EXHIBIT 10.1
$12,500,000 TERM LOAN
CREDIT AGREEMENT
by and among
CHAMPION INDUSTRIES, INC.
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, As Agent
Dated as of March 31, 1997
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TABLE OF CONTENTS
SECTION PAGE
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1. CERTAIN DEFINITIONS............................................1
1.1 Certain Definitions........................................1
1.2 Construction..............................................12
1.2.1 Number; Inclusion...................................12
1.2.2 Determination.......................................12
1.2.3 Agent's Discretion and Consent......................12
1.2.4 Documents Taken as a Whole..........................13
1.2.5 Headings............................................13
1.2.6 Implied References to this Agreement................13
1.2.7 Persons.............................................13
1.2.8 Modifications to Documents..........................13
1.3 Accounting Principles.....................................14
2. TERM LOAN.....................................................14
2.1 Term Loan Commitments.....................................14
2.2 Nature of Banks' Obligations with Respect
to the Term Loan........................................14
2.3 Term Notes................................................15
2.4 Use of Proceeds...........................................15
3. INTEREST RATES................................................15
3.1 Euro-Rate.................................................15
3.2 Interest Periods..........................................15
3.2.1 Initial Period......................................15
3.2.2 Subsequent Periods..................................16
3.2.3 Rate Quotations.....................................16
3.2.4 Ending Date and Business Day........................16
3.2.5 Termination Before Expiration Date..................16
3.3 Interest After Default....................................16
3.4 Euro-Rate Unascertainable.................................17
3.4.1 Unascertainable.....................................17
3.4.2 Illegality; Increased Costs; Deposits
Not Available.....................................17
3.4.3 Agent's and Bank's Rights...........................17
4. PAYMENTS......................................................18
4.1 Payments..................................................18
4.2 Pro Rata Treatment of Banks...............................18
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4.3 Interest Payment Dates....................................18
4.4 Prepayments...............................................19
4.4.1 Right to Prepay.....................................19
4.4.2 Change of Lending Office............................20
4.5 Additional Compensation in Certain Circumstances..........20
4.5.1 Increased Costs or Reduced Return Resulting
From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc.......................20
4.5.2 Indemnity and Compensation..........................21
5. REPRESENTATIONS AND WARRANTIES................................21
5.1 Representations and Warranties............................21
5.1.1 Organization and Qualification......................22
5.1.2 Capitalization and Ownership........................22
5.1.3 Subsidiaries........................................22
5.1.4 Power and Authority.................................22
5.1.5 Validity and Binding Effect.........................23
5.1.6 No Conflict.........................................23
5.1.7 Litigation..........................................23
5.1.8 Title to Properties.................................24
5.1.9 Financial Statements................................24
5.1.10 Use of Proceeds; Margin Stock......................25
5.1.11 Full Disclosure....................................25
5.1.12 Taxes..............................................25
5.1.13 Consents and Approvals.............................25
5.1.14 No Event of Default; Compliance with Instruments...26
5.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.....26
5.1.16 Insurance..........................................26
5.1.17 Compliance with Laws...............................26
5.1.18 Material Contracts; Burdensome Restrictions........27
5.1.19 Investment Companies; Regulated Entities...........27
5.1.20 Plans and Benefit Arrangements.....................27
5.1.21 Employment Matters.................................28
5.1.22 Environmental Matters..............................29
5.1.23 Senior Debt Status.................................30
5.2 Updates to Schedules......................................30
6. CONDITIONS OF LENDING.........................................30
6.1 Officer's Certificate.....................................31
6.2 Secretary's Certificate...................................31
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6.3 Subsidiaries Guaranty.....................................31
6.4 Opinion of Counsel........................................32
6.5 Legal Details.............................................32
6.6 Payment of Fees...........................................32
6.7 Officer's Certificate Regarding MACs......................32
6.8 No Violation of Laws......................................32
6.9 No Actions or Proceedings.................................33
7. COVENANTS.....................................................33
7.1 Affirmative Covenants.....................................33
7.1.1 Preservation of Existence, Etc......................33
7.1.2 Payment of Liabilities, Including Taxes, Etc........33
7.1.3 Maintenance of Insurance............................34
7.1.4 Maintenance of Properties and Leases................34
7.1.5 Maintenance of Patents, Trademarks, Etc.............34
7.1.6 Visitation Rights...................................34
7.1.7 Keeping of Records and Books of Account.............34
7.1.8 Plans and Benefit Arrangements......................35
7.1.9 Compliance with Laws................................35
7.1.10 Use of Proceeds....................................35
7.2 Negative Covenants........................................36
7.2.1 Indebtedness........................................36
7.2.2 Liens...............................................36
7.2.3 Guaranties..........................................37
7.2.4 Loans and Investments...............................37
7.2.5 Liquidations, Mergers, Consolidations
and Acquisitions..................................37
7.2.6 Dispositions of Assets or Subsidiaries..............38
7.2.7 Affiliate Transactions..............................39
7.2.8 Continuation of or Change in Business...............39
7.2.9 Plans and Benefit Arrangements......................39
7.2.10 Fiscal Year........................................40
7.2.11 Issuance of Stock..................................40
7.2.12 Changes in Organizational Documents................41
7.2.13 Capital Expenditures and Leases....................41
7.2.14 Minimum Fixed Charge Coverage Ratio................41
7.2.15 Maximum Leverage Ratio.............................41
7.2.16 Minimum Tangible Net Worth.........................41
7.3 Reporting Requirements....................................42
7.3.1 Quarterly Financial Statements......................42
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7.3.2 Annual Financial Statements.........................42
7.3.3 Certificate of the Borrower.........................43
7.3.4 Notice of Default...................................43
7.3.5 Notice of Litigation................................43
7.3.6 Certain Events......................................43
7.3.7 Budgets, Forecasts, Other Reports and Information...43
7.3.8 Notices Regarding Plans and Benefit Arrangements....43
8. DEFAULT.......................................................46
8.1 Events of Default.........................................46
8.1.1 Payments Under Loan Documents.......................46
8.1.2 Breach of Warranty..................................46
8.1.3 Breach of Negative Covenants or Visitation Rights...46
8.1.4 Breach of Other Covenants...........................46
8.1.5 Defaults in Other Agreements or Indebtedness........47
8.1.6 Final Judgments or Orders...........................47
8.1.7 Loan Document Unenforceable.........................47
8.1.8 Uninsured Losses; Proceedings Against Assets........47
8.1.9 Notice of Lien or Assessment........................47
8.1.10 Insolvency.........................................48
8.1.11 Events Relating to Plans and Benefit Arrangements..48
8.1.12 Cessation of Business..............................48
8.1.13 Change of Control..................................49
8.1.14 Involuntary Proceedings............................49
8.1.15 Voluntary Proceedings..............................49
8.2 Consequences of Event of Default..........................50
8.2.1 Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings..........50
8.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings.......................................50
8.2.3 Set-off.............................................50
8.2.4 Suits, Actions, Proceedings.........................51
8.2.5 Application of Proceeds.............................51
9. THE AGENT.....................................................52
9.1 Appointment...............................................52
9.2 Delegation of Duties......................................52
9.3 Nature of Duties; Independent Credit Investigation........53
9.4 Actions in Discretion of Agent; Instructions from
the Banks...............................................53
9.5 Reimbursement and Indemnification of Agent
by the Borrower.........................................54
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9.6 Exculpatory Provisions; Limitation of Liability...........55
9.7 Reimbursement and Indemnification of Agent by Banks.......56
9.8 Reliance by Agent.........................................56
9.9 Notice of Default.........................................56
9.10 Notices..................................................57
9.11 Banks in Their Individual Capacities.....................57
9.12 Holders of Notes.........................................57
9.13 Equalization of Banks....................................58
9.14 Successor Agent..........................................58
9.15 Agent's Fee..............................................59
9.16 Calculations.............................................59
9.17 Beneficiaries............................................59
10. MISCELLANEOUS................................................59
10.1 Modifications, Amendments or Waivers.....................59
10.1.1 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms
of Payment......................................60
10.1.2 Release of Guarantor..............................60
10.1.3 Miscellaneous.....................................60
10.2 No Implied Waivers; Cumulative Remedies;
Writing Required.......................................60
10.3 Reimbursement and Indemnification of Banks
by the Borrower; Taxes.................................61
10.4 Holidays.................................................62
10.5 Notices..................................................62
10.6 Severability.............................................62
10.7 Governing Law............................................63
10.8 Prior Understanding......................................63
10.9 Duration; Survival.......................................63
10.10 Successors and Assigns..................................63
10.11 Confidentiality.........................................64
10.12 Counterparts............................................64
10.13 Agent's or Bank's Consent...............................64
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10.14 Exceptions..............................................64
10.15 Consent To Forum; Waiver Of Jury Trial..................65
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE
SCHEDULE 1.1(B)-COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(P)-PERMITTED LIENS
SCHEDULE 5.1.2-CAPITALIZATION
SCHEDULE 5.1.3-SUBSIDIARIES, PARTNERSHIPS AND LLC INTERESTS
SCHEDULE 5.1.20-EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 5.1.22-ENVIRONMENTAL DISCLOSURES
SCHEDULE 7.2.1-PERMITTED INDEBTEDNESS
EXHIBITS
EXHIBIT 1.1(G)-SUBSIDIARIES GUARANTY
EXHIBIT 1.1(T)-TERM NOTE
EXHIBIT 7.3.3-QUARTERLY COMPLIANCE CERTIFICATE
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of March 31, 1997, and is
made by and among CHAMPION INDUSTRIES, INC., a West Virginia
corporation, ("Borrower"), the BANKS (as hereinafter defined), and
PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the
Banks under this Agreement (hereinafter referred to in such
capacity as the "Agent").
WITNESSETH:
WHEREAS, pursuant to a Time/Term Note dated December 30, 1996,
as amended by an Amended and Restated Time/Term Note dated January
31, 1997 and a Second Amended and Restated Time/Term Note dated
February 28, 1997 (as amended, the "Bridge Note"), PNC Bank
provided $8,500,000.00 in bridge financing to the Borrower (the
"Bridge Loan") to fund the acquisition by the Borrower of all of
the capital stock of Interform Corporation; and
WHEREAS, all principal and interest and any other amounts owed
by the Borrower under the Bridge Note are due and payable on March
31, 1997; and
WHEREAS, the Borrower has requested the Banks to provide a
term loan to the Borrower in an aggregate principal amount of up to
Twelve Million Five Hundred Thousand Dollars ($12,500,000) for the
purpose of refinancing the Bridge Loan and other existing unsecured
indebtedness of the Borrower; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending
to be legally bound hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in
this Agreement, the following words and terms shall have the
following meanings, respectively, unless the context hereof clearly
requires otherwise:
Affiliate as to any Person shall mean any other Person
(i) which directly or indirectly controls, is controlled by, or is
under common control with such Person, (ii) which beneficially owns
or holds 5% or more of any class of the voting or other equity
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interests of such Person, or (iii) 5% or more of any class of
voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as
used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership
of voting securities, by contract or otherwise, including the power
to elect a majority of the directors or trustees of a corporation
or trust, as the case may be.
Agent shall mean PNC Bank, National Association, and
its successors and assigns.
Agent's Fee shall have the meaning assigned to that
term in Section 9.15.
Agreement shall mean this Credit Agreement, as the same
may be supplemented or amended from time to time, including all
schedules and exhibits.
Annual Statements shall have the meaning assigned to
that term in Section 5.1.9(i).
Authorized Officer shall mean those individuals,
designated by written notice to the Agent from the Borrower,
authorized to execute notices, reports and other documents on
behalf of the Borrower required hereunder. The Borrower may amend
such list of individuals from time to time by giving written notice
of such amendment to the Agent.
Banks shall mean the financial institutions named on
Schedule 1.1(B) and their respective successors and assigns as
permitted hereunder, each of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest
rate per annum announced from time to time by PNC Bank at its
Principal Office as its then prime rate, which rate may not be the
lowest rate then being charged commercial borrowers by the Bank, or
(ii) the Federal Funds Effective Rate plus 0.5% per annum.
Benefit Arrangement shall mean at any time an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, which
is neither a Plan nor a Multiemployer Plan and which is maintained,
sponsored or otherwise contributed to by any member of the ERISA
Group.
Borrower shall have the meaning given in the recitals
to this Agreement.
Business Day shall mean any day other than a Saturday
or Sunday or a legal holiday on which commercial banks are
authorized or required to be closed for business in Pittsburgh,
Pennsylvania and on which dealings in dollar deposits are carried
on in the London interbank market.
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Closing Date shall mean the Business Day on which the
Term Loan shall be made, which shall be March 31, 1997, or such
other time and place as the parties agree.
Consideration shall mean with respect to any Permitted
Acquisition, the aggregate of (i) the net present value paid by any
of the Borrower, directly or indirectly, to the seller in
connection therewith, (ii) the Indebtedness incurred or assumed by
any of the Borrower, whether in favor of the seller or otherwise
and whether fixed or contingent, (iii) any Guaranty given or
incurred by the Borrower in connection therewith, (iv) 50% of the
value of stock transferred, and (v) the net present value of any
other consideration given or obligation incurred by the Borrower in
connection therewith.
Consolidated Cash Flow From Operations for any period
of determination shall mean the sum of net income, depreciation,
amortization, other non-cash charges to net income, interest
expense and cash income tax expense minus non-cash credits to net
income, all measured on a rolling four quarters basis in each case
of the Borrower and its Subsidiaries for such period determined and
consolidated in accordance with GAAP.
Consolidated Tangible Net Worth shall mean as of any
date of determination total stockholders' equity less intangible
assets of the Borrower and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP.
Dollar, Dollars, U.S. Dollars and the symbol $ shall
mean lawful money of the United States of America.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal or property
damage or natural resource damage or equitable relief, order,
notice of violation, citation, request for information issued
pursuant to any Environmental Laws by an Official Body, subpoena or
other written notice of any type relating to, arising out of, or
issued pursuant to, any of the Environmental Laws or any
Environmental Conditions, as the case may be.
Environmental Conditions shall mean any conditions of
the environment, including the workplace, the ocean, natural
resources (including flora or fauna), soil, surface water,
groundwater, any actual or potential drinking water supply sources,
substrata or the ambient air, relating to or arising out of, or
caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping,
emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of
Regulated Substances resulting from the use of, or operations on,
any Property.
Environmental Laws shall mean all federal, state, local
and foreign Laws and regulations, including permits, licenses,
authorizations, bonds, orders, judgments, and consent decrees
issued, or entered into, pursuant thereto, relating to pollution or
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protection of human health or the environment or employee safety in
the workplace.
ERISA shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended or supplemented from time
to time, and any successor statute of similar import, and the rules
and regulations thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members
of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other
entities which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
Euro-Rate shall mean with respect to the Term Loan, the
interest rate per annum for any Interest Period determined by the
Agent by dividing (the resulting quotient rounded upward to the
nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Agent in accordance with its usual procedures
(which determination shall be conclusive and binding upon the
Borrower, absent manifest error on the part of the Agent) to be
equal to the offered rates for deposits in Dollars for the
applicable Euro-Rate Interest Period which appears on Page 3750 of
the TELERATE rate reporting system or other similar system as of
approximately 11:00 a.m. Greenwich Mean Time, two (2) Business Days
prior to the first day of such Euro-Rate Interest Period for an
amount comparable to such Loan and having a borrowing date and a
maturity comparable to such Interest Period by (ii) a number equal
to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may
also be expressed by the following formula:
Euro Rate = Offered rate on TELERATE Page 3750
-----------------------------------
1.00 - Euro-Rate Reserve Percentage
If more than one offered rate appears on Page 3750 of the TELERATE
reporting system or similar system, the rate will be the arithmetic
mean of such offered rates. The Euro-Rate shall be adjusted with
respect to the balance of the Term Loan outstanding on the
effective date of any change in the Euro-Rate Reserve Percentage as
of such effective date. The Agent shall give prompt notice to the
Borrower of the Euro-Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest
error.
Euro-Rate Reserve Percentage shall mean the maximum
percentage (expressed as a decimal rounded upward to the nearest
1/100 of 1%) as determined by the Agent which is in effect during
any relevant period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the
reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency Liabilities") of a
member bank in such System.
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Event of Default shall mean any of the events described
in Section 8.1 and referred to therein as an "Event of Default."
Federal Funds Effective Rate for any day shall mean the
rate per annum (based on a year of 360 days and actual days elapsed
and rounded upward to the nearest 1/100 of 1%) announced by the
Federal Reserve Bank of New York (or any successor) on such day as
being the weighted average of the rates on overnight federal funds
transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank
(or any successor) in substantially the same manner as such Federal
Reserve Bank computes and announces the weighted average it refers
to as the "Federal Funds Effective Rate" as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its
successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.
Financial Projections shall have the meaning assigned
to that term in Section 5.1.9(i).
Fixed Charge Coverage Ratio shall mean the ratio of
Consolidated Cash Flow from Operations to Fixed Charges.
GAAP shall mean generally accepted accounting
principles as are in effect from time to time, subject to the
provisions of Section 1.3, and applied on a consistent basis both
as to classification of items and amounts.
Guaranty of any Person shall mean any obligation of
such Person guaranteeing or in effect guaranteeing any liability or
obligation of any other Person in any manner, whether directly or
indirectly, including any performance bond or other suretyship
arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or
collection in the ordinary course of business and indemnities.
Indebtedness shall mean, as to any Person at any time,
any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, or joint or several) of such
Person for or in respect of: (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any letter of credit, currency swap
agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device, (iv) any other transaction
(including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of
a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade
payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note or other
evidence of indebtedness and which are not more than thirty (30)
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days past due), or (v) any Guaranty of Indebtedness for borrowed
money.
Ineligible Security shall mean any security which may
not be underwritten or dealt in by member banks of the Federal
Reserve System under Section 16 of the Banking Act of 1933 (12
U.S.C. Section 24, Seventh), as amended.
Insolvency Proceeding shall mean, with respect to any
Person, (a) case, action or proceeding with respect to such Person
(i) before any court or any other Official Body under any
bankruptcy, insolvency, reorganization or other similar Law now or
hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of the Borrower or otherwise relating to
liquidation, dissolution, winding-up or relief of such Person, or
(b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar
arrangement in respect of such Person's creditors generally or any
substantial portion of its creditors, undertaken under any Law.
Interest Period shall have the meaning assigned to such
term in Section 3.2.
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time
to time, and any successor statute of similar import, and the rules
and regulations thereunder, as from time to time in effect.
Labor Contracts shall mean all employment agreements,
employment contracts, collective bargaining agreements and other
agreements among the Borrower or any Subsidiary of the Borrower and
its employees.
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance,
opinion, release, ruling, order, injunction, writ, decree or award
of any Official Body.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, whether voluntarily or
involuntarily given, including any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or
lease intended as, or having the effect of, security and any filed
financing statement or other notice of any of the foregoing
(whether or not a lien or other encumbrance is created or exists at
the time of the filing).
LLC Interests shall have the meaning given to such term
in Section 5.1.3.
Loan Documents shall mean this Agreement, the Term
Notes, and any other instruments, certificates or documents
delivered or contemplated to be delivered hereunder or thereunder
or in connection herewith or therewith, as the same may be
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supplemented or amended from time to time in accordance herewith or
therewith, and Loan Document shall mean any of the Loan Documents.
Material Adverse Change shall mean any set of
circumstances or events which (a) has or could reasonably be
expected to have any material adverse effect whatsoever upon the
validity or enforceability of this Agreement or any other Loan
Document, (b) is or could reasonably be expected to be material and
adverse to the business, properties, assets, financial condition,
results of operations of the Borrower and its Subsidiaries taken as
a whole, (c) impairs materially or could reasonably be expected to
impair materially the ability of the Borrower and its Subsidiaries
taken as a whole to duly and punctually pay or perform their
Indebtedness, or (d) impairs materially or could reasonably be
expected to impair materially the ability of the Agent or any of
the Banks, to the extent permitted, to enforce their legal remedies
pursuant to this Agreement or any other Loan Document.
Maturity Date shall mean April 1, 2004.
Month, with respect to an Interest Period, shall mean
the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period.
If any Interest Period begins on a day of a calendar month for
which there is no numerically corresponding day in the month in
which such Interest Period is to end, the final month of such
Interest Period shall be deemed to end on the last Business Day of
such final month.
Multiemployer Plan shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA and to which any Borrower or any member
of the ERISA Group is then making or accruing an obligation to make
contributions or, within the preceding five Plan years, has made or
had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two
or more contributing sponsors (including any Borrower or any member
of the ERISA Group) at least two of whom are not under common
control, as such a plan is described in Sections 4063 and 4064 of
ERISA.
Notices shall have the meaning assigned to that term in
Section 10.5.
Obligation shall mean any obligation or liability of
the Borrower to the Agent or any of the Banks, howsoever created,
arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due,
under or in connection with this Agreement, the Term Notes, or any
other Loan Document.
Official Body shall mean any national, federal, state,
local or other government or political subdivision or any agency,
authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or
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arbitrator, in each case whether foreign or domestic.
Partnership Interests shall have the meaning given to
such term in Section 5.1.3.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA
or any successor.
Permitted Acquisition shall have the meaning assigned
to such term in Section 7.2.5.
Permitted Investments shall mean:
(i) direct obligations of the United States of
America or any agency or instrumentality thereof or obligations
backed by the full faith and credit of the United States of America
maturing in twelve (12) months or less from the date of
acquisition;
(ii) commercial paper maturing in 180 days or less
rated not lower than A-1, by Standard & Poor's or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. on the date of acquisition;
(iii) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose
obligations are rated A-1, A or the equivalent or better by
Standard & Poor's on the date of acquisition; and
(iv) Investments shown on Schedule 1.1(P).
Permitted Liens shall mean:
(i) Liens, security interests and mortgages in favor
of the Agent for the benefit of the Banks party to this Agreement;
(ii) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet
due and payable;
(iii) Pledges or deposits made in the ordinary course
of business to secure payment of workmen's compensation, or to
participate in any fund in connection with workmen's compensation,
unemployment insurance, old-age pensions or other social security
programs;
(iv) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the
ordinary course of business that are not yet due and payable and
Liens of landlords securing obligations to pay lease payments that
are not yet due and payable or in default;
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(v) Good-faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or
leases, not in excess of the aggregate amount due thereunder, or to
secure statutory obligations, or surety, appeal, indemnity,
performance or other similar bonds required in the ordinary course
of business;
(vi) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none
of which materially impairs the use of such property or the value
thereof, and none of which is violated in any material respect by
existing or proposed structures or land use;
(vii) Liens on property leased by the Borrower or any
Subsidiary of the Borrower under capital and operating leases
permitted in Section 7.2.13 securing obligations of the Borrower or
any Subsidiary of the Borrower to the lessor under such leases;
(viii) Any Lien existing on the date of this Agreement
and described on Schedule 1.1(P), as the debt underlying such Lien
may be refinanced or replaced (but the principal amount secured
thereby is not hereafter increased, and no additional assets become
subject to such Lien) and a replacement Lien placed thereon;
(ix) Purchase Money Security Interests, provided that
the aggregate amount of loans and deferred payments secured by such
Purchase Money Security Interests shall not exceed $1,500,000 and
any replacement or renewal thereof as long as the principal amount
secured thereby is not increased and no additional assets become
subject to such Lien (excluding for the purpose of this computation
any loans or deferred payments secured by Liens described on
Schedule 1.1(P));
(x) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful
proceedings diligently conducted so long as levy and execution
thereon have been stayed and continue to be stayed or (B) if a
final judgment is entered and such judgment is discharged within
thirty (30) days of entry, and in either case they do not, in the
aggregate, materially impair the ability of the Borrower to perform
its Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty,
provided that the Borrower maintains such reserves or other
appropriate provisions as shall be required by GAAP and pays all
such taxes, assessments or charges forthwith upon the commencement
of proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property, including any
attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; or
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(3) Claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual Liens.
(4) Liens resulting from final judgments or
orders described in Section 8.1.6; and
Person shall mean any individual, corporation,
partnership, limited liability company, association, joint-stock
company, trust, unincorporated organization, joint venture,
government or political subdivision or agency thereof, or any other
entity.
Plan shall mean at any time an employee pension benefit
plan (including a Multiple Employer Plan, but not a Multiemployer
Plan) which is covered by Title IV of ERISA or is subject to the
minimum funding standards under Section 412 of the Internal Revenue
Code and either (i) is maintained by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained by any entity
which was at such time a member of the ERISA Group for employees of
any entity which was at such time a member of the ERISA Group.
PNC Bank shall mean PNC Bank, National Association, its
successors and assigns.
Potential Default shall mean any event or condition
which with notice, passage of time or a determination by the Agent
or the Required Banks, or any combination of the foregoing, would
constitute an Event of Default.
Principal Office shall mean the main banking office of
the Agent in Pittsburgh, Pennsylvania.
Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code
or Section 406 of ERISA for which neither an individual nor a class
exemption has been issued by the United States Department of Labor.
Property shall mean all real property, both owned and
leased, of the Borrower or any Subsidiary of the Borrower.
Purchase Money Security Interest shall mean Liens upon
tangible property securing loans to the Borrower or any Subsidiary
of the Borrower or deferred payments by the Borrower or any
Subsidiary of the Borrower for the purchase of such tangible
property.
Ratable Share shall mean the proportion that a Bank's
Commitment bears to the Commitments of all of the Banks.
Ratio shall mean the ratio of the Borrower's Total
Senior Indebtedness to Earnings Before Interest, Taxes,
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Depreciation, and Amortization ("EBITDA"). For purposes of the
Ratio, Total Senior Indebtedness shall be measured as of the end of
each fiscal quarter and EBITDA shall be measured as of the end of
each fiscal quarter for the previous four fiscal quarters.
Regulated Substances shall mean any substance,
including any solid, liquid, semisolid, gaseous, thermal, thoriated
or radioactive material, refuse, garbage, wastes, chemicals,
petroleum products, by-products, coproducts, impurities, dust,
scrap, heavy metals, defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic
substance," "extremely hazardous substance," "toxic chemical,"
"toxic waste," "hazardous waste," "industrial waste," "residual
waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," or
"regulated substance" or any related materials, substances or
wastes as now or hereafter defined pursuant to any Environmental
Laws, ordinances, rules, regulations or other directives of any
Official Body, the generation, manufacture, extraction, processing,
distribution, treatment, storage, disposal, transport, recycling,
reclamation, use, reuse, spilling, leaking, dumping, injection,
pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the
Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve
System, as amended from time to time.
Reportable Event shall mean a reportable event
described in Section 4043 of ERISA and regulations thereunder with
respect to a Plan or Multiemployer Plan.
Required Banks shall mean Banks whose Commitments
aggregate at least 66 2/3% of the Commitments of all of the Banks.
Section 20 Subsidiary shall mean the Subsidiary of the
bank holding company controlling any Bank, which Subsidiary has
been granted authority by the Federal Reserve Board to underwrite
and deal in certain Ineligible Securities.
Shares shall have the meaning assigned to that term in
Section 5.1.2.
Standard & Poor's shall mean Standard & Poor's Ratings
Services.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which more than 50% (by number of shares or
number of votes) of the outstanding capital stock or shares of
beneficial interest normally entitled to vote for the election of
one or more directors or trustees (regardless of any contingency
which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of
such Person's Subsidiaries, (ii) any partnership of which such
Person is a general partner or of which more than 50% or more of
the partnership interests is at the time directly or indirectly
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owned by such Person or one or more of such Person's Subsidiaries,
(iii) any limited liability company of which such Person is a
member or of which more than 50% of the limited liability company
interests is at the time directly or indirectly owned by such
Person or one or more of such Person's Subsidiaries or (iv) any
corporation, trust, partnership, limited liability company or other
entity which is controlled or capable of being controlled by such
Person or one or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to
that term in Section 5.1.3.
Term Loan shall have the meaning assigned to that term
in Section 2.1.
Term Notes shall mean collectively and Term Note shall
mean separately all of the Term Notes of the Borrower in the form
of Exhibit 1.1(T) evidencing the Term loan together with all
amendments, extensions, renewals, replacements refinancings or
refunds thereof in whole or in part.
Total Senior Indebtedness shall mean as to the Borrower
and all of its Subsidiaries, the sum of all borrowed money and all
reimbursement obligations under any letters of credit.
1.2 Construction.
Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this
Agreement and each of the other Loan Documents:
1.2.1 Number; Inclusion.
references to the plural include the singular, the plural, the part
and the whole; "or" has the inclusive meaning represented by the
phrase "and/or," and "including" has the meaning represented by the
phrase "including without limitation";
1.2.2 Determination.
references to "determination" of or by the Agent or the Banks shall
be deemed to include good-faith estimates by the Agent or the Banks
(in the case of quantitative determinations) and good-faith beliefs
by the Agent or the Banks (in the case of qualitative
determinations) and such determination shall be conclusive absent
manifest error;
1.2.3 Agent's Discretion and Consent.
whenever the Agent or the Banks are granted the right herein to act
in its or their sole discretion or to grant or withhold consent
such right shall be exercised reasonably and in good faith;
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1.2.4 Documents Taken as a Whole.
the words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document;
1.2.5 Headings.
the section and other headings contained in this Agreement or such
other Loan Document and the Table of Contents (if any), preceding
this Agreement or such other Loan Document are for reference
purposes only and shall not control or affect the construction of
this Agreement or such other Loan Document or the interpretation
thereof in any respect;
1.2.6 Implied References to this Agreement.
article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the
case may be, unless otherwise specified;
1.2.7 Persons.
reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement or such other Loan Document, as the
case may be, and reference to a Person in a particular capacity
excludes such Person in any other capacity; and
1.2.8 Modifications to Documents.
reference to any agreement (including this Agreement and any other
Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for,
superseded or restated.
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1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to
this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all
accounting or financial terms shall have the meanings ascribed to
such terms by GAAP; provided, however, that all accounting terms
used in Section 7.2 (and all defined terms used in the definition
of any accounting term used in Section 7.2 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on
the date hereof applied on a basis consistent with those used in
preparing the Annual Statements referred to in Section 5.1.9). In
the event of any change after the date hereof in GAAP, and if such
change would result in the inability to determine compliance with
the financial covenants set forth in Section 7.2 based upon the
Borrower's regularly prepared financial statements by reason of the
preceding sentence, then the parties hereto agree to endeavor, in
good faith, to agree upon an amendment to this Agreement that would
adjust such financial covenants in a manner that would not affect
the substance thereof, but would allow compliance therewith to be
determined in accordance with the Borrower's financial statements
at that time.
2. TERM LOAN
2.1 Term Loan Commitments.
Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Bank
severally agrees to make a term loan (each a "Loan" and the
aggregate of such Loans comprising the "Term Loan") to the Borrower
on the Closing Date in a principal amount equal to such Bank's
Commitment.
2.2 Nature of Banks' Obligations with Respect to the Term
Loan.
The obligations of each Bank to make a Loan to the
Borrower shall be in the proportion that such Bank's Commitment
bears to the Commitments of all Banks to the Borrower, but each
Bank's Loan to the Borrower shall never exceed its Commitment. The
failure of any Bank to perform its obligations hereunder shall not
affect the Obligations of the Borrowers to any other party nor
shall any other party be liable for the failure of such Bank to
perform its obligations hereunder. The Banks shall have no
obligation to make Loans hereunder on or after the Closing Date.
The Commitments are not revolving credit commitments, and the
Borrower shall not have the right to borrow, repay and reborrow
under Section 2.1.
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2.3 Term Notes.
The Obligation of the Borrower to repay the unpaid
principal amount of the Loan made to it by each Bank, together with
interest thereon, shall be evidenced by a Term Note dated the
Closing Date payable to the order of such Bank in a face amount
equal to the Loan extended by such Bank. The principal amount of
the Term Notes shall be payable in 84 monthly installments of
$148,809.53 beginning on May 10, 1997 and ending on April 10, 2004.
2.4 Use of Proceeds.
The proceeds of the Term Loan shall be used to
refinance the Bridge Loan provided to Borrower by PNC Bank for the
acquisition of Interform Corporation and to refinance other
existing unsecured indebtedness.
3. INTEREST RATES
3.1 Euro-Rate.
The Euro-Rate applicable to the Term Loan shall be a
rate per annum (Computed on the basis of a year of 360 days and
actual days elapsed) determined by reference to the Ratio as
follows:
Ratio Euro-Rate +
----- -----------
greater than= 2.00x 150 basis points
greater than= 1.50 - 2.00x 125 basis points
less than= 1.50x 100 basis points
3.2 Interest Periods.
3.2.1 Initial Period.
On the Closing Date, the Borrower shall specify an interest period
during which the initial Euro-Rate shall apply to the Term Loan.
Such initial interest period, and all subsequent interest periods
elected by the Borrower (each being an "Interest Period") shall be
one, two, three or six Months in duration.
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3.2.2 Subsequent Periods.
At least three (3) Business Days prior to the expiration of the
Interest Period then in effect, the Borrower shall submit a written
request (the "Euro-Rate Request") to the Agent specifying the term
of the next Interest Period to which the Euro-Rate shall apply. If
no such Euro-Rate Request is received by the Agent, then the term
of the following Interest Period then in effect shall automatically
be one Month.
3.2.3 Rate Quotations.
The Borrower may call the Agent on or before the date on which a
Euro-Rate Request is to be delivered to receive an indication of
the rates then in effect, but it is acknowledged that such
projection shall not be binding on the Agent or the Banks nor
affect the rate of interest which thereafter is actually in effect
when the election is made.
3.2.4 Ending Date and Business Day.
Any Interest Period which would otherwise end on a date which is
not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar
month, in which case such Interest Period shall end on the next
preceding Business Day.
3.2.5 Termination Before Expiration Date.
The Borrower shall not select, convert to or renew an Interest
Period for any portion of the Term Loan that would end after the
Maturity Date.
The entire outstanding balance of the Term Loan shall be subject to
the Euro-Rate for the applicable Interest Period unless otherwise
converted to the Base Rate pursuant to Section 3.4 or unless the
Default Rate (as defined in Section 3.3) shall apply.
3.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of
an Event of Default and until such time such Event of Default shall
have been cured or waived, the rate of interest applicable to the
entire outstanding balance of the Term Loan shall be increased to
a rate of interest equal to the Base Rate plus 2.0% per annum (the
"Default Rate"). The Borrower acknowledges that the increase in
rates referred to in this Section 3.3 reflects, among other things,
the fact that such Term Loan or other amounts have become a
substantially greater risk given their default status and that the
Banks are entitled to additional compensation for such risk; and
all such interest shall be payable by Borrower upon demand by
Agent.
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3.4 Euro-Rate Unascertainable.
3.4.1 Unascertainable.
If on any date on which a Euro-Rate would
otherwise be determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist
for ascertaining such Euro-Rate, or
(ii) a contingency has occurred which
materially and adversely affects the secondary market for
negotiable certificates of deposit maintained by dealers of
recognized standing relating to the London interbank eurodollar
market relating to the Euro-Rate, the Agent shall have the rights
specified in Section 3.4.3.
3.4.2 Illegality; Increased Costs; Deposits Not
Available.
If at any time any Bank shall have determined
that:
(i) the making, maintenance or funding of any
Loan to which a Euro-Rate would otherwise apply has been made
impracticable or unlawful by compliance by such Bank in good faith
with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any such Official
Body (whether or not having the force of Law), or
(ii) after making all reasonable efforts,
deposits of the relevant amount in Dollars for the relevant
Interest Period for a Loan to which a Euro-Rate would otherwise
apply, are not available to such Bank at the effective cost of
funding a proposed Loan in the London interbank market, then the
Agent shall have the rights specified in Section 3.4.3.
3.4.3 Agent's and Bank's Rights.
In the case of any event specified in Section
3.4.1 above, the Agent shall promptly so notify the Banks and the
Borrower thereof, and in the case of an event specified in Section
3.4.2 above, such Bank shall promptly so notify the Agent and
endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send
copies of such notice and certificate to the other Banks and the
Borrower. If any Bank notifies the Agent of a determination under
Section 3.4.2, the Borrower shall, subject to the Borrower's
indemnification Obligations under Section 4.5.2, on the date
specified in such notice either convert the outstanding balance of
the Term Loan to the Base Rate or prepay the Term Loan in
accordance with Section 4.4. Absent due notice from the Borrower
of conversion or prepayment, the then outstanding balance of the
Term Loan shall automatically be converted to the Base Rate upon
such specified date.
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4. PAYMENTS
4.1 Payments.
All payments and prepayments to be made in respect of
principal, interest, Agent's Fee or other fees or amounts due from
the Borrower hereunder shall be payable prior to 1:00 p.m.,
Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and without set-off, counterclaim or other
deduction of any nature, and an action therefor shall immediately
accrue. Such payments shall be made to the Agent at the Principal
Office for the ratable accounts of the Banks with respect to the
Term Loan in U.S. Dollars and in immediately available funds, and
the Agent shall promptly distribute such amounts to the Banks in
immediately available funds, provided that in the event payments
are received by 1:00 p.m., Pittsburgh time, by the Agent with
respect to the Term Loan and such payments are not distributed to
the Banks on the same day received by the Agent, the Agent shall
pay the Banks the Federal Funds Effective Rate with respect to the
amount of such payments for each day held by the Agent and not
distributed to the Banks. The Agent's and each Bank's statement of
account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of
principal of and interest on the Loans and other amounts owing
under this Agreement and shall be deemed an "account stated."
4.2 Pro Rata Treatment of Banks.
A portion of the Term Loan shall be allocated to each Bank
according to its Ratable Share, and each payment or prepayment by
the Borrower with respect to principal, interest or other fees
(except for the Agent's Fee) or amounts due from the Borrower
hereunder to the Banks with respect to the Term Loan, shall (except
as provided in Section 3.4.3 (Illegality; Deposits not Available)
in the case of an event specified in Sections 3.4 (Euro-Rate
Unascertainable), 4.4 (Voluntary Prepayments) or 4.5 (Additional
Compensation in Certain Circumstances)) be made in proportion to
the applicable Loans outstanding from each Bank and, if no such
Loans are then outstanding, in proportion to the Ratable Share of
each Bank.
4.3 Interest Payment Dates.
Interest on the outstanding balance of the Term Loan
shall be due and payable in arrears on the first Business Day of
each month beginning May 1, 1997 and on the Maturity Date or upon
acceleration of the Term Notes. Interest on the principal amount
of the Term Loan or other monetary Obligation shall be due and
payable on demand after such principal amount or other monetary
Obligation becomes due and payable (whether on the stated maturity
date, upon acceleration or otherwise).
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4.4 Prepayments.
4.4.1 Right to Prepay.
The Borrower shall have the right at its option
from time to time to prepay the Term Loan in whole or part without
premium or penalty (except as provided in Section 4.5):
(i) at any time when the Base Rate is then
applicable to the Term Loan; or
(ii) on the last day of the applicable Interest
Period during which the Euro-Rate is applicable to the Term Loan;
or
(iii) on the date specified in a notice by any
Bank pursuant to Section 3.4 (Euro-Rate Unascertainable) with
respect to any Loan to which the Euro-Rate applies.
Whenever the Borrower desires to prepay any part of the
Term Loan, it shall provide a prepayment notice to the Agent at
least one (1) Business Day prior to the date of prepayment of the
Term Loan setting forth the following information:
(x)the date, which shall be a Business Day, on which the proposed
prepayment is to be made; and
(y) the total principal amount of such
prepayment, which shall not be less than $50,000.
All prepayment notices shall be irrevocable. All Term
Loan prepayments permitted pursuant to this Section 4.4.1 shall be
applied to the unpaid installments of principal of the Term Loan in
the inverse order of scheduled maturities. Any prepayment
hereunder shall be subject to the Borrower's Obligation to
indemnify and compensate the Banks under Section 4.5.2.
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4.4.2 Change of Lending Office
Each Bank agrees that upon the occurrence of any
event giving rise to increased costs or other special payments
under Section 3.4.2 (Illegality, etc.) or 4.5.1 (Increased Costs,
etc.) with respect to such Bank, it will if requested by the
Borrower use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office
for any Loans affected by such event, provided that such
designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to
the operation of such Section. Nothing in this Section 4.4.2 shall
affect or postpone any of the Obligations of the Borrower or the
rights of the Agent or any Bank provided in this Agreement.
4.5 Additional Compensation in Certain Circumstances.
4.5.1 Increased Costs or Reduced Return Resulting From
Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or application
thereof by any Official Body charged with the interpretation or
administration thereof enacted or made after the date of this
Agreement or compliance with any request or directive (whether or
not having the force of Law) of any central bank or other Official
Body made after the date of this Agreement:
(i) subjects any Bank to any tax or changes the
basis of taxation with respect to this Agreement, the Term Notes,
the Term Loan or payments by the Borrower of principal, interest or
other amounts due from the Borrower hereunder or under the Term
Notes (except for taxes on the overall net income or gross receipts
of such Bank),
(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or
commitments to extend credit extended by, or assets (funded or
contingent) of, deposits with or for the account of, or other
acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded
or contingent) of, or other credits or commitments to extend credit
extended by, any Bank, or (B) otherwise applicable to the
obligations of any Bank under this Agreement,
and the result of any of the foregoing is to increase
the cost to, reduce the income receivable by, or impose any expense
(including loss of margin) upon any Bank with respect to this
Agreement, the Term Notes or the making, maintenance or funding of
any part of the Term Loan (or, in the case of any capital adequacy
or similar requirement, to have the effect of reducing the rate of
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return on any Bank's capital, taking into consideration such Bank's
customary policies with respect to capital adequacy) by an amount
which such Bank in its sole discretion deems to be material, such
Bank shall from time to time notify the Borrower and the Agent of
the amount determined in good faith (using any averaging and
attribution methods employed in good faith including allocation to
the Borrower of pro rated amounts ) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of
income, additional expense or reduced rate of return. The Banks
will use reasonable efforts to avoid such increase in costs,
reduction of income, additional expense or reduced rate of return.
Notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the
Borrower to such Bank thirty (30) Business Days after such notice
is given.
4.5.2 Indemnity and Compensation.
In addition to the compensation required by
Section 4.5.1, the Borrower shall indemnify and compensate each
Bank against all liabilities, losses or expenses (including loss of
margin, any loss or expense incurred in liquidating or employing
deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Bank to fund or maintain any
portion of the Term Loan subject to the Euro-Rate) which such Bank
sustains or incurs as a consequence of any default by the Borrower
in the performance or observance of any covenant or condition
contained in this Agreement or any other Loan Document, including
any failure of the Borrower to pay when due (by acceleration or
otherwise) any principal, interest or any other amount due
hereunder.
If any Bank sustains or incurs any such loss or
expense, it shall from time to time notify the Borrower of the
amount determined in good faith by such Bank (which determination
may include such assumptions, allocations of costs and expenses and
averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify and compensate such Bank
for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination and shall be
binding absent manifest error. Such amount shall be due and
payable by the Borrower to such Bank ten (10) Business Days after
such notice is given.
5. REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties.
The Borrower represents and warrants to the Agent and
each of the Banks on the date of this Agreement as follows:
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5.1.1 Organization and Qualification.
The Borrower is a corporation, duly organized,
validly existing and in good standing under the laws of the State
of West Virginia. The Borrower has the lawful power to own or
lease its properties and to engage in the business it presently
conducts or proposes to conduct. The Borrower is duly licensed or
qualified and in good standing in all other jurisdictions where the
property owned or leased by it or the nature of the business
transacted by it or both makes such licensing or qualification
necessary.
5.1.2 Capitalization and Ownership.
The authorized capital stock of the Borrower
consists of 20,000,000 shares of Common Stock, $1 par value, of
which 8,104,714 shares (referred to herein as the "Shares") are
issued and outstanding. All of the Shares have been validly issued
and are fully paid and nonassessable. There are no options,
warrants or other rights outstanding to purchase any such shares
except as indicated on Schedule 5.1.2.
5.1.3 Subsidiaries.
Schedule 5.1.3 states the name of each of the
Borrower's Subsidiaries, its jurisdiction of incorporation, its
authorized capital stock, the issued and outstanding shares
(referred to herein as the "Subsidiary Shares") and the owners
thereof if it is a corporation, its outstanding partnership
interests (the "Partnership Interests") if it is a partnership and
its outstanding limited liability company interests, interests
assigned to managers thereof and the voting rights associated
therewith (the "LLC Interests") if it is a limited liability
company. The Borrower and each Subsidiary of the Borrower has good
and marketable title to all of the Subsidiary Shares, Partnership
Interests and LLC Interests it purports to own, free and clear in
each case of any Lien. All Subsidiary Shares, Partnership
Interests and LLC Interests have been validly issued, and all
Subsidiary Shares are fully paid and nonassessable. All capital
contributions and other consideration required to be made or paid
in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There
are no options, warrants or other rights outstanding to purchase
any such Subsidiary Shares, Partnership Interests or LLC Interests
except as indicated on Schedule 5.1.3.
5.1.4 Power and Authority.
The Borrower has full power to enter into,
execute, deliver and carry out this Agreement and the other Loan
Documents to which it is a party, to incur the Indebtedness
contemplated by the Loan Documents and to perform its Obligations
under the Loan Documents to which it is a party, and all such
actions have been duly authorized by all necessary proceedings on
its part.
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5.1.5 Validity and Binding Effect.
This Agreement has been duly and validly
executed and delivered by the Borrower, and each other Loan
Document which the Borrower is required to execute and deliver on
or after the date hereof will have been duly executed and delivered
by the Borrower on the required date of delivery of such Loan
Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of the
Borrower which is or will be a party thereto on and after its date
of delivery thereof, enforceable against the Borrower in accordance
with its terms, except to the extent that enforceability of any of
such Loan Document may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforceability of creditors' rights generally or general equitable
principles.
5.1.6 No Conflict.
Neither the execution and delivery of this
Agreement or the other Loan Documents by the Borrower nor the
consummation of the transactions herein or therein contemplated or
compliance with the terms and provisions hereof or thereof by any
of them will conflict with, constitute a default under or result in
any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents of the Borrower
or (ii) any Law or any material agreement or instrument or order,
writ, judgment, injunction or decree to which the Borrower or any
of its Subsidiaries is a party or by which the Borrower or any of
its Subsidiaries is bound or to which it is subject, or result in
the creation or enforcement of any Lien, charge or encumbrance
whatsoever upon any property (now or hereafter acquired) of the
Borrower or any of its Subsidiaries.
5.1.7 Litigation.
There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary of the Borrower
at law or equity before any Official Body which individually or in
the aggregate may result in any Material Adverse Change. Neither
the Borrower nor any of its Subsidiaries is in material violation
of any order, writ, injunction or any decree of any Official Body
which may result in any Material Adverse Change.
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5.1.8 Title to Properties.
The Borrower and each of its Subsidiaries has
good and marketable title to or valid leasehold interest in all
properties, assets and other rights which it purports to own or
lease or which are reflected as owned or leased on its books and
records, free and clear of all Liens and encumbrances except
Permitted Liens, and subject to the terms and conditions of the
applicable leases. All leases of property are in full force and
effect without the necessity for any consent which has not
previously been obtained upon consummation of the transactions
contemplated hereby.
5.1.9 Financial Statements.
(i) Annual Statements. The Borrower has
delivered to the Bank copies of its audited consolidated year-end
financial statements for and as of the end of the three fiscal
years ended October 31, 1996 (the "Annual Statements"). The Annual
Statements were compiled from the books and records maintained by
the Borrower's management, are correct and complete and fairly
represent the consolidated financial condition of the Borrower and
its Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in
accordance with GAAP consistently applied, subject to normal
year-end audit adjustments.
(ii) Financial Projections. The Borrower has
delivered to the Agent financial projections of the Borrower and
its Subsidiaries for the period through October 31, 1997 derived
from various assumptions of the Borrower's management (the
"Financial Projections"). The Financial Projections represent a
reasonable range of possible results in light of the history
of the business, present and foreseeable conditions and the
intentions of the Borrower's management. The Financial
Projections accurately reflect the liabilities of the Borrower
and its Subsidiaries upon consummation of the transactions
contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. Neither
the Borrower nor any Subsidiary of the Borrower has any material
liabilities, contingent or otherwise, or forward or long-term
commitments that are not disclosed in the Annual Statements or in
the notes thereto and which under GAAP were required to be
disclosed therein, and except as disclosed therein there are no
unrealized or anticipated losses from any commitments of the
Borrower or any of its Subsidiaries which are reasonably likely to
cause a Material Adverse Change. Since October 31, 1996, no
Material Adverse Change has occurred.
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5.1.10 Use of Proceeds; Margin Stock.
The Borrower intends to use the proceeds of the
Loans in accordance with Section 2.4 hereof. Neither the Borrower
nor any of its Subsidiaries engages or intends to engage
principally, or as one of its important activities, in the business
of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of the Term Loan
has been or will be used, immediately, incidentally or ultimately,
to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock or to
refund Indebtedness originally incurred for such purpose, or for
any purpose which entails a violation of or which is inconsistent
with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. Neither the Borrower nor any of its
Subsidiaries holds or intends to hold margin stock in such amounts
that more than 25% of the reasonable value of the assets of the
Borrower or Subsidiary of the Borrower are or will be represented
by margin stock.
5.1.11 Full Disclosure.
Neither this Agreement nor any other Loan
Document, nor any certificate, statement, agreement or other
documents furnished to the Agent or any Bank in connection herewith
or therewith, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the
circumstances under which they were made, not misleading.
5.1.12 Taxes.
All federal, state, local and other tax returns
required to have been filed with respect to the Borrower and each
Subsidiary of the Borrower have been filed, and payment or adequate
provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become
due pursuant to said returns or to assessments received, except to
the extent that such taxes, fees, assessments and other charges are
not material and are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP
shall have been made. There are no agreements or waivers extending
the statutory period of limitations applicable to any federal
income tax return of the Borrower or any Subsidiary of the Borrower
for any period.
5.1.13 Consents and Approvals.
No consent, approval, exemption, order or
authorization of, or a registration or filing with, any Official
Body or any other Person is required by any Law or any agreement in
connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents by the Borrower.
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5.1.14 No Event of Default; Compliance with
Instruments.
No event has occurred and is continuing and no
condition exists or will exist after giving effect to the
borrowings or other extensions of credit to be made on the Closing
Date under or pursuant to the Loan Documents which constitutes an
Event of Default or Potential Default. Neither the Borrower nor
any Subsidiaries of the Borrower is in material violation of
(i) any term of its certificate of incorporation, bylaws,
certificate of limited partnership, partnership agreement,
certificate of formation, limited liability company agreement or
other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its
properties may be subject or bound.
5.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
The Borrower and each Subsidiary of the Borrower
owns or possesses all the material patents, trademarks, service
marks, trade names, copyrights, licenses, registrations,
franchises, permits and rights necessary to own and operate its
properties and to carry on its business as presently conducted and
planned to be conducted by such Borrower or Subsidiary, without
known possible, alleged or actual conflict with the rights of
others.
5.1.16 Insurance.
The Borrower maintains policies and bonds
provide adequate coverage from reputable and financially sound
insurers in amounts sufficient to insure the assets and risks of
the Borrower and each Subsidiary of the Borrower in accordance with
prudent business practice in the industries of the Borrower and its
Subsidiaries. No notice has been given or claim made and no
grounds exist to cancel or avoid any such policy or bonds or to
reduce the coverage provided hereby.
5.1.17 Compliance with Laws.
The Borrower and its Subsidiaries are in
compliance in all material respects with all applicable Laws (other
than Environmental Laws which are specifically addressed in
Section 5.1.22) in all jurisdictions in which the Borrower or any
of its Subsidiaries is presently or will be doing business.
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5.1.18 Material Contracts; Burdensome Restrictions.
All material agreements relating to the business
operations of the Borrower and its Subsidiaries, including all
employee benefit plans and Labor Contracts are valid, binding and
enforceable upon such Borrower or Subsidiary and each of the other
parties thereto in accordance with their respective terms, and
there is no default thereunder, to the Borrower's knowledge, with
respect to parties other than such Borrower or Subsidiary. Neither
the Borrower nor any of its Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any
organization document, or any requirement of Law which is
reasonably likely to result in a Material Adverse Change.
5.1.19 Investment Companies; Regulated Entities.
Neither the Borrower nor any of its Subsidiaries
is an "investment company" registered or required to be registered
under the Investment Company Act of 1940 or under the "control" of
an "investment company" as such terms are defined in the Investment
Company Act of 1940 and shall not become such an "investment
company" or under such "control." Neither the Borrower nor any of
its Subsidiaries is subject to any other Federal or state statute
or regulation limiting its ability to incur Indebtedness for
borrowed money.
5.1.20 Plans and Benefit Arrangements.
Except as set forth on Schedule 5.1.20:
(i) The Borrower and each other member of the
ERISA Group are in compliance in all material respects with any
applicable provisions of ERISA with respect to all Benefit
Arrangements, Plans and Multiemployer Plans. There has been no
Prohibited Transaction with respect to any Benefit Arrangement or
any Plan or, to the best knowledge of the Borrower, with respect to
any Multiemployer Plan or Multiple Employer Plan, which is
material. The Borrower and all other members of the ERISA Group
have made when due any and all payments required to be made under
any agreement relating to a Multiemployer Plan or a Multiple
Employer Plan or any Law pertaining thereto. With respect to each
Plan and Multiemployer Plan, the Borrower and each other member of
the ERISA Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii) have
not incurred any liability to the PBGC, and (iii) have not had
asserted against them any penalty for failure to fulfill the
minimum funding requirements of ERISA.
(ii) To the best of the Borrower's knowledge,
each Multiemployer Plan and Multiple Employer Plan is able to pay
benefits thereunder when due.
(iii) Neither the Borrower nor or any other
member of the ERISA Group has instituted or intends to institute
proceedings to terminate any Plan.
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(iv) No event requiring notice to the PBGC
under Section 302(f)(4)(A) of ERISA has occurred or is reasonably
expected to occur with respect to any Plan, and no amendment with
respect to which security is required under Section 307 of ERISA
has been made or is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of
all benefit liabilities (whether or not vested) under each Plan,
determined on a plan termination basis, as disclosed in, and as of
the date of, the most recent actuarial report for such Plan, does
not exceed the aggregate fair market value of the assets of such
Plan.
(vi) Neither the Borrower nor any other member
of the ERISA Group has incurred or reasonably expects to incur any
material withdrawal liability under ERISA to any Multiemployer Plan
or Multiple Employer Plan. Neither the Borrower nor any other
member of the ERISA Group has been notified by any Multiemployer
Plan or Multiple Employer Plan that such Multiemployer Plan or
Multiple Employer Plan has been terminated within the meaning of
Title IV of ERISA and, to the best knowledge of the Borrower, no
Multiemployer Plan or Multiple Employer Plan is reasonably expected
to be reorganized or terminated, within the meaning of Title IV of
ERISA.
(vii) To the extent that any Benefit Arrangement
is insured, the Borrowers and all other members of the ERISA Group
have paid when due all premiums required to be paid for all periods
through the Closing Date. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower and
all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the
Closing Date.
(viii)All Plans, Benefit Arrangements and
Multiemployer Plans have been administered in accordance with their
terms and applicable Law.
5.1.21 Employment Matters.
The Borrower and each of its Subsidiaries is in
compliance with the Labor Contracts and all applicable federal,
state and local labor and employment Laws including those related
to equal employment opportunity and affirmative action, labor
relations, minimum wage, overtime, child labor, medical insurance
continuation, worker adjustment and relocation notices, immigration
controls and worker and unemployment compensation, where the
failure to comply would constitute a Material Adverse Change.
There are no outstanding grievances, arbitration awards or appeals
therefrom arising out of the Labor Contracts or current or
threatened strikes, picketing, handbilling or other work stoppages
or slowdowns at facilities of the Borrower or any of its
Subsidiaries which in any case would constitute a Material Adverse
Change. The Borrower has delivered to the Agent true and correct
copies of each of the Labor Contracts (if any).
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5.1.22 Environmental Matters.
Except as disclosed on Schedule 5.1.22:
(i) Neither the Borrower nor any of its
Subsidiaries has received any material Environmental Complaint from
any Official Body or private Person alleging that such Borrower or
Subsidiary or any prior or subsequent owner of any of the Property
is a potentially responsible party under the Comprehensive
Environmental Response, Cleanup and Liability Act, 42 U.S.C.
9601, et seq., and the Borrower has no reason to believe that
such an Environmental Complaint might be received. There are no
pending or, to the Borrower's knowledge, threatened Environmental
Complaints relating to the Borrower or Subsidiary of the Borrower
or, to the Borrower's knowledge, any prior or subsequent owner of
any of the Property pertaining to, or arising out of, any material
Environmental Conditions.
(ii) There are no circumstances at, on or under
any of the Property that constitute a breach of or non-compliance
with any of the Environmental Laws, and there are no past or
present Environmental Conditions at, on or under any of the
Property or, to the Borrower's knowledge, at, on or under adjacent
property, that prevent compliance with the Environmental Laws at
any of the Property.
(iii) Neither any of the Property nor any
structures, improvements, equipment, fixtures, activities or
facilities thereon or thereunder contain or use Regulated
Substances except in substantial compliance with Environmental
Laws. There are no processes, facilities, operations, equipment or
other activities at, on or under any of the Property, or, to the
Borrower's knowledge, at, on or under adjacent property, that
currently result in the release or threatened release of Regulated
Substances onto any of the Property, except to the extent that such
releases or threatened releases are not a substantial breach of or
otherwise not a violation of the Environmental Laws.
(iv) There are no aboveground storage tanks,
underground storage tanks or underground piping associated with
such tanks, used for the management of Regulated Substances at, on
or under any of the Property that (a) do not have, to the extent
required by Environmental Laws, a full operational secondary
containment system in place, and (b) are not otherwise in
compliance with all Environmental Laws. There are no abandoned
underground storage tanks or underground piping associated with
such tanks, previously used for the management of Regulated
Substances at, on or under any of the Property that have not either
been closed in place in accordance with Environmental Laws or
removed in compliance with all applicable Environmental Laws and no
contamination associated with the use of such tanks exists on any
of the Property that is not in compliance with Environmental Laws.
(v) The Borrower and each of its Subsidiaries
has all material permits, licenses, authorizations, plans and
approvals necessary under the Environmental Laws for the conduct of
the business of such Borrower or Subsidiary as presently conducted.
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The Borrower and each of its Subsidiaries has submitted all
material notices, reports and other filings required by the
Environmental Laws to be submitted to an Official Body which
pertain to past and current operations on any of the Property.
(vi) All past and present on-site generation,
storage, processing, treatment, recycling, reclamation, disposal or
other use or management of Regulated Substances at, on, or under
any of the Property and all off-site transportation, storage,
processing, treatment, recycling, reclamation, disposal or other
use or management of Regulated Substances have been done materially
in accordance with the Environmental Laws.
5.1.23 Senior Debt Status.
(i) The Obligations of the Borrower under this
Agreement, the Term Notes and each of the other Loan Documents to
which it is a party do rank and will rank at least pari passu in
priority of payment with all other Indebtedness of the Borrower
except Indebtedness of the Borrower to the extent secured by
Permitted Liens. There is no Lien upon or with respect to any of
the properties or income of the Borrower or any of its Subsidiaries
which secures indebtedness or other obligations of any Person
except for Permitted Liens.
5.2 Updates to Schedules.
Should any of the information or disclosures provided
on any of the Schedules attached hereto become outdated or
incorrect in any material respect, the Borrower shall promptly
provide the Agent in writing with such revisions or updates to such
Schedule as may be necessary or appropriate to update or correct
same; provided, however, that no Schedule shall be deemed to have
been amended, modified or superseded by any such correction or
update, nor shall any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the
Required Banks, in their reasonable discretion, shall have accepted
in writing such revisions or updates to such Schedule.
6. CONDITIONS OF LENDING
The obligation of the Banks to make the Term Loan hereunder is
subject to the performance by each of the Borrower of its
Obligations to be performed hereunder at or prior to the making of
such Term Loan and to the satisfaction of the following further
conditions:
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6.1 Officer's Certificate.
The representations and warranties of the Borrower
contained in Section 5 and in each of the other Loan Documents
shall be true and accurate on and as of the Closing Date with the
same effect as though such representations and warranties had been
made on and as of such date (except representations and warranties
which relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as
of the specific dates or times referred to therein and except
changes in representations and warranties that, in the
determination of the Required Banks are reasonably likely to result
in a Material Adverse Change), and the Borrower shall have
performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have
occurred and be continuing or shall exist; and there shall be
delivered to the Agent for the benefit of each Bank a certificate
of the Borrower, dated the Closing Date to each such effect and
signed by two of the following officers: the Chief Executive
Officer, President, Chief Financial Officer, Secretary or Assistant
Secretary of the Borrower.
6.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit
of each Bank a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of the Borrower, certifying as
appropriate as to:
(i) all action taken by the Borrower in connection
with this Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized
to sign this Agreement and the other Loan Documents and the true
signatures of such officer or officers and specifying the
Authorized Officers permitted to act on behalf of the Borrower for
purposes of this Agreement and the true signatures of such
officers, on which the Agent and each Bank may conclusively rely;
and
(iii) copies of its organizational documents,
including its certificate of incorporation, bylaws, certificate of
limited partnership, partnership agreement, certificate of
formation, and limited liability company agreement as in effect on
the Closing Date certified by the appropriate state official where
such documents are filed in a state office together with
certificates from the appropriate state officials as to the
continued existence and good standing (or subsistence) of the
Borrower in each state where organized or qualified to do business
and a bring-down certificate by facsimile dated the Closing Date.
6.3 Subsidiaries Guaranty.
There shall be delivered to the Agent for the benefit
of the Banks, a Subsidiaries Guaranty in the form attached hereto
as Exhibit 6.3.
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6.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit
of each Bank a written opinion of Huddleston, Bolen, ▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇, counsel for the Borrower, dated the Closing Date and in
form and substance satisfactory to the Agent and its counsel as to
such other matters incident to the transactions contemplated herein
as the Agent may reasonably request.
6.5 Legal Details.
All legal details and proceedings in connection with
the transactions contemplated by this Agreement and the other Loan
Documents shall be in form and substance satisfactory to the Agent
and counsel for the Agent, and the Agent shall have received all
such other counterpart originals or certified or other copies of
such documents and proceedings in connection with such
transactions, in form and substance satisfactory to the Agent and
said counsel, as the Agent or said counsel may reasonably request.
6.6 Payment of Fees.
The Borrower shall have paid or caused to be paid to
the Agent, counsel fees, and all other fees, costs and expenses
accrued through the Closing Date for which the Agent and the Banks
are entitled to be reimbursed.
6.7 Officer's Certificate Regarding MACs.
Since October 31, 1996, no Material Adverse Change
shall have occurred; prior to the Closing Date, there shall have
been no material change in the management of the Borrower or any
Subsidiary of the Borrower, and there shall have been delivered to
the Agent for the benefit of each Bank a certificate of the
Borrower dated the Closing Date and signed on behalf of the
Borrower by any two of the Chief Executive Officer, President,
Chief Financial Officer, Secretary or Assistant Secretary of the
Borrower to each such effect.
6.8 No Violation of Laws.
The making of the Term Loan shall not contravene any
Law applicable to the Borrower or to the Agent or any of the Banks.
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6.9 No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain damages in respect of,
this Agreement, the other Loan Documents or the consummation of
the transactions contemplated hereby or thereby or which, in the
Agent's reasonable judgment, would make it inadvisable to
consummate the transactions contemplated by this Agreement or any
of the other Loan Documents.
7. COVENANTS
7.1 Affirmative Covenants.
The Borrower, covenants and agrees that until payment
in full of the Term Loan, and interest thereon, and satisfaction of
all of the Borrower's other Obligations under the Loan Documents,
the Borrower shall comply at all times with the following
affirmative covenants:
7.1.1 Preservation of Existence, Etc.
The Borrower shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation,
limited partnership or limited liability company and its license or
qualification and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes
such license or qualification necessary, except as otherwise
expressly permitted in Section 7.2.5.
7.1.2 Payment of Liabilities, Including Taxes, Etc.
The Borrower shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it
is subject or which are asserted against it, promptly as and when
the same shall become due and payable, including all taxes,
assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such
liabilities, including taxes, assessments or charges, are being
contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall
have been made, but only to the extent that failure to discharge
any such liabilities would not result in any additional liability
which would adversely affect to a material extent the financial
condition of the Borrower or Subsidiary of the Borrower.
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7.1.3 Maintenance of Insurance.
The Borrower shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or
damage by fire and such other insurable hazards as such assets are
commonly insured (including fire, extended coverage, property
damage, workers' compensation, public liability and business
interruption insurance) and against other risks (including errors
and omissions) in such amounts as similar properties and assets are
insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary, all as
reasonably determined by the Agent.
7.1.4 Maintenance of Properties and Leases.
The Borrower shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and
condition (ordinary wear and tear excepted) in accordance with the
general practice of other businesses of similar character and size,
all of those properties useful or necessary to its business, and
from time to time, the Borrower will make or cause to be made all
appropriate repairs, renewals or replacements thereof.
7.1.5 Maintenance of Patents, Trademarks, Etc.
The Borrower shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents,
trademarks, service marks, trade names, copyrights, licenses,
franchises, permits and other authorizations necessary for the
ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse
Change.
7.1.6 Visitation Rights.
The Borrower shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees
or representatives of the Agent to visit and inspect any of its
properties and to examine and make excerpts from its books and
records and discuss its business affairs, finances and accounts
with its officers, all in such detail and at such times and as
often as the Agent may reasonably request, provided that the Agent
shall provide the Borrower with reasonable notice prior to any
visit or inspection.
7.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each
Subsidiary of the Borrower to, maintain and keep proper books of
record and account which enable the Borrowers and their
Subsidiaries to issue financial statements in accordance with GAAP
and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of the
Borrower, and in which full, true and correct entries shall be made
in all material respects of all its dealings and business and
financial affairs.
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7.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each member
of the ERISA Group to, comply with ERISA, the Internal Revenue Code
and other applicable Laws applicable to Plans and Benefit
Arrangements except where any such failure would not result in a
Material Adverse Change. Without limiting the generality of the
foregoing, the Borrower shall cause all of its Plans and all Plans
maintained by any member of the ERISA Group to be funded in
accordance with the minimum funding requirements of ERISA and shall
make, and cause each member of the ERISA Group to make, in a timely
manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans except where such failure would not result in
a Material Adverse Change.
7.1.9 Compliance with Laws.
The Borrower shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all
Environmental Laws, in all respects, provided that it shall not be
deemed to be a violation of this Section 7.1.9 if any failure to
comply with any Law would not result in fines, penalties,
remediation costs, other similar liabilities or injunctive relief
any of which would constitute a Material Adverse Change.
7.1.10 Use of Proceeds.
7.1.10.1 General
The Loan Parties will use the proceeds
of the Term Loan only to refinance the Bridge Loan provided to
Borrower by PNC Bank for the acquisition of Interform Corporation
and to refinance other existing unsecured indebtedness..
7.1.10.2 Margin Stock.
The Borrower shall not use the
proceeds of the Term Loan to purchase or carry margin stock as more
fully provided in Section 5.1.10.
7.1.10.3 Section 20 Subsidiaries.
The Borrower will not, directly or
indirectly, use any portion of the proceeds of the Term Loan
(i) knowingly to purchase any Ineligible Securities from a
Section 20 Subsidiary during any period in which such Section 20
Subsidiary makes a market in such Ineligible Securities,
(ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed
by a Section 20 Subsidiary, or (iii) to make payments of principal
or interest on Ineligible Securities underwritten or privately
placed by as Section 20 Subsidiary and issued by or for the benefit
of Borrower or any Affiliate of the Borrower.
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7.2 Negative Covenants.
The Borrower covenants and agrees that until payment in
full of the Term Loan, and interest thereon and satisfaction of all
of the Borrower's other Obligations hereunder, the Borrower shall
comply with the following negative covenants:
7.2.1 Indebtedness.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on
Schedule 7.2.1. (including any extensions, renewals or refinancings
thereof), provided there is no increase in the amount thereof or
other significant change in the terms thereof unless otherwise
specified on Schedule 7.2.1;
(iii) Capitalized and operating leases as and to
the extent permitted under Section 7.2.13;
(iv) Indebtedness secured by Purchase Money
Security Interests not exceeding $1,500,000; and
(v) the existing $2,000,000 unsecured
revolving credit facility with Banc One, West Virginia, and
(vi) the Existing $800,000 unsecured revolving
credit facility with First Century Bank, Huntington, West Virginia,
which is personally guaranteed by ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
7.2.2 Liens.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property or assets, tangible or
intangible, now owned or hereafter acquired, or agree or become
liable to do so, except Permitted Liens.
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7.2.3 Guaranties.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become
or be liable in respect of any Guaranty, or assume, guarantee,
become surety for, endorse or otherwise agree, become or remain
directly or contingently liable upon or with respect to any
obligation or liability of any other Person, except for the
Guaranty of the Obligations of the Borrower provided by each
Subsidiary of the Borrower pursuant to the Subsidiaries Guaranty.
7.2.4 Loans and Investments.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time make or suffer to remain
outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest
(whether general or limited) or limited liability company interest
in, or any other investment or interest in, or make any capital
contribution to, any other Person, or agree, become or remain
liable to do any of the foregoing, except:
(i) trade credit extended on usual and
customary terms in the ordinary course of business;
(ii) advances to employees to meet expenses
incurred by such employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) loans, advances and investments in
Affiliates of the Borrower.
7.2.5 Liquidations, Mergers, Consolidations and
Acquisitions.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, dissolve, liquidate or wind-up its affairs,
or become a party to any merger or consolidation, or acquire by
purchase, lease or otherwise all or substantially all of the assets
or capital stock of any other Person, provided that
(1) any Affiliate of the Borrower may
consolidate or merge into another Affiliate of the Borrower which
is wholly-owned by the Borrower, and
(2) the Borrower may acquire, whether by
purchase or by merger, (A) all of the ownership interests and
voting rights of another Person or (B) substantially all of assets
of another Person or of a business or division of another Person
(each an "Permitted Acquisition"), provided that each of the
following requirements is met:
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(i) the board of directors or other
equivalent governing body of such Person shall have approved such
Permitted Acquisition and the Loan Parties shall have delivered to
the Banks written evidence of such approval prior to such Permitted
Acquisition,
(ii) the Borrower is acquiring the
ownership interests in such Person, such Person shall execute a
Subsidiaries Guaranty in favor of the Agent and the Banks in the
form attached hereto as Exhibit 1.1(G) on or before the date of
such Permitted Acquisition,
(iii) the business acquired, or the
business conducted by the Person whose ownership interests are
being acquired, as applicable, shall be substantially the same as
one or more line or lines of business conducted by the Borrower and
shall comply with Section 7.2.8,
(iv) immediately prior to and after
giving effect to such Permitted Acquisition, (A) no payment default
exists, (B) no violation of Section 7.2 exists, (C) the Agent has
not sent a notice of a violation of Section 7.1 which has not been
cured and (D) no Event of Default exits,
(v) the Borrower shall demonstrate on a
pro forma basis that it shall be in compliance with all the
covenants contained in this Agreement after giving effect to such
Permitted Acquisition by delivering at least five (5) Business Days
prior to such Permitted Acquisition a certificate evidencing such
compliance,
Subject to the above limitations, Permitted Acquisitions may
include any merger or acquisition, whether accounted for under GAAP
as a purchase or a pooling of interests and regardless of whether
the value of the Consideration paid or received is comprised of
cash, common stock, preferred stock, assets or partnership
interests, estimated value of earn-outs or other means.
7.2.6 Dispositions of Assets or Subsidiaries.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, sell, convey, assign, sell and leaseback,
abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or
intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment
or general intangibles with or without recourse or of capital
stock, shares of beneficial interest, partnership interests or
limited liability company interests of a Subsidiary of the
Borrower), except:
(i) transactions involving the sale of
inventory in the ordinary course of business;
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(ii) any sale, transfer or lease of assets in
the ordinary course of business which are no longer necessary or
required in the conduct of the Borrower's or such Subsidiary's
business;
(iii) any sale, transfer or lease of assets by
any Subsidiary of the Borrower to the Borrower; or
(iv) any sale, transfer or lease of assets in
the ordinary course of business which are replaced by substitute
assets acquired or leased within the parameters of Section 7.2.13.
7.2.7 Affiliate Transactions.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into or carry out any transaction
(including purchasing property or services from or selling property
or services to any Affiliate of the Borrower or other Person)
unless such transaction is not otherwise prohibited by this
Agreement, is entered into in the ordinary course of business upon
fair and reasonable arm's-length terms and conditions which are
fully disclosed to the Agent and is in accordance with all
applicable Law.
7.2.8 Continuation of or Change in Business.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than
commercial printing, and certain leasing businesses in support
thereof, and the supplying of office products and office furniture,
substantially as conducted and operated by such Borrower or
Subsidiary during the present fiscal year, and such Borrower or
Subsidiary shall not permit any material change in such business.
7.2.9 Plans and Benefit Arrangements.
The Borrower shall not, and shall not permit any
of its Subsidiaries to:
(i) fail to satisfy the minimum funding
requirements of ERISA and the Internal Revenue Code with respect to
any Plan where such failure is likely to result in a Material
Adverse Change;
(ii) request a minimum funding waiver from the
Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with
any Plan, Benefit Arrangement or Multiemployer Plan which would
constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present
value of all benefit liabilities (whether or not vested) under each
Plan, determined on a plan termination basis, as disclosed in the
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most recent actuarial report completed with respect to such Plan,
to exceed, as of any actuarial valuation date, the fair market
value of the assets of such Plan;
(v) fail to make when due any contribution to
any Multiemployer Plan that any Borrower or any member of the ERISA
Group may be required to make under any agreement relating to such
Multiemployer Plan, or any Law pertaining thereto, where such
failure is likely to result in a Material Adverse Change;
(vi) withdraw (completely or partially) from
any Multiemployer Plan or withdraw (or be deemed under
Section 4062(e) of ERISA to withdraw) from any Multiple Employer
Plan, where any such withdrawal is likely to result in a Material
Adverse Change;
(vii) terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result in
a Material Adverse Change;
(viii) make any amendment to any Plan with
respect to which security is required under Section 307 of ERISA;
or
(ix) fail to give any and all notices and make
all disclosures and governmental filings required under ERISA or
the Internal Revenue Code, where such failure is likely to result
in a Material Adverse Change.
7.2.10 Fiscal Year.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, change its fiscal year from the twelve-month
period beginning November 1 and ending October 31.
7.2.11 Issuance of Stock.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, issue any additional shares of its capital
stock or any options, warrants or other rights in respect thereof
except that the Borrower may issue stock: (a) as all or part of the
Consideration for a Permitted Acquisition; (b) pursuant to the
provisions of Borrower's 1993 Stock Option Plan or any successor
plan providing for employee stock options; or ( c) incident to any
stock split or dividend.
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7.2.12 Changes in Organizational Documents.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to
capital stock), by-laws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents in the event
such change would be adverse to the Banks as determined by the
Agent in its sole discretion, without obtaining the prior written
consent of the Required Banks. The Borrower will provide true and
correct copies of all amendments to organizational documents to the
Agent at the time annual financial statements are delivered.
7.2.13 Capital Expenditures and Leases.
The Borrower shall not, and shall not permit any
of its Subsidiaries to, make any payments in any fiscal year on
account of the lease of any asset which if leased would constitute
a capitalized lease, other than (i) those capitalized leases
reflected on the Borrower's balance sheet as of October 31, 1996
and (ii) payments in the aggregate not to exceed $1,500,000 in any
fiscal year, and all such capital expenditures and leases shall be
made under usual and customary terms and in the ordinary course of
business.
7.2.14 Minimum Fixed Charge Coverage Ratio.
The Borrower shall not permit the ratio of
Consolidated Cash Flow from Operations divided by Fixed Charges,
calculated as of the end of each fiscal quarter for the previous
four fiscal quarters then ended, to be less than 1.10 to 1.0.
7.2.15 Maximum Leverage Ratio.
The Borrower shall not at any time permit the
ratio of Total Senior Indebtedness divided by EBITDA to be greater
than:
2.75 to 1.0 as of October 31, 1997
2.50 to 1.0 as of October 31, 1998
2.50 to 1.0 as of October 31, 1999
2.25 to 1.0 as of October 31, 2000 and
2.0 to 1.0 as of October 31 of each
year thereafter.
7.2.16 Minimum Tangible Net Worth.
The Borrower shall not at any time permit
Consolidated Tangible Net Worth to be less than the sum of (i) 90%
of Tangible Net Worth on the Closing Date, (ii) an amount equal to
50% of the Consolidated Net Income and (iii) 100% of the proceeds
of all stock issued by the Borrower or any of its Subsidiaries.
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7.3 Reporting Requirements.
The Borrower covenants and agrees that until payment in
full of the Term Loan and interest thereon and satisfaction of all
of the Borrower's other Obligations hereunder and under the other
Loan Documents the Borrower will furnish or cause to be furnished
to the Agent:
7.3.1 Quarterly Financial Statements.
As soon as available and in any event within
forty-five (45) calendar days after the end of each of the first
three fiscal quarters in each fiscal year, financial statements of
the Borrower, consisting of a consolidated balance sheet as of the
end of such fiscal quarter and related consolidated statements of
income, retained earnings and cash flows for the fiscal quarter
then ended and the fiscal year through that date, all in reasonable
detail and certified (subject to normal year-end audit adjustments)
by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with
GAAP, consistently applied, and setting forth in comparative form
the respective financial statements for the corresponding date and
period in the previous fiscal year.
7.3.2 Annual Financial Statements.
As soon as available and in any event within
ninety (90) days after the end of each fiscal year of the Borrower,
financial statements of the Borrower consisting of a consolidated
balance sheet as of the end of such fiscal year, and related
consolidated statements of income, retained earnings and cash flows
for the fiscal year then ended, all in reasonable detail and
setting forth in comparative form the financial statements as of
the end of and for the preceding fiscal year, and certified by
independent certified public accountants of nationally recognized
standing. The certificate or report of accountants shall be free
of qualifications (other than any consistency qualification that
may result from a change in the method used to prepare the
financial statements as to which such accountants concur).
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7.3.3 Certificate of the Borrower
Concurrently with the financial statements of
the Borrower. furnished to the Agent pursuant to Sections 7.3.1 and
7.3.3, a certificate of the Borrower signed by the Chief Executive
Officer, President or Chief Financial Officer of the Borrower, in
the form of Exhibit 7.3.3, to the effect that, except as described
pursuant to Section 7.3.4, (i) the representations and warranties
of the Borrower contained in Section 5 and in the other Loan
Documents are true on and as of the date of such certificate with
the same effect as though such representations and warranties had
been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or
time) and the Borrower has performed and complied with all
covenants and conditions hereof, (ii) no Event of Default or
Potential Default exists and is continuing on the date of such
certificate and (iii) containing calculations in sufficient detail
to demonstrate compliance as of the date of such financial
statements with all financial covenants contained in Section 7.2.
7.3.4 Notice of Default.
Promptly after any executive officer of the
Borrower has learned of the occurrence of an Event of Default or
Potential Default, a certificate signed on behalf of the Loan
parties by an executive officer of the Borrower setting forth the
details of such Event of Default or Potential Default and the
action which the Borrower proposes to take with respect thereto.
7.3.5 Notice of Litigation.
Promptly after the commencement thereof, notice
of all actions, suits, proceedings or investigations before or by
any Official Body or any other Person against the Borrower or any
of its Subsidiaries which involve a claim or series of claims in
excess of $500,000 or which if adversely determined would
constitute a Material Adverse Change.
7.3.6 Certain Events.
Written notice to the Agent:
(i) at least ten (10) calendar days after
closing, with respect to any proposed sale or transfer of assets
pursuant to Section 7.2.6(iv), and
(ii) within the restrictions set forth in
Section 7.2.12, any amendments to the organizational documents of
the Borrower.
7.3.7 Budgets, Forecasts, Other Reports and
Information.
Promptly upon their becoming available to the
Borrower:
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(i) the annual budget and any forecasts of the
Borrower, to be supplied not later than thirty (30) days prior to
commencement of the fiscal year to which any of the foregoing may
be applicable,
(ii) any reports including reports on the
internal control structure the Borrower based upon any audit of the
Borrower,
(iii) any reports, notices or proxy statements
generally distributed by the Borrower to its stockholders on a date
no later than the date supplied to such stockholders,
(iv) regular or periodic reports, including
Forms 10-K, 10-Q and 8-K, registration statements and prospectuses,
filed the Borrower with the Securities and Exchange Commission,
(v) upon the Agent's reasonable request, a
copy of any order in any proceeding to which the Borrower or any of
its Subsidiaries is a party issued by any Official Body, and
(vi) such other reports and information as any
of the Agent may from time to time reasonably request. The
Borrower shall also notify the Agent promptly of the enactment or
adoption of any Law which may result in a Material Adverse Change.
7.3.8 Notices Regarding Plans and Benefit
Arrangements.
7.3.8.1 Certain Events.
Promptly upon becoming aware of the
occurrence thereof, notice (including the nature of the event and,
when known, any action taken or threatened by the Internal Revenue
Service or the PBGC with respect thereto) of:
(i) any Reportable Event with
respect to the Borrower or any other member of the ERISA Group
(regardless of whether the obligation to report said Reportable
Event to the PBGC has been waived),
(ii) any Prohibited Transaction
which could subject the Borrower or any other member of the ERISA
Group to a civil penalty assessed pursuant to Section 502(i) of
ERISA or a tax imposed by Section 4975 of the Internal Revenue Code
in connection with any Plan, any Benefit Arrangement or any trust
created thereunder where such civil penalty or tax is likely to
result in a Material Adverse Change,
(iii) any assertion of material
withdrawal liability with respect to any Multiemployer Plan,
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(iv) any partial or complete
withdrawal from a Multiemployer Plan by the Borrower or any other
member of the ERISA Group under Title IV of ERISA (or assertion
thereof), where such withdrawal is likely to result in material
withdrawal liability,
(v) any cessation of operations
(by the Borrower or any other member of the ERISA Group) at a
facility in the circumstances described in Section 4062(e) of
ERISA,
(vi) withdrawal by the Borrower or
any other member of the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or
any other member of the ERISA Group to make a payment to a Plan
required to avoid imposition of a Lien under Section 302(f) of
ERISA,
(viii) the adoption of an amendment
to a Plan requiring the provision of security to such Plan pursuant
to Section 307 of ERISA, or
(ix) any change in the actuarial
assumptions or funding methods used for any Plan, where the effect
of such change is to materially increase or materially reduce the
unfounded benefit liability or obligation to make periodic
contributions.
7.3.8.2 Notices of Involuntary Termination
and Annual Reports.
Promptly after receipt thereof,
copies of (a) all notices received by the Borrower or any other
member of the ERISA Group of the PBGC's intent to terminate any
Plan administered or maintained by the Borrower or any member of
the ERISA Group, or to have a trustee appointed to administer any
such Plan; and (b) at the request of the Agent each annual report
(IRS Form 5500 series) and all accompanying schedules, the most
recent actuarial reports, the most recent financial information
concerning the financial status of each Plan administered or
maintained by the Borrower or any other member of the ERISA Group,
and schedules showing the amounts contributed to each such Plan by
or on behalf of the Borrower or any other member of the ERISA Group
in which any of their personnel participate or from which such
personnel may derive a benefit, and each Schedule B (Actuarial
Information) to the annual report filed by the Borrower or any
other member of the ERISA Group with the Internal Revenue Service
with respect to each such Plan.
7.3.8.3 Notice of Voluntary Termination.
Promptly upon the filing thereof,
copies of any Form 5310, or any successor or equivalent form to
Form 5310, filed with the PBGC in connection with the termination
of any Plan.
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8. DEFAULT
8.1 Events of Default.
An Event of Default shall mean the occurrence or
existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary or
effected by operation of Law):
8.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay any principal of
the Term Loan (including scheduled installments, mandatory
prepayments or the payment due at maturity), or shall fail to pay
any interest on the Term Loan after such principal or interest
becomes due in accordance with the terms hereof or thereof, or the
Borrower fails to pay any other amount owing hereunder or under the
other Loan Documents after the date provided in an invoice or other
notice of payment due;
8.1.2 Breach of Warranty.
Any representation or warranty made at any time
by any of the Borrower herein or in any other Loan Document, or in
any certificate, other instrument or statement furnished pursuant
to the provisions hereof or thereof, shall prove to have been false
or misleading in any material respect as of the time it was made or
furnished;
8.1.3 Breach of Negative Covenants or Visitation
Rights.
A default shall occur in the observance or
performance of any covenant contained in Section 7.1.6 or Section
7.2;
8.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the
observance or performance of any other covenant, condition or
provision hereof or of any other Loan Document and such default
shall continue unremedied for a period of thirty (30) Business Days
after the Chief Executive Officer, President, Chief Financial
Officer or Corporate Secretary of the Borrower becomes aware of the
occurrence thereof (such grace period to be applicable only in the
event such default can be remedied by corrective action of the
Borrower as determined by the Agent in its sole discretion);
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8.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any
time under the terms of any other agreement involving borrowed
money or the extension of credit or any other Indebtedness under
which the Borrower or Subsidiary of the Borrower may be obligated
as a borrower or guarantor in excess of $750,000 in the aggregate,
and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect
thereto, whether waived or not) any indebtedness when due (whether
at stated maturity, by acceleration or otherwise) or if such breach
or default permits (because of nonpayment) or causes the
acceleration of any indebtedness (whether or not such right shall
have been waived) or the termination of any commitment to lend;
8.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of
money in excess of $50,000 in the aggregate shall be entered
against the Borrower or any of its Subsidiaries by a court having
jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry;
8.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party
executing the same or such party's successors and assigns (as
permitted under the Loan Documents) in accordance with the
respective terms thereof or shall in any way be terminated (except
in accordance with its terms) or become or be declared ineffective
or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests,
rights, titles, interests, remedies, powers or privileges intended
to be created thereby;
8.1.8 Uninsured Losses; Proceedings Against Assets.
Any assets of the Borrower or its Subsidiaries
are attached, seized, levied upon or subjected to a writ or
distress warrant; or such come within the possession of any
receiver, trustee, custodian or assignee for the benefit of
creditors and the same is not cured within thirty (30) days
thereafter;
8.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment, other than a
Permitted Lien, is filed of record with respect to all or any part
of the assets of the Borrower or any of its Subsidiaries by the
United States, or any department, agency or instrumentality
thereof, or by any state, county, municipal or other governmental
agency, including the PBGC, or any taxes or debts owing at any time
or times hereafter to any one of these becomes payable and the same
is not paid within thirty (30) days after the same becomes payable;
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8.1.10 Insolvency.
The Borrower or any Subsidiary of the Borrower
ceases to be solvent or admits in writing its inability to pay its
debts as they mature;
8.1.11 Events Relating to Plans and Benefit
Arrangements.
Any of the following occurs: (i) any Reportable
Event, which the Agent determines in good faith constitutes grounds
for the termination of any Plan by the PBGC or the appointment of
a trustee to administer or liquidate any Plan, shall have occurred
and be continuing; (ii) proceedings shall have been instituted or
other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee
shall be appointed to administer or liquidate any Plan; (iv) the
PBGC shall give notice of its intent to institute proceedings to
terminate any Plan or Plans or to appoint a trustee to administer
or liquidate any Plan; and, in the case of the occurrence of (i),
(ii), (iii) or (iv) above, the Agent determines in good faith that
the amount of the Borrower's liability is likely to exceed 10% of
its Consolidated Net Worth; (v) the Borrower or any member of the
ERISA Group shall fail to make any contributions when due to a Plan
or a Multiemployer Plan; (vi) the Borrower or any other member of
the ERISA Group shall make any amendment to a Plan with respect to
which security is required under Section 307 of ERISA; (vii) the
Borrower or any other member of the ERISA Group shall withdraw
completely or partially from a Multiemployer Plan; (viii) the
Borrower or any other member of the ERISA Group shall withdraw (or
shall be deemed under Section 4062(e) of ERISA to withdraw) from a
Multiple Employer Plan; or (ix) any applicable Law is adopted,
changed or interpreted by any Official Body with respect to or
otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events
specified in (v), (vi), (vii), (viii) or (ix), the Agent determines
in good faith that any such occurrence would be reasonably likely
to materially and adversely affect the total enterprise represented
by the Borrower and the other members of the ERISA Group;
8.1.12 Cessation of Business.
The Borrower or Subsidiary of the Borrower
ceases to conduct its business as contemplated, except as expressly
permitted under Section 7.2.5 or 7.2.6, or the Borrower or
Subsidiary of the Borrower is enjoined, restrained or in any way
prevented by court order from conducting all or any material part
of its business and such injunction, restraint or other preventive
order is not dismissed within thirty (30) days after the entry
thereof;
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8.1.13 Change of Control.
(i) Any person or group of persons (within the
meaning of Sections 13(a) or 14(a) of the Securities Exchange Act
of 1934, as amended) shall have acquired beneficial ownership of
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) 33% or more of the voting
capital stock of the Borrower; or (ii) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall
cease to have beneficial ownership of at least 40% of the voting
capital stock of the Borrower.
8.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a
court having jurisdiction in the premises seeking a decree or order
for relief in respect of the Borrower or Subsidiary of a the
Borrower in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official)
of the Borrower or Subsidiary of the Borrower for any substantial
part of its property, or for the winding-up or liquidation of its
affairs, and such proceeding shall remain undismissed or unstayed
and in effect for a period of thirty (30) consecutive days or such
court shall enter a decree or order granting any of the relief
sought in such proceeding; or
8.1.15 Voluntary Proceedings.
The Borrower or Subsidiary of the Borrower shall
commence a voluntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other
similar official) of itself or for any substantial part of its
property or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the
foregoing.
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8.2 Consequences of Event of Default.
8.2.1 Events of Default Other Than Bankruptcy,
Insolvency or Reorganization Proceedings.
If an Event of Default specified under Sections
8.1.1 through 8.1.13 shall occur and be continuing, the Banks and
the Agent shall be, if determined by the Required Banks, under no
further obligation to make Loans hereunder and the Agent, upon the
request of the Required Banks, shall by written notice to the
Borrowers, declare the unpaid principal amount of the Term Notes
then outstanding and all interest accrued thereon, any unpaid fees
and all other Indebtedness of the Borrower to the Banks hereunder
and thereunder to be forthwith due and payable, and the same shall
thereupon become and be immediately due and payable to the Agent
for the benefit of each Bank without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly
waived, and
8.2.2 Bankruptcy, Insolvency or Reorganization
Proceedings.
If an Event of Default specified under
Section 8.1.14 or 8.1.15 shall occur, the Banks shall be under no
further obligations to make Loans hereunder and the unpaid
principal amount of the Term Notes then outstanding and all
interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder
shall be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived; and
8.2.3 Set-off.
If an Event of Default shall occur and be
continuing, any Bank to whom any Obligation is owed by the Borrower
hereunder or under any other Loan Document or any participant of
such Bank which has agreed in writing to be bound by the provisions
of Section 9.13 and any branch, Subsidiary or Affiliate of such
Bank or participant anywhere in the world shall have the right, in
addition to all other rights and remedies available to it, without
notice to such Loan Party, to set-off against and apply to the then
unpaid balance of all the Loans and all other Obligations of the
Borrower hereunder or under any other Loan Document any debt owing
to, and any other funds held in any manner for the account of, the
Borrower by such Bank or participant or by such branch, Subsidiary
or Affiliate, including all funds in all deposit accounts (whether
time or demand, general or special, provisionally credited or
finally credited, or otherwise) now or hereafter maintained by the
Borrower for its own respective account (but not including funds
held in custodian or trust accounts) with such Bank or participant
or such branch, Subsidiary or Affiliate. Such right shall exist
whether or not any Bank or the Agent shall have made any demand
under this Agreement or any other Loan Document, whether or not
such debt owing to or funds held for the account of such Loan Party
is or are matured or unmatured and regardless of the existence or
adequacy of any Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
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8.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be
continuing, and if the Required Bank have elected to accelerate the
maturity of Loans pursuant to any of the foregoing provisions of
this Section 8.2, the Agent or any Bank, if owed any amount with
respect to the Term Notes, may proceed to protect and enforce its
rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement or the Term Notes, including
as permitted by applicable Law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Agent or such
Bank; and
8.2.5 Application of Proceeds.
From and after the date on which the Agent has
taken any action pursuant to this Section 8.2 and until all
Obligations of the Borrower have been paid in full, any and all
proceeds received by the Agent from the exercise of any other
remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the
Banks for out-of-pocket costs, expenses and disbursements,
including reasonable attorneys' and paralegals' fees and legal
expenses, incurred by the Agent or the Banks in connection with
realizing on the Collateral or collection of any Obligations of any
of the Borrower under any of the Loan Documents;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Borrower to the Banks
incurred under this Agreement or any of the other Loan Documents,
whether of principal, interest, fees, expenses or otherwise, in
such manner as the Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
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9. THE AGENT
9.1 Appointment.
Each Bank hereby irrevocably designates, appoints and
authorizes PNC Bank to act as Agent for such Bank under this
Agreement and to execute and deliver or accept on behalf of each of
the Banks the other Loan Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Term Note by the acceptance of
a Term Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and any other instruments
and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder as are specifically delegated to
or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to
act as the Agent on behalf of the Banks to the extent provided in
this Agreement.
9.2 Delegation of Duties.
The Agent may perform any of its duties hereunder by or
through agents or employees (provided such delegation does not
constitute a relinquishment of its duties as Agent) and, subject to
Sections 9.5 and 9.6, shall be entitled to engage and pay for the
advice or services of any attorneys, accountants or other experts
concerning all matters pertaining to its duties hereunder and to
rely upon any advice so obtained.
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9.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and no implied
covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or otherwise exist.
The duties of the Agent shall be mechanical and administrative in
nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing
in this Agreement, expressed or implied, is intended to or shall be
so construed as to impose upon the Agent any obligations in respect
of this Agreement except as expressly set forth herein. Without
limiting the generality of the foregoing, the use of the term
"agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and
is intended to create or reflect only an administrative
relationship between independent contracting parties. Each Bank
expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or
warranty by the Agent to any Bank; (ii) that it has made and will
continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of the Borrower in
connection with this Agreement and the making and continuance of
the Loans hereunder; and (iii) except as expressly provided herein,
that the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any
credit or other information with respect thereto, whether coming
into its possession before the making of any Loan or at any time or
times thereafter.
9.4 Actions in Discretion of Agent; Instructions from the
Banks.
The Agent agrees, upon the written request of the
Required Banks, to take or refrain from taking any action of the
type specified as being within the Agent's rights, powers or
discretion herein, provided that the Agent shall not be required to
take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or
applicable Law. In the absence of a request by the Required Banks,
the Agent shall have authority, in its sole discretion, to take or
not to take any such action, unless this Agreement specifically
requires the consent of the Required Banks or all of the Banks.
Any action taken or failure to act pursuant to such instructions or
discretion shall be binding on the Banks, subject to Section 9.6.
Subject to the provisions of Section 9.6, no Bank shall have any
right of action whatsoever against the Agent as a result of the
Agent acting or refraining from acting hereunder in accordance with
the instructions of the Required Banks, or in the absence of such
instructions, in the absolute discretion of the Agent.
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9.5 Reimbursement and Indemnification of Agent by the
Borrower.
The Borrower unconditionally agrees to pay or reimburse
the Agent and hold the Agent harmless against (a) liability for the
payment of all reasonable out-of-pocket costs, expenses and
disbursements, including fees and expenses of counsel (including
the allocated costs of staff counsel), appraisers and environmental
consultants, incurred by the Agent (i) in connection with the
development, negotiation, preparation, printing, execution,
syndication, interpretation and performance of this Agreement and
the other Loan Documents, (ii) relating to any requested
amendments, waivers or consents pursuant to the provisions hereof,
(iii) in connection with the enforcement of this Agreement or any
other Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or
receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation,
exercise or enforcement of any of the terms hereof or of any rights
hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, and (b) all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to
or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by the Agent hereunder or thereunder,
provided that the Borrower shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same
results from the Agent's gross negligence or willful misconduct, or
if the Borrower was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense
(except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower),
or if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not
be unreasonably withheld. At the Borrower's reasonable request, an
officer of the Borrower may discuss initial budgets developed by
counsel for the Agent (as long as such counsel determines that no
privilege will be waived as a result of such discussions). Nothing
in this Section 9.5 prevents the Borrower from obtaining its own
counsel and controlling its own defense in any action.
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9.6 Exculpatory Provisions; Limitation of Liability.
Neither the Agent nor any of its directors, officers,
employees, agents, attorneys or Affiliates shall (a) be liable to
any Bank for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including pursuant to any Loan
Document, unless caused by its or their own gross negligence or
willful misconduct, (b) be responsible in any manner to any of the
Banks for the effectiveness, enforceability, genuineness, validity
or the due execution of this Agreement or any other Loan Documents
or for any recital, representation, warranty, document,
certificate, report or statement herein or made or furnished under
or in connection with this Agreement or any other Loan Documents,
or (c) be under any obligation to any of the Banks to ascertain or
to inquire as to the performance or observance of any of the terms,
covenants or conditions hereof or thereof on the part of the
Borrower, or the financial condition of the Loan Parties, or the
existence or possible existence of any Event of Default or
Potential Default. No claim may be made by the Borrower, any Bank,
the Agent or any of their respective Subsidiaries against the
Agent, any Bank or any of their respective directors, officers,
employees, agents, attorneys or Affiliates, or any of them, for any
special, indirect or consequential damages or, to the fullest
extent permitted by Law, for any punitive damages in respect of any
claim or cause of action (whether based on contract, tort,
statutory liability, or any other ground) based on, arising out of
or related to any Loan Document or the transactions contemplated
hereby or any act, omission or event occurring in connection
therewith, including the negotiation, documentation, administration
or collection of the Loans, and the Borrower, (for itself and on
behalf of each of its Subsidiaries), the Agent and each Bank hereby
waive, releases and agree never to ▇▇▇ upon any claim for any such
damages, whether such claim now exists or hereafter arises and
whether or not it is now known or suspected to exist in its favor.
Each Bank agrees that, except for notices, reports and other
documents expressly required to be furnished to the Banks by the
Agent hereunder or given to the Agent for the account of or with
copies for the Banks, the Agent and each of its directors,
officers, employees, agents, attorneys or Affiliates shall not have
any duty or responsibility to provide any Bank with an credit or
other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness
of the Borrower which may come into the possession of the Agent or
any of its directors, officers, employees, agents, attorneys or
Affiliates.
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9.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent
(to the extent not reimbursed by the Borrower and without limiting
the Obligation of the Borrower to do so) in proportion to its
Ratable Share from and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements, including attorneys' fees and
disbursements (including the allocated costs of staff counsel), and
costs of appraisers and environmental consultants, of any kind or
nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to
or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by the Agent hereunder or thereunder,
provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same
results from the Agent's gross negligence or willful misconduct, or
(b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such
failure to give notice does not result in a loss to the Bank), or
(c) if the same results from a compromise and settlement agreement
entered into without the consent of such Bank, which shall not be
unreasonably withheld. In addition, each Bank agrees promptly upon
demand to reimburse the Agent (to the extent not reimbursed by the
Borrower and without limiting the Obligation of the Borrower to do
so) in proportion to its Ratable Share for all amounts due and
payable by the Borrower to the Agent in connection with the Agent's
periodic audit of the Borrower's books, records and business
properties.
9.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document
or conversation by telephone or otherwise believed by it to be
genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to
take any such action.
9.9 Notice of Default.
The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Potential Default or Event of
Default unless the Agent has received written notice from a Bank or
the Borrower referring to this Agreement, describing such Potential
Default or Event of Default and stating that such notice is a
"notice of default."
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9.10 Notices.
The Agent shall promptly send to each Bank a copy of
all notices received from the Borrowers pursuant to the provisions
of this Agreement or the other Loan Documents promptly upon receipt
thereof. The Agent shall promptly notify the Borrower and the
other Banks of each change in the Base Rate and the effective date
thereof.
9.11 Banks in Their Individual Capacities.
With respect to the Loans made by it, and any other
rights and powers given to it as a Bank hereunder or under any of
the other Loan Documents, the Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the term "Banks" shall, unless
the context otherwise indicates, include the Agent in its
individual capacity. PNC Bank and its Affiliates and each of the
Banks and their respective Affiliates may, without liability to
account, except as prohibited herein, make loans to, accept
deposits from, discount drafts for, act as trustee under indentures
of, and generally engage in any kind of banking or trust business
with, the Borrower and its Affiliates, in the case of the Agent, as
though it were not acting as Agent hereunder and in the case of
each Bank, as though such Bank were not a Bank hereunder. The
Banks acknowledge that, pursuant to such activities, the Agent or
its Affiliates may (i) receive information regarding the Borrower
(including information that may be subject to confidentiality
obligations in favor of the Borrower) and acknowledge that the
Agent shall be under no obligation to provide such information to
them, and (ii) accept fees and other consideration from the
Borrower for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
9.12 Holders of Notes.
The Agent may deem and treat any payee of any Term Note
as the owner thereof for all purposes hereof unless and until
written notice of the assignment or transfer thereof shall have
been filed with the Agent. Any request, authority or consent of
any Person who at the time of making such request or giving such
authority or consent is the holder of any Term Note shall be
conclusive and binding on any subsequent holder, transferee or
assignee of such Term Note or of any Term Note or Term Notes issued
in exchange therefor.
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9.13 Equalization of Banks.
The Banks agree among themselves that, with respect to
all amounts received by any Bank for application on any Obligation
hereunder or under any Term Note, whether received by voluntary
payment, by realization upon security, by the exercise of the right
of set-off or banker's lien, by counterclaim or by any other non-pro
rata source, equitable adjustment will be made in the manner
stated in the following sentence so that, in effect, all such
excess amounts will be shared ratably among the Banks and such
holders in proportion to their interests in payments under the Term
Notes, except as otherwise provided in Section 3.4.3 or 4.5. The
Banks receiving any such amount shall purchase for cash from each
of the other Banks an interest in such Bank's Loans in such amount
as shall result in a ratable participation by the Banks in the
aggregate unpaid amount under the Term Notes, provided that if all
or any portion of such excess amount is thereafter recovered from
the Bank making such purchase, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law
(including court order) to be paid by the Bank making such
purchase.
9.14 Successor Agent.
The Agent (i) may resign as Agent or (ii) shall resign
if such resignation is requested by the Required Banks (if the
Agent is a Bank, the Agent's Commitment shall be considered in
determining whether the Required Banks have requested such
resignation), in either case of (i) or (ii) by giving not less than
thirty (30) days' prior written notice to the Borrowers. If the
Agent shall resign under this Agreement, then either (a) the
Required Banks shall appoint from among the Banks a successor agent
for the Banks, subject to the consent of the Borrower, such consent
not to be unreasonably withheld, or (b) if a successor agent shall
not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then
the Agent shall appoint, with the consent of the Borrowers, such
consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint
and the Borrower consent to the appointment of a successor agent.
Upon its appointment pursuant to either clause (a) or (b) above,
such successor agent shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall mean such successor agent,
effective upon its appointment, and the former Agent's rights,
powers and duties as Agent shall be terminated without any other or
further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any Agent
hereunder, the provisions of this Section 9 shall inure to the
benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability
for any actions taken or not taken by it while it was an Agent
under this Agreement.
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9.15 Agent's Fee.
The Borrower shall pay to the Agent a nonrefundable fee
(the "Agent's Fee"), payable quarterly in arrears, equal to .25%
per annum of the average outstanding principal balance of the Term
Loan for each year that any such balance remains outstanding..
9.16 Calculations.
In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any error in
computing the amount payable to any Bank whether in respect of the
Loans, fees or any other amounts due to the Banks under this
Agreement. In the event an error in computing any amount payable
to any Bank is made, the Agent, the Borrower and each affected Bank
shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds
Effective Rate.
9.17 Beneficiaries.
Except as expressly provided herein, the provisions of
this Section 9 are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights to rely on or
enforce any of the provisions hereof. In performing its functions
and duties under this Agreement, the Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or
trust with or for the Borrower.
10. MISCELLANEOUS
10.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the
Agent, acting on behalf of all the Banks and the Borrower, may from
time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the
rights of the Banks or the Borrower hereunder or thereunder, or may
grant written waivers or consents to a departure from the due
performance of the Obligations of the Borrower hereunder or
thereunder. Any such agreement, waiver or consent made with such
written consent shall be effective to bind all the Banks and the
Borrower; provided, that, without the written consent of all the
Banks, no such agreement, waiver or consent may be made which will:
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10.1.1 Extension of Payment; Reduction of Principal
Interest or Fees; Modification of Terms of Payment.
Whether or not any portion of the Term Loan is
outstanding, extend the time for payment of principal or interest
of the Term Loan or any other fee payable to any Bank, or reduce
the principal amount of or the rate of interest borne by the Term
Loan, or otherwise affect the terms of payment of the principal of
or interest of the Term Loan or any other fee payable to any Bank;
10.1.2 Release of Guarantor.
Release any Guarantor from its Obligations under
the Subsidiaries Guaranty; or
10.1.3 Miscellaneous
Amend Section 4.2 (Pro Rata Treatment of Banks),
9.6 (Exculpatory Provisions, etc.) or 9.13 (Equalization of Banks)
or this Section 10.1, alter any provision regarding the pro rata
treatment of the Banks, change the definition of Required Banks, or
change any requirement providing for the Banks or the Required
Banks to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would
modify the interests, rights or obligations of the Agent in its
capacity as Agent shall be effective without the written consent of
the Agent.
10.2 No Implied Waivers; Cumulative Remedies; Writing
Required.
No course of dealing and no delay or failure of the
Agent or any Bank or the Borrower in exercising any right, power,
remedy or privilege under this Agreement or any other Loan Document
shall affect any other or future exercise thereof or operate as a
waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right,
power, remedy or privilege preclude any further exercise thereof or
of any other right, power, remedy or privilege. The rights and
remedies of the Agent and the Banks under this Agreement and any
other Loan Documents are cumulative and not exclusive of any rights
or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any
Bank of any breach or default under this Agreement or any such
waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set
forth in such writing.
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10.3 Reimbursement and Indemnification of Banks by the
Borrower; Taxes.
The Borrower agrees within thirty (30) calendar days
after demand to pay or reimburse to each Bank (other than the
Agent, as to which the Borrower's Obligations are set forth in
Section 9.5) and to save such Bank harmless against (i) liability
for the payment of all reasonable out-of-pocket costs, expenses and
disbursements (including fees and expenses of counsel for each Bank
except with respect to (a) and (b) below), incurred by such Bank
(a) in connection with the interpretation of this Agreement, and
other instruments and documents to be delivered hereunder,
(b) relating to any amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this
Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (d) in any
workout or restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) 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 such Bank, in its capacity as
such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by such
Bank hereunder or thereunder, provided that the Borrower shall not
be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrower was not
given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the
Borrower shall remain liable to the extent such failure to give
notice does not result in a loss to the Borrower), or (C) if the
same results from a compromise or settlement agreement entered into
without the consent of the Borrower, which shall not be
unreasonably withheld. The Banks will attempt to minimize the fees
and expenses of legal counsel for the Banks which are subject to
reimbursement by the Borrower hereunder by considering the usage of
one law firm to represent the Banks and the Agent if appropriate
under the circumstances. The Borrower agrees unconditionally to
pay all stamp, document, transfer, recording or filing taxes or
fees and similar impositions now or hereafter determined by the
Agent or any Bank to be payable in connection with this Agreement
or any other Loan Document, and the Borrower agree unconditionally
to save the Agent and the Banks harmless from and against any and
all present or future claims, liabilities or losses with respect to
or resulting from any omission to pay or delay in paying any such
taxes, fees or impositions.
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10.4 Holidays.
Whenever payment of the Term Loan to be made or taken
hereunder shall be due on a day which is not a Business Day such
payment shall be due on the next Business Day and such extension of
time shall be included in computing interest and fee, except that
the Term Loan shall be due on the Business Day preceding the
Maturity Date if the Maturity Date is not a Business Day. Whenever
any payment or action to be made or taken hereunder (other than
payment of the Loans) shall be stated to be due on a day which is
not a Business Day, such payment or action shall be made or taken
on the next following Business Day (except as provided in Section
3.2 with respect to Interest Periods), and such extension of time
shall not be included in computing interest or fees, if any, in
connection with such payment or action.
10.5 Notices.
All notices, requests, demands, directions and other
communications (as used in this Section 10.5, collectively referred
to as "notices") given to or made upon any party hereto under the
provisions of this Agreement shall be by telephone or in writing
(including telex or facsimile communication) unless otherwise
expressly permitted hereunder and shall be delivered or sent by
telex or facsimile to the respective parties at the addresses and
numbers set forth under their respective names on Schedule 1.1(B)
hereof or in accordance with any subsequent unrevoked written
direction from any party to the others. All notices shall, except
as otherwise expressly herein provided, be effective (a) in the
case of telex or facsimile, when received, (b) in the case of
hand-delivered notice, when hand-delivered, (c) in the case of
telephone, when telephoned, provided, however, that in order to be
effective, telephonic notices must be confirmed in writing no later
than the next day by letter, facsimile or telex, (d) if given by
mail, four (4) days after such communication is deposited in the
mail with first-class postage prepaid, return receipt requested,
and (e) if given by any other means (including by air courier),
when delivered; provided, that notices to the Agent shall not be
effective until received and provided, further, that any notices of
a Potential Default or an Event of Default shall be sent by
facsimile or overnight delivery service. Any Bank giving any
notice to the Borrower shall simultaneously send a copy thereof to
the Agent, and the Agent shall promptly notify the other Banks of
the receipt by it of any such notice.
10.6 Severability.
The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any
other jurisdiction or the remaining provisions hereof in any
jurisdiction.
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10.7 Governing Law.
This Agreement shall be deemed to be a contract under
the Laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed and enforced in accordance with
the internal laws of the Commonwealth of Pennsylvania without
regard to its conflict of laws principles.
10.8 Prior Understanding.
This Agreement and the other Loan Documents supersede
all prior understandings and agreements, whether written or oral,
between the parties hereto and thereto relating to the transactions
provided for herein and therein, including any prior
confidentiality agreements and commitments.
10.9 Duration; Survival.
All representations and warranties of the Borrower
contained herein or made in connection herewith shall survive the
making of the Term Loan and shall not be waived by the execution
and delivery of this Agreement, any investigation by the Agent or
the Banks, the making of the Term Loan, or payment in full of the
Term Loan. All covenants and agreements of the Borrower contained
in Sections 7.1, 7.2 and 7.3 herein shall continue in full force
and effect from and after the date hereof until payment in full of
the Term Loan. All covenants and agreements of the Borrower
contained herein relating to the payment of principal, interest,
premiums, additional compensation or expenses and indemnification,
including those set forth in the Term Notes, Section 4 and Sections
9.5, 9.7 and 10.3, shall survive payment in full of the Term Loan.
10.10 Successors and Assigns.
This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Borrower and their
respective successors and assigns, except that (i) the Borrower may
not assign or transfer any of its rights and Obligations hereunder
or any interest herein and (ii) no Bank may assign or transfer its
interest hereunder without the prior written consent of the Agent,
which consent may be granted in the Agent's sole discretion.
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10.11 Confidentiality.
The Agent and the Banks each agree to keep confidential
all information obtained from the Borrower or its Subsidiaries
which is nonpublic and confidential or proprietary in nature
(including any information the Borrower specifically designate as
confidential), except as provided below, and to use such
information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The
Agent and the Banks shall be permitted to disclose such information
(i) to outside legal counsel, accountants and other professional
advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to
agreement of such Persons to maintain the confidentiality, (ii) to
assignees and participants as contemplated by Section 10.10
provided that they shall execute an agreement in favor of the
Borrower covering the matters set forth in this Section 10.12,
(iii) to the extent requested by any bank regulatory authority or,
with notice to the Borrower, as otherwise required by applicable
Law or by any subpoena or similar legal process, or in connection
with any investigation or proceeding arising out of the
transactions contemplated by this Agreement, (iv) if it becomes
publicly available other than as a result of a breach of this
Agreement or becomes available from a source not bound by
confidentiality restrictions, or (v) if the Borrower shall have
consented to such disclosure.
10.12 Counterparts.
This Agreement may be executed by different parties
hereto on any number of separate counterparts, each of which, when
so executed and delivered, shall be an original, and all such
counterparts shall together constitute one and the same instrument.
10.13 Agent's or Bank's Consent.
Except as otherwise provided in the Loan Documents,
whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as
a condition to any action, inaction, condition or event, the Agent
and each Bank shall be authorized to give or withhold such consent
in its reasonable discretion.
10.14 Exceptions.
The representations, warranties and covenants contained
herein shall be independent of each other, and no exception to any
representation, warranty or covenant shall be deemed to be an
exception to any other representation, warranty or covenant
contained herein unless expressly provided, nor shall any such
exceptions be deemed to permit any action or omission that would be
in contravention of applicable Law.
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10.15 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY
COUNTY AND THE UNITED STATES DISTRICT COURT FOR THE WESTERN
DISTRICT OF PENNSYLVANIA, AND WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS
BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE BORROWER AT
THE ADDRESSE PROVIDED FOR IN SECTION 10.5 AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. THE BORROWER
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE. THE BORROWER,
THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
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IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the
day and year first above written.
ATTEST: CHAMPION INDUSTRIES, INC.,
a West Virginia corporation
By: /s/ ▇▇▇▇▇▇ ▇. Worth, III
------------------------------ ---------------------------------------------
▇▇▇▇▇▇ ▇. Worth, III
Chief Financial Officer
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PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Vice President
BANC ONE, WEST VIRGINIA
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
NATIONAL CITY BANK OF COLUMBUS
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
STAR BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇
Vice President
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SCHEDULE 1.1(B)REVOLVING CREDIT COMMITMENTS OF BANKS AND
ADDRESSES FOR NOTICES
Part 1 - Commitments of Banks and Addresses for Notices to Banks
----------------------------------------------------------------
Amount of Commitment
Bank for Term Loan Ratable Share
---- -------------------- --------------
PNC Bank, National Association
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ $5,000,000.00 40%
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ $3,000,000.00 24%
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
National City Bank of Columbus
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ $2,500,000.00 20%
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.1(B) - 1
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Star Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ (ML8160) $2,000,000.00 16%
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Total $12,500,000.00 100%
============== ====
SCHEDULE 1.1(B) - 2
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SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Part 2 - Addresses for Notices to Borrower:
AGENT
PNC Bank, National Association
One PNC Plaza
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Multi-Bank Loan Administration
One PNC Plaza
4th Floor
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BORROWER:
Champion Industries, Inc.
▇▇▇▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ Worth, Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.1(B) - 3
-141-
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1, made as of this 1st day of August,
1997 (Amendment No. 1), among CHAMPION INDUSTRIES, INC. (the
Borrower), BANC ONE, WEST VIRGINIA (a Bank), NATIONAL CITY BANK OF
COLUMBUS (a Bank), STAR BANK, NATIONAL ASSOCIATION (a Bank) and PNC
Bank, National Association, as Agent (a Bank and the Agent).
WHEREAS, the Borrower, the Banks and the Agent are parties to
a Credit Agreement dated as of March 31, 1997 (the Credit
Agreement); and
WHEREAS, the Borrower, the Banks and the Agent wish to amend
the Credit Agreement as to the payment dates for installments due
under the Term Notes.
NOW, THEREFORE, in consideration of the premises and covenants
contained herein and intending to be legally bound hereby, the
Agent, the Banks and the Borrower agree as follows:
1. Definitions. Capitalized terms used herein but not
defined herein shall have the meanings set forth in the Credit
Agreement.
2. Payment Dates. Section 2.3 is amended to restate the
second sentence in its entirety as follows:
The principal amount of the Term Notes shall be
payable in 84 monthly installments of $148,809.53
beginning on May 10, 1997 and ending on April 10, 2004.
3. Representations and Warranties. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
(a) all representations, warranties and covenants made
by the Borrower to the Banks and the Agent that are contained in
the Loan Documents are true and correct on and as of the date
hereof with the same effect as though such representations,
warranties and covenants had been made on and as of the date
hereof;
(b) to the Borrower's knowledge, no event or condition
has occurred or exists which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default
under any of the Loan Documents;
(c) the copies of the Articles of Incorporation and
Bylaws of the Borrower delivered by the Borrower to the Agent on
March 31, 1997 have not been amended, revised, supplemented,
restated or changed in any way and are still in full force and
effect; and
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(d) The execution and delivery of this Amendment No. 1
and the consummation of the transactions contemplated hereby and by
any other documents executed by the Borrower required to be
delivered to the Agent in connection with this Amendment No. 1 have
been duly and validly authorized by the Borrower and all such
documents together constitute the legal, valid and binding
agreement of the Borrowers, enforceable against the Borrower in
accordance with their respective terms, except to the extent that
enforceability of any of such document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforceability of creditors' rights generally or
general equitable principles.
4. Counterparts. This Amendment No. 1 may be executed in one
or more counterparts by any party hereto in separate counterparts,
each of which when so executed and delivered to the other party
shall be deemed an original. All such counterparts together shall
constitute one and the same instrument.
5. Waivers. This Amendment No. 1 shall not, except as
expressly set forth above, serve to waive, supplement or amend the
Credit Agreement, which Credit Agreement shall remain in full force
and effect as amended hereby.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment No. 1 as of the date and year first above
written.
ATTEST: CHAMPION INDUSTRIES, INC.,
a Delaware corporation
--------------------------- By:-------------------------------
--------------------------- Title:----------------------------
[Seal]
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BANC ONE, WEST VIRGINIA
--------------------------- By:-------------------------------
--------------------------- Title:----------------------------
NATIONAL CITY BANK OF COLUMBUS
--------------------------- By:-------------------------------
--------------------------- Title:----------------------------
STAR BANK, NATIONAL ASSOCIATION
--------------------------- By:-------------------------------
--------------------------- Title:----------------------------
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
--------------------------- By:-------------------------------
--------------------------- Title:----------------------------
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