate equal to the CD Rate or the
LIBOR Rate, as applicable. Such interest shall be due and
payable on the last Business Day of the applicable Interest
Period of ninety (90) days or less, for all other CD Rate Loans
and LIBOR Rate Loans, interest shall be payable, in arrears as
aforesaid, on (x) that Business Day which is ninety (90) days
after the beginning of the Interest Period for such Loans; and
(y) on the final day of the Interest Period therefor.
(e) Interest on Overdue Payments; Default Interest Rate. If any payment of
principal or interest is not paid when due, or prior to the expiration of the
applicable period of grace (if any) therefor, Agent may charge and collect from
Borrowers, or may add to the unpaid balance of the Notes, a Late Charge. Any
Late Charge charged and collected by the agent shall be distributed to Lenders
in proportion to their respective Commitments. No failure by Agent to charge or
collect any Late Charge in respect of any delinquent payment shall be considered
to be a waiver by Agent or Lenders of any rights they may have hereunder,
including without limitation the right subsequently to impose a Late Charge for
such delinquent payment or to take such other actions as may then be available
to them hereunder or at law or in equity, including but not limited to the right
to terminate the Commitments and/or to accelerate the Obligations pursuant to
the terms hereof. If the Notes have been accelerated pursuant to this Agreement
or if a Default hereunder or under any other Loan Document shall have occurred
and be continuing, the outstanding principal balance of the Indebtedness
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advanced under this Agreement, together with all accrued interest thereon and
any and all other Obligations, shall bear interest from the date on which such
amount shall have first become due and payable to the date on which such amount
shall be paid (whether before or after judgment) at the Default Interest Rate.
Interest at the Default Interest Rate will continue to accrue and will (to the
extent permitted by applicable law) be compounded daily until the Obligations in
respect of such payment are discharged (whether before or after judgment).
2.9 Repayments and Prepayments of Principal.
(a) Optional Prepayments. Without derogating from the mandatory
prepayment requirements contained in Section 2.9(b) hereof, Borrowers may prepay
the principal of the Loans in full or in part at any time and from time to time
upon payment to Agent of all accrued interest to the date of payment; provided,
however, that (i) all partial payments of principal shall be in an amount equal
to or greater than One Hundred Thousand Dollars ($100,000.00); and (ii) all
Loans may be prepaid without penalty or premium. If Borrowers shall prepay any
Loan which is a LIBOR Rate Loan or a CD Rate Loan on a day other than the final
day of the applicable Interest Period therefor, such prepayment must include an
amount equal to all of Lenders' aggregate LIBOR Break Funding Costs or CD Break
Funding Costs, respectively, applicable to or resulting from such prepayment in
accordance with Section 2.9, below.
(b) Mandatory Prepayments. If at any time the aggregate principal
balance of all Loans made hereunder exceeds the aggregate amount of the
Commitments Borrowers shall immediately prepay an amount equal to such excess.
(c) Application of Prepayments. Any prepayment of the Obligations shall
be applied by Agent as set forth in Section 2.10 hereof. To the extent that
such payment, repayment or prepayment shall be applied to a CD Rate Loan or a
LIBOR Rate Loan, Agent shall retain such amount until the expiration of the
Interest Period applicable to such Loan, and, shall apply such payment at such
time so as to minimize the LIBOR Break Funding Costs or CD Break Funding Costs
applicable to such payment, repayment or prepayment, unless otherwise instructed
by Borrowers to pay, repay or prepay such Loan and nonetheless incur the
applicable LIBOR Break Funding Cost or CD Break Funding Cost.
(d) Maturity. Subject to the terms and conditions of
this Agreement, Borrowers will be entitled to reborrow all or any
part of the principal of the Notes repaid or prepaid prior to the
termination of the Commitments. The Commitments shall terminate,
and all of the Indebtedness evidenced by each Note shall, if not
sooner paid, be in any event absolutely and unconditionally due and
payable in full by Borrowers, on the Facility Termination Date.
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(e) Notice of Prepayments of Principal. Borrowers will provide Agent
at least (1) one Business Day's advance, written notice of their intention to
make any voluntary prepayment of principal. Such notice shall be irrevocable
and shall specify the date of prepayment and the aggregate amount to be paid.
(f) Reduction in Commitment. Provided there is not then any Default or
Unmatured Default hereunder or any other Loan Document, Borrowers may, upon and
subject to the terms and conditions set forth in this Section 2.9(f), elect
permanently to reduce the Aggregate Commitment by providing Agent and each
Lender with not less than thirty (30) days' prior written notice of its election
to do so. Such notice shall specify the date on which such reduction is
intended to become effective and the amount to which Borrowers would propose to
reduce the Aggregate Commitment. Provided that Borrowers shall, on or prior to
the effective date for such reduction specified in such notice, have made such
payments or prepayments as may be necessary to cause the outstanding balance of
all Loans to Borrowers to be reduced to an amount equal to or less than the
amount of the Aggregate Commitment (giving effect to the proposed reduction
thereof contemplated in Borrowers' notice), the Aggregate Commitment shall, on
the date specified in Borrowers' notice, be reduced to the amount stipulated in
Borrowers' notice. In the event that Borrowers shall elect to reduce the
Aggregate Commitment as aforesaid, each Lender's commitment shall be reduced,
pro rata, to reflect any such reduction in the Aggregate Commitment, and the
amount of the Commitment Fee payable during the fiscal quarter in which such
reduction shall become effective shall be calculated so as to give effect to
such reduction, as of the effective date thereof, on a per diem basis. Each
reduction in the amount of the Aggregate Commitment effected pursuant to this
Section 2.9(f) shall be in a multiple of Five Million Dollars ($5,000,000), and
the minimum reduction shall be Twenty-Five Million Dollars ($25,000,000). Each
reduction in the amount of the Aggregate Commitment shall be permanent.
Borrowers may exercise their right permanently to reduce the amount of the
Aggregate Commitment not more frequently than twice during any six-month period.
Borrowers shall pay all reasonable costs and expenses of Agent (including,
without limitation, reasonable attorney's fees) incurred in connection with the
exercise of Borrowers' rights under this Section 2.9(f).
2.10 Payments and Computations.
(a) Time and Place of Payments. Each payment to be made by Borrowers
under this Agreement or any other Loan Documents shall be made directly to Agent
at its Head Office, not later than 12:00 noon Cleveland time, on the due date of
each such payment, in immediately available and freely transferrable funds. Any
payment received after such time will be deemed to have been received on the
next Business Day. Agent will, on the same Business Day that it receives (or is
deemed to receive, as aforesaid) each such payment, cause to be distributed to
each Lender, in immediately
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available and freely transferrable funds, such Lender's Pro Rata Share of each
such payment received by Agent.
(b) Application of Funds. Notwithstanding anything herein to the
contrary, the funds received by Agent with respect to the Obligations shall be
applied as follows:
(i) No Default. Provided that the Notes have not been accelerated
pursuant to Section 7.1, below, and provided further that no Default
or Unmatured Default hereunder or under any Loan Document shall have
occurred and be continuing at the time that Agent receives such
funds, in the following manner: (a) first, to the payment of all
fees, charges, and other sums (other than principal and interest)
then due and payable to Agent or Lenders under the Notes, this
Agreement or the other Loan Documents (including, without limitation,
any LIBOR Break Funding Costs or CD Break Funding Costs which may
then be payable); (b) second, to the payment of all accrued but
unpaid interest at the time of such payment in accordance with each
Lender's Pro Rata Share; and (c) third, to the payment of principal
of the Notes in accordance with Lender's Pro Rata Shares.
(ii) Default. If the Notes have been accelerated pursuant to Section
7.1, or if a Default hereunder shall have occurred and be continuing
hereunder or under the Notes or any of the other Loan Documents at
the time Agent receives such funds, in the following manner: (a)
first to the payment or reimbursement of Lenders and Agent for all
costs, expenses, disbursements and losses which shall have been
incurred or sustained by Lenders or Agent in or incidental to the
collection of the Obligations owed by Borrowers hereunder or the
exercise, protection, or enforcement by Lenders or Agent of all or
any of the rights, remedies, powers and privileges of Lenders and
Agent under this Agreement, the Notes, or any of the other Loan
Documents and in and towards the provision of adequate indemnity to
Agent and any of Lenders against all taxes or Liens which by law
shall or may have priority over the rights of Agent or Lenders in and
to such funds; and (b) second to the payment of all of the
Obligations in accordance with Section 2.10(b)(i) above.
(c) Payments on Business Days. If any sum would (but for the provisions
of this Section 2.10(c)) become due and payable on any day which is not a
Business Day, then such sum shall become due and payable on the next succeeding
Business Day, and interest
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payable on such sum shall continue to accrue and shall be adjusted by Agent
accordingly.
(d) Computation of Interest. All computations of interest payable
under this Agreement, the Notes, or any of the other Loan Documents shall be
computed by Agent on the basis of the actual principal amount outstanding on
each day during the payment period, and shall be calculated with reference to
the actual number of days elapsed during such period on the basis of a year
consisting of three hundred and sixty (360) days. The daily interest charge
shall be one three-hundred-sixtieth (1/360th) of the annual interest amount.
Each determination of any interest rate by Agent shall be conclusive and binding
on Borrowers in the absence of manifest error. Absent manifest error, a
certificate or statement signed by an authorized officer of the Agent shall be
conclusive evidence of the amount of the Obligations due and unpaid as of the
date of such certificate or statement.
2.11 Payments to be Free of Deductions. Each payment to be made by
Borrowers under this Agreement, any Note, or any of the other Loan Documents
shall be made in accordance with Section 2.10 hereof, without set-off, deduction
or counterclaim whatsoever, and free and clear of taxes, levies, imposts,
duties, charges, fees, deduction, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
governmental or taxing authority, unless Borrowers are compelled by law to make
any such deduction or withholding. In the event that any such obligation to
deduct or withhold is imposed upon Borrowers with respect to any such payment:
(a) Borrowers shall be permitted to make the deduction or withholding required
by law in respect of the said payment, and (b) there shall become and be
absolutely due and payable by Borrowers to Agent or such Lender on the date on
which the said payment shall be due and payable, and Borrowers hereby promise to
pay to Agent or such Lender on such date, such additional amount as shall be
necessary to enable Agent or such Lender to receive the same net amount which
Agent or such Lender would have received on such due date had no such obligation
been imposed by law. Notwithstanding any provision of this Section 2.11 to the
contrary, the foregoing provisions of this Section 2.11 shall not apply in the
case of any deductions or withholding made (y) in respect of taxes charged upon
or by reference to the overall net income, profits or gains of Agent or any
Lender, or (z) failure by a Lender to comply with Section 2.21.
2.12 Use of Proceeds. Borrowers represent, warrant and covenant to
Agent and to each Lender that all proceeds of the Advances shall be used by
Borrowers only for the following purposes: (i) the Technologies Acquisition,
(ii) refinancing existing Indebtedness for Borrowed Money, (iii) Working Capital
needs, and (iv) Acquisitions, to the extent expressly permitted under this
Agreement and (v) except as expressly limited in this Agreement, general
corporate purposes.
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2.13 LIBOR Break Funding Cost; CD Break Funding Cost. Borrowers shall pay
to Agent, for the ratable benefit of each Lender, the LIBOR Break Funding Costs
or CD Break Funding Costs that Agent determines are attributable to:
(a) any payment (including, without limitation, any payment resulting
from the acceleration of the Loans pursuant to this Agreement or any Loan
Document), repayment, mandatory or optional prepayment, or conversion of a LIBOR
Rate Loan or CD Rate Loan for any reason on a date other than the last day of
the Interest Period for such LIBOR Rate Loan or CD Rate Loan; or
(b) any failure by Borrowers for any reason to borrow a LIBOR Rate Loan
or CD Rate Loan on the date for such borrowing specified in the relevant notice
of borrowing or Borrowing Notice given pursuant to this Agreement.
2.14 Additional Costs.
(a) Notwithstanding any conflicting provisions of this Agreement to the
contrary, if any applicable law, rule or regulation not in effect as of the date
hereof shall (i) subject Agent or any Lender to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to any Loan,
this Agreement, any Note, or any of the other Loan Documents or the payment by
Borrowers of any amounts payable to Agent or any Lender hereunder or thereunder
(other than taxes charged upon or by reference to the overall net income,
profits or gains of Agent or any Lender or taxes charged with respect to any
Lender's failure to comply with Section 2.21 hereof); or (ii) materially change,
in the reasonable opinion of the party so affected, the basis of taxation (other
than changes in tax rates applicable to taxes charged upon or by reference to
the overall net income, profits or gains of Agent or any Lender or taxes charged
with respect to any Lender's failure to comply with Section 2.21 hereof) of
payments to Agent or any Lender of the principal of or the interest on any Note
or any other amounts payable to Agent or any Lender under this Agreement, or any
of the other Loan Documents; or (iii) impose or increase or render applicable
any special or supplementary special deposit or reserve or similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or any eligible liabilities of, or loans by any office or
branch of, Agent or any Lender; or (iv) impose on Agent or any Lender any other
condition or requirement with respect to this Agreement, any Note, or any of the
other Loan Documents, and if the result of any of the foregoing is (A) to
increase the cost to Agent or any Lender of making, funding or maintaining all
or any part of the principal of the Loans, or (B) to reduce the amount of
principal, interest or any other sum payable by Borrowers to Agent or any Lender
under this Agreement, any Note, or any of the other Loan Documents, or (C) to
require Agent or any Lender to make any payment or to forego any interest or
other sum payable by Borrowers to Agent or any Lender under this Agreement, any
Note, or any of the other Loan
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Documents, the amount of which payment or foregone interest or other sum is
measured by or calculated by reference to the gross amount of any sum receivable
or deemed received by Agent or any Lender from Borrowers under this Agreement,
any Note, or any of the other Loans Documents, then, and in each such case,
Borrowers will pay to Agent for Agent or the account of a Lender, as the case
may be, within sixty (60) days of written notice by Agent or such Lender, such
additional amounts as will (in the reasonable opinion of Agent or such Lender,
as the case may be) be sufficient to compensate Agent or such Lender for such
sum.
(b) If any present or future applicable law, rule or regulation shall
make it unlawful for any Borrowers to perform any one or more of its agreements
or Obligations under this Agreement, any Note, or any of the other Loan
Documents, then the obligations of Lenders under their respective Commitment
shall terminate immediately. If any present or future applicable law, rule or
regulation shall make it unlawful for any Borrowers to perform any one or more
of its agreements or obligations under this Agreement, any Note, or any of the
other Loan Documents, and Agent, or any Lender shall at any time determine
(which reasonable determination shall be conclusive and binding on Borrowers)
(i) that, as a consequence of the effect or operation (whether direct or
indirect) of any such applicable law, rule or regulation, any one or more of the
rights, remedies, powers or privileges of Agent or any Lender under or in
respect of this Agreement, any Note, or any of the other Loan Documents shall be
or become invalid, unenforceable, or materially restricted; and (ii) that all or
any one or more of the rights, remedies, powers and privileges so affected are
of material importance to Agent or any Lender (as determined by the party so
affected), then Agent shall, at the direction of the Required Banks, by giving
notice to Borrowers, declare all of the Obligations, including, without
limitation, the entire unpaid principal of the Notes, all of the unpaid interest
accrued thereon and any and all other sums due and payable by Borrowers to Agent
or Lenders under this Agreement, any Note, and any of the other Loan Documents,
to be immediately due and payable, and, thereupon, such Obligations shall (if
not already due and payable) forthwith become and be due and payable without
further notice or other formalities of any kind, all of which are hereby
expressly waived.
(c) If Agent or any Lender shall reasonably determine that any law, rule
or regulation not in effect as of the date hereof regarding capital adequacy, or
in the event of any change in any existing such law, rule or regulation or in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
such authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Lender's capital, as a consequence of its
obligations hereunder, to a level below that which such Lender could have
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achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by any amount deemed by
such Lender to be material, then Borrowers shall pay to such Lender within sixty
(60) days of written notice by such Lender such amount or amounts, in addition
to the amounts payable under the provisions of this Agreement or any other Loan
Document, as will compensate such Lender for such reduction. Determinations by
any Lender of the additional amount or amounts required to compensate such
Lender in respect of the foregoing shall be presumptively correct absent
manifest error. In determining such amount or amounts, each Lender may use in
good faith any reasonable averaging and attribution methods of general
application.
(d) Each Lender agrees, that upon the occurrence of any event giving rise
to the operation of Section 2.11, or (a)-(c) of this Section 2.14 with respect
to such Lender, it will, to the extent permitted by Applicable Law or by the
relevant governmental authority, in consultation with the Agent, for a period of
thirty (30) days endeavor in good faith to avoid or minimize the increase in
costs or reduction in payments resulting from such event (including, but not
limited to, endeavoring to change its Lending Installation); providing, however,
that such avoidance or minimization can be made in such a manner that such
Lender, in its sole determination, suffers no economic, legal or regulatory
disadvantage. If any Lender (an "Affected Lender") shall make a demand for
payment under any of such Sections, and Borrowers shall find a Lender or an
assignee which offers in writing to purchase the Commitments and Advances of
such Affected Lender without recourse at par on a specified date, together with
accrued and unpaid interest and commitment fees thereon to the date of purchase,
and tenders the purchase price of such Commitments and Advances on such
specified date, and if, in the reasonable opinion of such Affected Lender, its
acceptance of such offer would be permitted under Applicable Law and all
relevant governmental authorities and would not result in its suffering any
economic, legal, or other regulatory disadvantage, then Borrowers shall be
excused from the payment of the increased costs claimed by such Affected Lender
under any of such Sections accruing after the first interest payment date
pursuant to Section 2.18 for each Advance of such Affected Lender following such
specified date, if the Affected Lender demanding payment under either such
Section declines such purchase offer. If such Affected Lender accepts such
purchase offer, upon consummation of such purchase offer such Affected Lender
shall cease to be a party hereto. Except as provided in the immediately
preceding sentence, nothing in this Section 2.14(d) shall affect or postpone the
obligations of Borrowers to make payments as provided hereunder. Any reasonable
expenses incurred by such Affected Lender under this Section 2.14(d) shall be
paid by the Borrowers upon delivery by such Affected Lender to Borrowers of a
certificate as to the amount of such expenses, which certificate shall be
conclusive and binding, in absence of manifest error.
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(e) For purposes of this Section 2.14, "laws, rules and regulations not in
effect on the date hereof" or similar words shall be deemed to include future
interpretations of existing laws, rules and regulations.
2.15 Indemnification of Losses. Without derogating from any of the other
provisions of this Agreement or any of the other Loan Documents Borrowers hereby
absolutely and unconditionally agree to indemnify Agent and each Lender, upon
demand at any time and as often as the occasion therefor may require, against
any and all claim, demands, suits, actions, damages, losses, costs, expenses and
all other liabilities whatsoever which Agent or any Lender or any of their
respective directors or officers may sustain or incur as a consequence of, on
account of, in relation to or in any way in connection with (a) any failure by
Borrowers to pay, punctually on the due date thereof, any amount payable under
this agreement, any Note, or any of the other Loan Documents beyond the
expiration of the period of grace (if any) applicable thereto, or (b) the
acceleration of the maturity of any of the Obligations, or (c) any failure by
any Borrower to perform or comply with any of the terms and provisions of this
Agreement, any Note or any of the other Loan Documents. Such claims, demands,
suits, actions, damages, losses, costs, expenses shall include, without
limitation (i) any costs incurred by Agent or any lender in carrying funds to
cover any overdue principal, overdue interest or any other overdue sums payable
by Borrowers under this Agreement, any Note or any of the other Loan Documents;
(ii) any interest payable by Agent or any Lender in order to carry the fund
referred to in clause (i) of this Section 2.15; and (iii) any losses (but
excluding losses of anticipated profit) incurred or sustained by Agent or any
Lender in liquidating or re-employing funds acquired from third parties to make,
fund or maintain all or any part of the Loans.
2.16 Statements by Agent or any Lender. A certified statement signed by an
officer of Agent or any Lender setting forth any additional amount required to
be paid by Borrowers to Agent or such Lender (together with supporting
documentation setting forth in reasonable detail an explanation of the basis for
requesting payment of such amount), respectively, under Section 2.14 and 2.15
hereof shall be submitted by Agent or such Lender to Borrowers in connection
with each demand made at any time by Agent (with copies thereof delivered to
each other Lender) or such Lender under either of such Sections. A claim by
Agent or any Lender for all or any part of any additional amounts required to be
paid by Borrowers under Section 2.14 and 2.15 hereof may be made before or after
any payment to which such claim relates. Each such statement shall, in the
absence of manifest error, constitute presumptive evidence of the additional
amount required to be paid to Agent or such Lender.
2.17 Borrowing Notices; Telephonic Notices. (a) All requests for draws,
advances, or disbursements of Loan proceeds shall be made by and on behalf of
Borrowers in writing on a Borrowing Notice, or by Telephonic Notice. All
Telephonic Notices,
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must be followed by same day (which shall mean prior to 5:00 p.m., Cleveland,
Ohio, time) written Borrowing Notice delivered to Agent via facsimile. Borrowing
Notices may be transmitted to Agent at its Head Office via fax or telecopy,
provided that Borrowers immediately notify Agent by telephone of such
transmission. Each Borrowing Notice for Base Rate Loans shall be transmitted to
and received by Agent, or each Telephonic Notice shall be received by telephone
by Agent, not later than 12:00 p.m. Cleveland, Ohio, time not more than ten (10)
Business Days nor less than one (1) Business Day before the Borrowing Date of
each Base Rate Loan and not more than ten (10) Business Days nor less than three
(3) Business Days before the Borrowing Date for each CD Rate Loan or LIBOR Rate
Loan. All Borrowing Notices shall be accompanied by such documents, reports and
other materials as may be reasonably necessary to enable Agent (and each Lender)
to confirm that the conditions precedent to the disbursement of such requested
Loan have been satisfied.
(b) Agent shall notify Lenders promptly by telephone of its receipt of
Borrower's Borrowing Notice, but in no event shall Agent notify Lenders later
than 5:00 p.m. Cleveland time, on the day on which Agent actually receives the
applicable Borrowing Notice. In addition, Agent shall provide each Lender with
a copy of each such Borrowing Notice, together with all accompanying materials,
promptly upon Agent's receipt thereof, and shall in addition provide each Lender
with a statement showing Agent's calculation of its respective Pro Rata Share of
the Advance so requested. Each Lender will, upon receiving notice from Agent of
Borrower's Borrowing Notice, become and be obligated to place at the disposal of
Agent, not later than 10:00 a.m., Cleveland time, on the Borrowing Date set
forth on such Borrowing Notice, an aggregate amount in dollars equal to such
Lender's Pro Rata Share multiplied by the amount of the Advance requested. The
payment by each Lender of such aggregate amount shall be made to Agent at
Agent's Head Office in immediately available and freely transferrable funds.
(c) Agent shall disburse the proceeds of each Loan to Borrowers, in
immediately available funds not later than noon, Cleveland time, on the
Borrowing Date described therefor, provided that: (x) Borrowers shall have
provided Agent with a Borrowing Notice for such Advance as and when provided
above; (y) all of the conditions precedent applicable to such Advance shall be
satisfied as at the Closing Date or such later Borrowing Date as may be
applicable to such Loan; and (z) each Lender shall fund the amount equal to its
Loan as provided in Section 2.17(b), above.
2.18 Notes; Telephonic Notices. Each Lender is hereby authorized to record
the principal amount of each of its Loans and each repayment on the schedule
attached to its Note, provided, however, that the failure to so record shall not
affect Borrowers' obligations under such Note. Borrowers hereby authorize
Lenders and Agent to extend, convert or continue Loans, effect selections
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of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons Agent or any Lender in good faith believes to be acting on
behalf of Borrowers. Borrowers agree to deliver promptly to Agent a written
confirmation, if such confirmation is requested by Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by Agent and Lenders, the
records of Agent and Lenders shall govern absent manifest error.
2.19 Lending Installations. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or telex notice to
Agent and Borrowers, designate a Lending Installation through which Loans will
be made by it and for whose account Loan payments are to be made.
2.20 Non-Receipt of Funds by Agent. Unless Borrowers or a Lender, as the
case may be, notifies Agent prior to the date on which it is scheduled to make
payment to Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii)
in the case of Borrowers, a payment of principal, interest or fees to Agent for
the account of Lenders, that it does not intend to make such payment, Agent may
assume that such payment has been made. Agent may, but shall not be obligated
to, make the amount of such payment available to the intended recipient in
reliance upon such assumption. If such Lender or Borrowers, as the case may be,
has not in fact made such payment to Agent, the recipient of such payment shall,
on demand by Agent, repay to Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by Agent until the date Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by
Borrowers, the interest rate applicable to the relevant Loan.
2.21 Withholding Tax Exemption. At least five Business Days prior to the
first date on which interest or fees are payable hereunder for the account of
any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each
Borrower and Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes. Each Lender
which so delivers a Form 1001 or 4224 further undertakes to deliver to each
Borrower and Agent two additional copies of such form (or a successor form) on
or before the date that such form expires (currently, three successive
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calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Borrowers or Agent, in each
case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises Borrowers and Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.
2.22 The Interim Letter of Credit.
(a) Payment in Certain Circumstances. Upon the occurrence of an
Event of Default and the acceleration of the maturity of the Loans or, if
payment is not then due to the beneficiary under the Interim Letter of Credit,
Agent shall not pay the beneficiary under the Interim Letter of Credit prior to
the date for payment specified thereunder. Agent, may, however, provide for the
deposit of funds in an account to secure payment to the beneficiary, and any
funds so deposited shall be paid to such beneficiary (subject to the
satisfaction of all conditions to such payment), or returned to the Agent for
distribution to the Banks (or, if all Obligations then shall have been
indefeasibly paid in full, to the Company) if no payment to such beneficiary has
been made and if the final date available for drawings under the Interim Letter
of Credit has passed. Each payment or deposit of funds by the Agent as provided
in this paragraph shall be treated for all purposes of this Agreement as a
drawing duly honored by the Agent under the Interim Letter of Credit and an
Advance under this Agreement.
(b) Termination of Credit Commitments. If for any reason the obligations
of the Lenders to make Loans hereunder shall terminate when the Interim Letter
of Credit is outstanding, Borrowers shall, in addition to their repayment
obligations hereunder, immediately deposit with Agent an amount, in cash, equal
to the face amount of the Interim Letter of Credit.
(c) Payment by Banks. If Borrowers shall fail to reimburse the Agent as
and when required above for the amount of any drawing honored by the Agent under
the Interim Letter of Credit, the Agent shall promptly notify each Bank of the
unreimbursed amount of such drawing and of such Bank's respective Pro Rata Share
thereof. Each Bank shall make available to the Agent an amount equal to its
respective Pro Rata Share of such unreimbursed drawing, in immediately available
funds, at the office of the Agent specified in such notice, not later than 12:00
P.M.
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(Cleveland time) on the first Business Day after such Bank's receipt of such
notice from the Agent. If any Bank fails to make available to the Agent the
amount of such Bank's Pro Rata Share of such unreimbursed drawing, the Agent
shall be entitled to recover such amount on demand from such Bank, together with
interest at the customary rate set by the Agent for the correction of errors
among banks. Nothing in this provision shall prejudice the right of any Bank to
recover from the Agent any amounts made available by such Bank to the Agent
pursuant to this provision in the event that it is determined by a court of
competent jurisdiction that the payment with respect to the Interim Letter of
Credit by the Agent in respect of which payment was made by the Agent
constituted gross negligence or willful misconduct on the part of the Agent. The
Agent shall distribute to each other Bank which has paid all amounts payable by
it under this Section 2.22(c) with respect to the Interim Letter of Credit such
other Bank's Pro Rata Share of all payments received by the Agent from Borrowers
in reimbursement of drawings honored by the Agent under the Interim Letter of
Credit when such payments are received.
(d) Obligations Absolute. The obligation of Borrowers to reimburse the
Agent for drawings made under the Interim Letter of Credit and the obligations
of the Banks under Section 2.22(c) 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:
(i) any lack of validity or enforceability of the Interim Letter of
Credit;
(ii) the existence of any claim, setoff, defense or other right
which Borrowers may have at any time against a beneficiary or any
transferee of the Interim Letter of Credit (or any persons or entities for
whom any such transferee may be acting), the Agent, any Bank or any other
Person, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between Borrowers and the beneficiary for which the Interim
Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under the Interim 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 Agent under the Interim Letter of Credit against
presentation of a demand, draft or certificate or other document which does
not comply with the terms of the Interim Letter of Credit, provided that
such payment does not constitute gross negligence or willful misconduct of
the Agent;
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(v) any other circumstance or occurrence whatsoever, which is
similar to any of the foregoing; or
(vi) the fact that a default or an Event of Default shall have
occurred and be continuing.
(e) Indemnification: Nature of the Agent's Duties. In addition to
amounts payable as elsewhere provided in this Section 2.22, and without limiting
any other indemnification provided for in this Agreement, Borrowers agree to
protect, indemnify, pay and save the Agent harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) which the Agent may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of the Interim
Letter of Credit, other than as a result of the gross negligence or willful
misconduct of the Agent as determined by a court of competent jurisdiction, or
(ii) the failure of the Agent to honor a drawing under the Interim Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority. As
between Borrowers and the Agent, Borrowers assume all risks of the acts and
omissions of, or misuse of the Interim Letter of Credit by, the respective
beneficiaries thereof. In furtherance and not in limitation of the foregoing,
the Agent shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of the Interim Letter of
Credit, even if any of the foregoing should in fact prove to be invalid,
insufficient, inaccurate, fraudulent or forged in any respect; (ii) the validity
or insufficiency of any instrument transferring or assigning or purporting to
transfer or assign the Interim Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
the Interim Letter of Credit to comply fully with conditions required in order
to draw thereupon; (iv) the errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telecopy,
telex or otherwise, whether or not they be in cipher; (v) the errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under the Interim
Letter of Credit or any proceeds thereof; (vii) the misapplication by the
beneficiary of the Interim Letter of Credit of the proceeds of any drawing under
such Interim Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Agent. None of the above shall affect, impair,
or prevent the vesting of any of the Agent's rights or powers hereunder. In
determining whether to pay under the Interim Letter of Credit, the Agent shall
be responsible only to determine that the documents and certificates required to
be delivered under the Interim Letter of Credit have been delivered and that the
same comply on their face with the requirements of the Interim Letter of Credit.
Borrowers
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shall have no obligation to indemnify the Agent in respect of any liability
incurred by the Agent arising solely out of the gross negligence or willful
misconduct of the Agent, as determined by a court of competent jurisdiction, or
out of the wrongful dishonor by the Agent of a proper demand for payment made
under the Interim Letter of Credit.
ARTICLE III
CONDITIONS PRECEDENT
3.1 Initial Advance. Lenders shall not be required to make the Initial
Advance hereunder unless (a) Borrowers shall have paid all fees due and payable
to Lenders and Agent hereunder, (b) the initial Borrowing Notice is delivered to
the Agent on or before November 29, 1995, (c) the proceeds of the Initial
Advance are sufficient to and are used for the payoff and termination of the
Existing Facilities, (d)(i) five (5) Business Days prior to the Technologies
Acquisition, the Company shall have provided in writing to Agent a detailed list
certified by an Authorized Financial Officer, of the amount and kind of all
consideration being paid by the Company and or Maryland in connection with the
Technologies Acquisition, and (ii) each Lender, in its sole discretion, has
approved the contents of Borrower's notice (the Agent shall respond in writing
to the Company within five (5) Business Days of receiving the Company's original
notice as to Lenders' approval or disapproval; in the event that any Lender
disapproves of the amount and kind of consideration being paid by the Company
and or Maryland in connection with the Technologies Acquisition, this Agreement
shall terminate with respect to such Lender as of the date of Agent's notice of
disapproval to the Company), (e) the closing of the Technologies Acquisition
shall have occurred on or before November 30, 1995, in accordance with the terms
and conditions of documents and instruments (the "Merger Documents") that have
been reviewed and approved by Agent and Agent's counsel, and (f) Borrowers shall
have furnished to Agent, with sufficient copies for Lenders, the following:
(i) The duly executed originals of the Loan Documents, including
the Notes, payable to the order of each of Lenders, and this
Agreement and a Subsidiary Guaranty from Canada;
(ii) A certificate of good standing for each Borrower and Canada,
certified by the appropriate governmental officer, and foreign
qualification certificates, certified by the appropriate
governmental officer, for each jurisdiction where the failure to
so qualify or be licensed (if required) could reasonably be
expected to result in a Material Adverse Change;
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(iii) Copies, certified by an officer of each Borrower and Canada, of
each of the Borrower's formation documents (including by-laws
or code of regulations), together with all amendments thereto;
(iv) An incumbency certificate, executed by an officer of each
Borrower and Canada, which shall identify by name and title and
bear the signature of the Persons authorized to sign the Loan
Documents and the Subsidiary Guaranty, respectively, and to
make borrowings hereunder on behalf of each Borrower, upon
which certificate Agent and Lenders shall be entitled to rely
until informed of any change in writing by each Borrower or
Canada;
(v) Copies, certified by the Secretary or Assistant Secretary, of
each Borrower's and Canada's Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary
by counsel for any Lender) authorizing, as the case may be, the
Advances provided for herein and the execution, delivery and
performance of the Loan Documents or the Subsidiary Guaranty to
be executed and delivered by each Borrower and Canada
hereunder;
(vi) A written opinion of each Borrower's and Canada's counsel,
addressed to Lenders in substantially the form of Exhibit D and
Exhibit E hereto;
(vii) A certificate, signed by an officer of each Borrower, stating
that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing and that all
representations and warranties of each Borrower are true and
correct as of the initial Borrowing Date;
(viii) The most recent financial statements of the Company and a
certificate from an officer of the Company stating that no
material adverse change in the Company's financial condition
has occurred since September 30, 1995;
(ix) UCC financing statement, judgment, and tax lien searches with
respect to each Borrower from the State of Ohio, from the state
of Maryland with respect to Technologies and Maryland and from
the province of Ontario with respect to Canada;
(x) A certificate, signed by an officer of each Borrower, stating
that all judgments against each Borrower have been satisfied,
and that all liens or encumbrances on any Property of any
Borrower have
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been released, other than liens permitted pursuant to Section
5.15;
(xi) Written money transfer instructions, in substantially the form
of Exhibit F hereto, addressed to Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as Agent may have reasonably requested;
(xii) An original counterpart of the articles of merger relating to
the Technologies Acquisition and any other documents or
instruments relating thereto requested by Agent or any Lender,
and a certificate of an Authorized Financial Officer stating
that the Technologies Acquisition occurred in accordance with
the terms of the Merger Documents;
(xiii) Immediately following the closing of the Technologies
Acquisition, a resolution of the new board of directors of the
surviving corporation acknowledging its obligations as a
Borrower under this Agreement; and
(xiv) Such other documents as any Lender or its counsel may have
reasonably requested, the form and substance of which documents
shall be acceptable to the parties and their respective
counsel.
3.2 Each Advance. Lenders shall not be required to make any Advance
unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in Article IV are
true and correct in all material respects as of such Borrowing
Date with respect to each Borrower and to any Subsidiary in
existence on such Borrowing Date, except to the extent any such
representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty
shall be true and correct in all material respects on and as of
such earlier date;
(iii) All legal matters incident to the making of such Advance shall
be satisfactory to Lenders and their counsel; and
(iv) Borrowers have provided to Lenders, Borrowers latest audited
annual financial statements and unaudited partial year
financial statements (all
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such financial statements to be prepared with the specified detail
required in Section 5.1 hereof).
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by Borrowers that the conditions contained in
Sections 3.2(i) and (ii) have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to Lenders that:
4.1 Existence. The Company is a corporation duly organized and
validly existing under the laws of the State of Ohio, having its principal place
of business in Garfield Heights, Ohio; and Maryland is a corporation duly
organized and validly existing under the laws of the State of Maryland, having
its principal place of business in Gaithersburg, Maryland; and each has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted. Each Borrower's Subsidiaries are duly incorporated,
validly existing and in good standing under the laws of their jurisdiction of
incorporation and have all requisite authority to conduct its business in each
jurisdiction in which their business is conducted.
4.2 Authorization and Validity. Each Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by each Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper proceedings, and the Loan Documents constitute
legal, valid and binding obligations of each Borrower enforceable against each
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
4.3 No Conflict, Government Consent. Neither the execution and
delivery by each Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on each Borrower or any of its Subsidiaries or each
Borrower's or any Subsidiary's articles of incorporation or bylaws, or the
provisions of any material indenture, material instrument or material agreement
to which each Borrower or any of its Subsidiaries is a party or is subject, or
by which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on the
Property of the Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No
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order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents.
4.4 Financial Statements-- Material Adverse Change. The September 30,
1995 financial statements of Borrowers and their Subsidiaries heretofore
delivered to Lenders were prepared in accordance with GAAP in effect on the date
such statements were prepared and fairly present the financial condition and
operations of Borrowers and their Subsidiaries at such date and the consolidated
results of their operations for the period then ended. Since September 30, 1995
there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of Borrowers and their
Subsidiaries which could reasonably be expected to result in a Material Adverse
Change.
4.5 Tax. Borrowers and their Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by Borrowers or any of their Subsidiaries except such taxes,
if any, as are being contested in good faith and as to which adequate reserves
have been provided. No tax liens have been filed and no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves on
the books of Borrowers and their Subsidiaries in respect of any taxes or other
governmental charges are adequate.
4.6 Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry: pending or, to
the knowledge of any of their officers, threatened against or affecting
Borrowers or any of their Subsidiaries which could reasonably be expected to
result in a Material Adverse Change. Borrowers have no material Contingent
Obligations not provided for or disclosed in the financial statements referred
to in Section 5.1.
4.7 Subsidiaries. Schedule 1 hereto contains an accurate list of
all of the presently existing Subsidiaries of each Borrower setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by each Borrower or other Subsidiaries. All of the issued
and outstanding shares of capital stock of such Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable.
4.8 ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither Borrowers nor any other member
of the Controlled Group has
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incurred, or is reasonably expected to incur, any withdrawal liability to
Multiemployer Plans in excess of $250,000 in the aggregate. Each Plan complies
in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan, neither
Borrowers nor any other member of the Controlled Group have withdrawn from any
Plan or initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan.
4.9 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of Borrowers or any of their
Subsidiaries to Agent or any Lender for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all other such factual
information hereafter furnished by or on behalf of Borrowers or any of their
Subsidiaries to Agent or any Lender will be, true and accurate in all material
respects (taken as a whole) on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time.
4.10 Regulation U. No Borrower holds any margin stock (as defined in
Regulation U).
4.11 Material Agreements. No Borrower nor any of their respective
Subsidiaries is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could reasonably be expected to result in a
Material Adverse Change. No Borrower nor any of their respective Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any agreement to which it
is a party, which default could reasonably be expected to result in a Material
Adverse Change or (ii) any agreement or instrument evidencing or governing
Indebtedness.
4.12 Compliance with Laws. Each Borrower and its Subsidiaries has
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses, and ownership of their respective Property, the non-compliance with
which could reasonably be expected to result in a Material Adverse Change. No
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local environmental, health and safety statutes
and regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to result in a Material Adverse
Change.
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4.13 Ownership of Properties. Except as set forth on Schedule 2
hereto, on the date of this Agreement, Borrowers and their Subsidiaries will
have good title, free of all Liens other than those permitted by Section 5.15,
to all of the Property and assets reflected in the financial statements as owned
by it.
4.14 Investment Company Act. No Borrower nor any of their respective
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
4.15 Public Utility Holding Company Act. No Borrower nor any of their
respective Subsidiaries is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
4.16 Solvency. (i) Immediately after the Closing Date and immediately
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of Borrowers and
their Subsidiaries on a consolidated basis, at a fair valuation, will exceed the
debts and liabilities, subordinated, contingent or otherwise, of Borrowers and
their Subsidiaries on a consolidated basis; (b) the present fair saleable value
of the Property of Borrowers and their Subsidiaries on a consolidated basis will
be greater than the amount that will be required to pay the probable liability
of Borrowers and their Subsidiaries on a consolidated basis on their debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) Borrowers and their
Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) Borrowers and their
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) Borrowers do not intend to, or to permit any of their Subsidiaries to,
and does not believe that they or any of their Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by them or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of their
Indebtedness or the Indebtedness of any such Subsidiary.
4.17 Insurance. Borrowers and their Subsidiaries carry insurance on
their businesses with financially sound and reputable insurance companies, in
such amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged
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in similar businesses in localities where Borrowers and their Subsidiaries
operate, including, without limitation:
(i) Property and casualty insurance (including coverage for flood
and other water damage for any Property located within a
100-year flood plain) in the amount of the replacement cost of
the improvements at the Property;
(ii) Comprehensive general liability insurance in the amount of
$20,000,000 per occurrence.
4.18 Environmental Matters. Each of the following
representations and warranties is true and correct on and as of the Closing Date
except to the extent that the facts and circumstances giving rise to any such
failure to be so true and correct, in the aggregate, could not reasonably be
expected to result in a Material Adverse Change:
(a) To the best knowledge of Borrowers, the Property of Borrowers
and their Subsidiaries does not contain, and has not previously contained,
any Materials of Environmental Concern in amounts or concentrations which
constitute or constituted a violation of, or could reasonably give rise to
liability under, Environmental Laws.
(b) To the best knowledge of Borrowers, the Property of Borrowers
and their Subsidiaries and all operations of such Property are in
compliance, and have in the last two years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Property of Borrowers and their Subsidiaries, or violation of any
Environmental Law with respect to the Property of Borrowers and their
Subsidiaries.
(c) Neither Borrowers nor any of their Subsidiaries have received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their Property, nor does any
Borrower or their respective Subsidiaries have knowledge or reason to
believe that any such notice will be received or is being threatened.
(d) To the best knowledge of Borrowers, Materials of Environmental
Concern have not been transported or disposed of from any Property of
Borrowers and their Subsidiaries in violation of, or in a manner or to a
location which could reasonably give rise to liability under, Environmental
Laws, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Property of
Borrowers and their Subsidiaries in
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violation of, or in a manner that could give rise to liability under, any
applicable Environmental Laws.
(e) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of any Borrower or their respective
Subsidiaries, threatened, under any Environmental Law to which the Borrower
or any of its Subsidiaries is or will be named as a party with respect to
any Property of Borrowers and their Subsidiaries nor are there any consent
decrees or other decrees, consent orders, administrative order or other
orders, or other administrative of judicial requirements outstanding under
any Environmental Law with respect to any Property of Borrowers and their
Subsidiaries.
(f) To the best knowledge of each Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or
from any Property of Borrowers or their Subsidiaries, or arising from or
related to the operations of Borrowers and their Subsidiaries in connection
with any Property in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.
ARTICLE V
COVENANTS
During the term of this Agreement, unless Lenders shall otherwise consent
in writing:
5.1 Financial Reporting. Each Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to Lenders:.
(i) As soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Company and its
Subsidiaries, an unaudited consolidated and consolidating
balance sheet as of the close of each such period and the
related unaudited consolidated and consolidating statements of
income and retained earnings for such period and the portion of
the fiscal year through the end of such period and of year to
date cash flows of the Company and its Subsidiaries, all
certified by an Authorized Financial Officer;
(ii) As soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Company and its
Subsidiaries, related reports in form and substance
satisfactory to Lenders, all certified by the Company's
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Authorized Financial Officer, a statement detailing
Consolidated Outstanding Indebtedness;
(iii) As soon as available, but in any event not later than 90 days
after the close of each fiscal year, for the Company and its
Subsidiaries, (i) audited financial statements, including a
consolidated balance sheet as at the end of such year and the
related consolidated statements of income and retained earnings
and of cash flows for such year, setting forth in comparative
form the figures for the previous year, reported on without a
"going concern" or like qualification or exception, by Ernst &
Young, LLP (or other independent certified public accountants
of nationally recognized standing acceptable to (Agent), and
(ii) unaudited financial statements, including a consolidating
balance sheet as at the end of such year and the related
consolidating statements of income and retained earnings and of
cash flow for such year;
(iv) As soon as available, but in any event not later than 90 days
after the close of each fiscal year, for each Borrower and its
Subsidiaries, the following related reports in form and
substance satisfactory to Lenders, all certified by the
entity's Authorized Financial Officer: a statement of
Consolidated Outstanding Indebtedness;
(v) Together with the quarterly and annual financial statements
required hereunder, a compliance certificate in substantially
the form of Exhibit G hereto signed by an Authorized Officer
showing the calculations and computations necessary to
determine compliance with the financial covenants set forth in
this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof;
(vi) As soon as possible and in any event within 10 days after a
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized
Financial Officer of any Borrower, describing said Reportable
Event and the action which any Borrower proposes to take with
respect thereto;
(vii) As soon as possible and in any event within 10 days after
receipt by a Borrower, a copy of (a) any notice or claim to the
effect that a Borrower or any of its Subsidiaries is or may be
liable to any Person as a result of the release by any
Borrower,
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any of its Subsidiaries, or any other Person of any toxic or
hazardous waste or substance into the environment, which could
reasonably be expected to result in a Material Adverse Change
and (b) any notice alleging any violation of any federal, state
or local environmental, health or safety law or regulation by
any Borrower or any of its Subsidiaries, which, in either case,
could reasonably be expected to result in a Material Adverse
Change;
(viii) Promptly upon the furnishing thereof to the shareholders of
each Borrower, copies of all financial statements, reports and
proxy statements so furnished;
(ix) Within three (3) business days after due to the SEC, copies of
all registration statements and annual, quarterly, monthly or
other reports and any other public information which each
Borrower or any of its Subsidiaries files with the Securities
Exchange Commission; and
(x) Such other information (including, without limitation,
financial statements for each Borrower and nonfinancial
information) as Agent may from time to time reasonably request.
5.2 Prohibited Uses of Proceeds. Borrowers will not nor will it
permit any Subsidiary to, use any of the proceeds of the Advances (i) to
purchase or carry any "margin stock" (as defined in Regulation U), or (ii) for
any purpose that shall be a violation of Regulation U, or regulations G, T and X
of the Board of Governors of the Federal Reserve System or for any other purpose
violative of any rule or regulation of such Board.
5.3 Notice of Default. Each Borrower will give, and will cause
each of its Subsidiaries to give, notice in writing to Lenders of the occurrence
of any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to result in a Material Adverse
Change, promptly upon (but in no event later then ten (10) Business Days after)
such occurrence or development.
5.4 Conduct of Business. Each Borrower will do, and will cause
each of its Subsidiaries to do, all things necessary to remain duly incorporated
or duly qualified, validly existing and in good standing as a corporation,
general partnership, limited partnership or limited liability company, as the
case may be, in its jurisdiction of incorporation/formation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted and to carry on and conduct its business in substantially
the same manner as it is presently
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conducted and, specifically, no Borrower nor their respective Subsidiaries may
undertake any significant business other than the manufacture or distribution of
industrial and consumer electronic products or related consulting or support
services.
5.5 Taxes. Each Borrower will pay, and will cause each of its
Subsidiaries to pay, when due all taxes, assessments and governmental charges
and levies upon it of its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside.
5.6 Insurance. Each Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies, insurance in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses in
localities where Borrowers and their Subsidiaries operate, including, without
limitation:
(i) Property and casualty insurance (including coverage for flood
and other water damage for any Property located within a
100-year flood plain) in the amount of the replacement cost of
the improvements at the Property; and
(ii) Comprehensive general liability insurance in the amount of
$20,000,000 per occurrence.
5.7 Compliance with Laws. Each Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, the
non-compliance with which could reasonably be expected to result in a Material
Adverse Change.
5.8 Maintenance of Properties. Except as permitted pursuant to
Section 5.11 of this Agreement, each Borrower will, and will cause each of its
Subsidiaries to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, ordinary wear and tear
excepted, and make all necessary and proper repairs, renewals and replacements
so that its business carried on in connection therewith may be properly
conducted at all times.
5.9 Inspection. Borrowers will, and will cause each of their
Subsidiaries to, permit Agent and each Lender , by its respective
representatives and agents, to inspect any Property, corporate books and
financial records of each Borrower and each of its Subsidiaries, to examine and
make copies of the books of accounts and other financial records of each
Borrower and each of its Subsidiaries, and to discuss the affairs, finances and
accounts of each Borrower and each of its Subsidiaries, and to be advised as
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to the same by their respective officers at such reasonable times and intervals
as Agent may designate (provided, however, that any inspection by a Lender shall
be arranged by Agent).
5.10 Maintenance of Status. Each Borrower shall remain a
corporation validly existing and in good standing in the state of its
incorporation and the Company shall at all times remain a corporation listed and
in good standing on NASDAQ or other national securities exchange. The Company
shall not permit a Change in Control to occur with respect to Maryland or
Technologies.
5.11 Merger; Sale of Assets. Other than the Technologies
Acquisition, no Borrower will, nor will it permit any of its Subsidiaries to,
enter into any merger, consolidation, reorganization or liquidation or transfer
or otherwise dispose of all or a Substantial Portion of its Property or
business, unless approved in advance by Lenders.
5.12 Delivery of Subsidiary Guaranties. Each Borrower shall
promptly notify Agent of any planned formation or acquisition of any Substantial
Subsidiary. Within 10 days after any Borrower forms or acquires any Substantial
Subsidiary, that Borrower shall cause such Substantial Subsidiary to execute and
deliver to Lenders' a guaranty agreement (together with such other documents as
Lenders shall reasonably request) whereby such Substantial Subsidiary agrees
that it shall be jointly and severally liable for all Obligations of that
Borrower under the Loan Documents. The guaranty agreement and such other
documents each shall be in form and substance satisfactory to Lenders.
5.13 Sale and Leaseback. Each Borrower will not, nor will it permit
any of its Subsidiaries to, sell or transfer all or a Substantial Portion of its
Property in order to concurrently or subsequently lease as lessee such or
similar Properties.
5.14 Acquisitions and Investments. Each Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including,
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or create any Subsidiary or become or
remain a partner in any partnership or joint venture, or make any Acquisition of
any Person, except:
(i) Cash Equivalents;
(ii) up to $10,800,000 investment in Canada, other existing
Investments in Subsidiaries and joint ventures, and other
Investments in existence on the date hereof and described in
Schedule "1" hereto;
(iii) acquisitions permitted pursuant to Section 5.27;
(iv) mergers permitted pursuant to Section 5.11;
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(v) investments and loans permitted under Section 5.26; and
(vi) investments and loans from either Borrower to the other so long
as the source of such investments or loans is not a Loan or
Advance hereunder and such investment or loan would cause
borrowings hereunder to exceed the limits contained in Section
2.1.
5.15 Liens. Each Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on any
Property of it or any of its Subsidiaries, except:
(i) with respect to Property consisting of real property under the
laws of the state where such Property is located, any tax lien,
or any lien securing workers' compensation or unemployment
insurance obligations, or any mechanic's, carrier's or
landlord's lien, or any lien arising under ERISA, or any
security interest arising under article four (bank deposits and
collections) or five (letters or credit) of the Uniform
Commercial Code, or any security interest or other lien similar
to the foregoing, EXCEPT that this clause (i) shall apply only
to (A) the extent that the aggregate of such liens does not
exceed $1,000,000, and (B) security interests and other liens
arising by operation of law (whether statutory or common law)
and in the ordinary course of business and shall not apply to
any security interest or other lien that secures any
Indebtedness for Borrowed Money or any Contingent Obligation or
any obligation that is in material default in any manner (other
than any default contested in good faith by timely and
appropriate proceedings effective to stay enforcement of the
security interest or other lien in question);
(ii) zoning or deed restrictions, public utility easements, minor
title irregularities and similar matters having no adverse
effect as a practical matter on the ownership or use of any of
the properties or interfere with use thereof in the business of
the Borrower or its Subsidiaries;
(iii) with respect to Property consisting of real property under the
laws of the state where such Property is located, any lien
securing or given in lieu of surety, stay, appeal or
performance bonds, or securing performance of contracts or bids
(other than contracts for the payment of money borrowed), or
deposits required by law or governmental
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regulations or by any court order, decree, judgment or rule or
as a condition to the transaction of business or the exercise
of any right, privilege or license, EXCEPT that this clause
(iii) shall not apply to (A) the extent that the aggregate of
such liens exceeds $1,000,000, and (B) any lien or deposit
securing any obligation that is in material default in any
manner (other than any default contested in good faith by
timely and appropriate proceedings effective to stay
enforcement of the security interest or than lien in question);
(iv) any mortgage, security, interest or other lien (each a
"Purchase Money Security Interest") which is created or assumed
in purchasing, constructing or improving any real property or
equipment to which any property is subject when purchased,
PROVIDED, that (A) the Purchase Money Security Interest shall
be confined to the aforesaid property, (B) the indebtedness
secured thereby does not exceed the total cost of the purchase,
construction or improvement and (C) any such indebtedness, if
repaid in whole or in part, cannot be reborrowed;
(v) any lease other than any Capitalized Lease (it being agreed
that a Capitalized Lease is a lien rather than a lease for the
purposes of this Agreement) so long as the aggregate annual
rentals of all such leases do not exceed Ten Million Dollars
($10,000,000);
(vi) any financing statement perfecting a security interest that
would be permissible under this subsection; and
(vii) liens existing on the date hereof and described on Schedule 2
hereof.
Liens permitted pursuant to this Section 5.15 shall be deemed to be "Permitted
Liens".
5.16 Affiliates. Except as permitted pursuant to Section 5.2,
no Borrower will, nor will it permit any of its Subsidiaries to, enter into any
transaction (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate except in
the ordinary course of business and pursuant to the reasonable requirements of
each Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to that Borrower or such Subsidiary than that Borrower or such
Subsidiary would obtain in a comparable arm's-length transaction.
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5.17 Additional Indebtedness and Financial Undertakings. No Borrower
will enter into or remain liable upon, nor will it permit any Subsidiary to
enter into or remain liable upon, any Financial Undertaking, nor will any
Borrower or their respective Subsidiaries incur Indebtedness for Borrowed Money
(other than Indebtedness for Borrowed Money which is incurred under this
Agreement or the Additional Facilities) (a) in any instance in the aggregate, on
a consolidated basis, exceeding $100,000,000, and (b) in any amount if such
Indebtedness has a scheduled maturity, either contingent or otherwise, prior to
November 15, 1997, and (c) that consists of interest rate exchange agreements or
interest rate option agreements, that in the aggregate, at any time, creates an
Aggregate Measured Credit Risk in excess of $7,500,000.
5.18 Litigation. Borrowers shall furnish or cause to be furnished to
Agent, promptly (and, in any event, within five (5) Business Days) after any
Borrower or their respective Subsidiaries shall have first become aware of the
same, a written notice setting forth full particulars of and what action any
Borrower or their respective Subsidiaries is taking or proposes to take with
respect to (a) any final judgment in an amount exceeding One Million Dollars
($1,000,000) rendered against any Borrower or any Affiliate of any Borrower; (b)
the commencement or institution of any legal or administrative action, suit,
proceeding or investigation by or against any Borrower in or before any court,
governmental or regulatory body, agency, commission, or official, board of
arbitration or arbitrator, the outcome of which could reasonably be expected to
result in a Material Adverse Change; or (c) the occurrence of any adverse
development not previously disclosed by any Borrower to Agent in writing, in any
such action, suit, proceeding or investigation.
5.19 Further Assurances. Borrowers will execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any and all such
further assurances and other agreements or instruments, and take or cause to be
taken all such other action, as shall be reasonably requested by Agent from time
to time in order to give full force and effect to the Loan Documents.
5.20 Current Ratio. Borrowers shall maintain, at all times, a
Current Ratio in excess of 1.7 to 1.
5.21 Consolidated Tangible Net Worth. Borrowers shall have a
Consolidated Tangible Net Worth of not less than $85,000,000 at Closing.
Thereafter, Borrowers shall maintain, at all times, a Consolidated Tangible Net
Worth equal to $85,000,000 plus (i) 100% of the net proceeds to Borrowers of any
equity offering; and (ii) an amount equal to: (a) a minimum of 50% of positive
Consolidated Net Income, if any, per calendar quarter through March 31, 1996,
and (b) a minimum of 75% of positive Consolidated Net Income, if any, per
calendar quarter thereafter; provided, however, that no adjustments shall be
made as a consequence of any loss.
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5.22 Working Capital. Borrowers shall have and maintain at all times
until March 31, 1997, Working Capital of $175,000,000. From and after April 1,
1997, Borrowers shall maintain at all times, Working Capital of $190,000,000.
5.23 Capital Expenditures. Capital Expenditures for Borrowers, on a
consolidated basis, shall not exceed $25,000,000 for Borrowers' fiscal year
ending March 31, 1996, and $20,000,000 for fiscal years ending March 31, 1997
and thereafter.
5.24 Leverage Ratio. The Leverage Ratio shall not exceed 4.75 to 1.00
at any time during the period commencing on the Closing Date, and ending on
March 31, 1996, 4.25 to 1.00 at any time during the period commencing April 1,
1996, and ending on March 31, 1997, and 3.00 to 1.00 at any time during the
period commencing on April 1, 1997, and thereafter.
5.25 Fixed Charge Coverage Ratio. Borrowers shall maintain a Fixed
Charge Coverage Ratio of no less than the following, during each of the
following periods:.
(i) At all times during the period commencing July 1, 1995, and
ending September 30, 1995, not less than 1.5x to 1.0.
(ii) At all times during the period commencing July 1, 1995, and
ending December 31, 1995, not less than 1.75X to 1.0.
(iii) At all times during the period commencing July 1, 1995, and
ending March 31, 1996, not less than 2.0x to 1.0.
(iv) Beginning with the quarter ending June 30, 1996, and every
quarter thereafter, not less than 2.0x to 1.0 on a rolling
four-quarter basis.
5.26 Investment and Loan Limit. Neither the Company, Technologies nor
Maryland, nor any of their Subsidiaries, together or individually, directly or
indirectly, in any instance or in the aggregate over time may: (a) invest in any
manner more than $10,800,000 in Canada, or (b) loan more than an aggregate
principal amount of $25,000,000 to Canada.
5.27 Acquisition Limit. Neither Borrowers nor any of their
Subsidiaries shall fund the Acquisitions of Persons, or offer for, any Capital
Stock of Persons, to the extent the aggregate consideration (including
contingent consideration) of all such Acquisitions made after the Closing Date
and until the Facility Termination Date would exceed $2,000,000.
5.28 Environmental Matters. Each Borrower and its Subsidiaries shall:
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(a) Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws, except
to the extent that (i) the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to result in a Material Adverse Change, or (ii) that Borrowers have
determined in good faith that contesting the same is not in the best interests
of that Borrower and its Subsidiaries and the failure to contest the same could
not be reasonably expected to result in a Material Adverse Change.
(b) Defend, indemnify and hold harmless Agent and each Lender, and their
respective employees, agents, officers and directors from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under any Environmental Laws applicable to the operations of that
Borrower, its Subsidiaries or its Property, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement.
ARTICLE VI
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
6.1 Nonpayment of Principal. Nonpayment of any principal payment on
any Note when due.
6.2 Nonpayment of Other Obligations. Nonpayment of interest upon any
Note or of any Commitment Fee or other payment Obligations under any of the Loan
Documents within three (3) Business Days after the same becomes due.
6.3 Certain Breaches. The breach of any of the terms or provisions of
Sections 5.2, 5.6, 5.7 and 5.9 through 5.28.
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6.4 Representations and Warranties. Any representation or warranty
made or deemed made by or on behalf of each Borrower or any of its Subsidiaries
to Lenders or Agent under or in connection with this Agreement, any Loan, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.
6.5 Other Breaches. The breach by any Borrower (other than a breach
which constitutes a Default under any other section of this Article VI) which
constitutes a Default under any of the terms or provisions of this Agreement
which is not remedied within fifteen (15) days after written notice from Agent
or any Lender.
6.6 Defaults on Indebtedness. Failure of any Borrower or any of their
respective Subsidiaries to pay any of its respective Indebtedness when due; or
the default by any Borrower or any of their respective Subsidiaries in the
performance of any term, provision or condition contained in any agreement, or
any other event shall occur or condition exist which causes or permits any
Indebtedness of any Borrower or any of their respective Subsidiaries to be due
and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the stated maturity thereof; provided, however, that it shall
not be a default under this Section 6.6 if Borrowers shall be in default with
respect to Indebtedness arising from Indebtedness other than Indebtedness for
Borrowed Money in an aggregate amount not exceeding One Million Dollars
($1,000,000).
6.7 Bankruptcy, etc. Any Borrower or any of their respective
Subsidiaries shall (i) have an order for relief entered with respect to it under
the Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any of its Property, (iv) institute any
proceeding for an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or to adjudicate it as a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 6.7, (vi) fail to contest in good faith any
appointment or proceeding described in Section 6.8 or (vii) not pay, or admit in
writing its inability to pay, its debts generally as they become due.
6.8 Appointment of Receiver. A receiver, trustee, examiner,
liquidator or similar official shall be appointed for any Borrower or their
respective Subsidiaries or any of their respective Property, or a proceeding
described in Section 6.7(iv)
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shall be instituted against such Borrower or any such Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty (30) consecutive days.
6.9 Condemnation. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of any Borrower and their
respective Subsidiaries which, when taken together with all other Property of
such Person so condemned, seized, appropriated, or taken custody or control of,
during the twelve-month period ending with the month in which any such
Condemnation occurs, could reasonably be expected to result in a Material
Adverse Change on such Borrower or Subsidiary.
6.10 Judgments. Any Borrower or any of their respective Subsidiaries
shall fail within sixty (60) days to pay, bond or otherwise discharge any
judgments or orders for the payment of money in an amount which, when added to
all other judgments or orders outstanding against Borrowers or any Subsidiary
would exceed $1,000,000 in the aggregate, which have not been stayed on appeal
or otherwise appropriately contested in good faith.
6.11 ERISA Withdrawal. Any Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by Borrowers or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification), exceeds
$250,000 or requires payments exceeding $100,000 per annum.
6.12 ERISA Reorganization. Any Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of that Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $250,000.
6.13 Other Defaults. The occurrence of any default under any Loan
Document or the breach of any of the terms or provisions of any Loan Document,
which default or breach continues beyond any period of grace therein provided.
ARTICLE VII
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ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
7.1 Acceleration. If any Default described in Section 6.7 or 6.8
occurs with respect to any Borrower, the obligations of Lenders to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of Agent or
any Lender. If any other Default occurs, the Agent may, with the concurrence of
the Required Lenders, terminate or suspend the obligations of Lenders to make
Loans hereunder, or declare the Obligations to be due and payable or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which each Borrower
hereby expressly waives.
If, within ten (10) days after acceleration of the maturity of the
Obligations or termination of the obligations of Lenders to make Loans hereunder
as a result of any Default (other than any Default as described in Section 6.7
or 6.8 with respect to any Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, each Lender
(in their sole discretion) shall so direct, Agent shall, by notice to that
Borrower, rescind and annul such acceleration and/or termination.
7.2 Amendments & Waivers. Subject to the provisions of this Article
VII., the Required Lenders (or Agent with the consent in writing of Lenders) and
Borrowers may enter into agreements and waivers supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of Lenders or Borrowers hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement or
waiver shall, without the consent of each Lender affected thereby:
(i) Extend the Facility Termination Date or forgive all or any
portion of the principal amount of any Loan or accrued interest
thereon or the Commitment Fee, reduce the Applicable Margins or
the underlying interest rate options or extend the time of
payment of such interest or Commitment Fees.
(ii) Release any Subsidiary from the Subsidiary Guaranty.
(iii) Increase the amount of the Commitment of any Lender hereunder.
(iv) Permit any Borrower to assign its rights under this Agreement.
(v) Amend this Section 7.2.
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No amendment of any provision of this Agreement relating to Agent shall be
effective without the written consent of Agent.
7.3 Preservation of Rights. No delay or omission of Lenders or Agent
to exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
Borrowers to satisfy the conditions precedent to such Loan shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by Lenders required pursuant to Section 7.2, and then only to
the extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to Agent and Lenders jointly until the Obligations have been paid in full.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Survival of Representations. All representations and warranties
of Borrowers contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
8.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
Borrowers in violation of any limitation or prohibition provided by any
applicable statute or regulation.
8.3 Tax. Any taxes (excluding federal income taxes on the overall net
income of any Lender and taxes resulting from a Lenders failure to comply with
Section 2.21) or other similar assessments or charges made by any governmental
or revenue authority in respect of the Loan Documents shall be paid by
Borrowers, together with interest and penalties, if any.
8.4 Heading. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
8.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among Borrowers, Agent and Lenders and supersede all prior
commitments, agreements and understandings among Borrowers, Agent and Lenders
relating to the subject matter thereof.
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8.6 Several Obligations Benefits of This Agreement. The respective
obligations of Lenders hereunder are several and not joint and no Lender shall
be the partner or agent of any other (except to the extent to which Agent is
authorized to act as such). The failure of any Lender to perform any of its
obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
8.7 Expenses; Indemnification. Borrowers shall reimburse Agent for
any costs, internal charges and out-of-pocket expenses (including, without
limitation, all expenses of Agent's due diligence investigation of Borrowers,
syndication expenses, travel expenses, reasonable fees for consultants and fees
and reasonable expenses for attorneys for Agent, which attorneys may be
employees of Agent) paid or incurred by Agent in connection with the amendment,
modification, and administration of the Loan Documents. Borrowers also agree to
reimburse Agent and Lenders for any costs, internal charges and out-of-pocket
expenses (including, without limitation, all fees and reasonable expenses for
attorneys for Agent and Lenders, which attorneys may be employees of Agent or
Lenders) paid or incurred by Agent or any Lender in connection with the
collection and enforcement of the Loan Documents (including, without limitation,
any workout). Borrowers further agree to indemnify Agent and each Lender, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not Agent or any
Lender is a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, any Property, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder. The obligations of
Borrowers under this Section shall survive the termination of this Agreement.
8.8 Numbers. All statements, notices, closing documents, and requests
hereunder shall be furnished to Agent with sufficient counterparts so that Agent
may furnish one to each of Lenders.
8.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for Borrowers and all their Subsidiaries, including those Subsidiaries,
if any, which are unconsolidated on Borrowers' official financial statements.
8.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be
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inoperative, unenforceable, or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the provisions of all
Loan Documents are declared to be severable.
8.11 Nonliability of Lenders. The relationship between Borrowers, on
the one hand, and Lenders and Agent, on the other, shall be solely that of
borrowers and lender. Neither Agent nor any Lender shall have any fiduciary
responsibilities to Borrowers. Neither Agent nor any Lender undertakes any
responsibility to Borrowers to review or inform Borrowers of any matter in
connection with any phase of any Borrower's business or operations.
8.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN TH0SE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF OHIO, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8.13 CONSENT TO JURISDICTION. EACH BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR OHIO
STATE COURT SITTING IN CUYAHOGA COUNTY IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
IMPAIR THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY
BORROWER AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE OF Agent OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CUYAHOGA COUNTY, OHIO.
8.14 WAIVER OF JURY TRIAL. EACH BORROWER, AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE IX
AGENT
9.1 Appointment. National City Bank is hereby appointed Agent
hereunder and under each other Loan Document, and each of Lenders irrevocably
authorizes Agent to act as the agent of such Lender. Agent agrees to act as such
upon the express conditions
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contained in this Article IX. Agent shall not have a fiduciary relationship in
respect of Borrowers or any Lender by reason of this Agreement.
9.2 Powers. Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. Agent
shall have no implied duties to Lenders, or any obligation to Lenders to take
any action thereunder except any action specifically provided by the Loan
Documents to be taken by Agent.
9.3 General Immunity. Neither Agent nor any of its directors,
officers, agents or employees shall be liable to Borrowers, Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except for
its or their own gross negligence or willful misconduct.
9.4 No Responsibility for Loans, Recitals, etc. Neither Agent nor any
of its directors, officers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into, or verify (i) any statement, warranty or
representation made in connection with any Loan Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered to Agent; (iv) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; or (v) the value, sufficiency,
creation, perfection or priority of any interest in any collateral security.
Agent shall have no duty to disclose to Lenders information that is not required
to be furnished by Borrowers to Agent at such time, but is voluntarily furnished
by Borrowers to Agent (either in its capacity as Agent or in its individual
capacity).
9.5 Action on Instructions of Lenders. Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of Lenders and on all holders of Notes.
Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be indemnified
to its satisfaction by Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
9.6 Employment of Agents and Counsel. Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and
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shall not be answerable to Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Agent shall be entitled
to advice of counsel concerning all matters pertaining to the agency hereby
created and its duties hereunder and under any other Loan Document.
9.7 Reliance on Documents; Counsel. Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by Agent, which counsel may
be employees of Agent.
9.8 Agent's Reimbursement and Indemnification. Lenders agree to
reimburse and indemnify Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by Borrowers for which Agent is
entitled to reimbursement by Borrowers under the Loan Documents, (ii) for any
other expenses incurred by Agent on behalf of Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against Agent in any way relating to or arising out of the Loan Documents or any
other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of Agent. The obligations of Lenders under this Section 9.8 shall
survive payment of the Obligations and termination of this Agreement.
9.9 Rights as a Lender. In the event Agent is a Lender, Agent shall
have the same rights and powers hereunder and under any other Loan Document as
any Lender and may exercise the same as though it were not Agent, and the term
"Lender" or "Lenders" shall, at any time when Agent is a Lender, unless the
context otherwise indicates, include Agent in its individual capacity. Agent may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with Borrowers or any of their
Subsidiaries in which Borrowers or such Subsidiary is not restricted hereby from
engaging with any other Person. Agent, in its individual capacity, is not
obligated to remain a Lender.
9.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements prepared by Borrowers and such other documents and
information as it has deemed
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appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents.
9.11 Successor Agent. Agent may resign at any time by giving written
notice thereof to Lenders and Borrowers, such resignation to be effective upon
the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, Lenders shall have the right to
appoint, on behalf of Borrowers and Lenders, a successor Agent. If no successor
Agent shall have been so appointed by Lenders within thirty days after the
resigning Agent's giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of Borrowers and Lenders, a successor Agent. If
Agent has resigned and no successor Agent has been appointed, Lenders may
perform all the duties of Agent hereunder and Borrowers shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with Lenders. No successor Agent shall be deemed to
be appointed hereunder until such successor Agent has accepted the appointment.
Any such successor Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the effectiveness of the resignation of Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article X shall continue in effect for the benefit
of such Agent in respect of any actions taken or omitted to be taken by it while
it was acting as Agent hereunder and under the other Loan Documents.
ARTICLE X
SETOFF; RATABLE PAYMENTS
10.1 Setoff. In addition to, and without limitation of, any rights of
Lenders under applicable law, if any Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender to
or for the credit or account of Borrowers may be offset and applied toward the
payment of the Obligations owing to such Lender, whether or not the Obligations,
or any part hereof, shall then be due.
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10.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans in a greater proportion than that received
by any other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENT; PARTICIPATIONS
11.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrowers and
Lenders and their respective successors and assigns, except that (i) Borrowers
shall not have the right to assign their rights or obligations under the Loan
Documents and (ii) any assignment by any Lender must be made in compliance with
Section 11.3. Notwithstanding clause (ii) of this Section, any Lender may at any
time, without the consent of Borrowers or Agent, assign all or any portion of
its rights under this Agreement and its Notes to a Federal Reserve Bank;
provided, however, that no such assignment shall release the transferor Lender
from its obligations hereunder. Agent may treat the payee of any Note as the
owner thereof for all purposes hereof unless and until such payee complies with
Section 11.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
11.2 Participations.
11.2.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks, financial institutions, pension funds,
or any other funds or entities participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment of such
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Lender or any other interest of such Lender under the Loan Documents. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall
remain the holder of any such Note for all purposes under the Loan
Documents, all amounts payable by Borrowers under this Agreement shall be
determined as if such Lender had not sold such participating interests,
and Borrowers and Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
the Loan Documents.
11.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or Commitment or postpones any date fixed
for any regularly scheduled payment of principal of, or interest or fees
on, any such Loan or Commitment or releases any Subsidiary from the
Subsidiary Guaranty.
11.2.3 Benefit of Setoff. Each Borrower agrees that each Participant
shall be deemed to have the right of Setoff provided in Section 10.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
provided that each Lender shall retain the right of setoff provided in
Section 10.1 with respect to the amount of participating interests sold to
each Participant. Lenders agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 10.1,
agrees to share with each Lender, any amount received pursuant to the
exercise of its right of setoff, such amounts to be shared in accordance
with Section 10.2 as if each Participant were a Lender.
11.3 Assignments.
11.3.1 Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign
to one or more banks, financial institutions, pension funds, or any other
funds or entities ("Purchasers") all or any portion of its rights and
obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit H hereto or in such other form as may
be agreed to by the parties thereto. The consent of Agent shall be
required prior to an assignment
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becoming effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof. Such consent shall not be unreasonably withheld.
11.3.2 Prior Consent. Notwithstanding Section 11.3.1, Lenders may not
assign rights and obligations under the Loan Documents to a Purchaser
without the prior written consent of Borrowers if any of the following
would occur: (i) an assignment of less than five (5%) of the Aggregate
Commitment as of the date of such assignment, (ii) the proposed purchaser
is a financial institution not organized under the laws of a state or of
the United States (unless such institution is an affiliate of the
transferring Lender), or (iii) such transfer would result in Borrowers
incurring increased payments pursuant to Section 2.11; provided, however,
that, if at the time of the proposed assignment either Borrower is the
subject of a proceeding referenced in Section 6.7 or 6.8, or any Default
shall have occurred, the Borrowers consent shall not be required and any
Lender may consummate an assignment notwithstanding the requirements of
clauses (i), (ii) or (iii) of this Section 11.3.2.
11.3.3 Effective Date. Upon (i) delivery to Agent of a notice of
assignment, substantially in the form attached as Exhibit 1 to Exhibit H
hereto (a "Notice of Assignment"), together with any consents required by
Section 11.3.2, and (ii) payment of a $2,500 fee to Agent for processing
such assignment (provided, however, that if such assignment shall be made
to an Affiliate of Lender, then Lender shall not be required to pay such
fee to Agent), such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that none of
the consideration used to make the purchase of the Commitment and Loans
under the applicable assignment agreement are "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower,
Lenders or Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Commitment and Loans assigned
to such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 11.3.2, the transferor Lender, Agent and
Borrowers shall make appropriate arrangements so that replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case
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in principal amounts reflecting their Commitment, as adjusted pursuant to
such assignment.
11.4 Dissemination of Information. Borrowers authorize each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrowers and their Subsidiaries.
11.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other-than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.21.
ARTICLE XII
NOTICES; NATURE OF OBLIGATIONS
12.1 Giving Notice. Except as otherwise permitted by Section 2.17
with respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the log of telexes).
12.2 Change of Address. Borrowers, Agent and any Lender may change
the address for service of notice upon it by a notice in writing to the other
parties hereto.
12.3 Nature of Borrower's Obligations and Modification Thereof. THE
OBLIGATIONS OF BORROWERS UNDER THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS ARE JOINT AND SEVERAL. The obligations of Borrowers under this
Agreement are absolute and unconditional and shall be irrevocable. Borrowers
agree that their obligations hereunder shall not be impaired, modified, changed,
released or limited in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of any of Borrowers by any
bankruptcy case or by any stay or other legal impediment in or arising from the
operation of any present or future provision of the Bankruptcy Code or other
similar state or federal statute, or from the decision of any court. Borrowers
agree that Lenders may, in their discretion, (i) release,
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discharge, compromise or settle with, or grant indulgences to, refuse to proceed
or take action against, any Borrower with respect to its respective obligations
under this Agreement, (ii) release, surrender, modify, impair, exchange,
substitute or extend the period or duration of time for the performance,
discharge or payment of, refuse to enforce, compromise or settle its respective
lien, security interest, pledge or assignment against, any and all deposits or
other property or assets on which Lenders may have a lien, security interest,
pledge or assignment or which secures any of the obligations of Borrowers under
this Agreement, and (iii) amend, modify, alter or restate, in accordance with
their respective terms, this Agreement or any of the Loan Documents or
otherwise, accept deposits or other property from, or enter into transactions of
any kind or nature with, Borrowers. Each of Borrowers confirms that it will be
directly or indirectly benefitted by the Loan and any and all other Advances
under this Agreement or any of the Loan Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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ARTICLE XIII
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by each Borrower, Agent and Lenders and each
party has notified Agent by telex or telephone, that it has taken such action.
IN WITNESS WHEREOF, Borrowers, Lenders and Agent have executed this
Agreement as of the date first above written.
PIONEER-STANDARD ELECTRONICS, INC.
By: /s/ John V. Goodger
-------------------------------
Print Name: John V. Goodger
Title: Vice President
4800 East 131st Street
Garfield Heights, Ohio 44105
phone: 216 587-3600
facsimile: 216 587-3563
Attention: John V. Goodger
PIONEER-STANDARD OF MARYLAND, INC.
By: /s/ John V. Goodger
-------------------------------
Print Name: John V. Goodger
Title: Treasurer
c/o Pioneer-Standard
Electronics, Inc.
4800 East 131st Street
Garfield Heights, Ohio 44105
phone: 216 587-3600
facsimile: 216 587-3563
Attention: John V. Goodger
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Commitments
$75,000,000 NATIONAL CITY BANK,
Individually and as
Agent
By: /s/ A. J. DiMare
-------------------------------
Print Name: A. J. DiMare
-----------------------
Title: Vice President
----------------------------
Via Hand Delivery
National City Bank
National City Center, 10th
Floor
1900 East Ninth Street
Cleveland, Ohio 44114
Via U.S. Mail
National City Bank
P. O. Box 5756
Cleveland, Ohio 44101-0756
Attention: Anthony J. DiMare
Vice President
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$55,000,000 SOCIETY NATIONAL BANK
By: /s/ Michael J. Jackson
-------------------------------
Print Name: Michael J. Jackson
-----------------------
Title: Vice President
----------------------------
Via Hand Delivery
Society National Bank
Large Corporate Group
127 Public Square
Cleveland, Ohio 44114-1306
Via U.S. Mail
Society National Bank
Large Corporate Group
127 Public Square
Cleveland, Ohio 44114-1306
Attention:
------------------------
Michael J. Jackson
$25,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ Stan W. Reynolds
-------------------------------
Print Name: Stan W. Reynolds
-----------------------
Title: Vice President
----------------------------
Via Hand Delivery
NationsBank of Texas, N.A.
Technology Corporate
Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202-1000
Via U.S. Mail
NationsBank of Texas, N.A.
Technology Corporate
Finance Group
901 Main Street, 67th Floor
Dallas, Texas 75202-1000
Attention:
------------------------
Stan W. Reynolds
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$32,000,000 MELLON BANK, N.A.
By: /s/ Mark F. Johnston
-------------------------------
Print Name: Mark F. Johnston
-----------------------
Title: AVP
----------------------------
Via Hand Delivery
Mellon Bank, N.A.
One Mellon Bank Center
Grant Street, Room 4530
Pittsburgh, PA 15258-0001
Via U.S. Mail
Mellon Bank, N.A.
One Mellon Bank Center
Grant Street, Room 4530
Pittsburgh, PA 15258-0001
Attention:
------------------------
Mark Johnston
$13,000,000 STAR BANK, N.A.
By: /s/ John D. Barrett
-------------------------------
Print Name: John D. Barrett
-----------------------
Title: Vice President
----------------------------
Via Hand Delivery
Star Bank, N.A.
1350 Euclid Avenue, Suite 220
Cleveland, Ohio 44115
Via U.S. Mail
Star Bank, N.A.
1350 Euclid Avenue, Suite 220
Mail Location 4432
Cleveland, Ohio 44115
Attention:
------------------------
John D. Barrett
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