EXHIBIT 10.1
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CREDIT AGREEMENT
By and Among
FLEET BANK,
MARINE MIDLAND BANK,
FLEET BANK, AS ADMINISTRATIVE AGENT
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COLUMBUS McKINNON CORPORATION
DATED AS OF AUGUST 5, 1996
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS 1
Section 1.01 Certain Definitions 1
Section 1.02 Accounting Terms 9
Section 1.03 Construction 9
ARTICLE II. AMOUNT AND TERM OF REVOLVING LOANS 10
Section 2.01 Revolving Credit Commitment 10
Section 2.02 Notice and Manner of Borrowing 10
Section 2.03 Revolving Credit Notes 11
Section 2.04 Non-Receipt of Funds by Administrative Agent 11
Section 2.05 Conversions and Renewals 12
Section 2.06 Interest Pricing Grid 13
Section 2.07 Commitment Fee 14
Section 2.08 Prepayments 15
Section 2.09 Method of Payment 15
Section 2.10 Illegality 16
Section 2.11 Disaster 16
Section 2.12 Funding Loss Indemnification 16
ARTICLE III. LETTERS OF CREDIT 17
Section 3.01 Standby and Trade Letters of Credit 17
Section 3.02 Reimbursement 17
Section 3.03 Indemnity for Costs 18
Section 3.04 Fees 18
Section 3.05 Reimbursement Unconditional 18
Section 3.06 Validity and Sufficiency of Documents 19
Section 3.07 Successors 20
ARTICLE IV. USE OF LOANS 20
ARTICLE V. CONDITIONS PRECEDENT 20
Section 5.01 Documents 20
Section 5.02 No Default 20
Section 5.03 Representations and Warranties 20
Section 5.04 Guaranties 21
Section 5.05 Authorization 21
Section 5.06 Certain Corporate Documents 21
Section 5.07 Legal Opinion 21
Section 5.08 Amendments 21
ARTICLE VI. REPRESENTATIONS AND WARRANTIES 22
Section 6.01 Existence 22
Section 6.02 Authority 22
Section 6.03 Binding Effect 22
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Section 6.04 Financial Data 23
Section 6.05 Liens and Encumbrances 23
Section 6.06 Tax Obligations 23
Section 6.07 Indebtedness and Liabilities 23
Section 6.08 Use of Proceeds and Margin Security 24
Section 6.09 Investments 24
Section 6.10 Litigation and Proceedings 24
Section 6.11 Other Agreements 24
Section 6.12 Compliance with Laws and Regulations 24
Section 6.13 Patents, Trademarks and Licenses 25
Section 6.14 ERISA 25
Section 6.15 Assets 26
Section 6.16 Investment Company Act 27
Section 6.17 Licenses and Permits 27
Section 6.18 Environmental Compliance 27
Section 6.19 Subsidiaries 28
Section 6.20 Full Disclosure 29
Section 6.21 Survival of Warranties 29
ARTICLE VII. AFFIRMATIVE COVENANTS 29
Section 7.01 Payments 29
Section 7.02 Financial Statements 29
Section 7.03 Taxes 30
Section 7.04 Actions and Claims 30
Section 7.05 Tax Adjustments and Defaults 30
Section 7.06 Insurance 31
Section 7.07 Existence of the Borrower 31
Section 7.08 Inspections 31
Section 7.09 ERISA Notices 31
Section 7.10 Labor Disputes 32
Section 7.11 Environmental Matters 32
Section 7.12 Proxy Statements, etc. 33
Section 7.13 Leverage Ratio 33
Section 7.14 Interest Coverage Ratio 33
Section 7.15 Debt Service Coverage Ratio 33
ARTICLE VIII. NEGATIVE COVENANTS 34
Section 8.01 Indebtedness and Liabilities 34
Section 8.02 Encumbrances 34
Section 8.03 Consolidations, Acquisitions, Fundamental Changes 34
Section 8.04 Guaranties 34
Section 8.05 Disposal of Property 35
Section 8.06 Investments 35
Section 8.07 Transactions with Affiliates 35
Section 8.08 Other Business 35
ARTICLE IX. EVENTS OF DEFAULT 35
Section 9.01 Events of Default 35
Section 9.02 Rights of the Banks on Default 37
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ARTICLE X. THE ADMINISTRATIVE AGENT AND THE BANKS 38
Section 10.01 Authorization and Action 38
Section 10.02 Liability of Administrative Agent 38
Section 10.03 Rights of the Administrative Agent as a Bank 39
Section 10.04 Independent Credit Decisions 39
Section 10.05 Indemnification 39
Section 10.06 Successor Administrative Agent 40
Section 10.07 Sharing of Payments, Etc. 40
Section 10.08 Other Transactions with the Borrower 41
Section 10.09 Payments 41
ARTICLE XI. MISCELLANEOUS 41
Section 11.01 Expenses 41
Section 11.02 Entire Agreement 42
Section 11.03 No Waiver; Cumulative Remedies 42
Section 11.04 Notices 42
Section 11.05 Governing Law 43
Section 11.06 Other Agreements 43
Section 11.07 Successors and Assigns 43
Section 11.08 Set-Off 43
Section 11.09 WAIVER OF JURY TRIAL 43
Section 11.10 CONSENT TO JURISDICTION 43
EXHIBITS AND SCHEDULES
Exhibit A - Revolving Credit Note
Schedule 1.01 - Permitted Liens
Schedule 6.06 - Tax Obligations
Schedule 6.07 - Indebtedness Disclosure
Schedule 6.10 - Litigation
Schedule 6.18 - Environmental Matters
Schedule 8.01 - Indebtedness
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CREDIT AGREEMENT
This Credit Agreement is made the 5th day of August, 1996 by and among
FLEET BANK, a New York bank and trust company having an office and place of
business at 10 Fountain Plaza, Buffalo, New York 14202 ("Fleet"), MARINE MIDLAND
BANK, a New York bank and trust company having an office and place of business
at One Marine Midland Center, Buffalo, New York 14203 ("Marine"), FLEET BANK, as
administrative agent for itself and Marine (in such capacity, the
"Administrative Agent"), and COLUMBUS McKINNON CORPORATION, a New York
corporation having its principal office and place of business at 140 John James
Audubon Parkway, Amherst, New York 14228 ("Borrower").
Fleet, Marine, the Administrative Agent, and the Borrower hereby agree
as follows:
ARTICLE I.
DEFINITIONS
Section 1.01 Certain Definitions. The following terms have the
following meanings in this Agreement:
"ADMINISTRATIVE AGENT" has the meaning set forth in the first
paragraph of this Agreement.
"AFFILIATE" means any Person (as defined herein) (a) that
directly or indirectly, or through one or more intermediaries, controls or is
controlled by, or is under common control with the Borrower, including, without
limitation, the officers and directors of the Borrower, (b) that directly or
beneficially owns or holds 10% or more of any voting stock in the Borrower, or
(c) 10% or more of whose voting stock (or in the case of a Person which is not a
corporation 10% or more of any equity interest) is owned directly or
beneficially by the Borrower. As used herein, the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through ownership
of securities, by contract or otherwise.
"AGREEMENT" means this Credit Agreement as originally executed
and as the same may from time to time be amended or supplemented.
"ASSETS" has the meaning usually given that term in accordance
with GAAP.
"BANK" means either Fleet or Marine separately.
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"BANKS" means Fleet and Marine collectively.
"BORROWER" has the meaning set forth in the first paragraph of
this Agreement.
"BORROWING CAPACITY" means, at any time, the amount determined by
taking $12,500,000 and subtracting therefrom the maximum amount payable under
all outstanding Standby Letters of Credit and Trade Letters of Credit.
"BORROWER'S LOAN DOCUMENTS" means this Agreement, the Revolving
Credit Notes, and any other documents executed and delivered by the Borrower to
either or both of the Banks in connection with this Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday, or
other day on which commercial banks in Buffalo, New York are authorized or
required to close under the laws of the State of New York and, if the applicable
day relates to a LIBOR Loan, LIBOR Interest Period or notice with respect to a
LIBOR Loan, a day on which dealings in U.S. dollar deposits are also carried on
in the London interbank market and banks are open for business in London.
"CODE" means the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall
be construed also to refer to any successor sections.
"CONSOLIDATED SUBSIDIARIES" means, as of any date, the Guarantor,
Columbus McKinnon Limited, Lift-Tech International Cranes and Hoists, Ltd. and
any of the Borrower's other Subsidiaries included as of such date in the
consolidated financial statements of the Borrower other than Endor S.A. de CV.
"CONTROLLED GROUP" means a controlled group of corporations of
which the Borrower is a member within the meaning of Section 414(b) of the Code,
any group of corporations or entities under common control with the Borrower
within the meaning of Section 414(c) of the Code or any affiliated service group
of which the Borrower is a member within the meaning of Section 414(m) of the
Code.
"CONTROLLED GROUP MEMBER" means each trade or business (whether
or not incorporated) which is a member of a Controlled Group.
"CURRENT ASSETS" means those assets classified as current in
accordance with GAAP which would be reflected on the balance sheet of the
Borrower.
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"CURRENT LIABILITIES" means those Liabilities classified as
current in accordance with GAAP which would be reflected on the balance sheet of
the Borrower with adequate provisions for all accrued Liabilities, including,
without limitation, all federal and state taxes, except those taxes classified
as deferred in accordance with GAAP.
"Distribution" means (a) dividends, except in the form of stock
of the Borrower, and (b) the acquisition, redemption or retirement of any stock
of the Borrower or of any warrants, rights or options therefor.
"Environmental Lien" means a lien in favor of the United States
government or any state or political subdivision thereof or any governmental
entity exercising executive, legislative, judicial regulatory, or administrative
functions for (a) any liability under federal, state or local environmental laws
or regulations, or (b) damages arising from or costs incurred by any
governmental entity in response to a release of a hazardous substance into the
environment.
"EPA Matters" has the meaning set forth in Section 6.18.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import and regulations
thereunder, as in effect from time to time. References to sections of ERISA
shall be construed also to refer to any successor sections.
"ERISA Title IV Liability Event" means the occurrence of any one
or more of the following events with respect to a Pension Plan subject to
Title IV of ERISA: (a) the termination of the plan or the filing with the PBGC
or delivery to affected parties of a notice of intent to terminate the plan;
(b) the institution by the PBGC of proceedings to terminate the plan under
Section 4042 of ERISA or the occurrence or existence of any event or condition
that constitutes grounds for the PBGC to do so; (c) the occurrence of a
Reportable Event; (d) the termination of a plan that is a Multiple Employer Plan
or the withdrawal by the Borrower or a Controlled Group Member from a plan that
is a Multiple Employer Plan under which the Borrower or a Controlled Group
Member was a substantial employer (within the meaning of Sections 4001(a)(2) and
4063 of ERISA); (e) the cessation of operations by the Borrower or a Controlled
Group Member at a facility resulting in an event described in Section 4068(f) of
ERISA with respect to the plan; or (f) the termination of a plan within five
years of participation by the Borrower or a Controlled Group Member in a
transaction that would be characterized under Section 4069(a) of ERISA as having
as a principal purpose the evasion of liability under Title IV of ERISA with
respect to the plan.
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"Eurocurrency Reserve Requirement" means, for any LIBOR Loan for
any LIBOR Interest Period, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during such LIBOR Interest
Period under Regulation D by the Administrative Agent against "Eurocurrency
liabilities" (as such term is used in Regulation D) but without benefit or
credit of proration, exemptions or offsets that might otherwise be available
from time to time under Regulation D. Without limiting the effect of the
foregoing, the Eurocurrency Reserve Requirement shall reflect any other reserves
required to be maintained against (a) any category of liabilities that includes
deposits by reference to which the LIBOR Interest Rate for LIBOR Loans is to be
determined; or (b) any category of extension of credit or other assets that
include LIBOR Loans.
"EVENT OF DEFAULT" has the meaning set forth in Section 9.01.
"FINANCING DOCUMENTS" means the Borrower's Loan Documents, the
Guaranty, and all other agreements, instruments and documents (and with respect
to the foregoing, any amendments or supplements thereto or modifications
thereof) executed or delivered to the Banks pursuant to the terms of this
Agreement.
"GAAP" means as of the date of any determination with respect
thereto, generally accepted accounting principles as used by the Financial
Accounting Standards Board and/or the American Institute of Certified Public
Accountants and which are consistently applied for all periods after the date
hereof so as to properly reflect the financial condition, and the results of
operations and changes in financial position of the Borrower and its
Subsidiaries, except that any accounting principle or practice required to be
changed by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants in order to continue as a generally accepted
accounting principle or practice may be so changed. In the event of a change in
Generally Accepted Accounting Principles, the Banks and the Borrower will
thereafter negotiate in good faith to revise covenants in this Agreement
affected thereby in order to make such covenants consistent with GAAP then in
effect.
"GUARANTOR" means Lift-Tech.
"GUARANTY" has the meaning set forth in Section 5.04.
"INDEBTEDNESS" means at a particular time and with respect to a
particular Person, (a) indebtedness for borrowed money or for the deferred
purchase price of property or services in respect of which such Person is
liable, as obligor, guarantor
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or otherwise or any commitment by which such Person assures a creditor against
loss, (b) obligations under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases in respect of which obligations
such Person is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person assures a creditor
against loss, and (c) any obligation of such Person to a Multiemployer Plan
which constitutes a liability under GAAP.
"INTEREST PERIOD" means with respect to any LIBOR Loan, the
period commencing on the date such loan is made and ending, as the Borrower may
select, pursuant to Sections 2.02 and 2.05 hereof, on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, except that each such Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(a) no Interest Period may extend beyond the Revolving
Credit Maturity Date; and
(b) if an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next Business Day,
unless such Business Day would fall in the next calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day.
"LEVERAGE RATIO" means the ratio of Borrower's total Liabilities
to Tangible Net Worth such figures to be determined in accordance with GAAP
consistently applied each year and from year to year in conformity with the most
recent financial statements of the Borrower delivered to the Administrative
Agent and the Banks pursuant to Section 7.02.
"LIABILITIES" has the meaning usually given that term in
accordance with GAAP, and includes Indebtedness.
"LIBOR INTEREST RATE" means, for each LIBOR Loan, the rate per
annum (rounded upward, if necessary, to the nearest hundredth of one percent)
determined by either of the Banks to be equal to the quotient of (a) the London
Interbank Offered Rate for such LIBOR Loan for such Interest Period divided by
(b) one minus the Eurocurrency Reserve Requirement for such Interest Period.
"LIBOR LOAN" means any Revolving Loan, to the extent that the
interest rate therefor is determined by reference to the LIBOR Interest Rate.
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"LICENSES" has the meaning set forth in Section 6.17.
"LIFT-TECH" means Lift-Tech International, Inc., a Delaware
corporation.
"LITIGATION" has the meaning set forth in Section 6.10.
"LOAN(S)" means, individually and collectively, any advance or
advances made as a Revolving Loan or pending loans.
"LONDON INTERBANK OFFERED RATE" applicable to any Interest Period
for a LIBOR Loan means the greater of the rate per annum (rounded upward, if
necessary, to the nearest hundredth of one percent) quoted at approximately
11:00 a.m. London time by Reuters or Telerate two Business Days prior to the
first day of such Interest Period for the offering to leading banks in the
London interbank market of U.S. dollar deposits for a period, and in an amount,
comparable to the Interest Period and principal amount of the LIBOR Loan which
shall be made by the Banks and outstanding during such Interest Period.
"MULTIEMPLOYER PLAN" means any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower of any Controlled Group Member has or had on or after
September 26, 1980 an obligation to contribute.
"MULTIPLE EMPLOYER PLAN" means any employee pension benefit plan
subject to Title IV of ERISA and described in Section 4063 of ERISA of which the
Borrower or another Controlled Group member at any time during the five
preceding plan years is or has been a contributing sponsor and which has at
least one other contributing sponsor who is not a Controlled Group Member.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02.
"OBLIGATIONS" means all of the Borrower's obligations,
liabilities and indebtedness to the Banks of any and every kind and nature,
whether heretofore, now or hereafter owing, arising, due or payable and
howsoever evidenced, created, incurred, acquired or owing, whether primary,
secondary, direct, indirect, contingent, fixed or otherwise and whether arising
or existing under written agreement, oral agreement or operation of law,
including, without limitation, all of the Borrower's indebtedness, liabilities
and obligations to the Banks pursuant to this Agreement, and the Revolving
Credit Notes.
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"PBGC" means the Pension Benefit Guaranty Corporation established
under Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of the said corporation.
"PENSION PLAN" means any employee pension benefit plan (other
than a Multiemployer Plan) as defined in Section 3(2) of ERISA maintained for
employees of the Borrower or any Controlled Group Member or to which Borrower or
any Controlled Group Member made, or was required to make, contributions at any
time within the preceding six years.
"PERMITTED INVESTMENTS" means (a) securities issued or directly
and fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof and having maturities of not more than one year from the
date of acquisition, (b) time deposits and certificates of deposit, having
maturities of not more than one year from the date of acquisition, or either of
the Banks or any other domestic commercial bank having capital and surplus in
excess of $250,000,000, which has, or the holding company of which has, a
commercial paper rating meeting the requirements specified in clause (d) below,
(c) repurchase obligations with a term of not more than one year for underlying
securities of the types described in clauses (a) and (b) entered into with any
bank meeting the qualifications specified in clause (b) above, (d) commercial
paper rated at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or P-2 or the equivalent thereof by Moody's Investors Service, Inc.
and in either case maturing within one year after the date of acquisition,
(e) the Borrower's investments on the date of this Agreement in each of its
Subsidiaries and CM Insurance Company, Inc., (f) the Columbus McKinnon Corp.
Capital Focus Account with Fleet Investment Services, (g) the pending proposed
investment in Lister Bolt and Chain Ltd., and (h) other investments having an
aggregate fair market value not to exceed $3,000,000 at any time.
"PERMITTED LIENS" means (a) liens securing the payment of taxes
or other governmental charges not yet due and payable; (b) deposits under
workmen's compensation, unemployment insurance, social security and other
similar laws, or to secure the performance of bids, tenders or contracts (other
than for the repayment of borrowed money) or to secure statutory obligations or
surety or appeal bonds, or to secure indemnity, performance or other similar
bonds in the ordinary course of business; (c) the liens and security interests
in favor of the Banks; (d) liens securing the payment of taxes or other
governmental charges or mechanic's or artisan's liens, the validity of which is
being contested in good faith by appropriate proceedings, and as to which the
Borrower shall, if appropriate under GAAP, have set aside on its books and
records adequate reserves; (e) any reservation, exception, encroachment,
easement, right-of-way,
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covenant condition, restriction, lease or similar title exception or encumbrance
affecting the title to any real property of the Borrower that does not, in the
Banks' reasonable determination, (i) materially impair the use of such property
or (ii) materially lessen the value of such property for the purposes for which
the same is held by the Borrower; and (f) liens disclosed in Schedule 1.01
attached hereto.
"PERSON" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, entity, party, or government (whether national, federal, state,
provincial, county, city, municipal or otherwise, including, without limitation,
any instrumentality, division, agency, body or department thereof).
"PREMISES" means all real property owned by the Borrower or any
of its Subsidiaries.
"PRIME LOAN" means any Revolving Loan, to the extent that the
interest rate therefor is determined by reference to the Stated Prime Rate.
"PROPORTIONATE SHARE" means, with respect to a Bank, the ratio of
such Bank's Revolving Credit Commitment to the total of both Banks' Revolving
Credit Commitments.
"PROHIBITED TRANSACTION" has the meaning set forth in Section 406
of ERISA or Section 4975 of the Code.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as amended or supplemented from time to time.
"REPORTABLE EVENT" means a reportable event described in
Section 4043 of ERISA and regulations thereunder other than a reportable event
not subject to the requirement for a 30-day notice to the PBGC.
"REVOLVING CREDIT COMMITMENT(S)" means $6,250,000 outstanding at
any one time for each Bank separately and $12,500,000 outstanding at any one
time for both Banks collectively.
"REVOLVING CREDIT MATURITY DATE" means the third anniversary of
the date of this Agreement.
"REVOLVING CREDIT NOTE" and "Revolving Credit Notes" have the
meanings set forth in Section 2.03.
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"REVOLVING LOAN" and "Revolving Loans" have the meanings set
forth in Section 2.01.
"STANDBY LETTER OF CREDIT" means a standby letter of credit
issued by a Bank at the request of the Borrower pursuant to Section 3.01.
"STATED PRIME RATE" means the rate of interest established by the
Administrative Agent from time to time as a guide for determining actual lending
rates to its customers, and may or may not be the most favorable rate charged by
the Administrative Agent, or the Banks, to its, or their, borrowers from time to
time.
"SUBSIDIARY" means, as to an entity, a corporation of which
shares of stock having ordinary voting power (other than stock having said power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such entity.
"TANGIBLE ASSETS" means as of the date of any determination
thereof the Borrower's total Assets (less applicable reserves and other properly
deductible items) which under GAAP, consistently applied, would be reflected on
the balance sheet of the Borrower, after deducting therefrom intangible assets
of any kind.
"TANGIBLE NET WORTH" means the total stockholders' equity
(including capital stock, additional paid-in capital and retained earnings after
deducting treasury stock) of the Borrower determined in accordance with GAAP,
less intangible assets of any kind.
"TRADE LETTER OF CREDIT" means an import trade letter of credit
issued by a Bank at the request of the Borrower pursuant to Section 3.01.
"WELFARE PLAN" means any employee benefit welfare plan as defined
in Section 3(1) of ERISA maintained for employees of the Borrower or another
Controlled Group Member or to which Borrower or any Controlled Group Member
made, or was required to make, contributions at any time within the preceding
six years.
SECTION 1.02 ACCOUNTING TERMS. All accounting terms used but not
specifically defined in this Agreement shall be construed in accordance with
GAAP.
SECTION 1.03 CONSTRUCTION. Unless the context of this Agreement
otherwise clearly requires, references to the plural
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include the singular, the singular the plural and "or" has the inclusive meaning
represented by the phrase "and/or". The words "hereof", "herein", "hereunder"
and similar terms in this Agreement refer to this Agreement as a whole and not
to any particular provision of this Agreement. The article, section, table of
contents and other headings contained in this Agreement are for reference
purposes only and shall not control or affect the construction of this Agreement
or the interpretation thereof in any respect. Article, section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
ARTICLE II.
AMOUNT AND TERM OF REVOLVING LOANS
SECTION 2.01 REVOLVING CREDIT COMMITMENT. Subject to all of the
terms and conditions of this Agreement, each Bank severally agrees to lend to
the Borrower during normal business hours prior to the Revolving Credit Maturity
Date, such sum or sums of money (individually a "Revolving Loan" and
collectively, the "Revolving Loans") as the Borrower may request in accordance
with the procedures set forth herein in an aggregate principal amount at any
time outstanding not to exceed such Bank's Proportionate Share of the Borrowing
Capacity. Each Revolving Loan which is to be made as, continued as, or
converted to a LIBOR Loan shall be in an amount not less than $250,000 for each
Bank. Each Revolving Loan shall be made ratably by each Bank in accordance with
its Proportionate Share. Within the foregoing limits and subject to all other
terms and conditions hereof, the Borrower may borrow, repay and reborrow
hereunder. The failure of either Bank to make any requested Revolving Loan to
be made by it shall not relieve the other Bank of its obligation (if any) to
make any Revolving Loans, but neither Bank shall be responsible for the failure
of the other Bank to make any Revolving Loan to be made by such other Bank.
SECTION 2.02 NOTICE AND MANNER OF BORROWING. On the first day of
each month during the term of this Agreement, Borrower shall be entitled to
determine which portion, if any, of the Revolving Loans may be made as,
continued as, or converted to a LIBOR Loan or made as, continued as, or
converted to a Prime Loan. Except for "Sweep Loans" as defined below, Borrower
shall give the Administrative Agent notice (a "Notice of Borrowing") at least
one (1) Business Day prior to the date it desires any Revolving Loan to be made,
if all of such Loan is to be a Prime Loan, and at least three (3) Business Days
prior to the date it desires any Revolving Loan, if all or any portion of such
Loan is to be a LIBOR Loan, specifying: (a) the date of such Loan, (b) the
amount of such Loan, (c) the type of such Loan and (d) in the case that all or a
portion of such Loan is to be a LIBOR Loan, the duration of the Interest Period
applicable thereto;
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provided that the minimum principal amount of each LIBOR Loan shall be
$250,000. Borrower has established with Fleet a certain bank account
relationship pursuantto which the relevant account ("Account") is swept on a
daily basis of excess cash, and loans are made as necessary to fund any deficit
(individually, a "Sweep Loan" and collectively, "Sweep Loans"). The
Administrative Agent is hereby authorized by Borrower and the Banks to make
Prime Loans hereunder as needed to fund any necessary Sweep Loan without
advance notice to Borrower or Marine and without advance notice by Borrower to
Administrative Agent, Fleet or Marine. Any such Prime Loan made to fund a Sweep
Loan, may also be repaid without premium or penalty from the next available
excess cash in the Account. After receiving a Notice of Borrowing, the
Administrative Agent shall notify each Bank by telephone of such notice and such
Bank's share of such Loan. Each Bank shall, before 11:00 a.m. (New York time)
on the date a Loan is requested to be made as specified in a Notice of Borrowing
, deposit with the Administrative Agent such Bank's share of such Loan in
immediately available funds. Upon fulfillment of all applicable conditions set
forth herein and after receipt by the Administrative Agent of such funds, the
Administrative Agent shall pay or deliver all funds so received to the order of
the Borrower at the office of the Administrative Agent. All Notices of
Borrowing shall be irrevocable and shall be given not later than 11:00 a.m. on
the day which is not less than the number of Business Days specified above for
such notice.
SECTION 2.03 REVOLVING CREDIT NOTES. The obligation of the Borrower
to repay all of the Revolving Loans made by a Bank under this Agreement shall be
evidenced by a Revolving Credit Note substantially in the form of Exhibit A
hereto (individually a "Revolving Credit Note" and collectively the "Revolving
Credit Notes") duly completed, in the maximum principal amount of $6,250,000,
payable to such Bank and maturing on the Revolving Credit Maturity Date.
SECTION 2.04 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT. Unless
the Administrative Agent shall have received notice from a Bank prior to the
date of any Loan that such Bank will not make available to the Administrative
Agent such Bank's share of such Loan, the Administrative Agent may assume that
such Bank has made such amount available to the Administrative Agent on the date
of such Loan in accordance with the terms of this Section 2.04. If and to the
extent any Bank shall not have so made its share of any Loan available to the
Administrative Agent, such Bank agrees to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
such amount is repaid to the Administrative Agent, at the customary rate set by
the Administrative Agent for the correction of errors among banks. If such Bank
shall repay to Administrative Agent such corresponding amount, such amount so
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repaid shall constitute such Bank's share of such Loan for purposes of this
Agreement. If such Bank does not repay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately repay such
corresponding amount to the Administrative Agent with interest thereon, for each
day from the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the rate of interest
applicable at the time to such proposed Loan. Any such repayment by the
Borrower may, but need not, be made with proceeds of another loan, not subject
to this Agreement, extended to the Borrower by one of the Banks.
Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent in its
sole discretion may, but shall not be obligated to, in reliance upon such
assumption, cause to be distributed to each Bank on such date an amount equal to
the amount then due such Bank. If and to the extent the Borrower shall not have
so made such payment in full to the Administrative Agent, each Bank shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent at the customary rate set by the Administrative Agent for
the correction of errors among Banks.
SECTION 2.05 CONVERSIONS AND RENEWALS. Borrower may elect on the
first day of each month during the term hereof to convert all or part of a Prime
Loan into a LIBOR Loan or a LIBOR Loan into a Prime Loan or to renew all or part
of a LIBOR Loan by giving the Administrative Agent notice at least one (1)
Business Day before conversion into a Prime Loan and at least three (3) Business
Days before conversion into or renewal of a LIBOR Loan specifying: (a) the
renewal or conversion date; (b) the amount of the Prime Loan or LIBOR Loan to be
converted or renewed; (c) in the case of a conversion, whether the conversion is
into a Prime Loan or a LIBOR Loan; and (d) in the case of a renewal of, or a
conversion into, a LIBOR Loan, the duration of the Interest Period applicable
thereto; provided that (i) the minimum principal amount of each Prime Loan
outstanding after a conversion shall be $250,000 and the minimum principal
amount of each LIBOR Loan after a renewal or conversion shall be $250,000; and
(ii) a LIBOR Loan can be converted only on the last day of the Interest Period
for such LIBOR Loan. The Administrative Agent shall promptly notify each bank
of each such notice. All conversions and renewals shall be made in the
proportion that
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each Bank's Loan bears to the total amount of both Banks' Loans.
All notices given under this Section 2.05 shall be irrevocable and shall be
given not later than 11:00 a.m. (New York time) on the day which is not less
than the number of Business Days specified above for such notice. If the
Borrower shall fail to give the Administrative Agent the notice specified above
for the renewal or conversion of a LIBOR Loan prior to the end of the Interest
Period with respect thereto, such LIBOR Loan shall be automatically converted
into a Prime Loan on the last day of the Interest Period for such LIBOR Loan.
SECTION 2.06 INTEREST PRICING GRID. (a) The applicable initial rates
of interest to be charged for each LIBOR Loan or Prime Loan made hereunder shall
be established as of the date of this Agreement as listed on the Pricing Grid
set forth below. The Initial Pricing shall be subject to adjustment as of the
day which is sixty (60) days after the last day of the then most recently
completed fiscal quarter of Borrower ("Pricing Date") and shall be effective for
all Revolving Loans regardless of when made based on any change in Borrower's
leverage, as measured by Borrower's Leverage Ratio as determined in accordance
with Section 7.13 of this Agreement ("Pricing Event"). The Pricing Grid
reflects the changed pricing which will replace the Initial Pricing as of a
Pricing Date based on a Pricing Event as follows:
PRICING GRID
A. INITIAL PRICING
Prime Loan Option -- Stated Prime Rate plus 0%
LIBOR Loan Option -- LIBOR Interest Rate plus 50 Basis
Points ("BP").
B. AFTER A PRICING EVENT
=====================================================================
Leverage Ratio* Prime Loan Option LIBOR Loan Option
- - ------------------- ---------------------- ---------------------
I. Less than .50 Stated Prime Rate LIBOR Interest Rate
to 1.0 plus 0% plus 50 BP
II. Equal to or Stated Prime Rate LIBOR Interest Rate
Greater than plus 0% plus 60 BP
.50 to 1.0 but
Less than .75
to 1.0
III. Equal to or Stated Prime Rate LIBOR Interest Rate
Greater than plus 0% plus 75 BP
.75 to 1.00
but Less than
1.0 to 1.0
-------------------------------------------------------------------
*For purposes of this Pricing Grid only, Borrower's Leverage Ratio
shall be calculated based on the GAAP definitions
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of "Liabilities" and "Tangible Net Worth" except that Borrower's unrestricted
cash and cash equivalents (as defined in FASB-95) may be netted against total
Liabilities.
Upon the Administrative Agent receiving notice of the occurrence of a Pricing
Event, the Administrative Agent shall notify Borrower in writing or by telephone
of the changed pricing which becomes effective as the result of a Pricing Event.
(b) Any change in the interest pricing resulting from a change
in the Stated Prime Rate shall be effective as of the opening of business on the
day on which such change in the Stated Prime Rate becomes effective.
(c) Interest on each Loan shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed which will result in a
higher effective annual rate.
(d) Interest on the Loans shall be paid in immediately available
funds to the Administrative Agent at 10 Fountain Plaza, Buffalo, New York as
follows:
(i) For all Loans, except to the extent that any Loan is a
LIBOR Loan, on the first day of each month commencing on the first such day
after the making of such Loan and at maturity of such Loan; and
(ii) For each LIBOR Loan, on the last day of the Interest
Period with respect thereto and in the case of any Interest Period greater than
three months, also at three month intervals after the first day of such Interest
Period.
(e) Upon failure to make any payment of interest on the
Revolving Note within ten (10) days of the due date thereof, Borrower promises
to pay, upon demand by the Administrative Agent, a late charge equal to the
greater of $25.00 or five percent (5%) of the amount of any such overdue amount.
The assessment and/or collection of late charges shall in no way impair the
right of the Banks or the Administrative Agent to pursue any other remedies
hereunder.
(f) Any principal amount not paid when due (at maturity, by
acceleration or otherwise) shall bear interest thereafter until paid in full,
payable on demand, at a rate per annum equal to the rate of interest otherwise
payable on such amount plus four percent (4%) until paid in full.
SECTION 2.07 COMMITMENT FEE. Borrower shall pay to the
Administrative Agent for the account of each Bank a commitment fee for the
period from the date hereof to the earlier of (a) the Revolving Credit Maturity
Date, or (b) any other termination of the Banks' commitment to extend Revolving
Loans to
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the Borrower pursuant to Section 2.01 above, computed at a rate per
annum (based on a year of 365 or 366 days as the case may be) equal to one
eighth of one percent (1/8%) on the average daily excess of each such Bank's
Proportionate Share of the Borrowing Capacity over the aggregate unpaid
principal balance of such Bank's share of all Revolving Loans and Letters of
Credit. Such commitment fees shall be payable in arrears on the last day of
each calendar quarter. Upon receipt of any commitment fee, the Administrative
Agent will promptly thereafter cause to be distributed to each Bank, such Bank's
Proportionate Share of such payments.
Section 2.08 Prepayments.
(a) Optional Prepayments. Borrower shall have the right to
prepay all or any portion of any Loans at any time; provided, however, (i) each
partial payment shall be in a principal amount of not less than $100,000 except
for prepayments of Prime Loans made to fund Sweep Loans to which no minimum
amount shall apply, and (ii) any LIBOR Loan may be prepaid only on the last day
of the Interest Period for such LIBOR Loan.
Section 2.09 Method of Payment. Borrower shall make each payment
under this Agreement and under the Revolving Credit Notes not later than 11:00
a.m. (New York time) on the date when due to the Administrative Agent at
10 Fountain Plaza, Buffalo, New York for the account of each Bank in immediately
available funds. Any such payment received by the Administrative Agent after
11:00 a.m. (New York time) shall be deemed to have been received by the
Administrative Agent on the next succeeding Business Day. The Administrative
Agent will before the close of business on the day of receipt cause to be
distributed (a) such payments of principal and interest in like funds to each
Bank in the proportion that such Bank's Loans to which the payment applies bears
to the total amount of all Loans of the Banks to which the payment applies and
(b) other fees payable to any Bank to be applied in accordance with the terms of
this Agreement. The Borrower hereby authorizes each Bank, if and to the extent
payment to such Bank is not made when due under this Agreement or the Revolving
Credit Notes to charge from time to time against any account of the Borrower
with such Bank any amount so due. Whenever any payment to be made under this
Agreement or the Revolving Credit Notes shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest, except, in the case of a LIBOR Loan, if
the result of such extension will be to extend such payment into another
calendar month, such payment shall be made on the immediately preceding Business
Day with interest only to such preceding Business Day.
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Section 2.10 Illegality. Notwithstanding any other provision in this
Agreement, if either of the Banks determines that any applicable law, rule or
regulation, or any change therein, or any change 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 such Bank with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for such Bank to maintain or fund its LIBOR
Loans, then upon notice to the Borrower (with a copy to the Administrative
Agent) by such Bank, the Borrower shall either (a) repay in full the outstanding
principal amount of all LIBOR Loans made by such Bank, together with interest
accrued thereon, or (b) convert all LIBOR Loans made by such Bank to a Prime
Loan (i) immediately upon demand of such Bank if such change or compliance with
such request, in the judgment of such Bank, requires immediate payment or
conversion; or (ii) at the expiration of the last Interest Period to expire
before the effective date of any such change or request.
Section 2.11 Disaster. Notwithstanding anything to the contrary
herein:
(a) If the Administrative Agent determines (which determination
shall be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of LIBOR Interest Rate are not being provided in
the relevant amounts or for the relative maturities for purposes of determining
the rate of interest on a LIBOR Loan as provided in this Agreement; or
(b) If both of the Banks determine (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition of
LIBOR Interest Rate, upon the basis of which the rate of interest for any LIBOR
Loan is to be determined, do not accurately cover the cost to the Banks of
making or maintaining LIBOR Loans;
then, the Administrative Agent shall forthwith give notice thereof to the
Borrower whereupon (i) the obligation of the Banks to make LIBOR Loans shall be
suspended until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist; and (ii) on the
last day of the then current Interest Period applicable to each LIBOR Loan, the
Borrower shall either (A) repay in full the then outstanding principal amount of
such LIBOR Loan, together with interest thereon, or (B) convert such LIBOR Loan
to a Prime Loan.
Section 2.12 Funding Loss Indemnification. Upon notice to the
Borrower from a Bank, the Borrower shall pay to the Administrative Agent, for
the account of the applicable Bank,
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such amount or amounts as shall be sufficient (in the reasonable opinion of such
Bank) to compensate it for any loss, cost or expense incurred as a result of:
(a) any payment of a LIBOR Loan on a date other than the last day of the
Interest Period for such loan including, but not limited to, acceleration of the
Loans pursuant to Section 9.02; or (b) any failure by the Borrower to borrow or
convert, as the case may be, a LIBOR Loan on the date for borrowing or
conversion, as the case may be, specified in the relevant notice under Section
2.02 or 2.05 hereof, as the case may be.
ARTICLE III.
LETTERS OF CREDIT
Section 3.01 Standby and Trade Letters of Credit. Upon the terms and
subject to the conditions hereof, the Administrative Agent shall, at the request
of the Borrower, issue irrevocable Letters of Credit in the Administrative
Agent's usual form expiring no later than, in the case of Standby Letters of
Credit, one year from the date of issuance and, in the case of Trade Letters of
Credit, seven months from the date of issuance, and in no case, in the case of
either Standby Letters of Credit or Trade Letters of Credit, later than the
Revolving Credit Maturity Date, provided that the maximum amount payable under
all Letters of Credit shall not, at the time of issue of each Letter of Credit
exceed the lesser of (a) $4,000,000 or (b) the unused portion of the Banks'
Revolving Credit Commitments.
Section 3.02 Reimbursement. In the event that the Administrative
Agent is called upon by a beneficiary to honor a Standby Letter of Credit or a
Trade Letter of Credit, the Administrative Agent shall forthwith give notice
thereof to the Borrower, unless the Borrower has made other arrangements with
the Administrative Agent with respect to payment to the Administrative Agent of
an amount sufficient to permit the Administrative Agent to discharge its
obligations under such Letter of Credit plus an amount equal to any and all
charges and expenses which the Administrative Agent may pay or incur relative to
such Letter of Credit. Any such payment on a Standby Letter of Credit or a
Trade Letter of Credit shall be deemed to be a Revolving Loan and, for the
purposes of payment of interest, a Prime Loan. Each of the Banks shall be
deemed to have purchased from the Administrative Agent a ratable portion of the
face amount of each Standby Letter of Credit and each Trade Letter of Credit
based upon the respective amounts of their Revolving Credit Commitments. Each
of the Banks agrees to indemnify the Administrative Agent as to such Bank's
ratable portion of any amount paid by the Administrative Agent under any Standby
Letter of Credit or Trade Letter of Credit, plus an amount equal to any and all
payments, losses, costs, charges and expenses which the
-17-
Administrative Agent may pay or incur relative to such Standby Letter of Credit
or Trade Letter of Credit.
Section 3.03 Indemnity for Costs. Borrower shall indemnify the
Administrative Agent and the Banks against any and all actions, proceedings,
costs, damages, expenses, taxes (other than taxes on overall net income, assets
or capital), claims and demands which the Administrative Agent or either of the
Banks may incur or sustain by reason of or arising in any way whatsoever in
connection with the opening, establishing or paying of the amounts payable under
a Letter of Credit or arising in connection with any amounts payable by the
Administrative Agent or either of the Banks thereunder.
Section 3.04 Fees.
(a) Issuance Fees.
(i) At the time of issue of any Standby Letter of Credit
and on each renewal thereof, the Borrower shall pay to the Administrative Agent
(A) for the account of each Bank, a per annum fee of one percent (1%) of the
face amount of such Letter of Credit.
(ii) At the time of issue of each Trade Letter of Credit,
the Borrower shall pay to the Administrative Agent (a) for the account of each
Bank, a fee equal to one quarter of one percent (1/4%) of the face amount of
such Letter of Credit and (b) for the account of the Administrative Agent, an
issuance fee at the Administrative Agent's then current rate for issuing letters
of credit.
(b) Administrative Fees. At the time of any draw on, amendment
to, issuance or renewal of, any Letter of Credit, the Borrower shall pay to the
Administrative Agent, in the case of Standby Letters of Credit and Trade Letters
of Credit, for the account of the Administrative Agent, (i) an administrative
fee at such Bank's or the Administrative Agent's, as the case may be, then
current rate for draws on, amendments to, issuance or renewals of letters of
credit and (ii) any out-of-pocket expenses incurred by such Bank or the
Administrative Agent, as the case may be, in effecting such draw, amendment,
issuance or renewal.
Section 3.05 Reimbursement Unconditional. Unless due to the gross
negligence or willful misconduct of the Administrative Agent or a Bank, neither
the Administrative Agent nor either of the Banks or any of their correspondents
shall be liable, and the Borrower's obligations to the Administrative Agent and
the Banks with respect to the Letters of Credit shall not be affected by, any
change of circumstance or conditions or action of any person or entity related
to this Agreement or the Letters of Credit, including without limitation:
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(a) the validity, accuracy, sufficiency or genuineness of any
document, instrument, statement or endorsement thereon, even if such should in
fact prove to be in any or all respects invalid, inaccurate, insufficient,
fraudulent or forged;
(b) any breach of any agreement between the Borrower and any
beneficiary of any Letter of Credit or any other party, even if the
Administrative Agent or either or the banks has received notice of the same;
(c) any failure of any draft to bear any reference or adequate
reference to the related Letter of Credit;
(d) any act or omission by the Administrative Agent or either of
the Banks in connection with any Letter of Credit or related drafts and
documents if done in good faith;
(e) any omissions, interruptions, errors misdeliveries or delays
in the transmission or delivery of any documents, message or communication by
mail, cable, telegram or other media in connection with any Letter of Credit;
(f) any act, error, default, omission or failure in business or
any beneficiary of any Letter of Credit, any correspondent or any other party,
or any other act or omission beyond the control of the Administrative Agent or
either of the Banks;
(g) any acceptance or payment of overdrafts or irregular drafts
or extensions of time limits or other changes or variations in any Letter of
Credit if assented to, orally or in writing, by the Borrower, and the Borrower
shall be conclusively deemed to have waived any right to object to such
variation unless within five (5) days of receipt of such irregular drafts or
documents or notice of such variation, the Borrower files written notice with
the issuer of such Letter of Credit;
(h) any delay by any party in giving, or failure to give notice
of any default under any agreement involving the Administrative Agent or either
of the Banks;
(i) failure of the Administrative Agent or either of the Banks
to perfect any interest in or exercise any right with respect to any collateral
or any other security, endorsement or guarantee it may have for payment of the
Borrower's obligations; or
(j) any amendment to which the Borrower has assented.
Section 3.06 Validity and Sufficiency of Documents. Delivery to the
Administrative Agent or either of the Banks of any documents complying on their
face with the requirements of any Letter of Credit, as originally issued or
subsequently amended or modified, shall be sufficient evidence of their validity
and of the sufficiency and good faith of the beneficiary of such Letter of
Credit, and its successors, transferees, agents or assignees, notwithstanding
any actual or implied notice to the contrary, and the Administrative Agent or
such Bank may pay such document without liability or responsibility for their
validity or sufficiency.
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Section 3.07 Successors. The Administrative Agent and the Banks may
rely upon and pay, as complying with the terms of the Letters of Credit, any
drafts, required statements or other documents otherwise in order that may be
signed or issued by the administrator, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver or other
legal representative of the party who is authorized under the respective Letter
of Credit to draw, sign or issue any drafts, required statements or other
documents.
ARTICLE IV.
USE OF LOANS
Borrower shall use the proceeds of all Revolving Loans for general
corporate purposes.
ARTICLE V.
CONDITIONS PRECEDENT
The agreement of the Banks and the Administrative Agent to make
available the Revolving Loans and Letters of Credit shall be effective only upon
fulfillment of the following conditions at the date of the execution of this
Agreement:
Section 5.01 Documents. All instruments, certificates and agreements
to be furnished to the Administrative Agent and the Banks hereunder shall be of
such form and content as the Banks shall reasonably require, and the Borrower
shall furnish such consents, authorizations and other instruments and agreements
as the Administrative Agent and the Banks shall deem reasonably necessary to
effectuate the intent of this Agreement.
Section 5.02 No Default. No Event of Default and no event which with
notice or lapse of time or both would become an Event of Default shall have
occurred and be continuing.
Section 5.03 Representations and Warranties. The representations and
warranties of the Borrower set forth in Article VI of this Agreement shall be
true on and as of the date of each Revolving Loan, and the issuance of each
Letter of Credit with the same force and effect as if made on and as of such
date.
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Section 5.04 Guaranties. Guarantor shall have unconditionally
guaranteed to the Banks the payment of the Revolving Credit Notes, and the
performance of all other Obligations of the Borrower to the Banks (including,
without limitation, Obligations existing on the date of this Agreement to Fleet
and Marine with respect to various loans and letters of credit), without
limitation as to amount. Each of said agreements of guaranty shall be in form
and content satisfactory to the Administrative Agent and the Banks ("Guaranty").
Section 5.05 Authorization. Borrower shall have taken appropriate
corporate action to authorize, and the Borrower's board of directors shall have
adopted resolutions authorizing the execution and delivery of this Agreement,
the Revolving Credit Notes, and the other Borrower's Loan Documents and the
taking of all action called for by this Agreement, the Revolving Credit Notes,
and the other Borrower's Loan Documents, and the Borrower shall have furnished
to the Administrative Agent and the Banks certified copies of such corporate
action and board resolutions and such other corporate documents as
Administrative Agent and the Banks may request.
Section 5.06 Certain Corporate Documents. Borrower and the Guarantor
shall have furnished to the Administrative Agent and the Banks a certificate in
form and content satisfactory to the Banks from an officer of Borrower
certifying that there have been no changes to the certificate of incorporation
or by-laws of Borrower or Guarantor since November 3, 1995 and certifying to
such corporate proceedings, status and incumbency matters as the Banks may
reasonably request.
Section 5.07 Legal Opinion. Legal counsel for the Borrower and the
Guarantor shall have furnished to the Administrative Agent, the Banks and their
counsel a favorable opinion in form and content satisfactory to the Banks dated
the date of this Agreement.
Section 5.08 Amendments. Borrower and the Banks shall have executed
satisfactory amendment agreements amending the loan documentation for each of
the presently outstanding ESOP loans and Industrial Revenue Bonds involving
Borrower and the Banks to conform the financial covenants and pricing in such
loan documentation to the financial covenants and pricing set forth in this
Agreement.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to the
Banks:
Section 6.01 Existence. Each of the Borrower and its Subsidiaries
(other than Endor S.A. de CV) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it was
incorporated. Each of the Borrower and its Subsidiaries is qualified to do
business and is in good standing under the laws of all states in which failure
to qualify or maintain good standing would have a material adverse effect on its
operations or financial condition.
Section 6.02 Authority. Borrower has full power, authority and legal
right to enter into this Agreement, the Revolving Credit Notes, and the other
Borrower's Loan Documents. The execution, delivery and performance by the
Borrower of this Agreement, the Revolving Credit Notes, and the other Borrower's
Loan Documents, and the execution, delivery and performance by Lift-Tech of the
Guaranty (a) have been duly authorized by all necessary action; (b) are not in
contravention of the terms of the Borrower's certificate of incorporation or
by-laws or of any indenture, agreement or undertaking to which the Borrower is a
party or by which the Borrower, or any of the property of the Borrower, is
bound; (c) to Borrower's knowledge do not and will not require any governmental
consent, registration or approval; (d) to Borrower's knowledge do not and will
not contravene any contractual or governmental restriction to which the Borrower
or Lift-Tech or any of the property of the Borrower or Lift-Tech may be subject;
and (e) do not and will not, except as contemplated herein, result in the
imposition of any lien, charge, security interest or encumbrance upon any
property of the Borrower, Lift-Tech under any existing indenture, mortgage, deed
of trust, loan or credit agreement or other material agreement or instrument to
which the Borrower or Lift-Tech is a party or by which the Borrower, or any of
the property of the Borrower, or Lift-Tech may be bound or affected. Each of
the Borrower and Lift-Tech, has the full corporate authority to own or lease and
operate its property and to conduct the business in which it is currently
engaged and in which it proposes to engage.
Section 6.03 Binding Effect. (a) This Agreement constitutes, and the
Revolving Credit Notes, and the other Borrower's Loan Documents, when executed
and delivered by the Borrower pursuant hereto, will constitute, the legal, valid
and binding obligations of the Borrower enforceable in accordance with their
respective terms, except to the extent that enforcement of any such obligations
of the Borrower may be limited by bankruptcy, insolvency, reorganization or
similar laws of general application affecting the rights and remedies of
creditors generally.
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(b) The Guaranty, when executed and delivered by Lift-Tech
pursuant hereto, will constitute the legal, valid and binding obligation of
Lift-Tech enforceable in accordance with its terms, except to the extent that
enforcement of any such obligation of Lift-Tech may be limited by bankruptcy,
insolvency, reorganization or similar laws of general application affecting the
rights and remedies of creditors generally.
Section 6.04 Financial Data. (a) Borrower has delivered to the Banks
audited financial statements of the Borrower for its fiscal years ending
March 31, 1992, March 31, 1993, March 31, 1994, March 31, 1995 and March 31,
1996 certified by Ernst & Young, certified public accountants. Such financial
statements fairly present the results of operations and financial condition of
the Borrower and its Subsidiaries for the periods indicated therein in
accordance with GAAP except as otherwise disclosed therein.
(b) No material adverse change has occurred in the business or
financial condition of the Borrower and its Subsidiaries, since March 31, 1996.
Section 6.05 Liens and Encumbrances. Except for Permitted Liens, all
Assets of the Borrower and its Subsidiaries are owned free and clear of all
security interests, liens, claims, and encumbrances.
Section 6.06 Tax Obligations. Borrower and its Subsidiaries have
filed complete and to Borrower's knowledge correct federal, state and local tax
reports and returns required to be filed by them, prepared in accordance with
any applicable law or regulation, and except for extensions duly obtained, the
Borrower and its Subsidiaries have either duly paid all taxes, duties and
charges indicated on such reports and returns as owed by them, or made adequate
provision for the payment thereof. Except as disclosed on Schedule 6.06
attached hereto, and to Borrower's knowledge there are no material unresolved
questions or claims concerning any tax liability of the Borrower or its
Subsidiaries.
Section 6.07 Indebtedness and Liabilities. Borrower and its
Subsidiaries have no Indebtedness other than Indebtedness reflected on the
Borrower's consolidated balance sheet as of March 31, 1996 and Indebtedness
disclosed on Schedule 6.07 hereto. Except for the Indebtedness referred to
above, and liabilities for trade payables and accrued expenses reflected on the
Borrower's consolidated balance sheet as of March 31, 1996, or incurred since
the date thereof in the ordinary course of business, the Borrower and its
Subsidiaries have no Liabilities.
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Section 6.08 Use of Proceeds and Margin Security. Borrower shall use
the proceeds of the Revolving Loans in a manner consistent with all applicable
laws, statutes, rules and regulations. The Borrower does not own any margin
security and none of the loans advanced or funded hereunder will be used for the
purpose of purchasing or carrying any margin securities or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin securities or for any other purpose not permitted by
Regulation G or U of the Board of Governors of the Federal Reserve System.
Section 6.09 Investments. As of the date hereof, the Borrower does
not have any investment in any Person (other than Permitted Investments) and is
not engaged in any joint venture or partnership with any other Person.
Section 6.10 Litigation and Proceedings. Except as set forth on
Schedule 6.10 attached hereto, there is no "Litigation" (as defined below)
pending or to the knowledge of the Borrower, threatened, against the Borrower or
any of its Subsidiaries, which, if adversely determined, would have a material
adverse effect on the business, financial condition or operations of the
Borrower or any of its Subsidiaries. No judgments are outstanding against the
Borrower or any of its Subsidiaries or binding upon any of the assets or
property of any of them, nor is there now pending or, to the best of the
Borrower's knowledge after diligent inquiry, threatened, any litigation, claim,
arbitration or governmental proceeding ("Litigation") by or against the Borrower
or any of its Subsidiaries, which, if adversely determined, would have a
material adverse effect on the business, financial condition or operations of
the Borrower or any of its Subsidiaries and, to the best of the Borrower's
knowledge after diligent inquiry, there are no presently existing facts or
circumstances likely to give rise to any such litigation, claim, arbitration or
governmental proceedings.
Section 6.11 Other Agreements. Neither the Borrower nor any of its
Subsidiaries to their knowledge is in default under any material indenture, loan
agreement, mortgage, deed of trust or similar document relating to the borrowing
of monies or any other material contract, lease, or commitment to which it is a
party or by which it is bound. There is no dispute regarding any contract,
lease, or commitment which is material to the financial condition, results of
operations or business of the Borrower or any of its Subsidiaries.
Section 6.12 Compliance with Laws and Regulations. The execution and
delivery by the Borrower of this Agreement, the Revolving Credit Notes, and all
of the other Borrower's Loan Documents and the performance of the Borrower's
obligations hereunder and thereunder are not to Borrower's knowledge in
contravention of any laws, orders, regulations or ordinances. Each of the
Borrower and any of its Subsidiaries is in compliance with all laws, orders,
regulations and ordinances of all federal, foreign, state and local governmental
authorities relating to its business operations and assets, except for laws,
orders, regulations and ordinances the violation of which would not, in the
aggregate, have a material adverse effect on its financial condition, results of
operations or business.
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Section 6.13 Patents, Trademarks and Licenses. Each of the Borrower
and its Subsidiaries owns or possesses rights to use all licenses, patents,
patent applications, copyrights, service marks, trademarks and tradenames
required to continue to conduct its business substantially as heretofore
conducted. No such license, patent or trademark has been declared invalid, been
limited by order of any court or by agreement, or is the subject of any
infringement, interference or similar proceeding or challenge.
Section 6.14 ERISA.
(a) With respect to each Pension Plan:
(i) The plan is qualified under Section 401(a) of the Code,
and any trust through which the plan is funded meets the requirements to be
exempt from federal income tax under Section 501(a) of the Code.
(ii) There has been no accumulated funding deficiency (as
defined in Section 412(a) of the Code) with respect to the plan, whether or not
waived, at any time since the effective date of Section 412 of the Code as to
the plan.
(iii) All contributions required to be made to the plan under
the terms of the plan or any collective bargaining agreement or applicable law
have been made to the plan.
(iv) If the plan is a defined benefit plan (as defined in
Section 3(35) of ERISA), had the plan terminated and benefits been distributed
on the last plan valuation date, the plan would have been sufficient for benefit
liabilities (within the meaning of Sections 4001(a)(16) and 4041(d) of ERISA) as
of that date.
(b) No ERISA Title IV Liability Event has occurred or is
expected to occur with respect to any Pension Plan subject to Title IV of ERISA
that is not sufficient for liabilities within the meaning of Section 4041(d) of
ERISA.
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(c) With respect to each Multiemployer Plan:
(i) Neither the Borrower nor any Controlled Group Member
has incurred or expects to incur withdrawal liability to the plan (within the
meaning of Section 4201 of ERISA) in connection with complete or partial
withdrawal from the plan.
(ii) Borrower and each Controlled Group Member have made all
contributions they are required to make to the plan under the terms of the plan
or any collective bargaining agreement or applicable law.
(iii) Neither the Borrower nor any Controlled Group Member
has been notified that the plan is in reorganization (within the meaning of
Section 4241 of ERISA) or that it is suspected to go into reorganization or be
terminated.
(d) With respect to each Welfare Plan:
(i) The administrator of the plan (as defined in
Section 3(16)(A) of ERISA) has materially complied with any applicable
requirements under Part 1 of Title I of ERISA.
(ii) The plan has been administered and operated in
accordance with its governing documents and in material compliance with all
applicable federal and state laws and regulations thereunder.
(iii) Neither the plan, nor any fiduciary with respect to the
plan has engaged in any Prohibited Transaction, other than any transaction
subject to a statutory or administrative exemption.
(iv) All premiums due on any insurance contracts through
which the plan is funded have been or will be paid. All contributions required
to be made to the plan under any collective bargaining agreement or otherwise
have been or will be made.
(v) Any trust through which the plan is funded is exempt
from federal income tax under Section 501(a) of the Code and satisfies the
requirements of Section 505 of the Code.
Section 6.15 Assets. Each of the Borrower and any of its
Subsidiaries possesses, or has unrestricted rights to use or exercise all assets
and rights necessary for the conduct of its business as hereto before conducted.
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Section 6.16 Investment Company Act. Borrower is not an "investment
company" or a company "controlled" by an investment company within the meaning
of the Investment Company Act of 1940, as amended.
Section 6.17 Licenses and Permits. To Borrower's knowledge, each of
the Borrower and its Subsidiaries is current and in good standing with respect
to all governmental approvals, permits, certificates, licenses, inspections,
consents and franchises (collectively, the "Licenses") necessary to continue to
conduct its business and to own or lease and operate its properties
substantially as heretofore conducted, owned, leased or operated, including,
without limitation, any and all Licenses related to federal, state and local
environmental laws.
Section 6.18 Environmental Compliance. Except as set forth on
Schedule 6.18 hereto:
(a) There are no claims, investigations, litigation,
administrative proceedings, whether pending or, to the best of the Borrower's
knowledge, threatened, or judgments or orders, relating to any hazardous
substances, hazardous wastes, discharges, emissions, or releases of same
(collectively "EPA Matters") relating to any real estate owned or leased by the
Borrower or any of its Subsidiaries.
(b) To the best of the Borrower's knowledge, no hazardous
substances, hazardous materials, hazardous wastes, oil, or toxic substances,
within the meaning of any applicable statute or regulation, are presently stored
or otherwise located on real estate owned or leased by the Borrower or any of
its Subsidiaries, except for such substances as are stored or otherwise located
thereon in material compliance with all federal, state and local statutes and
regulations (including applicable permits held by the Borrower).
(c) It is the Borrower's corporate policy that no hazardous
substances, hazardous materials, hazardous wastes or toxic substances, within
the definition of any applicable statute or regulations, may be used by or on
behalf of Borrower for any purpose upon any such real estate or stored thereon,
except in material compliance with all applicable federal, state and local
statutes and regulations (including applicable permits held by the Borrower),
and the Borrower makes appropriate efforts to ensure that its employees and
other Persons act in conformance with such policy with regard to such real
estate.
(d) There has been no release of any hazardous substance as
defined in the Comprehensive Environmental Response Compensation and Liability
Act of 1980 (42 U.S.C. 9601 et. seq.), as amended, nor any release of oil or
hazardous wastes upon or into the real estate owned or leased by the Borrower or
any of its Subsidiaries and, to the best of the Borrower's knowledge, there have
been no such releases on, upon or into any real property adjoining or in the
vicinity of such real estate which through soil or groundwater migration could
have come to be located upon such real estate.
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(e) To the best of the Borrower's knowledge, there are no
friable asbestos-containing materials, whether, in the nature of thermal
insulation products such as pipe, boiler or breach coverings, wraps or blankets
or sprayed-on or trowelled-on products, in, on or upon the real estate owned or
leased by the Borrower or any of its Subsidiaries.
(f) To the best of the Borrower's knowledge, there is no urea
formaldehyde foam insulation in or upon the real estate owned or leased by the
Borrower or any of its Subsidiaries.
(g) The real estate owned or leased by the Borrower or any of
its Subsidiaries, to the best of the Borrower's knowledge, has not been used,
and will not be used, for the generation, treatment, storage or disposal of any
hazardous substances or hazardous wastes or as a landfill or other hazardous
waste disposal site, except in full compliance with all applicable laws, rules
and regulations. To the best of the Borrower's knowledge, there are no
underground storage tanks on the real estate owned or leased by the Borrower or
any of its Subsidiaries, and any former underground storage tanks have been
closed and removed to the satisfaction of appropriate regulatory agencies.
(h) To the best of the Borrower's knowledge, no prior owner of
the real estate owned or leased by the Borrower or any of its Subsidiaries or
any tenant, subtenant, prior tenant or prior subtenant has used oil or hazardous
wastes or substances on, from, or affecting such real estate in any manner which
violates federal, state or local laws, ordinances, rules, regulations or
policies governing the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of oil or hazardous wastes or
substances.
(i) To the best of the Borrower's knowledge, there has been no
release of any hazardous substance to the soil, surface water or ground water
located at the real estate owned or leased by the Borrower or any of its
Subsidiaries.
Section 6.19 Subsidiaries. All of the capital stock of all of the
Borrower's Subsidiaries has been validly issued, is fully paid and nonassessable
and is owned by the Borrower free and clear of all liens.
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Section 6.20 Full Disclosure. This Agreement, the financial
statements delivered in connection herewith, the representations and warranties
of the Borrower herein and in any other document delivered or to be delivered by
or on behalf of the Borrower or any of its Subsidiaries, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein or herein, in light of the
circumstances under which they were made, not misleading. There is no material
fact which the Borrower has not disclosed which materially and adversely affects
or, so far as the Borrower now foresees, will materially and adversely affect
the assets, business, prospects, profits, or condition (financial or otherwise)
of the Borrower or any of its Subsidiaries, the rights of the Banks or the
ability of the Borrower to perform this Agreement.
Section 6.21 Survival of Warranties. All representations and
warranties contained in this Agreement and the other Financing Documents shall
survive the execution and delivery of this Agreement and the termination hereof.
ARTICLE VII.
AFFIRMATIVE COVENANTS
During the term of this Agreement and so long as the Revolving Credit
Notes, or any other Obligations remain outstanding and (even if there are no
Obligations outstanding) so long as this Agreement remains in effect:
Section 7.01 Payments. Borrower shall duly and punctually make
payments of principal and interest on all indebtedness incurred by it pursuant
to this Agreement in the manner set forth in this Agreement and the Revolving
Credit Notes.
Section 7.02 Financial Statements. Borrower shall furnish to the
Administrative Agent and the Banks: (a) within 45 days after the end of each of
its three-month fiscal periods unaudited consolidated and consolidating balance
sheets and income statements of the Borrower and its Consolidated Subsidiaries
and balance sheets and income statements of CM Insurance Company, Inc., all at
and as of the end of each such three-month fiscal period and, when applicable,
at and as of the end of each fiscal year, all in such detail as the Banks may
reasonably request; (b) within 120 days after the end of each of its fiscal
years, and as of the end of each such year, audited consolidated financial
statements of the Borrower and its Consolidated Subsidiaries and audited
financial statements of CM Insurance Company, Inc. certified by Ernst &
Young, LLP or other independent certified public accountants satisfactory to the
Banks; (c) promptly upon receipt thereof, copies of any reports submitted to the
Borrower or any of its Subsidiaries by independent certified public accountants
in connection with the examination of financial statements of the Borrower or
any of its Subsidiaries made by such accountants; and (d) together with each
financial statement provided for herein, a certificate of the chief financial
officer of the Borrower certifying, to the best of his knowledge and belief,
that (i) no Event of Default under the terms of this Agreement has occurred, and
(ii) no event which would constitute an Event of Default under this Agreement
but for the requirement that notice be given or time elapse, or both has
occurred, or if any such event has occurred or then exists, stating the nature
thereof and the steps being taken by Borrower to cure same.
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Section 7.03 Taxes. Borrower shall promptly pay, and shall cause
each of its Subsidiaries to promptly pay, all of its taxes, assessments and
other governmental charges prior to the date on which penalties are attached
thereto (except for non-material penalties incurred in the ordinary course of
business of the Borrower and its Subsidiaries, as such business is presently
conducted), establish, and cause each of its Subsidiaries to establish, adequate
reserves for the payment of taxes and assessments and make all required
withholding and other tax deposits; provided, however, that nothing herein
contained shall be interpreted to require the payment of any tax, assessment or
charge so long as its validity is being contested in good faith by the Borrower
or any of its Subsidiaries.
Section 7.04 Actions and Claims. Borrower shall promptly inform the
Banks of the commencement of any action, suit, counterclaim or proceeding
against the Borrower or any of its Subsidiaries involving (a) any claim in
excess of $2,000,000, unless such claim is fully covered by insurance (other
than any applicable standard deductible); (b) any claim which results in the
aggregate of all claims then outstanding and not fully insured to exceed
$2,000,000; (c) any claim which would materially adversely affect the financial
condition of the Borrower or any of its Subsidiaries; or (d) any claim which
questions the validity of this Agreement, any of the other Financing Documents
or any action taken or to be taken pursuant to any of the foregoing.
Section 7.05 Tax Adjustments and Defaults. Borrower shall promptly
notify the Banks in writing of (a) any material adjustment or assessment by any
taxing authority as soon as it has knowledge thereof and the results of any
audit of any tax returns of the Borrower or any of its Subsidiaries after its
completion; (b) the occurrence of any event or the existence of a condition
which constitutes, or which but for a requirement of lapse of time or notice, or
both would constitute, an Event of Default; or (c) any material default in the
performance of any terms or conditions contained in any mortgage, indenture or
instrument relating to borrowed money or the material lease of real or personal
property or any other material contract to which the Borrower or any of its
Subsidiaries is bound.
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Section 7.06 Insurance. Borrower shall, and shall cause each of its
Subsidiaries to: (a) maintain, at all times, insurance with responsible
insurance carriers against fire, theft and other hazards on all of its property
so insurable in such manner and to the extent that like properties are usually
insured by others operating properties of a similar character in the same
general localities; (b) maintain, at all times, adequate insurance with
responsible insurance carriers (which may include CM Insurance Company, Inc. for
the first $5,000,000 of coverage and may include, with respect to workers'
compensation insurance, self-insurance in amounts acceptable to the Banks)
against liability on account of damage to persons or property and under all
applicable workers' compensation laws; and (c) deliver promptly to the Banks
upon request, certificates of insurance evidencing those insurance policies
required to be carried by the Borrower and its Subsidiaries pursuant hereto.
Section 7.07 Existence of the Borrower. Borrower shall, and shall
cause each of its Subsidiaries to, maintain its existence as a corporation under
the laws of the jurisdiction in which it was incorporated and remain or become
duly qualified or licensed in each jurisdiction in which the conduct of its
business requires such qualification or license.
Section 7.08 Inspections. Borrower shall, and shall cause each of
its Subsidiaries to, permit any persons designated by the Banks at such times as
the Banks may request to visit and inspect any of the properties, books and
financial records of the Borrower and any of its Subsidiaries, and to make
extracts from and copies of such books and financial records.
Section 7.09 ERISA Notices. At the request of a Bank, the Borrower
shall deliver to the Banks copies of (a) all annual reports, including schedules
and attachments, filed with the Internal Revenue Service or PBGC by the Borrower
or a Controlled Group Member with respect to any Pension Plan subject to
Title IV of ERISA and (b) all notices the Borrower or a Controlled Group Member
receives from the Internal Revenue Service, PBGC, or U.S. Department of Labor
with respect to any Pension Plan, Welfare Plan, or Multiemployer Plan, promptly
after the filing or receipt of such documents. As soon as possible, and in any
event within thirty (30) days after the Borrower knows or has reason to know
that any Reportable Event or Prohibited Transaction has occurred or will occur
with respect to any Pension Plan or Welfare Plan, or that the PBGC, the Borrower
or any Controlled Group Member has instituted or will institute proceedings
under Title IV of ERISA to terminate any Pension Plan, or that application will
be made to the Secretary of the Treasury for a waiver of the minimum funding
standard pursuant to Section 412(d) of the Code with respect to any Pension Plan
or Multiemployer Plan, the Borrower shall deliver to the Banks a certificate of
the chief financial officer of the Borrower setting forth details as to such
Reportable Event or Prohibited Transaction or Pension Plan termination or waiver
application and the action the Borrower proposes to take with respect thereto.
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Section 7.10 Labor Disputes. Within ten (10) days after the Borrower
learns of (a) any material labor dispute to which the Borrower or any of its
Subsidiaries may become a party, (b) any strikes or material walkouts relating
to any of the plants or other facilities of the Borrower or any of its
Subsidiaries, or (c) the expiration of any labor contract to which the Borrower
or any of its Subsidiaries is a party or by which the Borrower or any of its
Subsidiaries is bound, the Borrower shall notify the Banks of the same and the
steps the Borrower plans to take in response thereto.
Section 7.11 Environmental Matters. (a) Borrower shall indemnify and
hold the Administrative Agent and the Banks harmless from any loss, cost
(including reasonable attorneys' fees), liability and damage whatsoever incurred
by the Borrower, any of its Subsidiaries, the Administrative Agent or either of
the Banks by reason of any violation by the Borrower or any of its Subsidiaries
of any applicable statute or regulation for the protection of the environment
for which the Borrower or any of its Subsidiaries has any liability or which
occurs upon any real estate owned by or under the control of the Borrower or any
of its Subsidiaries, or by reason of the imposition of any governmental lien for
the recovery of environmental clean-up costs expended by reason of such
violation as related to any real estate owned by or under the control of the
Borrower or any of its Subsidiaries; provided that, to the extent that the
Borrower or any of its Subsidiaries is held by a court of competent jurisdiction
to be strictly liable without regard to fault under any such statute, the
Borrower's obligation to indemnify the Administrative Agent and the Banks under
this subsection 7.11(a) shall likewise be without regard to fault on the part of
the Borrower or any of its Subsidiaries with respect to the violation of law
which results in liability to either of the Banks; and provided further that
this agreement to indemnify and hold harmless shall not apply to any loss, cost,
liability or damage arising by reason of the gross negligence or willful
misconduct of the Administrative Agent or either of the Banks.
(b) So long as any Obligations are outstanding and (even if
there are no Obligations outstanding) so long as this Agreement remains in
effect, if either of the Banks, at any time, has a reasonable basis to believe
that real estate owned or leased by the Borrower or any of its Subsidiaries has
become subject to a lawful clean-up order or decree by an agency having
jurisdiction over the Borrower or any of its Subsidiaries, then the Borrower
shall, upon request from either of the Banks, provide such Bank with such
reports, certificates, engineering studies or other written material or data as
the Banks may reasonably require from it so as to satisfy either of the Banks
that it and each of its Subsidiaries is in material compliance with all
applicable environmental laws and regulations.
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(c) Upon the Borrower learning that (i) any real estate owned or
leased by the Borrower or any of its Subsidiaries has become subject to a lawful
environmental clean-up order or decree or to an environmental compliance
enforcement action by an agency having jurisdiction over the Borrower or any of
its Subsidiaries, (ii) the Borrower or any of its Subsidiaries is subject to
federal or state investigation evaluating whether any remedial action is needed
to respond to the unpermitted or unauthorized release of any hazardous substance
into the environment, or in, on or to any real estate owned or leased to
Borrower, or (iii) any properties or assets of the Borrower or any of its
Subsidiaries are subject to an Environmental Lien, the Borrower shall notify the
Banks of the same and the steps the Borrower plans to take in response thereto.
Section 7.12 Proxy Statements, etc. Borrower shall furnish to the
Banks, promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports which the Borrower or any of its
Subsidiaries sends to its stockholders, and copies of all regular, periodic and
special reports and all registration statements which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any national
securities exchange.
Section 7.13 Leverage Ratio. Borrower shall have a Leverage Ratio as
of the last day of each of Borrower's fiscal quarters during the term of this
Agreement not in excess of 1.00 to 1.00.
Section 7.14 Interest Coverage Ratio. Borrower shall have a ratio of
earnings before interest and taxes to interest expense for each twelve (12)
month period ending on the last day of each of its fiscal quarters during the
term of this Agreement of not less than 3.00 to 1.00.
Section 7.15 Debt Service Coverage Ratio. Borrower shall have a
ratio of (a) earnings before interest expense, taxes, depreciation and
amortization, less capital expenditures and dividends for each twelve (12) month
period ending on the last day of each of its fiscal quarters during the term of
this Agreement to (b) all principal payments made or required or scheduled to be
made during such twelve (12) month period on account of long term indebtedness
plus interest expense for such period of at least 1.75 to 1.00.
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ARTICLE VIII.
NEGATIVE COVENANTS
During the term of this Agreement and so long as the Revolving Credit
Notes or any other Obligations remain outstanding and (even if there are no
Obligations outstanding) so long as this Agreement remains in effect:
Section 8.01 Indebtedness and Liabilities. Borrower shall not
create, incur, assume or suffer to exist any Indebtedness, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness,
except for trade obligations and normal accruals in the ordinary course of
business, and obligations to the Banks with respect to any Letters of Credit,
Revolving Loans and Indebtedness listed on Schedule 8.01 attached hereto.
Section 8.02 Encumbrances. Except for Permitted Liens and personal
property leases and purchase money security interests entered into in the
ordinary course of business, the Borrower shall not mortgage, pledge or
otherwise encumber or suffer to be encumbered any of its Assets, or permit any
of its Subsidiaries to mortgage, pledge or otherwise encumber or suffer to be
encumbered any of its Assets.
Section 8.03 Consolidations, Acquisitions, Fundamental Changes.
Borrower shall not, and shall not permit any of its Subsidiaries to, change its
name, merge or consolidate with or into any other corporation, acquire the stock
or assets of any other firm or corporation (except for the pending acquisition
of Lister Bolt and Chain Ltd.), or amend its certificate of incorporation for
the purpose of altering its structure, or change the general character of its
business as it is presently conducted.
Section 8.04 Guaranties. Borrower shall not, and shall not permit
any of its Subsidiaries to, guarantee, endorse or otherwise in any way become or
be responsible for any obligations of any other Person, whether directly or
indirectly, by agreement to purchase the indebtedness of any other Person or
through the purchase of goods, supplies or services, or maintenance of working
capital or other balance sheet covenants or conditions, or by way of stock
purchase, capital contribution, advance or loan for the purpose of paying or
discharging any indebtedness or obligation of such other Person or otherwise,
except endorsements of negotiable instruments for collection in the ordinary
course of business and the Guaranty.
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Section 8.05 Disposal of Property. Borrower shall not, and shall not
permit any of its Subsidiaries to, convey, lease or sell all or any substantial
portion of its respective property, assets or business to any other Person, or
sell and leaseback any substantial portion of its respective property or assets.
Section 8.06 Investments. Borrower shall not, and shall not permit
any of its Subsidiaries to, lend to, invest in, or otherwise advance funds to
any Person, except for Permitted Investments; provided, however, CM Insurance
Company, Inc. may make investments in the ordinary course of its business as it
has heretofore conducted such business.
Section 8.07 Transactions with Affiliates. Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any transaction
including, without limitation, the purchase, lease, sale or exchange of any
property to, from or with, or the rendering or purchase of any service to or
from, any Affiliate, except in the ordinary course of and pursuant to the
reasonable requirements of the business of the Borrower or any of its
Subsidiaries and upon fair and reasonable terms after allowance for any discount
given in the ordinary course of business.
Section 8.08 Other Business. Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any business unrelated to its
current businesses, engage in any transaction out of the ordinary course of
business, or engage in any transaction which materially and adversely affects
its ability to pay its Liabilities or its Obligations hereunder.
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.01 Events of Default. The occurrence or existence of any
one or more of the following events shall constitute an "Event of Default":
(a) Nonpayment, within ten (10) days of any applicable due date,
of any installment of principal of, or interest on, any of the Revolving Credit
Notes, or any other Obligation of the Borrower under this Agreement; or
(b) The making of a general assignment by the Borrower, any of
its Subsidiaries or the Guarantor for the benefit of creditors, or the
institution by the Borrower, any of its Subsidiaries or of the Guarantor of any
type of bankruptcy, reorganization or insolvency proceeding under any state or
federal law or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims or winding up of affairs of the Borrower,
any of its Subsidiaries or the Guarantor; or
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(c) The appointment of a receiver or trustee for the Borrower,
any of its Subsidiaries or the Guarantor or for any assets of the Borrower, any
of its Subsidiaries or the Guarantor or the institution against the Borrower,
any of its Subsidiaries or the Guarantor of any type of bankruptcy,
reorganization or insolvency proceeding under any state or federal law or for
any proceeding for the dissolution or liquidation of the affairs of the
Borrower, any of its Subsidiaries or the Guarantor and the failure to have such
appointment vacated, or such proceeding dismissed, within forty five (45) days;
or
(d) If the subject matter of any certificate, statement,
representation, warranty or audit heretofore, herein or hereafter furnished by
or on behalf of the Borrower, any of its Subsidiaries or the Guarantor pursuant
to or in connection with this Agreement (including, without limitation, the
representations and warranties contained herein) shall prove to be untrue or
misleading in any material respect or to have omitted any substantial contingent
or unliquidated liability or claim against the Borrower, any of its Subsidiaries
or the Guarantor; or, if on the date of the execution of this Agreement or on
the date of any Revolving Loan or Letter of Credit there shall have been any
adverse change in any of the facts disclosed by any such certificate, statement,
representation, warranty or audit; or
(e) Default by Borrower in the performance of any material term
or condition of this Agreement not otherwise specifically referred to in this
Section 9.01 unless such default is curable and Borrower has notified the Banks
and Administrative Agent of its intent to effect a cure, and is diligently
proceeding to cure such default, and cures such default within fifteen days of
the occurrence thereof; or
(f) Entry of a judgment or cumulative judgments in excess of
$2,000,000 (other than any judgment for which the Borrower or any of its
Subsidiaries is fully insured other than any applicable standard deductible)
against the Borrower or any of its Subsidiaries which remains unpaid, unstayed
on appeal, undischarged, unbonded or undismissed for a period of forty-five (45)
days; or
(g) The occurrence of any event of default, which, under any
other loan agreement, note, indenture, mortgage, security agreement or other
agreement evidencing or securing other indebtedness of the Borrower, any of its
Subsidiaries or the Guarantor to either Bank or to any other party, creates in
either Bank or such other party a right to require immediate payment in full of
such indebtedness; or
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(h) Default by Borrower, any of its Subsidiaries or the
Guarantor in the performance of the terms or conditions of any agreement whether
now existing or hereafter arising with either Bank or any other party and the
continuance of such default beyond any applicable cure period; or
(i) If the representations and warranties set forth in
Sections 6.14, 6.17 and 6.18 hereof cease to be accurate in all material
respects because of the occurrence or existence of one of the events or
conditions specified therein, unless such events or conditions are curable and
Borrower has notified the Banks and Administrative Agent of its intent to effect
a cure, and is diligently proceeding to cure such default, and cures such
default within fifteen days of the occurrence thereof.
Section 9.02 Rights of the Banks on Default. Upon the occurrence of
any of the Events of Default enumerated in Section 9.01 hereof, the
Administrative Agent shall at the request of, or may with the consent of, both
of the Banks, (a) declare all obligations of the Banks under this Agreement to
be immediately terminated, and (b) declare all indebtedness evidenced by the
Revolving Credit Notes, and any other indebtedness of the Borrower to the Banks
under this Agreement to be immediately due and payable, without presentment,
demand, protest, or other notice of any kind, all of which are hereby waived by
the Borrower; provided, however, that (i) if any Event of Default specified in
Section 9.01(a) shall occur and continue to exist for more than ninety (90)
consecutive days, the Administrative Agent shall take such action at the request
of, or may take such action with the consent of, only one of the Banks and
(ii) if any Event of Default specified in Sections 9.01(b) or (c) shall occur
all indebtedness evidenced by the Revolving Credit Notes, and any other
indebtedness of the Borrower to the Banks under this Agreement shall thereupon
become due and payable concurrently therewith, and the Banks' obligations to
lend shall immediately terminate, without any further action by either Bank and
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower. Further, upon the occurrence of an
Event of Default, the Borrower agrees to furnish promptly to the Administrative
Agent such security as the Banks may reasonably request and to execute such
agreements or documents deemed reasonably necessary by the Banks to accomplish
same. The Borrower agrees that the foregoing rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which the Banks may or would otherwise have at law or by any instrument
evidencing terms of deposit of any fund or by an assignment or transfer of
collateral or by any other instrument signed or assented to by the Borrower.
-37-
ARTICLE X.
THE ADMINISTRATIVE AGENT AND THE BANKS
Section 10.01 Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under this
Agreement and the Guaranty as are delegated to the Administrative Agent by the
terms hereof, together with such powers as are reasonably incidental thereto.
The duties of the Administrative Agent shall be mechanical and administrative in
nature and Administrative Agent shall not by reason of this Agreement be a
trustee or fiduciary for any Bank. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth herein. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Revolving Credit Notes and the
Guaranty), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or so refraining from acting)
upon the instructions of both of the Banks (or, if expressly provided herein,
one of the Banks), and such instructions shall be binding upon both of the Banks
and all holders of the Revolving Credit Notes and beneficiaries to the Guaranty;
provided, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or which
is contrary to this Agreement or applicable law.
Section 10.02 Liability of Administrative Agent. Neither the
Administrative Agent nor any of its directors, officers, agents, or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement in the absence of its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as a holder thereof until it receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
it; (b) consult with legal counsel (including counsel for the Borrower),
independent public accountants, and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it or
them in accordance with the advice of such counsel, accountants or experts;
(c) makes no warranty or representation to any Bank and shall not be responsible
to any Bank for any statements, warranties or representations made in or in
connection with this Agreement; (d) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (e) shall not be
responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, perfection, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant thereto; and (f) shall
incur no liability under or in respect to this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be sent
by telegram, telex, or facsimile transmission) believed by it to be genuine and
to be signed by the proper party or parties.
-38-
Section 10.03 Rights of the Administrative Agent as a Bank. With
respect to its Revolving Credit Commitment, the Revolving Loans made by it, and
the Revolving Credit Note issued to it, the Administrative Agent shall have the
same rights and powers under this Agreement as any other Bank and may exercise
the same as though it were not the Administrative Agent and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include the Administrative
Agent in its capacity as a Bank. The Administrative Agent and its affiliates
may accept deposits from, lend money to, act as trustee under indentures of and
generally engage in any kind of business with the Borrower and any person who
may do business with or own securities of the Borrower, all as if it were not
the Administrative Agent without any duty to account therefor to the Banks.
Section 10.04 Independent Credit Decisions. Each Bank acknowledges
that it has, independently and without reliance upon the Administrative Agent,
or any other Bank and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent, or any other Bank 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. The Administrative Agent shall have no duty or responsibility to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrower which may come into the
possession of the Administrative Agent, or any of its affiliates.
Section 10.05 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) ratably
according to the respective amounts of their Revolving Credit Commitments, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way related to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement,
provided that no Bank shall be liable for any portion of any of the foregoing
resulting from the Administrative Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank agrees to reimburse
the Administrative Agent (to the extent not reimbursed by the Borrower) promptly
upon demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Administrative Agent in connection with the
preparation, administration or enforcement of, or legal advice in respect of
rights or responsibilities under this Agreement.
-39-
Section 10.06 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving written notice
thereof to the Banks and the Borrower and the Administrative Agent may be
removed at any time with or without cause by both the Banks. Upon any such
resignation or removal, the Banks acting together shall appoint a successor
Administrative Agent, and shall endeavor to give the Borrower at least ten (10)
days prior written notice of the identity of any such proposed successor
Administrative Agent, but failure to provide such notice, or of the Borrower to
consent to the appointment of such successor Administrative Agent shall not
affect the Banks' right to so appoint a successor Administrative Agent. Until a
successor Administrative Agent shall have been so appointed by the Banks and
shall have accepted such appointment, the Administrative Agent shall continue to
act as such. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed thereto and become vested with all the rights,
powers, privileges, and duties of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
Section 10.07 Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) with respect to the Revolving Loans in excess of its pro
rata share of such payments shared by both Banks, such Bank shall forthwith
purchase from the other Bank such participation in the Revolving Loans made by
it as shall be necessary to cause such purchasing Bank to share the excess
payment ratably with the other Bank; provided, however, if all or any portion of
such excess payment is hereafter recovered from such purchasing Bank, such
purchase from the other Bank shall be rescinded and the other Bank shall repay
to the purchasing Bank the purchase price to the extent of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (a) the amount of such Bank's required prepayment, to (b) the
total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount
recovered. The Borrower agrees that either Bank purchasing a participation from
the other Bank pursuant to this Section 10.07 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
-40-
Section 10.08 Other Transactions with the Borrower. The Banks and
their affiliates may accept deposits from, lend money to, act as trustee under
indentures for and generally engage in any kind of business with the Borrower,
any person who may do business with or own securities of the Borrower or any
Affiliate or Subsidiary of the Borrower, all without any duty to account
therefor to the other parties hereto. Each Bank agrees that the other Bank
shall have no obligation to attempt to collect payments on the Revolving Loans
or with respect to Letters of Credit in preference or priority over the
collection of payments under any other loan to the Borrower or its Affiliates.
Any receipts or collections from the Borrower or any other obligor on the
Revolving Loans when amounts are owing to the recipient on another loan to the
Borrower which cannot reasonably be identified to the Revolving Loans or the
other loan shall be applied pro rata to the Revolving Loans and such other loan
on the basis of the outstanding amount of principal and interest on advances
under the Revolving Loans and such other loan.
Section 10.09 Payments. All payments to be made by Borrower under
this Agreement shall be made to the Administrative Agent and Borrower shall be
under no obligation to make any payments to anyone other than the Administrative
Agent or to allocate, divide or designate any portion of such payments among the
Banks. The Administrative Agent shall have sole responsibility for receiving
payments and making the necessary allocations and transfers to the Banks of
their shares of such payments.
ARTICLE XI.
MISCELLANEOUS
Section 11.01 Expenses. Borrower shall reimburse the Administrative
Agent and the Banks promptly for all reasonable costs and expenses, including
reasonable counsel fees and expenses, incurred by the Administrative Agent and
the Banks in connection with this Agreement and any indebtedness created
hereunder; and for costs and expenses, including reasonable counsel fees and
expenses, of the Administrative Agent and the Banks incident to the enforcement
of any provision of this Agreement, the Revolving Credit Notes, and any other
Financing Documents.
-41-
Section 11.02 Entire Agreement. This Agreement represents the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof; supersedes all prior negotiations between the parties
with respect to the subject matter hereof; cannot be amended, supplemented,
modified or terminated orally (or by any course of conduct or usage of trade)
and may be amended only by an agreement in writing duly executed by authorized
officers of the parties hereto.
Section 11.03 No Waiver; Cumulative Remedies. No course of dealing
and no failure on the part of either of the Banks to exercise and no delay by
either of the Banks in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise by either of the
Banks of any right or power hereunder preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies
herein expressed are cumulative and not exclusive of any other right or remedy
which either of the Banks may have.
Section 11.04 Notices. Any notice or demand to be given hereunder or
any notice or demand on the Revolving Credit Notes or any other document
delivered pursuant to this Agreement shall be duly given if mailed by registered
or certified mail to each of the parties at the addresses specified below and
shall be effective on the date of mailing:
To Fleet At Fleet Bank
10 Fountain Plaza
Buffalo, New York 14202
Attention: Corporate Banking Group
To Marine At Marine Midland Bank
One Marine Midland Center
Buffalo, New York 14203
Attention: Regional Commercial
Banking
with a copy to Phillips, Lytle, Hitchcock,
(which shall not Blaine & Huber
constitute notice) 3400 Marine Midland Center
Buffalo, New York 14203
Attention: Raymond H. Seitz, Esq.
To the Fleet Bank
Administrative 10 Fountain Plaza
Agent At Buffalo, New York 14202
Attention: Corporate Banking Group
-42-
To the Borrower At Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Attention: R.L. Montgomery
Executive Vice President
or to such other address as each party designates to the other in the manner
herein prescribed.
Section 11.05 Governing Law. This Agreement and the acts and
obligations of the parties hereunder shall be construed and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflicts of laws.
Section 11.06 Other Agreements. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any agreement or document executed and delivered in connection herewith, the
terms and conditions of this Agreement shall control.
Section 11.07 Successors and Assigns. This Agreement and all
documents executed pursuant hereto are binding upon and for the benefit of the
Borrower, the Banks, the Administrative Agent, all future holders of the
Revolving Credit Notes and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of the Banks and the
Administrative Agent.
Section 11.08 Set-Off. In addition to any rights and remedies of the
Banks provided by law, each Bank shall have the right, without prior notice to
the Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon the occurrence of any Event of Default,
to set-off and apply against any indebtedness, whether matured or unmatured, of
the Borrower to such Bank, any amount owing from such Bank to the Borrower, at
or at any time after, the happening of such Event of Default.
Section 11.09 WAIVER OF JURY TRIAL. BORROWER AND EACH OF THE BANKS
AND THE ADMINISTRATIVE AGENT HERETO EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY
ON ANY CAUSE OF ACTION DIRECTLY OR INDIRECTLY INVOLVING THE TERMS, COVENANTS OR
CONDITIONS OF THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE
REVOLVING CREDIT NOTES OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH. THE PROVISIONS OF THIS SECTION 11.9 SHALL SURVIVE THE TERMINATION OR
EXPIRATION OF THIS AGREEMENT.
Section 11.10 CONSENT TO JURISDICTION. BORROWER AND EACH OF THE
BANKS AND THE ADMINISTRATIVE AGENT AGREE THAT ANY ACTION OR PROCEEDING TO
ENFORCE OR ARISING OUT OF THIS AGREEMENT MAY BE COMMENCED IN THE SUPREME COURT
OF NEW YORK IN ERIE COUNTY, OR IN THE DISTRICT COURT OF THE UNITED STATES FOR
THE WESTERN DISTRICT OF NEW YORK.
-43-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed as of the day and year first above written.
BANKS:
FLEET BANK
By: /s/ John J. Larry
MARINE MIDLAND BANK
By: /s/ Cary J. Haller
ADMINISTRATIVE AGENT:
FLEET BANK
By: /s/ John J. Larry
BORROWER:
COLUMBUS McKINNON CORPORATION
By: /s/ R. L. Montgomery
BBoe/be
337772.6 -44-
EXHIBIT A
REVOLVING NOTE
$6,250,000.00 Buffalo, New York
August 5, 1996
FOR VALUE RECEIVED, COLUMBUS McKINNON CORPORATION, a New York
corporation (Borrower), promises to pay to the order of ________________________
(Bank) at the office of Fleet Bank, as Administrative Agent, at 10 Fountain
Plaza, Buffalo, New York 14202, or, at the option of the Administrative Agent,
at such other place as may be designated from time to time by the Administrative
Agent, in lawful money of the United States of America, on or before August 5,
1999 (Maturity Date), the lesser of the principal sum of SIX MILLION TWO HUNDRED
FIFTY THOUSAND DOLLARS ($6,250,000.00) or the aggregate unpaid principal amount
of all Loans made by Bank pursuant to the Credit Agreement among Borrower, Fleet
Bank, Marine Midland Bank and Fleet Bank as the Administrative Agent of even
date herewith, as the same may from time to time be amended, supplemented or
otherwise modified (Agreement), together with interest on the unpaid principal
amount hereof at the rates and on the terms set forth in the Agreement. Within
the limits of the Revolving Credit, Borrower may borrow, repay and reborrow.
All capitalized terms used, but not defined in this Note, shall have the
meanings specified in the Agreement.
Interest shall be payable monthly on the first day of each month, on
the Maturity Date, and in the case of LIBOR Loans, on the last day of each
applicable LIBOR Interest Period, if earlier.
The Bank is authorized to inscribe the date of the making of each
Loan, the amount of each Loan, its character as a Prime Loan, or a LIBOR Loan,
the date on which each LIBOR Interest Period shall begin and end, each payment
or prepayment of principal, and the aggregate unpaid principal balance of this
Note, on the schedule on the reverse side hereof and constituting a part hereof,
or on any continuation thereof, which shall be attached hereto and made a part
hereof (Schedule).
Each entry set forth on the Schedule shall be prima facie evidence of
the facts so set forth. No failure by the Bank to make, and no error in making,
any inscription on the Schedule shall affect Borrower's obligation to repay the
full principal amount advanced by Bank to or for the account of Borrower or
Borrower's obligation to pay interest thereon at the agreed upon rate.
If this Note becomes due and payable on a day other than a Business
Day, the maturity hereof shall be extended to the next succeeding Business Day,
-1-
and Borrower will pay interest at the aforesaid rate until the date of actual
receipt of payment by the holder of this Note.
No failure by the holder hereof to exercise, and no delay in
exercising, any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by the holder of any right or power
hereunder preclude any other or further exercise thereof or the exercise of any
other right of power. The rights and remedies of the holder as herein specified
are cumulative and not exclusive of any other rights or remedies which the
holder may otherwise have.
No modification, rescission, waiver, release or amendment of any
provision of this Note shall be made except by a written agreement subscribed by
duly authorized officers of Borrower and the holder hereof.
This Note evidences a borrowing under and is entitled to the benefits
of the Agreement, to which reference is hereby made with respect to interest
rate options and periods, prepayment, waivers of rights to a jury trial,
consents to jurisdiction and rights of acceleration of the principal hereof on
the occurrence of certain events.
Borrower hereby waives diligence, presentment, protest and demand, and
also notice of protest, demand, dishonor and nonpayment of this Note.
Borrower agrees to pay on demand by the Bank all reasonable costs and
expenses incurred by the holder in preserving holder's rights, enforcing this
Note or in collecting the indebtedness evidenced hereby, including, without
limitation, if the holder retains counsel for any such purpose, reasonable
attorneys' fees and expenses.
This Note shall be construed under, and governed by the internal laws
of the State of New York without regard to principles of conflicts of law.
(SEAL) COLUMBUS McKINNON CORPORATION
By ______________________________
(Title)
BB/oe
337772.6
-2-
SCHEDULE
ADVANCES AND REPAYMENTS OF PRINCIPAL
--------------------------------------
===============================================================================
BASIS OF
INTEREST AMOUNT OF
RATE (STATED LIBOR PRINCIPAL OUTSTANDING
AMOUNT OF PRIME RATE OR INTEREST PAID OR PRINCIPAL NOTATION
DATE LOAN OR LIBOR RATE) PERIOD REPAID BALANCE MADE BY
- - ---- --------- -------------- -------- --------- ----------- --------
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
BBsm/337772.6
-3-
SCHEDULE 1.01
PERMITTED LIENS
Liens presently in existence which will remain active after the
Closing are:
Columbus McKinnon Corporation ("CMC"):
1. In favor of Amplicon Financial Corporation and CIT
Corporation securing their financing lease with CMC for
various components of computer hardware and software.
2. In favor of Fleet Trust Company, as Trustee, securing
various sinking and accumulation funds held in connection
with Town of Amherst and City of Cedar Rapids 1993
Adjustable Rate Demand Industrial Revenue Refunding Bonds
(MMars Second Program), Series A (Columbus McKinnon
Corporation Project).
3. In favor of Hunter Oil Corporation securing acquisition of a
250 gallon above-ground oil storage tank which was returned
to Hunter Oil Corporation approximately two weeks ago.
Columbus McKinnon Limited:
4. In favor of Toronto-Dominion Bank to secure all assets in
connection with demand promissory note and term loan
financing currently in place.
LIFT-TECH INTERNATIONAL CRANE & HOISTS, LTD.
5. Secured Party: AVISCAR
Location of Filing: Province of Ontario - Ministry of
Consumer and Commercial Relations
Filing No.: 435781512
Collateral: 1992 Oldsmobile Cutlass
6. Secured Party: IBM CANADA CREDIT INC.
Location of Filing: Province of Ontario - Ministry of
Consumer and Commercial Relations
Filing No.: 002072376
Collateral: Computer Equipment
7. Secured Party: COMMCORP FINANCIAL SERVICES, INC. by
assignment from Norex Leasing Inc.
Location of Filing: Province of Ontario - Ministry of
Consumer and Commercial Relations
Filing No.: 939678894
Collateral: Copier
-1-
LIFT-TECH INTERNATIONAL INC.
8. Secured Party: UNISYS FINANCE CORP.
Location of Filing: Michigan Secretary of State
Filing No.: 454208, 42623, 42760, 914884
Collateral: Computer products
9. Secured Party: GTE LEASING CORPORATION
Location of Filing: Michigan Secretary of State
Filing No.: 527481, 554603
Collateral: Thermal machining center, Galt water
table and engineering package, CNC
plazma software, Northern Telecom PBX
Meridian
10. Secured Party: NORTHWEST EQUIPMENT FINANCE, INC.
Location of Filing: Michigan Secretary of State
Filing No.: 24771, 40456, 878009
Collateral: Various identified equipment including
Okuma Lath Tooling packaging for CNC
50V-Flang, Daewoo Puma 15 Turning
Center, Daewoo Ace V-65 Machining
Center, Monarch Vertical Machining
Center
11. Secured Party: PITNEY BOWES CREDIT CORPORATION
Location of Filing: Michigan Secretary of State
Filing No.: 936490
Collateral: Paragon processor/inserting system
12. Secured Party: ARTHUR MACHINERY, INC.
Location of Filing: Michigan Secretary of State
Filing No.: 993111
Collateral: Miyano MSV-40, CNC Vertical Machining
Center
13. Secured Party: ADVANTA LEASING CORPORATION
Location of Filing: Ohio Secretary of State
Filing No.: AL29597, AK66427
Collateral: Detecto PCS 100 Shipping System, Friden
Alkatel 9130 Al and 7450 Postage Scale,
Tennant 1186E Polly Sweep and Scrubber
Brush
-2-
14. Secured Party: CITIZENS BANKING CO.
Location of Filing: Columbiana County Clerk of the State of
Ohio
Filing No.: 12461
Collateral: Water conditioning equipment
BBor/oe
337772.6
-3-
SCHEDULE 6.06
TAX OBLIGATIONS
None material, except:
As has been reviewed in detail with the Lenders, Internal
Revenue Services is examining the LTI Holdings, Inc. and
Subsidiary federal income tax return for the fiscal years
ended March 31, 1992 and 1993. In connection therewith, the
Company and IRS have reached a mutually acceptable verbal
settlement agreement. The formal written settlement
agreement is in process of being drafted. The Company
believes that all tax liabilities for the years under review
and other years impacted thereby as a result of the
settlement agreement have been reserved by the Company.
BBor/oe
337772.6
-1-
SCHEDULE 6.07
INDEBTEDNESS NOT DISCLOSED ON BORROWER'S
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996
None, except:
Debt incurred hereunder
Liabilities for trade payables and accrued expenses incurred
in the ordinary course of business
BBor/oe
337772.6
-1-
SCHEDULE 6.10
LITIGATION AND PROCEEDINGS
None, except:
I. Columbus McKinnon Corporation
A. Various open liability claims: - see Exhibit A
attached
B. Environmental claims, investigations, litigation, or
administrative procedures
1. Relating to any real estate owned or leased by
Borrower or its Subsidiaries: - see Schedule 6.18
2. Relating to sites other than any real estate owned
or leased by Borrower or its subsidiaries:
a. Pendleton Site - Between August 1969 and June
1977, Borrower sent waste pickle liquor to
the Frontier Chemical Waste Process, Inc.
storage site in Pendleton, New York.
Borrower has been identified by New York
State Department of Environmental
Conservation (NYSDEC) as one of several
responsible parties, and Borrower's
negotiated allocation of the site remedial
costs among the participating PRPs is 12.6%.
The approved remediation project is to
encapsulate all non-site waste and monitor
any future migration. The Borrower's share
of encapsulation construction costs and
applicable legal and engineering costs is
estimated to be a $1.3 million, while future
monitoring costs are expected to be
approximately $403,000.00 over a 30-year
period. Some of these costs will likely be
reimbursed from insurance.
b. Conservation Chemical Matter - The Borrower,
through its Positech Division, sent a small
amount of waste to this Gary, Indiana site.
As such, it is a de minimus contributor, and
its future liability will likely not exceed
$50.00 under the terms of a recent Order on
Consent with the United States Environmental
Protection Agency, recently signed by the
Borrower.
c. Blasdell Site - Borrower was informed by
Waste Management, Inc. that it is one of many
companies that arranged for the disposal of
wastes at a site located in Blasdell, New
York, owned by Waste Management, Inc. The
proposed settlement figure offered by Waste
Management, Inc. is $74,819.00. Borrower is
in the process of negotiating a reduction of
that figure to what it believes is a more
reasonable amount.
-1-
C. Other
Karen Kladius v. Columbus McKinnon Corporation,
April 4, 1995, alleged violation of Equal Pay Act
at the Midland Forge Division facility.
II. Lift-Tech International, Inc.
A. Rock Mudge v. Lift-Tech International, Inc., United
States District Court, Western District of Michigan,
Complaint pursuant to the Americans with Disabilities
Act.
B. Michigan Department of Labor, Bureau of Safety and
Regulation, Citation and Notification of Penalty.
Inspection number 124979071.
C. Product Liability And Other Cases Pending:
1. Darleen Ritter, 7/25/91: Herniated disc while
operating hoist
2. Angel Ortiz et al. v. Duff-Norton Company, Inc.,
et al., Civ. Action No. 95-5970), United States
District Court, Eastern District of Pennsylvania.
Complaint alleges that plaintiff was injured by
molten metal when a bull ladle fell from an
overhead transfer crane. Investigation in the
early stages; may be the responsibility of Duff-Norton Company.
3. Courlands Performance, 12/8/94: Investigation in
the early stages, reserves have not been set.
This is a subrogation case by Courlands workers'
compensation carrier.
4. Helen Collins, 12/18/94: Workers compensation
subrogation case. Probably will close without
payment.
5. Richard Havener, 4/18/95: While lifting a 2200 lb.
mold, a cable came loose from book and claimant
broke four bones in foot and missed 4-5 months of
work.
-2-
6. Bunting, 9/26/95: Hurt back while operating
Budgit hoist.
BBor/oe
337772.6
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EXHIBIT A
TO SCHEDULE 6.10
Listing of open liability claims as of June 1996
SCHEDULE 6.18
ENVIRONMENTAL MATTERS
With specific reference to Section 6.18 of the Credit
Agreement dated as of August 5, 1996, by and among Fleet Bank,
Marine Midland Bank, Fleet Bank as Administrative Agent and
Columbus McKinnon Corporation, Columbus McKinnon Corporation
makes no warranty or representation regarding or in connection
with:
1. The issue of whether the documentation for the
electrical equipment at the Lift Tech Facility, Muskegon Heights,
Michigan ("Michigan Facility") has been completed in compliance
with the TSCA PCB regulations.
2. The issue of the asbestos at the Michigan Facility.
3. The issue of whether the preparation of a Spill
Prevention, Control and Countermeasure (SPCC) Plan at the
Michigan Facility is proper.
4. The issue of whether the development and implementation
of a HWCP/PIPP at the Michigan Facility is proper.
5. The issue of compliance with the exemption under
Rule 290 in regard to the maximum noncarcinogenic VOC emission
rate of 1,000 pounds per month, and records showing same at the
Michigan Facility.
6. The issue of whether the Michigan Facility is in
compliance with, or is a major facility pursuant to, the Clear
Air Act Amendments of 1990 Title V.
7. The issue of whether storage of listed chemicals in
quantities exceeds the thresholds subjecting the Michigan
Facility to the Accidental Release Prevention regulations.
8. The issue of whether the presence and storage of
quantities of EHSs at the Michigan Facility is proper under SARA
Section 302.
9. The issue of whether storage of EHSs above TPQs or RQs
at the Michigan Facility is proper under SARA Title III
Section 304.
10. The issue of whether there is storage of hazardous
substances on-site in quantities above 10,000 lb or of any EHSs
in quantities exceeding their TPQ, and the retention of records
detailing the same for three years, for purposes of compliance
with SARA Title III, Section 312, at the Michigan Facility.
11. The issue of whether the Michigan Facility has
submitted Form Rs, or made the threshold determinations, and
documented same for three years, in compliance with Section 313
of Title III of SARA.
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12. The issue of whether Lift Tech is in compliance with
the small quantity generator hazardous waste regulations at the
Michigan Facility.
13. The issue of whether the Michigan Facility is in
compliance with underground storage tank ("UST") regulations,
including any residual contamination stemming from any former
contents of the 20,100 gallon UST.
14. The issue of any residual contamination regarding or in
connection with the Chip Dumpster at the Michigan Facility.
15. The status of asbestos at the Ohio Facility.
16. The issue of whether the Hazardous Substance
Spills/Incidents Plan at the Ohio Facility is complete.
17. The issue of whether the smog hogs, natural gas-fired
boiler, natural gas-fired space heater, parts washers, and
coolant evaporator at the Ohio Facility qualify for air permit
exemptions.
18. The issue of whether the storm water pollution
prevention plan at the Ohio Facility is complete.
19. The issue of PRP status in connection with shipments of
certain wastes to the Frontier Chemical Royal Avenue Site in
Niagara Falls, New York, from the Ohio Facility.
20. The issue of soil contamination associated with the
former USTs at the Ohio Facility.
21. Any information set forth in the following documents
regarding the Chester Hoist Chip Hopper Remediation at the Ohio
Facility:
. July 25, 1995 Letter to Jim Mallon from Montgomery
Watson with proposal for general environmental
consulting services;
. Waste Characterization Data for Chester Hoist by
BFI Waste Systems for disposal of dirt and
concrete stained with waste oil, dated 8/3/95;
. Laboratory Analysis Report, dated 8/10/95 by
Caschem Laboratories, Inc. to Montgomery Watson re
Soil Sample from Chester Hoist, consisting of 3
pages;
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. Scope of Work for General Contractor, dated
8/24/95;
. Project Approach, consisting of seven step
approach to address stained soil, dated 9/95;
. Chip Handling System Revision, dated 8/23/95;
. Letter dated 8/31/95 to Chester Hoist from J.
Herbert Construction Company, Inc. re proposal for
dumpster building;
. Proposal and Scope of Work to Bob Burkey from
Voorheis and Company, Inc. dated 9/14/95 re Scope
of Work and Proposal.
. Letter to Jim Mallon from John Woodruff,
Montgomery Watson, dated September 21, 1995, re
proposal to provide oversite of impacted soil
excavation at the chip hopper.
. Facsimile to Courtney Price from J.R. Burkey,
dated September 21, 1995, re evaluation of
proposals for Chip Hopper Remediation, with
attached proposal from Hal Jones Construction
Company, dated September 20, 1995, and disposal
agreement with BFI.
. Memorandum by facsimile from Robert R. Kimmel to
Jane Jablons at Kelly Drye and Warren, dated
September 27, 1995, re chip hopper remediation.
. Memorandum by facsimile from Robert R. Kimmel to
Jane Jablons at Kelly Drye and Warren, dated
September 28, 1995, re chip hopper remediation.
. Letter to Robert Kimmel from Courtney M. Price,
dated October 18, 1995 re reimbursement for
cleanup costs associated with scrap metal hopper.
22. The issue of the in-place closure of a concrete
underground storage tank located at the Lexington Facility,
located at State Road 22A, Lexington, Tennessee, which was taken
out of service and filled with compacted sand in accordance with
all applicable rules, regulations and statutes.
23. The issue of the possible migration of petroleum
contaminants onto a portion of the Borrower's Durbin Durco
Facility, located at 113 21st Avenue, S.W., Reform, Alabama, from
the James River Timber Corporation property located immediately
East of the Reform Facility.
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24. The issue of whether Borrower's facility located in
Lexington, Tennessee is in compliance with, or is a major
facility pursuant to the Clean Air Act Amendments of 1990 Title
V, as well as certain applicable Tennessee state air
requirements.
25. The issue of an amended closure plan that has been
submitted to the United States Environmental Protection Agency
(USEPA) Region VII with respect to remediation of hazardous waste
at the Positech Facility, located on Walnut Street in Laurens,
Iowa. Estimated cost of implementing the amended closure plan is
$31,000. USEPA has responded, and the Borrower is in the process
of revising the closure plan.
26. The issue of an observed oily sheen at the Borrower's
Damascus Facility, located at the Hoist Division, Route 1 Box 41,
Damascus, Virginia, that has been investigated. Borrower is in
the process of negotiating with the technical consultant to
remediate a small area of site contamination. Estimated cost of
completing the recommended remedial activities is between $70,000
and $100,000.
27. The environmental compliance matters, and matters
regarding environmental conditions, at the Michigan and Ohio
facilities and at the Cambridge, Ontario, Canada, facility, as
the case may be, to the extent such matters or conditions are
described in the documents listed in A, B or C below. For
purposes of the preceding sentence, mere citations to documents
shall not be considered descriptions of matters or conditions.
A. Phase I Environmental Site Assessment Report for
Lift-Tech International, Inc., 414 Broadway Avenue, Muskegon
Heights, Michigan, Project No. 011110111, prepared by Groundwater
Technology, Inc., dated June 28, 1995.
B. Phase I Environmental Site Assessment Report for
Chester Hoist, 7573 State Road, 45 North, Lisbon, Ohio, dated
June 28, 1995, Project No. 011110111, prepared by Groundwater
Technology, Inc.
C. Phase I Environmental Site Assessment Report for
Lift-Tech International Cranes and Hoist, Ltd., Cambridge,
Ontario, Canada Facility, 53-D Cowansville Raid, Project No.
011110111, prepared by Groundwater Technology, Inc., dated
June 28, 1995.
BBor/oe
337772.6
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PAGE
SCHEDULE 8.01
INDEBTEDNESS
Present Indebtedness of Columbus McKinnon Corporation ("CMC") and
its Subsidiaries which will survive the Closing is as follows:
1. Industrial Development Revenue Bonds payable by CMC to
various holders secured by Marine Midland Bank letter of
credit dated November 3, 1993
2. Employee Stock Ownership Plan term loan guaranteed by CMC
payable to:
Fleet Bank and Marine Midland Bank dated March 31, 1993
as amended October 27, 1994 and November 2, 1995.
BBor/oe
337772.6