CREDIT AGREEMENT
AMONG
XXXXXXX RESEARCH CORPORATION
("Borrower"),
THE BANKS SET FORTH ON SCHEDULE 1 HERETO
("Banks")
AND
CORESTATES BANK, N.A.,
AS AGENT FOR THE BANKS
("Agent")
November 25, 1997
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is made this 25th day
of November, 1997, by and among XXXXXXX RESEARCH CORPORATION, a Delaware
corporation ("Borrower"); CORESTATES BANK, N.A., a national banking association
("CoreStates") and the other banks identified on Schedule 1 attached hereto
(each individually a "Bank" and individually and collectively, "Banks"); and
CoreStates as agent for the Banks ("Agent").
In consideration of the agreements hereinafter set forth, and
intending to be legally bound, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions. When used in this Agreement, the following
terms shall have the respective meanings set forth below.
"Acquisition Price" means, with respect to any Permitted
Acquisition, the aggregate consideration payable by the Companies in connection
therewith, including deferred or contingent obligations accounted for as
liabilities in accordance with GAAP.
"Advance" means a borrowing under the Commitment pursuant to
Paragraph 2.7 hereof.
"Advance Request Form" means the certificate in the form
attached hereto as Exhibit A to be delivered by Borrower to Agent as a condition
of each Advance.
"Affiliate" means as to any party: (i) any person who or
entity which directly or indirectly owns, controls or holds ten percent (10%) or
more of the outstanding beneficial interests in such party; (ii) any entity of
which ten percent (10%) or more of the outstanding beneficial interest is
directly or indirectly owned, controlled, or held by such party; (iii) any
entity which directly or indirectly is under common control with such party;
(iv) any director or general partner of such party or any Affiliate; or (v) any
immediate family member of any person who is an Affiliate. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract, or otherwise.
"Agent" means CoreStates Bank, N.A., in its capacity as agent
for the Banks hereunder and any successor in such capacity appointed pursuant to
Paragraph 9.15 and 9.16 hereof.
"Agreement" means this Credit Agreement and all exhibits
hereto, as each may be amended, modified, extended, consolidated or restated
from time to time.
"ASIDA Bonds" means the bonds issued by the Alabama State
Industrial Development Authority for the benefit of Borrower, having an
aggregate principal balance of $1,842,300.00 as of the date hereof and a final
maturity of January, 2000.
"Bank" means individually, and "Banks" means individually and
collectively, the institutions identified on Schedule 1 attached hereto and
their respective successors and assigns so long as any such institution retains
any portion of the Commitment or Loan hereunder.
"Base Rate" means the higher of (a) the Federal Funds Rate
plus one half of one percent (1/2%) per annum or (b) the Prime Rate.
"Borrower" means Xxxxxxx Research Corporation, a Delaware
corporation.
"Business Day" means any day not a Saturday, Sunday or a day
on which banks are required or permitted to be closed under the laws of the
Commonwealth of Pennsylvania.
"Capital Leases" means capital leases and subleases, as
defined in Statement 13 of the Financial Accounting Standards Board dated
November 1976, as amended and updated from time to time.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, as amended from time to time, and all rules and
regulations promulgated in connection therewith.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and regulations with respect thereto in effect from time to
time.
"Commitment" means either the Short Term Commitment or the
Three Year Commitment, or both of them, as applicable..
"Company" means individually, and "Companies" means
individually and collectively, Borrower and each Guarantor.
"Compliance Certificate" means a certificate in the form of
Exhibit F attached hereto delivered by Borrower to Banks pursuant to Paragraph
5.4 or Paragraph 4.1 hereof.
"Debt to Capitalization Ratio" means, as of any date of
determination, the ratio of (a) Funded Debt of Borrower and its consolidated
Subsidiaries to (b) total stockholders' equity plus Funded Debt of Borrower and
its consolidated Subsidiaries, determined in accordance with GAAP.
"Default" means an event, condition or circumstance the
occurrence of which would, with the giving of notice or the passage of time or
both, constitute an Event of Default.
"EBITDA" means, for any period, net income for such period as
defined in accordance with GAAP, plus interest expense, taxes, depreciation and
amortization, in each case as defined in accordance with GAAP and to the extent
each has been deducted in determining net income.
"EBITDAR" means, for any period, EBITDA for such period plus
lease and rental expense for such period, as defined in accordance with GAAP and
to the extent deducted in determining net income.
"Environmental Control Statutes" means any federal, state,
county, regional or local laws governing the control, storage, removal, spill,
release or discharge of Hazardous Substances, including without limitation
CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984,
the Federal Water Pollution Control Act, as amended by the Clean Water Act of
1976, the Hazardous Materials Transportation Act, the Emergency Planning and
Community Right to Know Act of 1986, the National Environmental Policy Act of
1975, the Oil Pollution Act of 1990, any similar or implementing state law, and
in each case including all amendments thereto and all rules and regulations
promulgated thereunder and permits issued in connection therewith.
"EPA" means the United States Environmental Protection Agency,
or any successor thereto.
"ERISA" means the Employee Retirement Income Security Act of
1974, all amendments thereto and all rules and regulations in effect at any time
thereunder.
"ERISA Affiliate" means, when used with respect to any Plan,
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any person or entity that is a member of any group or organization within the
meaning of Code Sections 414(b), (c), (m) or (o) of which Borrower or any
Guarantor is a member.
"Event of Default" means an event described in Paragraph 8.1
hereof.
"Existing Credit Agreement" means the Credit Agreement dated
August 16, 1995 by and among Borrower and SouthTrust Bank of Alabama, National
Association, First Alabama Bank and CoreStates Bank, N.A., as amended.
"Federal Funds Rate" means, for any day, the effective rate of
interest for such day, as announced from time to time by the Board of Governors
of the Federal Reserve System as shown in publication H.15 as the "Federal Funds
Rate."
"Fixed Charge Coverage Ratio" means, as of any date of
determination, the ratio of (a) EBITDAR for Borrower and its consolidated
Subsidiaries for the most recent Rolling Period, to (b) the sum of (i) the
current portion of long term debt, and (ii) interest, lease and rental expense
for Borrower and its consolidated Subsidiaries for the most recent Rolling
Period.
"Funded Debt" means, as of the date of determination, the
aggregate outstanding principal amount of all Indebtedness for, without
duplication:
(A) borrowed money (other than trade Indebtedness
incurred in the normal and ordinary course of business for value received),
including without limitation the Loan hereunder;
(B) the purchase price for installment purchases of
real or personal property;
(C) the principal portion of Capital Leases;
(D) guaranties of Funded Debt of others; and
(E) reimbursement obligations under letters of
credit, including the amount of any Letters of Credit outstanding hereunder and
unreimbursed draws under Letters of Credit issued hereunder.
"GAAP" means generally accepted accounting principles set
forth in the Opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and in statements of the Financial
Accounting Standards Board and in such other statements by such other entity as
Agent may reasonably approve, which are applicable in the circumstances as of
the date in question, subject to Paragraph 1.2(a) hereof; and such principles
observed in a current period shall be comparable in all material respects to
those applied in a preceding period.
"Guarantor" means individually, and "Guarantors" means
individually and collectively, each Material Subsidiary of Borrower, including
any future Material Subsidiaries of Borrower which may join in the Guaranty
pursuant to Paragraph 5.20 hereof.
"Guaranty" means the Guaranty Agreement executed by Guarantors
in favor of Banks as required to be delivered pursuant to Paragraph 4.1 hereof
and including any joinders thereto pursuant to Paragraph 5.20 hereof, as may be
amended, modified or restated from time to time.
"Hazardous Substance" means petroleum products and items
defined in the Environmental Control Statutes as "hazardous substances",
"hazardous wastes", "pollutants" or "contaminants" and any other toxic,
reactive, corrosive, carcinogenic, flammable or hazardous substance or other
pollutant.
"Indebtedness" of any person as of any date of determination
means and includes all obligations of such person which, in accordance with
GAAP, shall be classified on a balance sheet of such person as liabilities of
such person and in any event shall include, without duplication, all (i)
obligations of such person for borrowed money or which have been incurred in
connection with acquisition of property or assets, (ii) obligations secured by
any lien upon property or assets owned by such person, notwithstanding that such
person has not assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (iv) Capital Leases, (v) guarantees and (vi) letters of
credit and letter of credit reimbursement obligations.
"Letter of Credit" means individually, and "Letters of Credit"
means individually and collectively, the letter(s) of credit issued from time to
time by Agent and participated in by Banks pursuant to the terms and conditions
of Section 2A hereof.
"Letter of Credit Request Form" shall mean the certificate in
the form attached as Exhibit B-1 hereto to be delivered by Borrowers to Agent as
a condition of each issuance of a Letter of Credit pursuant to Paragraph 2A.3
hereof.
"Letter of Credit Sublimit" shall mean the portion of the
Three Year Commitment up to which Banks have agreed to participate in the
issuance by Agent of Letters of Credit pursuant to Section 2A hereof, being
Twenty-Five Million Dollars ($25,000,000).
"Loan" means the aggregate outstanding balance of Indebtedness
under the Short Term Loan and the Three Year Loan, together with all interest,
costs and fees and expenses due hereunder.
"Loan Documents" means the Agreement, the Note, the Guaranty
and the other documents and agreements executed and delivered in connection with
this Agreement.
"Local Authorities" means individually and collectively the
state and local governmental authorities and administrative agencies which
govern the business, commercial activities or facilities owned or operated by
any Company.
"Material Adverse Effect" means a material adverse effect on
the business, financial condition or prospects of the Borrower and its
consolidated Subsidiaries taken as a whole.
"Material Subsidiary" means any direct or indirect Subsidiary
of Borrower which either: (i) comprises 5% or more of the assets of Borrower and
its consolidated Subsidiaries as of the last day of the most recently ended
fiscal quarter, or (ii) is responsible for 5% or more of the EBITDA of the
Borrower and its consolidated Subsidiaries for the most recent Rolling Period.
"Maximum Principal Amount" means the maximum principal amount
of the Commitment, or the Short Term Commitment or Three Year Commitment, as
applicable, up to which the applicable Bank has agreed to lend funds and/or
participate in the issuance of Letters of Credit, as set forth in Schedule 1
attached hereto, as such amounts may be reduced or terminated from time to time
pursuant to Paragraph 2.8 hereof.
"Net Cash Proceeds" shall mean, with respect to any Sale of
Material Assets, the cash proceeds received by the seller in such a transaction
less (i) the reasonable costs of the transaction, (ii) reasonable reserves for
retained liabilities, (iii) applicable taxes arising out of the transaction and
(iv) the amount of any such proceeds used to repay indebtedness secured by the
assets sold.
"Note" means individually, and "Notes" means individually and
collectively, the Short Term Notes and the Three Year Notes.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Acquisition" means any acquisition, whether by
merger, consolidation, purchase of equity securities or purchase of operating
assets, in which the acquisition target is operating solely in the United States
of America and is engaged in the same or a substantially similar business as the
Companies.
"Permitted Investments" means (i) investments in commercial
paper maturing in 180 days or less from the date of issuance which is rated A1
or better by Standard & Poor's Corporation or P1 or better by Xxxxx'x Investors
Services, Inc.; (ii) investments in direct obligations of the United States of
America or obligations of any agency thereof which are guaranteed by the United
States of America, provided that such obligations mature within twelve (12)
months of the date of acquisition thereof; and (iii) investments in certificates
of deposit maturing within one (1) year from the date of acquisition thereof
issued by a bank or trust company organized under the laws of the United States
or any state thereof, having capital, surplus and undivided profits aggregating
at least $500,000,000 and the long-term deposits of which are rated A1 or better
by Xxxxx'x Investors Services, Inc. or equivalent by Standard & Poor's
Corporation.
"Plan" means any employee pension benefit or employee welfare
benefit plan as defined in Sections 3(1) or (2) of ERISA maintained or sponsored
by, contributed to, or covering employees of, either Borrower or any ERISA
Affiliate.
"Prime Rate" means the rate of interest announced by Agent
from time to time as its prime rate.
"Pro Rata Share" shall mean, as to a Bank, the ratio which the
outstanding principal balance of its portion of the Loan hereunder bears to the
aggregate outstanding principal balance of the Loan at any time; or if no
indebtedness is outstanding hereunder or the context otherwise requires, its
percentage share of the Commitment as set forth in Schedule 1 attached hereto.
"Release" means any spill, leak, emission, discharge or the
pumping, pouring, emptying, disposing, injecting, escaping, leaching or dumping
of a Hazardous Substance.
"Required Banks" shall mean those Banks (which may include
Agent in its capacity as a Bank) holding Pro Rata Shares of the Loan aggregating
fifty-five percent (55%) or more.
"Required Tangible Net Worth" means Seventy-Five Million
Dollars ($75,000,000) as of August 31, 1997, increasing as of the end of each
fiscal quarter ending thereafter by an amount equal to fifty percent (50%) of
positive net income for such quarter (with no decrease for losses for any
quarter).
"Restricted Payments" means redemptions, repurchases, and
distributions of any kind (including redemptions in exchange for real or
tangible personal property held by a Company) in respect of the capital stock of
Borrower.
"Rolling Period" means a period of four consecutive fiscal
quarters for which a Compliance Certificate has been (or is required to have
been) delivered hereunder.
"Sale of Material Assets" means the sale or other disposition
(including damage, destruction or condemnation of assets) by any Borrower, in a
single transaction or in the aggregate as to all transactions within any twelve
(12) consecutive months, of assets (including stock or other investments or
interests in a Person) which, valued at the greater of book value or fair market
value, have a value of Five Million Dollars ($5,000,000) or more; excluding
dispositions of equipment and other assets in the ordinary course of business,
and the sale of Permitted Investments for cash or the conversion into cash of
Permitted Investments.
"Short Term Commitment" means at any time the maximum
aggregate principal amount which Banks have agreed to make available at such
time under Paragraph 2.1(a) hereof, being Fifty Million Dollars ($50,000,000) in
the aggregate on the date hereof.
"Short Term Commitment Termination Date" means the earlier of
(i) November __, 1998, or (ii) the date on which the Short Term Commitment is
terminated pursuant to Paragraph 2.8 hereof.
"Short Term Loan" means the aggregate principal balance of
Indebtedness advanced under the Short Term Commitment together with interest
accrued thereon and fees and expenses incurred in connection with any of the
foregoing.
"Short Term Note" means individually, and "Short Term Notes"
means individually and collectively, the promissory notes in the form of Exhibit
C-1 attached hereto delivered by Borrower to each Bank, as may be amended,
modified, consolidated or restated from time to time.
"SouthTrust Term Loan" means the indebtedness of the Borrower
pursuant to that certain Term Note dated February 9, 1994 between Borrower and
SouthTrust Bank of Alabama, National Association, having an outstanding
principal balance of $2,870,232.70 as of the date hereof and a final maturity of
February, 2003.
"Subsidiary" means any corporation or partnership of which any
Company, directly or indirectly (including as beneficiary of a business trust),
owns more than fifty percent (50%) of any class or classes of securities or
partnership interests. Unless otherwise specified, references to "Subsidiaries"
herein shall mean direct and indirect Subsidiaries of Borrower.
"Tangible Net Worth", means, as of any date of determination,
total stockholders' equity, less any intangible assets, determined in accordance
with GAAP.
"Three Year Commitment" means at any time the maximum
aggregate principal amount which Banks have agreed to make Advances under
Paragraph 2.1(b) hereof and/or issue Letters of Credit under Section 2A hereof,
being Fifty Million Dollars ($50,000,000) in the aggregate on the date hereof.
"Three Year Commitment Termination Date" means the earlier of
(i) November __, 2000 or (ii) the date on which the Three Year Commitment is
terminated pursuant to Paragraph 2.8 hereof.
"Three Year Loan" means the outstanding principal balance of
indebtedness advanced, and the face amount of Letters of Credit issued, under
the Three Year Commitment, and without duplication the amount of all
unreimbursed draws under Letters of Credit, together with interest accrued on
and fees and expenses incurred in connection with any of the foregoing.
"Three Year Note" mans individually, and "Three Year Notes"
means individually and collectively, the promissory notes in the form of Exhibit
C-2 attached hereto delivered by Borrower to each Bank, as may be amended,
modified, consolidated or restated from time to time.
1.2 Rules of Construction
(a) GAAP. Except as otherwise provided herein,
financial and accounting terms used in the foregoing definitions or elsewhere
in this Agreement, shall be defined in accordance with GAAP. If Borrower or
Required Banks determine that a change in GAAP from that in effect on the date
hereof has altered the treatment of certain financial data to its detriment
under this Agreement, such party may, by written notice to the other within ten
(10) days after the effective date of such change in GAAP, request renegotiation
of the financial covenants affected by such change. If Borrower and
Required Banks have not agreed on revised covenants within thirty (30) days
after the delivery of such notice, then, for purposes of this Agreement,
GAAP will mean generally accepted accounting principles on the date just
prior to the date on which the change occurred that gave rise to the notice.
(b) Use of term "consolidated". Any term defined in
Paragraph 1.1 hereof, when
modified by the word "consolidated," shall have the meaning given to such term
herein as to Borrower and all entities whose accounts, financial results or
position, for financial accounting purposes, are consolidated with those of
Borrower in accordance with GAAP.
SECTION 2
CREDIT FACILITY
2.1 The Facilities
(a) Short Term Commitment. From time to time
prior to the Short Term Commitment Termination Date, subject to the provisions
below, each Bank severally agrees to make Advances to Borrower under the Short
Term Commitment up to its respective Maximum Principal Amount with respect
to the Short Term Commitment, which Borrower may repay and reborrow prior to
the Short Term Commitment Termination Date, for purposes specified in Paragraph
2.4 hereof; provided, however, that the aggregate outstanding principal
amount of such Advances shall not exceed at any time the amount of the Short
Term Commitment.
(b) Three Year Commitment. From time to time
prior to the Three Year Commitment
Termination Date, subject to the provisions below, each Bank severally agrees to
make Advances to Borrower under the Three Year Commitment up to its respective
Maximum Principal Amount with respect to the Three Year Commitment, which
Borrower may repay and reborrow prior to the Three Year Commitment Termination
Date, for purposes specified in Paragraph 2.4 hereof; provided, however, that
the aggregate outstanding principal amount of such Advances, together with the
amount available to be drawn under Letters of Credit and any unreimbursed draws
under Letters of Credit, shall not exceed at any time the amount of the Three
Year Commitment.
2.2 Promissory Notes
(a) Short Term Notes. The Indebtedness of the
Borrower to each Bank under the Short Term Loan will be evidenced by a Short
Term Note executed by Borrower in favor of such Bank. The original principal
amount of each Bank's Short Term Note will be in the amount identified in
Schedule 1 attached hereto as its Maximum Principal Amount with respect to the
Short Term Loan; provided, however, that notwithstanding the face amount
of each such Short Term Note, Borrower's liability thereunder shall be
limited at all times to the actual indebtedness, principal, interest, fees
and expenses then outstanding to such Bank under the Loan.
(b) Three Year Note. The Indebtedness of the
Borrower to each Bank under the Three Year Loan will be evidenced by a Three
Year Note executed by Borrower in favor of such Bank. The original principal
amount of each Bank's Three Year Note will be in the amount identified in
Schedule 1 attached hereto as its Maximum Principal Amount with respect to the
Three Year Note; provided, however, that
notwithstanding the face amount of each such Three Year Note, Borrower's
liability thereunder shall be limited at all times to the actual indebtedness,
principal, interest, fees and expenses then outstanding to such Bank under the
Three Year Loan.
2.3 Banks' Participation. Banks shall be lenders in the Short
Term Loan and the Three Year Loan in the Maximum Principal Amounts and Pro
Rata Shares set forth in Schedule 1 attached hereto.
2.4 Use of Proceeds. Funds advanced under the Loan shall be
used solely (i) for the working capital needs and general corporate purposes of
the Companies, including the refinancing of existing indebtedness under the
Existing Credit Agreement and the purchase of equipment for sale to customers,
(ii) for reimbursement of draws under Letters of Credit in accordance with
Paragraph 2A.4(b) hereof, and (iii) to finance the purchase price and related
expenses in connection with Permitted Acquisitions.
2.5 Repayment
(a) Short Term Loan. The aggregate outstanding
principal balance under the Short Term Loan on the Short Term Commitment
Termination Date, together with all outstanding interest, fees and costs due
hereunder with respect to the Short Term Loan, shall be due and payable in full
on November __, 1998. Notwithstanding the immediately preceding sentence, the
aggregate outstanding balance of the Loan shall be due and payable immediately
upon acceleration of the Short Term Loan in accordance with Paragraph 8.2
hereof.
(b) Three Year Loan. The aggregate outstanding
principal balance under the Three Year Loan on the Three Year Commitment
Termination Date, together with all outstanding interest, fees and costs
due hereunder, shall be due and payable in full on November __, 2000.
Notwithstanding the immediately preceding sentence, the aggregate
outstanding balance of the Three Year Loan shall be due and payable
immediately upon acceleration of the Three Year Loan in accordance with
Paragraph 8.2 hereof.
2.6 Interest. Portions of the Loan shall bear interest on
the outstanding principal amount thereof in accordance with the following
provisions:
(a) Definitions. As used in this Paragraph 2.6
and elsewhere in this Agreement, the following words and terms shall have
the meanings specified below:
"Adjusted Libor Rate" shall mean, for any Interest Period, as
applied to a Portion, the rate per annum (rounded upwards, if necessary to the
next 1/100 of 1%) determined pursuant to the following formula:
Adjusted Libor Rate = Libor Rate
----------
[1 - Reserve Percentage]
For purposes hereof, "Libor Rate" shall mean, as applied to a Portion, the rate
which appears on the Telerate Page 3750 at approximately 9:00 a.m. Philadelphia
time two London Business Days prior to the commencement of such Interest Period
for the offering to leading banks in the London Interbank Market of deposits in
United States dollars ("Eurodollars") or, if such rate does not appear on the
Telerate page 3750, the rate which appears (or, if two or more such rates
appear, the average rounded up to the nearest 1/100 of 1% of the rates which
appear) on the Reuters Screen LIBO Page as of 9:00 a.m. Philadelphia time two
London Business Days prior to the commencement of the Interest Period, in either
case for an amount substantially equal to such Portion as to which Borrower may
elect the Adjusted Libor Rate to be applicable with a maturity of comparable
duration to the Interest Period selected by Borrower for such Portion, as may be
adjusted from time to time in accordance with Paragraph 2.6(f) hereof.
"Applicable Margin" means the percentage per annum set forth
in the appropriate column below that corresponds to the ratio for Borrower and
its consolidated Subsidiaries of Funded Debt as of the end of the most recent
Rolling Period to EBITDA for the most recent Rolling Period (the Applicable
Margin being the lowest applicable percentage per annum as to which the ratio
requirement has been attained):
Applicable Margin
-----------------
Short Term Loan Long Term Loan
--------------- --------------
Level Ratio of Funded Base Rate Libor Base Rate Libor
Debt to EBITDA Portions Portions Portions Portions
------ -------------- -------- -------- -------- --------
I Less than or equal to 1.25 to 1 0.00% 0.350% 0.00% 0.325%
II Less than or equal to 2.25 to 0.00% 0.400% 0.00% 0.375%
1 but greater than 1.25 to 1
III Greater than 2.25 to 1 0.00% 0.450% 0.00% 0.425%
The initial Applicable Margin shall be based on a closing Compliance Certificate
delivered pursuant to Paragraph 4.1 hereof; thereafter the Applicable Margin
shall adjust automatically, as appropriate, on the day following delivery of a
quarterly Compliance Certificate in accordance with Paragraph 5.4 hereof,
provided, that in the event that a quarterly compliance certificate has not been
delivered on the date required by Paragraph 5.4 then the Applicable Margin shall
adjust to Level III as of the date of required delivery; provided further,
however, that the Applicable Margin shall readjust on the day after delivery of
such delinquent Compliance Certificate based on the ratio set forth in such
Compliance Certificate.
"Interest Period" shall mean, with respect to the Adjusted
Libor Rate, a period of one (1), two (2), three (3) or six (6) months' duration,
as Borrower may elect, during which the Adjusted Libor Rate is applicable;
provided, however, that (a) if any Interest Period would otherwise end on a day
which shall not be a London Business Day, such Interest Period shall be extended
to the next succeeding London Business Day, unless such London Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding London Business Day, subject to clause (c) below; (b)
interest shall accrue from and including the first day of each Interest Period
to, but excluding, the day on which any Interest Period expires; (c) with
respect to an Interest Period which begins on the last London Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period), the Interest Period
shall end on the last London Business Day of a calendar month; and (d) Borrower
may not elect an Interest Period that would extend past the Termination Date.
"London Business Day" shall mean any Business Day on which
banks in London, England are open for business.
"Portion" shall mean a portion of the Loan as to which a
specific interest rate and, in the case of a Portion bearing interest based upon
the Adjusted Libor Rate, an Interest Period, has been elected by Borrower.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, comprising Part 204 of Title 12 Code of
Federal Regulations, as amended, and any successor thereto.
"Reserve" shall mean, for any day, that reserve (expressed as
a decimal) which is in effect (whether or not actually incurred) with respect to
a Bank (or any bank Affiliate of such Bank) on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor or any other
banking authority to which a Bank (or any bank Affiliate of such Bank) is
subject including any board or governmental or administrative agency of the
United States or any other jurisdiction to which a Bank (or any bank Affiliate
of such Bank) is subject for determining the maximum reserve requirement
(including without limitation any basic, supplemental, marginal or emergency
reserves) for Eurocurrency liabilities as defined in Regulation D.
"Reserve Percentage" shall mean, for a Bank (or any bank
Affiliate of such Bank) on any day, that percentage (expressed as a decimal)
prescribed by the Board of Governors of the Federal Reserve System (or any
successor or any other banking authority to which a Bank (or any bank Affiliate
of such Bank) is subject, including any board or governmental or administrative
agency of the United States or any other jurisdiction to which a Bank is
subject), for determining the reserve requirement (including without limitation
any basic, supplemental, marginal or emergency reserves) for (i) deposits of
United States Dollars or (ii) Eurocurrency liabilities as defined in Regulation
D, in each case used to fund a Portion subject to an Adjusted Libor Rate or any
Loan made with the proceeds of such deposit. The Adjusted Libor Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.
(b) Interest on Loan.
(i) At the Borrower's election in
accordance with the provisions of Paragraph 2.6(c) below, in the absence of
an Event of Default hereunder and prior to maturity or judgment, and
subject to clause (ii) below, any Portion of the Loan shall bear interest
at either of the following rates:
(A) Base Rate. The Base Rate
plus the Applicable Margin.
(B) Adjusted Libor Rate. The
Adjusted Libor Rate plus the Applicable Margin.
(ii) Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default hereunder,
including after maturity and upon judgment, Borrower hereby agrees to pay
to Banks interest (A) on any outstanding Portion bearing interest based on
the Adjusted Libor Rate, at the rate which is two percent (2%) per annum in
excess of the Adjusted Libor Rate plus the Applicable Margin for each such
Portion through the end of the applicable Interest Period, and thereafter,
at the rate of two percent (2%) per annum in excess of the Base Rate plus
the Applicable Margin, and (B) on any Portion bearing interest based on the
Base Rate, at the rate of two percent (2%) per annum in excess of the Base
Rate plus the Applicable Margin.
(iii) In the event that any interest rate
applicable hereto is in excess of the highest rate allowable under
applicable law, then the rate of such interest shall be reduced to the
highest rate not in excess of such maximum allowable interest and any
excess previously paid by Borrower shall be deemed to have been applied
against principal.
(c) Procedure for Determining Interest Periods
and Rates of Interest.
(i) If Borrower elects the rate based oN
the Base Rate to be applicable to a Portion, Borrower must notify Agent of
such election in writing prior to eleven o'clock (11:00) a.m. Philadelphia
time one (1) Business Day prior to the proposed application of such rate.
If Borrower elects the rate based on the Adjusted Libor Rate to be
applicable to a Portion, Borrower must notify Agent of such election and
the Interest Period selected prior to eleven o'clock (11:00) a.m.
Philadelphia time at least three (3) London Business Days prior to the
commencement of the proposed Interest Period. If Borrower does not provide
notice for the rate based on the Adjusted Libor Rate, then Borrower shall
be deemed to have requested that the rate based on the Base Rate shall
apply to any Portion as to which the Interest Period is expiring and to any
new Advance of the Loan until Borrower shall have given proper notice of a
change in or determination of the rate of interest in accordance with this
Paragraph 2.6(c).
(ii) Borrower shall not elect more than six
(6) different Portions bearing interest based on the Adjusted Libor Rate to
be applicable to the Loan at one time, and any Portion shall be in an
amount equal to Three Million Dollars ($3,000,000) or an even multiple of
Five Hundred Thousand Dollars ($500,000) in excess thereof.
(d) Payment and Calculation of Interest. With
respect to Portions which bear interest at the rate based on the Adjusted
Libor Rate, interest shall be due and payable on the last day of each
Interest Period for each such Portion, and, in the case of a Portion with
an Interest Period of six (6) months, on the ninetieth (90) day after the
commencement of such Interest Period and on the last day of the Interest
Period. With respect to Portions which bear interest at the rate based on
the Base Rate, interest shall be due and payable on the last Business Day
of each month commencing on the first such date after the first Advance
which bears interest at the rate based on the Base Rate. Interest shall be
calculated in accordance with the provisions of Paragraph 2.6(b) hereof;
all interest shall be calculated on the basis of the actual number of days
elapsed over a year of three hundred sixty (360) days.
(e) Reserves. If at any time when a Portion is
subject to the rate based on the Adjusted Libor Rate, a Bank (or a bank
Affiliate of such Bank) is subject to and incurs a Reserve, other than a
Reserve Percentage provided in the calculation of the applicable Adjusted
Libor Rate, Borrower hereby agrees to pay within five (5) Business Days of
demand thereof from time to time, as billed by Agent on behalf of itself or
any other Bank, such additional amount as is necessary to reimburse such
Bank (or such Bank's bank Affiliate) for its costs in maintaining such
Reserve. Such amount shall be computed by taking into account the cost
incurred by such Bank (or such Bank's bank Affiliate) in maintaining such
Reserve in an amount equal to such Bank's ratable share of the Portion on
which such Reserve is incurred, which computation shall be set forth in any
such demand by Agent on behalf of itself or any other Bank. The
determination by Agent or any Bank of such costs incurred and the
allocation of such costs among Borrower and other customers which have
similar arrangements with such Bank (or such Bank's bank Affiliate) shall
be prima facie evidence of the correctness of the fact and the amount of
such additional costs, if calculated in a manner consistent with similar
charges made by such Bank (or such Bank's Affiliates) to its other
customers having similar arrangements with such Bank. Upon notification to
Borrower of any payment required pursuant to this Paragraph 2.6(e),
Borrower (A) shall make such payment in accordance with the provisions
hereof and (B) may repay the Portion of the Loan with respect to which such
payment is required, subject to the requirements of Paragraph 2.9 and
2.6(g) hereof.
(f) Special Provisions Applicable to Adjusted
Libor Rate. The following special provisions shall apply to the Adjusted
Libor Rate:
(i) Change of Adjusted Libor Rate. The
Adjusted Libor Rate may be automatically adjusted by Agent on a prospective
basis to take into account the additional or increased cost of maintaining
any necessary reserves for Eurodollar deposits or increased costs due to
changes in applicable law or regulation or the interpretation thereof
occurring subsequent to the commencement of the then applicable Interest
Period, including but not limited to changes in tax laws (except changes of
general applicability in corporate income tax laws) and changes in the
reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), excluding the Reserve Percentage and any
Reserve which has resulted in a payment pursuant to subparagraph (e) above,
that increase the cost to Banks of funding the Loan or a portion thereof
bearing interest based on the Adjusted Libor Rate. Agent shall give
Borrower notice of such a determination and adjustment, which determination
shall be prima facie evidence of the correctness of the fact and the amount
of such adjustment. Borrower may, by notice to Agent, (A) request Agent to
furnish to Borrower a statement setting forth the basis for adjusting such
Adjusted Libor Rate and the method for determining the amount of such
adjustment; and/or (B) repay the Portion of the Loan with respect to which
such adjustment is made, subject to the requirements of Paragraph 2.9 and
2.6(g) hereof.
(ii) Unavailability of Eurodollar Funds.
In the event that Borrower shall have requested the rate based on the
Adjusted Libor Rate in accordance with Paragraph 2.6(c) and any Bank (or
such Bank's bank Affiliate) shall have reasonably determined that
Eurodollar deposits equal to the amount of the principal of the Portion and
for the Interest Period specified are unavailable, or that the rate based
on the Adjusted Libor Rate will not adequately and fairly reflect the cost
of making or maintaining the principal amount of the Portion specified by
Borrower during the Interest Period specified, or that by reason of
circumstances affecting Eurodollar markets, adequate and reasonable means
do not exist for ascertaining the rate based on the Adjusted Libor Rate
applicable to the specified Interest Period, such Bank shall give notice to
Agent and Agent shall promptly give notice of such determination to
Borrower that the rate based on the Adjusted Libor Rate is not available. A
determination by such Bank (or such Bank's bank Affiliate) hereunder shall
be prima facie evidence of the correctness of the fact and amount of such
additional costs or unavailability. Upon such a determination, (i) the
obligation to advance or maintain Portions at the rate based on the
Adjusted Libor Rate shall be suspended until Agent shall have notified
Borrower and Banks that such conditions shall have ceased to exist, and
(ii) the rate based on the Base Rate shall be applicable to all such
Portions. In the event of any such determination, Borrower shall be
entitled to replace the Bank that has made such determination with a bank
or banks (which may include one or more of the other Banks hereunder) that
have agreed to take such Bank's place.
(iii) Illegality. In the event that it
becomes unlawful for a Bank (or such Bank's bank Affiliate) to maintain
Eurodollar liabilities sufficient to fund any Portion of the Loan subject
to the rate based on the Adjusted Libor Rate, then such Bank shall
immediately notify Borrower thereof (with a copy to Agent) and such Bank's
obligations hereunder to advance or maintain advances at the rate based on
the Adjusted Libor Rate shall be suspended until such time as such Bank (or
such Bank's bank Affiliate) may again cause the rate based on the Adjusted
Libor Rate to be applicable to any Portion of the outstanding principal
balance of the Loan and any such Bank's share of any Portion shall then be
subject to the rate based on the Base Rate.
(g) Funding Costs and Loss of Earnings. In the
event that Borrower shall have requested the Adjusted Libor Rate to be
applicable to a Portion to be Advanced and Borrower shall revoke the
request for such Advance or shall fail to meet the conditions to such
Advance as set forth in Section Four hereof, and in connection with any
prepayment or repayment of a Portion bearing interest at the rate based on
the Adjusted Libor Rate made on other than the last day of the applicable
Interest Period, whether such prepayment or repayment is voluntary,
mandatory, by demand, acceleration or otherwise, Borrower shall pay to
Banks all reasonable funding costs and loss of earnings which may arise in
connection with such revocation of request for or failure to meet the
conditions to such Advance or such prepayment or repayment, as calculated
by Agent in accordance with Exhibit E hereto.
2.7 Advances
(a) Advance Request. Borrower shall give Agent
written notice, not later than eleven o'clock (11:00) a.m. Philadelphia
time one (1) Business Day prior to the proposed Advance in the case of an
advance to bear interest based on the Base Rate, and three (3) Business
Days prior to an advance to bear interest based on the Adjusted Libor Rate,
of each requested Advance under the Commitment specifying the date, amount
and purpose thereof. Such notice shall be in the form of the Advance
Request Form attached hereto as Exhibit A, shall be certified by the chief
financial officer or treasurer of Borrower, and shall contain the following
information and representations, which shall be deemed affirmed and true
and correct as of and upon receipt of the date of and upon receipt of the
requested Advance:
(i) whether the Advance is to be drawn
under the Short Term Commitment or the Three Year Commitment;
(ii) the aggregate amount of the requested
Advance, which shall be no less than $3,000,000 and in multiples of
$500,000 in excess thereof, or be the unborrowed balance of the applicable
Commitment;
(iii) confirmation of Borrower's compliance
with Paragraphs 5.14 through 5.17 as of the most recently ended fiscal
quarter for which a Compliance Certificate has been (or is required to have
been) delivered, and taking into account any Advances, including the
requested Advance, and payments since such date; and
(iv) statements that the representations and
warranties set forth herein and in the other Loan Documents are true and
correct as of the date thereof; no Event of Default or Default hereunder
has occurred and is then continuing or will be caused by the requested
Advance; and there has been no Material Adverse Effect since the date of
this Agreement and no event or circumstance (or combination of events or
circumstances) has occurred which is reasonably likely to have a Material
Adverse Effect.
(b) Procedures.
(i) Upon receiving a request for an
Advance in accordance with subparagraph (a) above, Agent shall request by
prompt notice to Banks that each Bank advance funds to Agent so that each
Bank participates in the requested Advance in the same percentage as it
participates in the Commitment. Each Bank shall advance its applicable
percentage of the requested Advance to Agent by delivering federal funds
immediately available at Agent's offices prior to twelve o'clock (12:00)
noon Philadelphia time on the date of the Advance. Subject to the
satisfaction of the terms and conditions hereof, Agent shall make the
requested Advance available to Borrower by crediting such amount to
Borrower's deposit account with Agent not later than two o'clock (2:00)
p.m. on the day of the requested Advance; provided, however, that in the
event Agent does not receive a Bank's share of the requested Advance by
such time as provided above, Agent shall not be obligated to advance such
Bank's share.
(ii) Unless Agent shall have been notified
by a Bank prior to the date such Bank's share of any such Advance is to be
made by such Bank that such Bank does not intend to make its share of such
requested Advance available to Agent, Agent may assume that such Bank has
made such proceeds available to Agent on such date, and Agent may, in
reliance upon such assumption (but shall not be obligated to), make
available to Borrower a corresponding amount. If such corresponding amount
is not in fact made available to Agent by such Bank on the date the Advance
is made, Agent shall be entitled to recover such amount on demand from such
Bank (or, if such Bank fails to pay such amount forthwith upon such demand,
from Borrower) together with interest thereon in respect of each day during
the period commencing on the date such amount was made available to
Borrower and ending on (but excluding) the date Agent recovers such amount,
from such Bank, at a rate per annum equal to the effective rate for
overnight federal funds in New York as reported by the Federal Reserve Bank
of New York for such day (or, if such day is not a Business Day, for the
next preceding Business Day) and from Borrower, at a rate per annum as
provided in Paragraph 2.6(b)(i)(A) hereof.
(c) Requests Irrevocable. Each request for an
Advance pursuant to this Paragraph 2.7 shall be irrevocable and binding on
Borrower. In the case of any Advance bearing interest at the rate based
upon the Adjusted Libor Rate, Borrower shall indemnify Banks against any
loss, cost or expense incurred by Bank as a result of not borrowing such
funds on the requested Advance date, including as a result of any failure
to fulfill on or before the date specified in such request for an Advance
the applicable conditions set forth in Section Four hereof, including,
without limitation, any loss, cost or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired by Banks to
fund the Advance to be made by Banks when such Advance, as a result of such
failure, is not made on such date, as calculated by Agent in accordance
with Exhibit E attached hereto.
2.8. Reduction and Termination of Commitment
(a) Borrower. Borrower shall have the right at
any time and from time to time, upon three (3) Business Days' prior written
notice to Agent, to reduce the Short Term Commitment and/or the Three Year
Commitment in increments aggregating $3,000,000 or multiples thereof
without penalty or premium, provided that on the effective date of such
reduction Borrower shall make a prepayment of Short Term Loan and/or the
Three Year Loan, as applicable, in an amount, if any, by which the
aggregate outstanding principal balance of such Loan exceeds the amount of
the applicable Commitment as then so reduced, together with accrued
interest on the amount so prepaid and any amounts due pursuant to Paragraph
2.6(g) hereof. Any reduction in the Short Term Commitment or the Three Year
Commitment shall proportionately reduce each Bank's Maximum Principal
Amount with respect thereto.
(b) Banks. Required Banks shall have the right to
terminate the Short Term Commitment and/or the Three Year Commitment at any
time, in their discretion and upon notice to Borrower, upon the occurrence
of any Event of Default hereunder (except if an Event of Default described
in Paragraph 8.1(i) shall occur, in which case termination of the Short
Term Commitment and/or the Three Year Commitment shall occur automatically
without notice).
(c) Restoration Only With Consent. Any termination or reduction of the
Commitment pursuant to subparagraphs 2.8(a) and (b) shall be permanent, and
such Commitment cannot thereafter be restored or increased without the
written consent of Banks.
2.9 Prepayment
(a) Upon one (1) Business Day's prior written
notice by Borrower to Agent, in the case of Base Rate Portions, and
upon three (3) Business Days prior written notice by Borrower to Agent, in
the case of Libor Portions, Borrower may repay all or any portion of the
outstanding principal balance under the Short Term Loan and/or the Three
Year Loan without premium or penalty, provided that any such payment shall
include all accrued interest on the amount prepaid plus any amounts which
may be due pursuant to Paragraph 2.6(g) hereof. Payments made prior to the
Short Term Commitment Termination Date or Three Year Commitment Termination
Date, as applicable, shall not reduce the Short Term Commitment or Long
Term Commitment, respectively, and may be reborrowed in accordance with
this Agreement.
(b) In addition to the scheduled payments of
principal pursuant to Paragraph 2.5 above, in connection with each
Sale of Material Assets approved by Banks pursuant to Paragraph 6.7 hereof,
the Net Cash Proceeds to the seller of such transaction shall be paid
directly to Agent for the account of Banks and applied to the Loan,
together with any amounts. Payments made pursuant to this subparagraph
2.9(b) shall be applied first to the outstanding principal balance of the
Short Term Loan and then to the outstanding principal balance of the Three
Year Loan, and shall be accompanied by all accrued and unpaid interest and
fees in connection with the amount prepaid (including any amount payable
under Paragraph 2.6(g) hereof). Any such payments shall not reduce the
respective Commitments and may be reborrowed in accordance herewith.
2.10 Payments. All payments of principal, interest, fees and
other amounts due hereunder, including any prepayments thereof, shall
be made by Borrower to Agent for the account of Banks in immediately
available funds before twelve o'clock (12:00) noon, Philadelphia time, on
any Business Day at the office of Agent set forth on Schedule 1 hereto.
Borrower hereby authorizes Agent to charge Borrower's account with Agent
for all payments of principal, interest and fees when due hereunder.
2.11 Facility Fee. Borrower shall pay to Agent, for the benefit
of Banks in accordance with their Pro Rata Shares, a non-refundable
facility fee at the rate of one-tenth of one percent (.10%) per annum on
the aggregate amount of the Short Term Commitment and at the rate of
one-eighth of one percent (.125%) per annum on the aggregate amount of the
Three Year Commitment from the date hereof through the Short Term
Commitment Termination Date and the Three Year Commitment Termination Date,
respectively, which fees shall be payable at the offices of Agent quarterly
in arrears on the first day of each March, June, September, and December
and on the applicable Termination Date. The commitment fee shall be
calculated on the basis of the actual number of days elapsed over a year of
three hundred sixty (360) days.
Borrower and Banks hereby agree that for purposes of
calculating the commitment fee to be paid from time to time under this
Paragraph 2.11, the unborrowed portion of the Three Year Commitment on
which such fee is calculated shall be reduced by the amount available to be
drawn under outstanding Letters of Credit and the amount of any
unreimbursed draws on any Letters of Credit.
2.12 Fees. Borrower shall pay to Agent, for itself and for
the account of Banks, fees as agreed pursuant to the letter dated
August 22, 1997.
2.13 Regulatory Changes in Capital Requirements. If any
Bank shall have determined that the adoption or the effectiveness
after the date hereof of any law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by such
Bank (or any lending office of such Bank) or such Bank's holding
company with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital or on the capital
of such Bank's holding company, as a consequence of this Agreement,
the Commitment, Advances or the Loan made by such Bank pursuant hereto
to a level below that which such Bank or its holding company could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such Bank's
holding company with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time Borrower shall pay
to such Bank such additional amount or amounts as will compensate such
Bank or its holding company for any such reduction suffered together
with interest on each such amount from the date demanded until payment
in full thereof at the rate provided in Paragraph 2.6(b)(ii) hereof
with respect to amounts not paid when due. Such Bank will notify
Borrower of any event occurring after the date of this Agreement that
will entitle such Bank to compensation pursuant to this Paragraph 2.13
as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and such compensation shall
not be charged for any period more than three (3) months prior to the
date of such notice.
A certificate of such Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or its holding company as
specified above shall be delivered to Borrower and shall be conclusive
absent manifest error, if calculated and charged in a manner consistent
with similar charges made by such Bank to its other customers having
similar arrangements with such Bank. Borrower shall pay such Bank the
amount shown as due on any such certificate delivered by such Bank within
ten (10) days after its receipt of the same.
Failure on the part of any Bank to demand compensation for increased
costs or reduction in amounts received or receivable or reductions in
return on capital with respect to any period shall not constitute a waiver
of such Bank's right to demand compensation with respect to any other
period except as otherwise limited by the terms of this Paragraph 2.13.
SECTION 2A
LETTERS OF CREDIT
2A.1 Availability of Credits. Subject to the terms and conditions set
forth herein, Banks shall from time to time prior to the Three Year
Commitment Termination Date participate in the issuance by Agent of Letters
of Credit for the account of Borrower on the following terms and
conditions:
(a) at the time of issuance of the Letter of Credit, the sum of the
amount available to be drawn under such Letter of Credit and all other
Letters of Credit then outstanding hereunder plus any unreimbursed draws
under Letters of Credit, plus the outstanding principal balance of the
Three Year Loan, shall not exceed the Three Year Commitment;
(b) at the time of issuance of the Letter of Credit, the amount
available to be drawn under such Letter of Credit and all other Letters of
Credit then outstanding hereunder plus any unreimbursed draws under Letters
of Credit shall not exceed, in the aggregate, the Letter of Credit
Sublimit;
(c) the final expiration date of each Letter of Credit shall be on or
before the earlier of (i) one year, in the case of standby Letters of
Credit, and one hundred eighty (180) days, in the case of documentary
Letters of Credit, from the date of issuance thereof or (ii) the Three Year
Commitment Termination Date;
(d) there shall not exist at the time of issuance of the Letter of
Credit, or as a result thereof, any Default or Event of Default hereunder;
and
(e) each Letter of Credit issued under this Section 2A shall be
utilized by Borrower for legitimate purposes in the ordinary course of its
business.
2A.2 Commitment Availability. The amount available under the Three
Year Commitment as from time to time in effect shall be reduced by the
amount available to be drawn under all outstanding Letters of Credit and
unreimbursed amounts of any draws under Letters of Credit. The amount by
which the Three Year Commitment is so reduced shall not be available for
Advances under Paragraph 2.6 hereof, except Advances thereunder which are
made to reimburse Bank for draws under the Letters of Credit as permitted
pursuant to Paragraph 2A.4(b) hereof.
2A.3. Approval and Issuance
(a) Borrower shall provide Agent not less than three (3) Business
Days' prior written notice of each request for the issuance of a Letter of
Credit by delivery of a Letter of Credit Request Form in the form attached
as Exhibit B-1 hereto and Agent's Letter of Credit Application in the form
attached as Exhibit B-2 hereto. Each Letter of Credit Request Form
submitted by Borrower to Agent requesting the issuance of a Letter of
Credit shall be certified by the chief financial officer or treasurer of
Borrower and shall, in addition to the matters described in Paragraph
2.7(a) hereof, list all Letters of Credit outstanding for the account of
Borrower at that time and, for each Letter of Credit so listed, its face
amount, outstanding undrawn balance and expiration date. It shall be a
condition to the issuance of any Letter of Credit that Agent shall have
received a Letter of Credit Request Form and Letter of Credit Application
as described above and that the conditions set forth in Paragraph 4.2 shall
be satisfied.
(b) Agent will promptly provide to Lenders written or telephonic
notification of Agent's receipt of the Letter of Credit Request Form and
the Letter of Credit Application which shall state (i) the amount of the
Letter of Credit requested and (ii) the expiration date of the requested
Letter of Credit.
2A.4. Obligations of the Borrower
(a) Borrower agrees to pay to Agent in connection with each Letter of
Credit issued hereunder:
(i) immediately upon the demand of Agent
on behalf of Banks, the amount paid by Banks with respect to such
Letter of Credit;
(ii) immediately upon demand of Agent, the
amount of any draft presented purporting to be drawn under such Letter
of Credit provided that the draft and accompanying documents conform to the
terms of the Letter of Credit but subject to the terms of Paragraph 2A.7
(whether or not Agent has at such time honored such draft) and any other
amounts paid thereunder (it being understood that Agent is not required to
make demand upon or proceed against any Bank or other party or to resort to
any collateral before obtaining payment from Borrowers);
(iii) in advance upon the date of issuance
or extension of any Letter of Credit, a non-refundable fee for the
benefit of Banks in accordance with each Banks percentage share of the
Three Year Commitment as set forth on Schedule 1 attached hereto,
calculated on the face amount of such standby Letter of Credit for the term
of such Letter of Credit at a rate per annum equal to the Applicable Margin
for a Libor Portion under the Three Year Loan as set forth in Paragraph 2.6
hereof;
(iv) on the date of issuance of each Letter
of Credit and on the effective date of any renewal or extension of any
Letter of Credit a fee of one-eighth of one percent (0.00125%) per annum on
the outstanding face amount of such Letter of Credit, payable to Agent for
its own account; and
(v) interest on any indebtedness
outstanding with respect to such Letter of Credit, whether for funds
paid on drafts on such Letter of Credit or otherwise (but such indebtedness
shall not include undrawn balances of such Letter of Credit issued
hereunder) at the rate set forth in Paragraph 2.5(b)(i)(A) hereof from the
date of payment by Agent (if not reimbursed by Borrower on the same day) to
the date one (1) Business Day after notice to Borrower of such payment, and
thereafter at the rate applicable to Portions bearing interest based on the
Base Rate under Paragraph 2.5(b)(ii) hereof; interest under this clause (v)
shall be paid at the times and in the manner set forth in Paragraph 2.6
hereof, and shall accrue on amounts paid on a Letter of Credit (if not
reimbursed by Borrower on the same day) from the date of payment by Agent,
whether or not demand is made, until such amounts are reimbursed by
Borrower whether before, at or after demand.
(b) On or before the Three Year Commitment
Termination Date, in the absence of a Default or Event of Default at
such time, and subject to the provisions of Paragraph 2.6 hereof, Banks
hereby agree to advance funds to Borrower under the Three Year Loan to make
the payments required under Paragraphs 2A.4(a)(i) and (ii) hereof. If any
payment by Agent of a draft drawn under a Letter of Credit is for any
reason (including without limitation the occurrence or continuation of a
Default or Event of Default hereunder) not reimbursed prior to or on the
date of such payment, the amount of such payment shall thereupon be deemed
for purposes hereof an advance under Paragraph 2.7 hereof. Such
reimbursement obligation shall be repayable, prepayable, and otherwise
subject to all the terms and conditions thereof as if advanced by Bank
pursuant to Paragraph 2.7 hereof (but without duplication).
2A.5. Payment by Banks on Letters of Credit
(a) With respect to each Letter of Credit, each
Bank agrees that it is irrevocably obligated to pay to Agent, for each
such Letter of Credit, such Bank's Pro Rata Share of each and every payment
made or to be made by Agent under such Letter of Credit (each such payment
to be made, a "LOC Contribution"). Each Bank's LOC Contribution shall be
due from such Bank immediately upon, and in any event no later than the
same day as, receipt of written notice (which may be sent by telex or
telecopier) from Agent (except that if such notice is received after 3:00
p.m. on any Business Day, payment may be made on the following Business
Day, together with interest equal to the effective rate for overnight funds
in New York as reported by the Federal Reserve Bank of New York for such
day (or, if such day is not a Business Day, for the next preceding Business
Day)) that (i) it has made a payment or (ii) a draft has been presented
purporting to be drawn on a Letter of Credit issued hereunder. Such payment
shall be made at Agent's offices in immediately available federal funds.
(b) The obligation of each Bank to make its LOC
Contribution hereunder is absolute, continuing and unconditional, and
Agent shall not be required first to make demand upon or proceed against
Borrowers or any guarantor or surety, or any others liable with respect to
the applicable Letter of Credit and shall not be required first to resort
to any Collateral. LOC Contributions shall be made without regard to
termination of this Agreement or the Commitment, the existence of an Event
of Default or Default hereunder, the acceleration of indebtedness hereunder
or any other event or circumstance.
2A.6. Collateral Security
(a) On the termination of the Three Year
Commitment or the occurrence of an Event of Default, Required
Banks may require (and in the case of an Event of Default
occurring under Paragraph 8.1(i) it shall be required
automatically) that Borrower deliver to Agent, for the benefit of
Banks, cash or U.S. Treasury Bills with maturities of not more
than 90 days from the date of delivery (discounted in accordance
with customary banking practice to present value to determine
amount) in an amount equal at all times to one hundred ten
percent (110%)of the outstanding undrawn amount of all Letters of
Credit, such cash or U.S. Treasury Bills and all interest earned
thereon to constitute cash collateral for all such Letters of
Credit. At such time as such collateral is required to be and has
not been deposited, Agent and any Bank shall be entitled to
liquidate such of the other collateral for the Loan (if any) or
any other assets of Borrower or any Guarantor as may be in the
possession of such Bank, as is necessary or appropriate in its
sole judgment so as to create such cash collateral.
(b) Any cash collateral deposited under
subparagraph (a) above, and all interest earned thereon, shall be
held by Agent and invested and reinvested at the expense and the
written direction of Borrower, in U.S. Treasury Bills with
maturities of no more than ninety (90) days from the date of
investment.
2A.7 General Terms of Credits. The following terms and
conditions apply with respect to each Letter of Credit
notwithstanding anything to the contrary contained herein:
(a) Borrower assumes all risks of the acts or
omissions of the beneficiary of each Letter of Credit with
respect to the use of the Letter of Credit or with respect to the
beneficiary's obligations to Borrower. Neither Agent nor any of
the Banks, nor any of their respective officers or directors,
shall be liable or responsible for, and Borrower hereby agrees to
indemnify and hold Agent and Banks harmless (except for such
party's respective gross negligence or willful misconduct) with
respect to: (i) the use which may be made of the Letter of Credit
or for any acts or omissions of the beneficiary in connection
therewith; (ii) the accuracy, truth, validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if
such documents should in fact prove to be in any or all respects
false, misleading, inaccurate, invalid, insufficient, fraudulent,
or forged; (iii) any other circumstances whatsoever in making or
failing to make payment under a Letter of Credit; or (iv) any
inaccuracy, interruption, error or delay in transmission or
delivery of correspondence or documents by post, telegraph or
otherwise. In furtherance and not in limitation of the foregoing,
Agent may accept documents that appear on their face to be in
order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
(b) Notwithstanding the foregoing, with respect
to any Letter of Credit, Borrower shall have a claim against Agent, and Agent
shall be liable to Borrower, to the extent, but only to the extent, of any
direct, as opposed to indirect or consequential, damages suffered by Borrower
caused by the Agent's willful misconduct or gross negligence.
(c) To the extent not inconsistent with this
Agreement, the Uniform Customs and Practices for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, are hereby
made a part of this Agreement with respect to obligations in connection with
each Letter of Credit.
SECTION 3
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Banks as follows:
3.1 Organization and Good Standing.
Each Company is a corporation or other legal entity as set forth
on Exhibit D attached hereto, duly formed and validly existing under
the laws of the jurisdiction of its formation as set forth in Exhibit
D, and each has the power and authority to carry on its business as
now conducted and, except as to failures to qualify which do not,
either singly or in the aggregate, have a Material Adverse Effect, is
qualified to do business in all other states in which the nature of
its business or the ownership of its properties requires such
qualification.
3.2 Power and Authority: Validity of Agreement.
Each Company has the power and authority under applicable law and
under its organizational documents to enter into and perform the Loan
Documents to the extent that it is a party thereto; and all actions
necessary or appropriate for the execution and performance by each
Company of the Loan Documents have been taken, and, upon their
execution, the same will constitute the valid and binding obligations
of each Company to the extent it is a party thereto, enforceable in
accordance with their terms, except as such enforceability may be
limited by bankruptcy or equitable principles applicable to the
enforcement of creditors' rights generally.
3.3 No Violation of Laws or Agreements.
The making and performance of the Loan Documents by each Company
will not violate any provisions of any law or regulation, federal,
state or local, or its partnership agreement, or result in any breach
or violation of, or constitute a default under, any material agreement
or instruments by which any Company or its property may be bound.
3.4 Material Contracts.
Except as set forth on Exhibit D attached hereto, there exists no
material default under any contracts material to the businesses of the
Companies.
3.5 Compliance
(a) Each of the Companies is in compliance with all applicable
laws and regulations, federal, state and local (including without
limitation those administered by the Local Authorities), except for
such failure to comply as would not, either singly or in the
aggregate, have a Material Adverse Effect;
(b) The Companies possess all the franchises, permits, licenses,
certificates of compliance and approval and grants of authority,
necessary or required in the conduct of the Companies' respective
businesses as of the date hereof; and except as identified on Exhibit
D attached hereto, as of the date hereof all such franchises, permits,
licenses, certificates and grants are valid, binding, enforceable and
subsisting without any defaults thereunder or enforceable adverse
limitations thereon and are not subject to any proceedings or claims
opposing the issuance, development or use thereof or contesting the
validity thereof, except to the extent that the failure to obtain or
maintain any of the foregoing would not, either singly or in the
aggregate, have a Material Adverse Effect; and
(c) No authorization, consent, approval, waiver, license or
formal exemptions from, nor any filing, declaration or registration
with, any court, governmental agency or regulatory authority (federal,
state or local) or non-governmental entity, under the terms of
contracts or otherwise, is required by the Companies by reason of or
in connection with the Companies' execution and performance of the
Loan Documents, except those which have been obtained.
3.6 Litigation.
Thereare no actions, suits, proceedings or claims which are
pending or, to the best of the Companies' knowledge or information,
threatened against any Company which, if adversely resolved, would
have a Material Adverse Effect.
3.7 Title to Assests.
Each of the Companies has good and marketable title to all of its
properties and assets material to the conduct of its business, free
and clear of any liens and encumbrances except the liens and
encumbrances permitted pursuant to Paragraph 6.4 hereof and the liens
and security interests identified on Exhibit D attached hereto. All
such assets are fully covered by the insurance required under
Paragraph 5.8 hereof.
3.8 Accuracy of Information; Full Disclosure
(a) All information furnished to Banks concerning the financial
condition of the Companies including Borrower's annual consolidated
financial statement for the period ending August 31, 1996 and
Borrower's interim consolidated financial statements dated May 31,
1997, copies of which have been furnished to Banks, has been prepared
in accordance with GAAP and fairly present in all material respects
the financial condition of the Companies as of the dates and for the
periods covered and discloses all liabilities of the Companies
required to be disclosed in accordance with GAAP, except that interim
statements do not have footnotes and are subject to year-end
adjustments; and there has been no material adverse change in the
financial condition or business of the Companies from the date of such
statements to the date hereof; and
(b) All financial statements and other documents furnished by the
Companies to Banks pursuant to this Agreement and the other Loan
Documents do not and will not contain any untrue statement of material
fact or omit to state a material fact necessary in order to make the
statements contained herein and therein not misleading. The Companies
have disclosed to the Banks in writing any and all facts which
materially and adversely affect the business, properties, operations
or condition, financial or otherwise, of the Companies considered as a
whole, or the Companies' ability to perform their obligations under
this Agreement and the other Loan Documents.
3.9 Taxes and Assessments
(a) Each Company has duly and timely filed all information and tax
returns and reports with any federal, state, or local governmental
taxing authority, body or agency, and all taxes, including without
limitation income, gross receipts, sales, use, excise, withholding and
any other taxes, and any governmental charges, penalties, interest or
fines with respect thereto, due and payable by any Company, have been
paid, withheld or reserved for in accordance with GAAP or, to the
extent they relate to periods on or prior to the date of the financial
statements referenced in Paragraphs 5.2 and 5.3 hereof, are reflected
as a liability on the financial statements in accordance with GAAP.
(b) Each Company has properly withheld all amounts required by
law to be withheld for income taxes and unemployment taxes including
without limitation, all amounts required with respect to social
security and unemployment compensation, relating to its employees, and
has remitted such withheld amounts in a timely manner to the
appropriate taxing authority, agency or body.
3.10 Indebtedness.
The Companies have no presently outstanding Indebtedness or
obligations, including contingent obligations and obligations under
leases of property from others, except the Indebtedness and
obligations described in Exhibit D hereto or in the Companies'
financial statements which have been furnished to Banks prior to the
date hereof pursuant to Paragraph 3.8 hereof, and indebtedness
permitted pursuant to Paragraph 6.1 hereof.
3.11 Management Agreements
No Company is a party to any management or consulting agreements
for the provision of senior executive services to such Company (other
than employment agreements with officers of the Companies) except as
described on Exhibit D hereto.
3.12 Investments
Borrower and each direct and indirect Subsidiary of Borrower is
identified on Exhibit D attached hereto, which indicates the number of
shares and classes of the capital stock or partnership interests, as
applicable, of Borrower and each such Subsidiary, and the ownership
thereof. No Company has any other Subsidiaries or any investments in
or loans to any other individuals or business entities except for
loans and investments permitted pursuant to Paragraphs 6.3 or 6.8
hereof.
3.13 ERISA
Each of the Companies and each ERISA Affiliate is in compliance
in all material respects with all applicable provisions of ERISA and
the regulations promulgated thereunder; and,
(a) No Company nor any ERISA Affiliate maintains or contributes
to or has maintained or contributed to any multiemployer plan (as
defined in section 4001 of ERISA) under which any Company or any ERISA
affiliate could have any withdrawal liability which is reasonably
likely to have a Material Adverse Effect;
(b) No Company nor any ERISA Affiliate, sponsors or maintains any
Plan under which there is an accumulated funding deficiency within the
meaning of ss.412 of the Code, whether or not waived which is
reasonably likely to have a Material Adverse Effect;
(c) The aggregate liability for accrued benefits and other
ancillary benefits under each defined benefit pension Plan that is
sponsored or maintained by any Company or any ERISA Affiliate
(determined on the basis of the actuarial assumptions prescribed for
valuing benefits under terminating single-employer defined benefit
plans under Title IV of ERISA) does not exceed the aggregate fair
market value of the assets under each such defined benefit pension
Plan by an amount which is reasonably likely to have a Material
Adverse Effect;
(d) The aggregate liability of each Company, and each ERISA
Affiliate arising out of or relating to a failure of any Plan to
comply with the provisions of ERISA or the Code, is not an amount
which is reasonably likely to have a Material Adverse Effect on any
Company; and
(e) There does not exist any unfunded liability (determined on
the basis of actuarial assumptions utilized by the actuary for the
Plan in preparing the most recent Annual Report) of any Company or
ERISA Affiliate under any Plan providing post-retirement life or
health benefits which is reasonably likely to have a Material Adverse
Effect.
3.14 Fees and Commissions
The Companies owe no brokers' or finders' fees or commissions of
any kind, and know of no claim for any brokers' or finders' fees or
commissions, in connection with the Companies' obtaining the
Commitment or the Loan from Banks, except those provided herein.
3.15 No Extension of Credit for Securities
The Companies are not now, nor at any time have they been
engaged principally, or as one of their respective important activities, in the
business of extending or arranging for the extension of credit, for the purpose
of purchasing or carrying any margin stock or margin securities; nor will the
proceeds of the Loan be used by any Company directly or indirectly, for such
purposes.
3.16 Hazardous Wastes, Substances and Petroleum Products.
Except as otherwise set forth on Exhibit D attached hereto:
(a) Each Company (i) has received all permits and filed all
notifications required by the Environmental Control Statutes to carry
on its respective business(es); and (ii) is in compliance with all
Environmental Control Statutes.
(b) Each Company has given any written or oral notice to the EPA
or any state or local agency with regard to any actual or imminently
threatened Release of Hazardous Substances on properties owned, leased
or operated by such Company or used in connection with the conduct of
its business and operations.
(c) No Company has received notice that it is potentially
responsible for clean-up, remediation, costs of clean-up or
remediation, fines or penalties with respect to any actual or
imminently threatened Release of Hazardous Substances pursuant to any
Environmental Control Statute.
3.17 Solvency
To the best of each Company's knowledge, excluding intercompany
indebtedness, each Company is, and after receipt and application of
the first Advance under this Agreement will be, solvent such that (i)
the fair value of its assets (including without limitation the fair
salable value of the goodwill and other intangible property of such
Company) is greater than the total amount of its liabilities,
including without limitation, contingent liabilities, (ii) the present
fair salable value of its assets (including without limitation the
fair salable value of the goodwill and other intangible property of
such Company) is not less than the amount that will be required to pay
the probable liability on their debts as they become absolute and
matured, and (iii) they are able to realize upon their assets and pay
their debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business. No
Company intends to, nor believes that it will, incur debts or
liabilities beyond its ability to pay as such debts and liabilities
mature, and no Company is engaged in a business or transaction, or
about to engage in a business or transaction, for which its property
would constitute unreasonably small capital after giving due
consideration to the prevailing practice and industry in which it is
engaged. For purposes of this Paragraph 3.17, in computing the amount
of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount
that reasonably can be expected to become an actual matured liability
of the applicable Company.
Each Company hereby agrees that to the extent a Company shall
have paid more than its proportionate share of any payment made
hereunder or under the Guaranty, such Company shall be entitled to
seek and receive contribution from and against any other Company who
has not paid its proportionate share of such payment; provided however
such Company shall not seek any such contribution from any other
Company until the Loans have been paid in full and all Commitments of
the Banks hereunder have been terminated. The provisions of this
paragraph shall in no respect limit the obligations and liabilities of
any Company to the Agent and the Banks and each Company shall remain
liable to the Agent and the Banks for the full amount of its
obligations hereunder and under the Guaranty.
3.18 Employee Controversies.
There are no material controversies pending or, to the knowledge
of the Companies, threatened or anticipated between any Company and
any of its respective employees, and there are no labor disputes,
grievances, arbitration proceedings or any strikes, work stoppages or
slowdowns pending, or to the Companies' knowledge, threatened between
any Company and its respective employees and representatives, which in
either event could impair the ability of the Company to perform their
obligations under the Loan Documents, or which might reasonably be
expected to have a Material Adverse Effect.
3.19 Government Contracting.
No Company has transferred or received any rights or obligations
with respect to any contract with any federal or state governmental
agency or instrumentality in violation of the federal Assignment of
Claims Act or related federal or state laws, rules or regulations. No
Company nor any employee of any Company has been proposed for or
received notice of intended suspension or debarment from federal
contracting pursuant to Part 9 of the Federal Acquisition Regulations,
nor has any similar event occurred under comparable state laws, rules
or regulations relating to contracting with state governmental
entities. No Company has received notice of cure or of default with
respect to any contract with a governmental agency, nor any claim for
excess reprocurement costs.
SECTION 4
CONDITIONS
4.1 Effectiveness
The effectiveness of this Agreement shall be subject to Agent's
receipt of the following documents and satisfaction of the following
conditions, each in form and substance satisfactory to Banks:
(a) Promissory Notes. The Notes duly executed by Borrower.
(b) Guaranty. A Guaranty Agreement executed by each Subsidiary of
Borrower in favor of Banks.
(c) Authorization Documents. A certificate of the secretary of
each Company attaching and certifying as to (i) the certificate or
articles of incorporation and bylaws or other organizational documents
of such Company; (ii) resolutions or other evidence of authorization
by the board of directors or other governing body of such Company
authorizing its execution and full performance of Loan Documents and
all other documents and actions required hereunder; and (iii)
incumbency certificates setting forth the name, title and specimen
signature of each officer of such Company who is authorized to execute
the Loan Documents on behalf of such entity.
(d) Good Standing. Certificates of good standing or the
equivalent for each Company for which such certificates are available
in its state of formation and each of the states in which it is
qualified to do business.
(e) Opinion of Counsel. An opinion letter from counsel for the
Companies, as may be reasonably satisfactory to Banks.
(f) Compliance and Borrowing Base Certificates. A Compliance
Certificate in the form of Exhibit F attached hereto calculated as of
the end of the most recent fiscal quarter of the Borrower for which
such certificates would be required hereunder.
(g) Fees and Expenses. Payment of all fees required by Paragraph
2.12 hereof.
(h) Searches. Uniform Commercial Code, tax and judgment searches
against the Companies in those offices and jurisdictions as Agent
shall reasonably request.
(i) Financial Projections. Projections for Borrower and its
consolidated Subsidiary for the period through fiscal year 2000,
certified by the chief financial officer of Borrower as constituting a
good faith projection based upon assumptions believed to be
reasonable.
(j) Consents. Receipt of all required consents and approvals
under applicable law or contract.
(k) Pay-Off of Existing Loan. Payment in full of all indebtedness
and obligations of Borrower under the Existing Credit Agreement, and
release of all liens and encumbrances thereunder.
(l) Other Documents. Such additional documents as Agent
reasonably may request.
4.2 Advances.
The obligation of Banks to make Advances under the Commitment or
issue Letters of Credit shall be subject to Borrower's compliance with
Paragraph 2.7 or 2A.3 hereof, as applicable, and it shall be a
condition to Banks' obligation hereunder to make any such Advance or
issue such Letter of Credit that (a) the representations and
warranties set forth herein and in the other Loan Documents shall be
true and correct as if made on the date of such Advance or issuance,
(b) no Event of Default or Default shall have occurred and not have
been waived on the date of such Advance or issuance or be caused by
such Advance or issuance, (c) all fees required pursuant to Paragraphs
2.11 and 2.12 hereof have been paid as and when due, and (d) there
shall have been no Material Adverse Effect since the date of this
Agreement, and no event or circumstance (or combination of events or
circumstances) shall have occurred which is reasonably likely to have
a Material Adverse Effect.
SECTION 5
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as the Commitment
of Banks to Borrower or any Indebtedness of Borrower to Banks is outstanding,
unless Required Banks have otherwise agreed in writing, each of the Companies
will (and with respect to Paragraph 5.13, will cause each ERISA Affiliate) to:
5.1 Existence and Good Standing.
Preserve and maintain (a) its existence as a corporation,
partnership or other legal entity, as applicable, and its good
standing in all states in which it conducts business and (b) the
effectiveness and validity of all its franchises, licenses, permits,
certificates of compliance or grants of authority required in the
conduct of its business, except for such instances of ineffectiveness
or invalidity as would not, either singly or in the aggregate, have a
Material Adverse Effect.
5.2 Interim Financial Statements.
Furnish to Agent (with sufficient copies for each Bank) within
forty-five (45) days of the end of each of the first three quarterly
periods in each fiscal year of Borrower, unaudited quarterly
consolidated financial statements, in form and substance as reasonably
required by Agent, including (i) a consolidated balance sheet, (ii) a
consolidated statement of income, and (iii) a statement of cash flows,
prepared in accordance with GAAP consistently applied (except that
such interim statements need not contain footnotes and may be subject
to year-end adjustments).
5.3 Annual Financial Statements.
Furnish to Agent (with sufficient copies for each Bank) within
ninety (90) days after the close of each fiscal year audited
consolidated annual financial statements, including the information
required under Paragraph 5.2 hereof, which financial statements shall
be prepared in accordance with GAAP and shall be certified without
qualification (except with respect to changes in GAAP as to which
Borrower's independent certified public accountants have concurred) by
an independent certified public accounting firm reasonably
satisfactory to Agent; and cause Agent to be furnished, at the time of
the completion of the annual audit, with copies of any management
letters prepared by such accountants and with a certificate signed by
such accountants to the effect that to the best of their knowledge
there exists no Event of Default or Default hereunder.
5.4 Compliance Certificate.
At the time of delivery of financial statements pursuant to
Paragraph 5.2 and 5.3 hereof, deliver to Agent (with sufficient copies
for each Bank) a certificate in the form of Exhibit F attached hereto
executed by the chief financial officer or treasurer of Borrower,
showing the calculation of the covenants set forth in Paragraph 5.14
through 5.17 hereof.
5.5 Public Information.
Deliver to Agent (with sufficient copies for each Bank) promptly
upon transmission thereof, copies of all financial statements, proxy
statements, notices and reports, and copies of any registration
statement or annual or quarterly reports, if any, filed with the
Securities and Exchange Commission (or successor entity).
5.6 Books and Records.
Keep and maintain satisfactory and adequate books and records of
account in accordance with GAAP and make or cause the same to be made
available to Agent or its agents or nominees at any reasonable time
upon reasonable notice for inspection and to make extracts thereof and
permit Agent or its agents or nominees to discuss contents of same
with senior officers of the Companies and also with outside auditors
and accountants of the Companies.
5.7 Interest Rate Hedging.
At such time as the outstanding principal balance of the Loan
shall equal or exceed Fifty Million Dollars ($50,000,000), enter into
interest rate protection agreements in a form acceptable to Agent and
from one or more of the Banks or an institution acceptable to Agent,
with respect to at least twenty percent (20%) of the Loan and for a
period of at least two years; provided, however, that (a) the
protected rate shall be no greater than 1.50% above the all-in rate on
the date hereof; and (b) all documentation for such interest rate
protection shall conform to ISDA standards and must be acceptable to
Agent with respect to intercreditor issues.
5.8 Insurance.
Keep and maintain all of its property and assets in good order
and repair and covered by insurance with reputable and financially
sound insurance companies against such hazards and in such amounts as
is customary in the industry, under policies requiring the insurer to
furnish reasonable notice to Agent and opportunity to cure any
non-payment of premiums prior to termination of coverage and naming
Agent, for the benefit of Banks, as loss payee and additional insured.
5.9 Litigation: Event of Default.
Notify Agent in writing immediately of the institution of any
litigation, the commencement of any administrative proceedings, the
happening of any event or the assertion or threat of any claim, to the
extent that any of the foregoing, could have a Material Adverse Effect
or the occurrence of any Event of Default or Default hereunder.
5.10 Taxes
Pay and discharge all taxes, assessments or other governmental
charges or levies imposed on it or any of its property or assets prior
to the date on which any penalty for non-payment or late payment is
incurred, unless the same are currently being contested in good faith
by appropriate proceedings, diligently prosecuted and covered by
appropriate reserves maintained in accordance with GAAP.
5.11 Costs and Expenses.
Pay or reimburse Agent for all reasonable out-of-pocket costs and
reasonable expenses (including but not limited to reasonable
attorneys' fees and disbursements) Agent may reasonably pay or incur
in connection with the preparation and review of this Agreement and
all waivers, consents and amendments in connection therewith and all
other documentation related thereto, and the making of the Loan
hereunder, and pay or reimburse Banks for all costs, liabilities and
expenses (including but not limited to reasonable attorneys' fees and
disbursements) associated with the collection or enforcement of the
same, including without limitation any fees and disbursements incurred
in defense of or to retain amounts of principal, interest or fees paid
or in connection with any audit or examination of the Companies. All
obligations provided for in this Paragraph 5.11 shall survive any
termination of this Agreement or the Commitment and the repayment of
the Loan.
5. 12 Compliance; Notification
(a) Comply in all material respects with all local, state and
federal laws and regulations applicable to its business (and in all
respects with the Environmental Control Statutes), including without
limitation the federal Assignment of Claims Act and any comparable
state laws, all laws and regulations relating to government
contracting, and all laws and regulations of the Local Authorities,
and with the provisions and requirements of all franchises, permits,
certificates of compliance, approval and need issued by regulatory
authorities and with other like grants of authority held by any
Company; and notify Agent immediately in detail of any actual or
alleged failure to comply with or perform, breach, violation or
default under any such laws or regulations or under the terms of any
of such franchises, licenses or grants of authority, or of the
occurrence or existence of any facts or circumstances which with the
passage of time, the giving of notice or otherwise could create such a
breach, violation or default or could occasion the termination of any
of such franchises, licenses or grants of authority, to the extent
that any of the foregoing could have a Material Adverse Effect.
(b) With respect to the Environmental Control Statutes,
immediately notify Agent when, in connection with the conduct of the
Companies' business(es) or operations, any person (including, without
limitation, EPA or any state or local agency) provides oral or written
notification to any Company, or any Company otherwise becomes aware,
of a condition with regard to an actual or imminently threatened
Release of Hazardous Substances which could reasonably be expected to
have a Material Adverse Effect; and notify Agent in detail immediately
upon the receipt by a Company of an assertion of liability under the
Environmental Control Statutes, of any actual or alleged failure to
comply with, failure to perform, breach, violation or default under
any such statutes or regulations which could reasonably be expected to
have a Material Adverse Effect or of the occurrence or existence of
any facts, events or circumstances which with the passage of time, the
giving of notice, or both, could create such a failure to breach,
violation or default.
5.13 ERISA.
(a) Comply in all material respects with the provisions of ERISA
to the extent applicable to any Plan maintained for the employees of
any Company or any ERISA Affiliate; (b) do or cause to be done all
such acts and things that are required to maintain the qualified
status of each Plan and tax exempt status of each trust forming part
of such Plan; (c) not incur any material accumulated funding
deficiency (within the meaning of ERISA and the regulations
promulgated thereunder), or any material liability to the PBGC (as
established by ERISA); (d) not permit any event to occur with respect
to any Plan sponsored by any Company or any ERISA Affiliate (i) as
described in Section 4042 of ERISA or (ii) which may result in the
imposition of a lien on its properties or assets; and (e) notify Agent
in writing promptly after it has come to the attention of senior
management of any Company of the written assertion or threat of any
event described in Section 4042 of ERISA (relating to the soundness of
a Plan) (including any "reportable event" described in Section
4042(a)(3) of ERISA) or the PBGC's ability to assert a material
liability against it or impose a lien on any Company's, or any ERISA
Affiliate's properties or assets; and (f) refrain from engaging in any
prohibited transactions or actions causing possible liability under
Section 502 of ERISA.
5.14 Maximum Debt to Capitalization Ratio.
Maintain at all times a Debt to Capitalization Ratio for Borrower
and its consolidated Subsidiaries of not greater than 0.50 to 1.
5.15 Maximum Funded Debt to EBITDA Ratio.
Maintain at all times a ratio of (a) Funded Debt of Borrower and
its consolidated Subsidiaries to (b) EBITDA of Borrower and its
Consolidated Subsidiaries for the most recent Rolling Period, of not
greater than 3.00 to 1.
5.16 Minimum Tangible Net Worth.
Maintain at all times Tangible Net Worth of Borrower and its
consolidated Subsidiaries in an amount not less than the Required
Tangible Net Worth.
5.17 Minimum Fixed Charge Coverage Ratio.
Maintain at all times a Fixed Charge Coverage Ratio for Borrower
and its consolidated Subsidiaries of not less than 1.75 to 1.
5.18 Management Changes.
Notify Agent in writing within ten (10) Business Days after any
change of the senior executive management of Borrower.
5.19 Transactions Among Affiliates.
Cause all transactions between and among it and its Affiliates,
other than transactions among the Companies, to be on an arms-length
basis and on such terms and conditions as are customary in the
applicable industry between and among unrelated entities.
5.20 Joinders.
If any Subsidiary becomes a Material Subsidiary or if a new
Material Subsidiary is formed or acquired, cause such Material
Subsidiary to execute and deliver a joinder to the Guaranty and such
other documents as Agent may reasonably require in connection
therewith, including without limitation secretary's certificates and
opinions of counsel.
5.21 Year 2000 Compliance.
The Companies shall take all action necessary to assure that the
Companies' computer-based systems are able to operate and effectively
process dates on or after January 1, 2000. At the request of Banks,
the Companies shall provide Banks assurances acceptable to Banks of
the Companies' Year 2000 compatability
5.22 Other Information.
Provide any Bank with any other documents and information,
financial or otherwise, reasonably requested by such Bank from time to
time.
SECTION 6
NEGATIVE COVENANTS
So long as any Commitment or any Indebtedness of Borrower to
Banks remains outstanding hereunder, Borrower covenants and agrees
that without Required Banks' prior written consent, each Company will
not:
6.1 Indebtedness.
Borrow any monies or create or permit to exist any Indebtedness
except: (i) borrowings from Banks hereunder; (ii) trade Indebtedness
in the normal and ordinary course of business for value received;
(iii) Indebtedness under the ASIDA Bonds and the SouthTrust Term Loan,
provided, that the aggregate principal thereof shall not be increased
after the date of this Agreement; and (iv) additional unsecured
Indebtedness or Indebtedness incurred to purchase or lease fixed or
capital assets in an aggregate principal amount which, together with
guarantees permitted pursuant to Paragraph 6.2(iii) hereof, does not
exceed ten Million Dollars ($10,000,000) at any time.
6.2 Guaranties.
Guarantee or assume or be or agree to become liable in any way,
either directly or indirectly, for any Indebtedness or liability of
others except: (i) to endorse checks or drafts in the ordinary course
of business, (ii) a Company may guaranty or otherwise agree to be
liable for obligations of any other Company, and (iii) additional
guarantees by one or more Companies of Indebtedness in an aggregate
principal amount which, together with Indebtedness permitted pursuant
to Paragraph 6.1(iv) hereof, does not exceed Ten Million Dollars
($10,000,000).
6.3 Loans.
Make any loans or advances to others; provided, however, that (a)
a Company may make loans and advances to any other Company and (b) the
Companies may make investments in companies that are not subsidiaries
to the extent permitted pursuant to Paragraph 6.8(b) hereof.
6.4 Liens and Encumbrances.
Create, permit or suffer the creation or existence of any liens,
security interests, or any other encumbrances on (including any
conditional sales arrangement with respect to) any of its property,
real or personal, except the security interests in favor of the Agent
on behalf of Banks as security for the Loan, and except (i) liens
arising in favor of sellers or lessors for indebtedness and
obligations incurred to purchase or lease fixed or capital assets
permitted under Paragraph 6.1(iv) hereof, provided, however, that such
liens secure only the indebtedness and obligations created thereunder
and are limited to the assets purchased or leased pursuant thereto and
the proceeds thereof; (ii) mechanic's and xxxxxxx'x liens, liens for
taxes, assessments or other governmental charges, federal, state or
local, which are then being currently contested in good faith by
appropriate proceedings and are covered by appropriate reserves
maintained in accordance with GAAP; (iii) pledges or deposits to
secure obligations under workmen's compensation, unemployment
insurance or social security laws or similar legislation; (iv)
deposits to secure surety, appeal or custom bonds required in the
ordinary course of business and (v) the liens in favor of IBM Credit
Corp. disclosed on Exhibit D attached hereto, securing trade
indebtedness from IBM to Xxxxxxx TXEN Corporation (formerly Computer
Services Corporation), provided, that such liens shall be released
within thirty (30) days after the date hereof.
6.5 Additional Negative Pledge.
Agree or covenant with or promise any person or entity other than
the Banks that it will not pledge its assets or properties or
otherwise grant any liens, security interests or encumbrances on its
property.
6.6 Restricted Payments.
Make any Restricted Payments, unless there is no Default or Event
of Default hereunder at such time, and such payment will not create a
Default or Event of Default.
6.7 Transfer of Assets; Liquidation
(a) Sell, lease, transfer or otherwise dispose of all or any
portion of its assets, real or personal, other than such transactions
in the normal and ordinary course of business for value received; or
(b) discontinue, liquidate, or change in any material respect any
substantial part of its operations or business(es).
6.8 Acquisitions and Investments.
Purchase or otherwise acquire (including without limitation by
way of share exchange) any part or amount of the capital stock,
partnership interests, or assets of, or make any investments in, any
other firm or corporation; or enter into any new business activities
or ventures not directly related to its present business; or merge or
consolidate with or into any other firm or corporation; or create any
Subsidiary; provided, however that in the absence of a Default or an
Event of Default at such time and if such transaction will not give
rise to a Default or an Event of Default:
(a) the Companies may make a Permitted Acquisition and create
Subsidiaries, provided that (i) Borrower provides to Agent, with a
copy to its counsel, not less than thirty (30) days prior written
notice of the proposed Permitted Acquisition or Subsidiary creation in
the form of Exhibit G attached hereto, including, in the case of a
Permitted Acquisition with respect to which the Acquisition Price is
in excess of Twenty-Five Million Dollars ($25,000,000), the following
information:
(A) a narrative description of the proposed acquisition which
demonstrates it to be a Permitted Acquisition, and describes
the business to be acquired, the legal structure for the
acquisition (including identification of any new
subsidiaries that will result from the transaction), the
acquisition price to be paid and form thereof, the
anticipated closing date, the anticipated borrowings under
the Commitment in connection therewith, and other material
features of the proposed acquisition;
(B) copies of the financial statements, if available, or federal
income tax returns if not, dated as of the three (3) most
recently ended fiscal years of such business or the seller
of such assets;
(C) pro forma financial statements of the business or assets and
Borrower and its consolidated Subsidiaries giving effect to
the proposed acquisition on an historical basis for the two
most recent fiscal quarters for which a Compliance
Certificate has been delivered and on a projected basis for
the period ending on the Three Year Commitment Termination
Date, including the information required pursuant to
Paragraph 5.2 and showing all adjustments which have been
made in connection with such pro forma statements, and
demonstrating compliance with the covenants set forth in
Paragraph 5.14 through 5.17 as of the end of each fiscal
quarter; and
(D) such additional documents as Agent may reasonably request,
each of the foregoing to be in form and substance reasonably
satisfactory to Agent;
(ii) Borrower complies with the terms and conditions of Paragraph 5.20 hereof,
and (iii) taking into account any supplement or amendment to Exhibit D hereto
which is reasonably acceptable to Required Banks, all of the representations and
warranties set forth herein are true and correct prior to and following such
Permitted Acquisition or the creation of such Subsidiary; and
(b) the Companies may make investments in companies that are not
Subsidiaries, provided that the aggregate amount of such investments,
whether as debt, equity or otherwise, shall not exceed Twenty-Five
Million Dollars ($25,000,000).
6.9 Payments to Affiliates.
Pay any salaries, compensation, management fees, consulting fees,
service fees, licensing fees, or other similar payments to Affiliates
of any Company other than on an arms-length basis for value, and on
terms and conditions as are customary in the industry between and
among unrelated entities.
6.10 Amendments to Documents.
Amend or modify the ASIDA Bonds or the SouthTrust Term Loan.
6.11 Use of Proceeds.
Use any of the proceeds of the Loan, directly or indirectly, to
purchase or carry margin securities within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System; or engage as
its principal business in the extension of credit for purchasing or
carrying such securities.
SECTION 7
ADDITIONAL COLLATERAL AND RIGHT OF SET-OFF
Each Bank is hereby authorized at any time and from time to time
following the occurrence and during the continuation of an Event of
Default hereunder, to the fullest extent permitted by law, to set-off
and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any
time owing by such Bank to or for the credit or the account of a
Company against any and all of the obligations of a Company now or
hereafter existing under this Agreement, the Notes or the Loan
Documents, irrespective of whether such Bank shall have made any
demand under this Agreement or such Notes and although such
obligations may be unmatured and irrespective of whether such Bank is
otherwise fully secured. Each Bank agrees promptly to notify the
applicable Company after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of
Banks under this Section Seven are in addition to other rights and
remedies (including, without limitation, other rights of set-off)
which Banks may have.
SECTION 8
DEFAULT
8.1 Events of Default.
Each of the following events shall be an Event of Default
hereunder:
(a) If Borrower shall fail to pay when due any installment of
principal or any interest, fees, costs, expenses or any other sum
payable to Banks or Agent hereunder; or
(b) If any representation or warranty made herein or in
connection herewith or in any statement, certificate or other document
furnished hereunder is false or misleading in any material respect
when made; or
(c) If any Company shall default (after expiration of any
applicable cure or grace periods) in the payment or performance of any
obligation or Indebtedness to another either singly or in the
aggregate in excess of Five Million Dollars ($5,000,000), whether now
or hereafter incurred; or
(d) If there shall be a default in or failure to observe at any
test date the covenants set forth in Paragraphs 5.14 through 5.17
hereof or in Section 6 hereof; or
(e) If any Company shall default in the performance of any other
agreement or covenant contained herein (other than as provided in
subparagraphs (a), (b) or (d) above) or in any document executed or
delivered in connection herewith, including without limitation with
respect to any Collateral, and such default shall continue uncured for
twenty (20) days after notice thereof to Borrower given by Agent; or
(f) If the Chairman, Chief Executive Officer or Chief Financial
Officer of the Borrower as of the date of this Agreement shall cease
to serve in such capacity, unless within ninety (90) days Agent is
notified in writing of the identity and qualifications of a person
with experience in the business of Borrower to serve in such capacity
and such new management is not objected to in writing by Required
Banks within sixty (60) days of such notice, or if objected to, then
within ninety (90) days after such objection Agent is notified in
writing of another such person given such authority and such
management is not objected to within sixty (60) days of such
subsequent notice; or
(g) If: (i) any person or group within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934
Act") and the rules and regulations promulgated thereunder, other than
any person described in Rule 13d-1(b)(i) (D) or (E) which is eligible
to file a Schedule 13G in lieu of a Schedule 13D (only for so long as
such person is so eligible), shall have beneficial ownership (within
the meaning of Rule 13d-3 of the 1934 Act), directly or indirectly, of
securities of Borrower (or other securities convertible into such
securities)representing twenty percent (20%) of the combined voting
power of all securities of Borrower entitled to vote in the election
of directors (hereinafter called a "Controlling Person"); or (ii) a
majority of the Board of Directors of Borrower shall cease for any
reason to consist of (A) individuals who on the date hereof were
serving as directors of Borrower or (B) individuals who subsequently
become members of the Board if such individuals' nomination for
election or election to the board is recommended or approved by a
majority of the Board of Directors of Borrower. For purposes of clause
(i) above, a person or group shall not be a Controlling Person if such
person or group holds voting power in good faith and not for the
purpose of circumventing this Paragraph 8.1(g) as an agent, bank,
broker, nominee, trustee, or holder of revocable proxies given in
response to a solicitation pursuant to the 1934 Act, for one or more
beneficial owners who do not individually, or, if they are a group
acting in concert, as a group, have the voting power specified in
clause (i) above; or
(h) If custody or control of any substantial part of the property
of any Company shall be assumed by any governmental agency or any
court of competent jurisdiction at the instance of any governmental
agency; if any license or franchise of a Company shall be suspended,
revoked, not renewed or otherwise terminated the loss of which would
reasonably be expected to have a Material Adverse Effect; if any
company or any employee of any Company shall have been proposed for or
received notice of intended suspension or debarment from federal
contracting pursuant to Part 9 of the Federal Acquisition Regulations,
of if any similar event shall have occurred under comparable state
laws; or if any governmental regulatory authority or judicial body
shall make any other final non-appealable determination the effect of
which would have Material Adverse Effect; or
(i) If any Company becomes insolvent, bankrupt or generally fails
to pay its debts as such debts become due; is adjudicated insolvent or
bankrupt; admits in writing its inability to pay its debts; or shall
suffer a custodian, receiver or trustee for it or substantially all of
its property to be appointed; makes a general assignment for the
benefit of creditors; or suffers proceedings under any law related to
bankruptcy, insolvency, liquidation or the reorganization,
readjustment or the release of debtors to be instituted against it; if
proceedings under any law related to bankruptcy, insolvency,
liquidation, or the reorganization, readjustment or the release of
debtors is instituted or commenced by any Company; if any order for
relief is entered relating to any of the foregoing proceedings; if any
Company shall call a meeting of its creditors with a view to arranging
a composition or adjustment of its debts; or if any Company shall by
any act or failure to act indicate its consent to, approval of or
acquiescence in any of the foregoing; or
(j) any event or condition shall occur or exist with respect to
any activity or substance regulated under the Environmental Control
Statutes and as a result of such event or condition, the Companies
have incurred or in the opinion of Borrower are reasonably likely to
incur liabilities in the aggregate in excess of Five Million Dollars
($5,000,000); or
(k) if any judgment, writ, warrant or attachment or execution or
similar process which calls for payment or presents liability in
excess of Five Million Dollars ($5,000,000) shall be rendered, issued
or levied against any Company or its respective property and such
process shall not be paid, waived, stayed, vacated, discharged,
settled, satisfied or fully bonded within thirty (30) days after its
issuance or levy unless such judgment is covered by insurance and the
insurer has acknowledged coverage in writing with respect thereto.
8.2 Remedies.
Upon the happening of any Event of Default and at any time
thereafter, and by notice by Agent on behalf of Required Banks to
Borrower (except if an Event of Default described in Paragraph 8.1(i)
shall occur in which case acceleration of the Loan and termination of
the Commitment shall occur automatically without notice), the Agent
shall, at the request of the Required Banks, and may, with the consent
of the Required Banks, (i) terminate the Short Term Commitment and/or
the Three Year Commitment, and (ii) declare the entire unpaid balance,
principal, interest, fees, and other amounts of all indebtedness of
Borrower to Banks, hereunder or otherwise, to be immediately due and
payable. Upon such declaration, Agent and Banks shall have the
immediate right to enforce or realize on any collateral granted
therefor in any manner or order it deems expedient without regard to
any equitable principles of marshaling or otherwise. In addition to
any rights granted hereunder or in any of the Loan Documents delivered
in connection herewith, Agent and Banks shall have all the rights and
remedies granted by any applicable law, all of which shall be
cumulative in nature.
SECTION 9
AGENCY PROVISIONS
This Section sets forth the relative rights and duties of
Agent and Banks respecting the Loan and, with the exception of Paragraphs 9.3
and 9.15 hereof, does not confer any enforceable rights on Borrower against
Banks or create on the part of Banks any duties or obligations to Borrower.
9.1 Application of Payments.
Agent shall apply all payments of principal, interest, commitment
fee or other amounts hereunder made to Agent by or on behalf of
Borrower with respect to the Loan to Banks on the basis of their Pro
Rata Shares of the outstanding principal balance of the Loan, except
the fees payable under Paragraph 2.12 and Paragraph 2A.4(a)(iv)
hereof, which shall be paid solely to Agent. Such distribution of
payments shall be made promptly in federal funds immediately available
at the office of each Bank set forth above.
9.2 Set-Off.
In the event a Bank, by exercise of its right of set-off, or
otherwise, receives any payment of principal or interest, in an amount
greater than its Pro Rata Share of such payment based upon the Banks'
respective shares of principal Indebtedness outstanding hereunder
immediately before such payment, such Bank shall purchase a portion of
the Indebtedness hereunder owing to each other Bank so that after such
purchase each Bank shall hold its Pro Rata Share of all the
Indebtedness then outstanding hereunder, provided that if all or any
portion of such excess payment is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to
the extent of any such recovery, but without interest.
9.3 Modifications and Waivers.
No modification or amendment hereof, consent hereunder or waiver
of any Event of Default shall be effective except by written consent
of the Required Banks; provided, however, that the written consent of
all Banks shall be required to (i) modify, amend, waive, discharge,
terminate or suspend compliance with (A) any rate of interest
applicable to the Loan to the extent it is proposed to be decreased,
(B) the amount of the Commitment to the extent it is proposed to be
increased, or the Banks' respective shares thereof; (C) the date or
amounts of payment of the Loan or interest thereon, to postpone or
decrease payment thereof, (D) the commitment fee set forth in
Paragraph 2.11 hereof or other amounts payable by Borrower hereunder
except if payable solely to the Agent, to the extent any such amount
is proposed to be decreased or postponed, (E) the definition of
Required Banks, (F) this Paragraph 9.3, or (G) the definition of Pro
Rata Share; or (ii) release any Guarantor.
9.4 Obligations Several.
The obligations of the Banks hereunder are several, and each Bank
hereunder shall not be responsible for the obligations of the other
Banks hereunder, nor will the failure of one Bank to perform any of
its obligations hereunder relieve the other Banks from the performance
of their respective obligations hereunder.
9.5 Banks' Representations.
Each Bank represents and warrants to the other Banks that (i) it
has been furnished all information it has requested for the purpose of
evaluating its proposed participation under this Agreement; and (ii)
it has decided to enter into this Agreement on the basis of its
independent review and credit analysis of Borrower, this Agreement and
the documentation in connection therewith and has not relied for such
analysis on any information or analysis provided by any other Bank.
9.6 Investigation.
No Bank shall have any obligation to the others to investigate
the condition of Borrower or any of the Collateral or any other matter
concerning the Loan.
9.7 Powers of Agent.
Agent shall have and may exercise those powers specifically
delegated to Agent herein, together with such powers as are reasonably
incidental thereto.
9.8 General Duties of Agent, Immunity and Indemnity.
Upon receipt of notices and reports delivered by Borrower to the
Agent under this Agreement, the Agent shall promptly deliver the same
in the form received to the Banks. Required Banks shall also have the
right to request Agent to inspect Borrower's books and records and
take the other steps provided in Paragraph 5.6 hereof. In performing
its duties as Agent hereunder, Agent will take the same care as it
takes in connection with loans in which it alone is interested,
subject to the limitations on liabilities contained herein; provided
that Agent shall not be obligated to ascertain or inquire as to the
performance of any of the terms, covenants or conditions hereof by
Borrower. Neither Agent nor any of its directors, officers, agents or
employees, shall be liable for any action or omission by any of them
hereunder or in connection herewith except for gross negligence or
willful misconduct. Subject to such exception, each of the Banks
hereby indemnifies Agent (in its capacity as Agent) on the basis of
such Bank's Pro Rata Share, against any liability, claim, loss or
expense arising from or relating to any action taken or omitted to be
taken with respect to this Agreement, any other Loan Document or the
transactions contemplated thereby or Borrower, to the extent that the
Agent has not been reimbursed therefor by Borrower, without affecting
any obligation of Borrower to reimburse.
9.9 No Responsibility for Representations or Validity, etc.
Each Bank agrees that Agent shall not be responsible to any Bank
for any representations, statements, or warranties of Borrower herein
or in the other Loan Documents. Neither Agent nor any of its
directors, officers, employees or agents, shall be responsible for the
validity, effectiveness, sufficiency, perfection or enforceability of
this Agreement or the other Loan Documents, or any collateral, or any
documents relating thereto or for the priority of any of Banks'
security interests in any such collateral.
9.10 Action on Instruction of Banks; Right to Indemnity.
Agent shall act upon written instruction of Banks or Required
Banks, as appropriate, and in all cases Agent shall be fully protected
in acting or refraining from acting hereunder in accordance with such
written instructions to it signed by Required Banks unless the consent
of all the Banks is expressly required hereunder in which case Agent
shall be so protected when acting in accordance with such instructions
from all the Banks. Such instructions and any action taken or failure
to act pursuant thereto shall be binding on all the Banks, provided
that except as otherwise provided herein, Agent may act hereunder in
its own discretion without requesting such instructions.
9.11 Employment of Agents.
In connection with its activities hereunder, Agent may employ
agents and attorneys-in-fact and shall not be answerable, except as to
money or securities received by it or its authorized agents, for the
default or misconduct of agents or attorneys-in-fact selected with
reasonable care.
9.12 Reliance on Documents.
Agent shall be entitled to rely upon (a) any paper or document
believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons and (b) upon the opinion of its
counsel with respect to legal matters.
9.13 Agent's Rights as a Bank.
With respect to their share of the indebtedness hereunder, Agent
shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not Agent. Each of the Banks
may accept deposits from and generally engage in other banking or
trust business with Borrower as if it were not Agent or a Bank
hereunder.
9.14 Expenses.
Each of the Banks shall reimburse Agent from time to time at the
request of Agent for its Pro Rata Share of any expenses incurred by
Agent in connection with the performance of its functions hereunder
without affecting any obligation of Borrower to reimburse, provided
however that in the event Banks shall reimburse Agent for expenses for
which Borrower subsequently reimburses Agent, then Agent shall remit
to each Bank the respective amount received from such Bank against
such expenses.
9.15 Resignation of Agent.
Agent may at any time resign its position as Agent, without
affecting its position as a Bank, by giving written notice to Banks
and Borrower. Such resignation shall take effect upon the appointment
of a successor agent in accordance with this Paragraph 9.15. In the
event Agent shall resign, Required Banks with the consent of Borrower,
which consent will not be unreasonably withheld, shall appoint a Bank
as successor Agent. If within thirty (30) days of the Agent's notice
of resignation no successor agent shall have been appointed by Banks
and accepted such appointment, then Agent, in its discretion may
appoint any other Bank with banking powers as a successor agent.
9.16 Successor Agent.
The successor Agent appointed pursuant to Paragraph 9.15 shall
execute and deliver to its predecessor and Banks an instrument in
writing accepting such appointment, and thereupon such successor,
without any further act, deed or conveyance, shall become fully vested
with all the properties, rights, duties and obligations of its
predecessor Agent. The predecessor Agent shall deliver to its
successor Agent forthwith all Collateral, documents and moneys held by
it as Agent, if any, whereupon such predecessor Agent shall be
discharged from its duties and obligations as Agent under this
Agreement.
9.17 Collateral Security.
Agent will hold, administer and manage any Collateral pledged
from time to time hereunder either in its own name or as Agent on
behalf of the Banks, but each Bank shall hold a direct, undivided
pro-rata beneficial interest therein, on the basis of its Pro Rata
Share, by reason of and as evidenced by this Agreement.
9.18 Enformcement by Agent.
All rights of action under this Agreement and under the Notes and
all rights to the Collateral hereunder may be enforced by Agent and
any suit or proceeding instituted by Agent in furtherance of such
enforcement shall be brought in its name as Agent, without the
necessity of joining as plaintiffs or defendants any other Banks, and
the recovery of any judgment shall be for the benefit of Banks subject
to the expenses of Agent.
SECTION 10
MISCELLANEOUS
10.1 Indemnification and Release Provisions.
Borrower hereby agrees to defend Agent and each Bank and their
directors, officers, agents, employees and counsel from, and hold each
of them harmless against, any and all losses, liabilities (including
without limitation settlement costs and amounts, transfer taxes,
documentary taxes, or assessments or charges made by any governmental
authority), claims, damages, interest judgments, costs, or expenses,
including without limitation reasonable fees and disbursements of
counsel, incurred by any of them arising out of or in connection with
or by reason of this Agreement, the Commitment, the making of the Loan
or any collateral therefor, other than those resulting primarily from
any such party's own wilful misconduct or gross negligence, including
without limitation, any and all losses, liabilities, claims, damages,
interests, judgments, costs or expenses relating to or arising under
any Environmental Control Statute or the application of any such
Statute to any of the Companies' properties or assets. Borrower hereby
releases Agent and each Bank and their directors, officers, agents,
employees and counsel from any and all claims for loss, damages, costs
or expenses caused or alleged to be caused by any act or omission on
the part of any of them other than those resulting primarily from any
such party's own wilful misconduct or gross negligence. All
obligations provided for in this Paragraph 10.1 shall survive any
termination of this Agreement or the Commitment and the repayment of
the Loan.
10.2 Participations and Assignments.
Borrower hereby acknowledges and agrees that a Bank may at any
time: (a) grant participations in all or any portion of its Maximum
Principal Amount of the Loan or of its right, title and interest
therein or in or to this Agreement (collectively, "Participations") to
any other lending office or to any other bank or lending institution
("Participants"); provided, however, that: (i) all amounts payable by
Borrower hereunder shall be determined as if such Bank had not granted
such Participation; and (ii) any agreement pursuant to which any Bank
may grant a Participation: (x) shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of
Borrower hereunder including, without limitation, the right to approve
any amendment, modification or waiver of any provisions of this
Agreement; (y) may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement without the
consent of the Participant if such modification, amendment or waiver
would require approval of all Banks pursuant to Paragraph 9.3 hereof;
and (z) shall not relieve such Bank from its obligations, which shall
remain absolute, to make Advances hereunder; and (b) assign its rights
and obligations under the Commitment and the Loan (i) to any Federal
Reserve Bank, (ii) to any Affiliate of such Lender, or (iii) with
notice to Borrower and Agent together with the payment to Agent of a
$3,500 transfer fee, to any other financial institution, provided,
that (x) any such assignment under this clause (iii) shall be in a
minimum amount of Five Million Dollars ($5,000,000), and (y) in the
absence of an Event of Default hereunder no Bank shall assign under
this clause (iii) more than forty-nine percent (49%) of its rights and
obligations hereunder. Any grant of an assignment pursuant to this
Paragraph 10.2 shall be pro rata as to the Short Term Loan and the
Three Year Loan. Borrower may not assign or otherwise transfer its
rights or obligation under this Agreement without the prior written
consent of Banks.
10.3 Binding and Government Law.
This Agreement and all documents executed hereunder shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns and, except as may be required
by mandatory provisions of applicable law, shall be governed as to
their validity, interpretation and effect by the laws of the
Commonwealth of Pennsylvania.
10.4 Survival.
All agreements, representations, warranties and covenants of
Borrower contained herein or in any documentation required hereunder
shall survive the execution of this Agreement and the making of the
Loan hereunder, and except for Paragraphs 5.11 and 10.1 which provide
otherwise will continue in full force and effect as long as any
indebtedness or other obligation of Borrower to Banks remains
outstanding.
10.5 No Waiver; Delay.
If Banks shall waive any power, right or remedy arising hereunder
or under any applicable law, such waiver shall not be deemed to be a
waiver upon the later occurrence or recurrence of any of said events
with respect to Banks. No delay by Banks in the exercise of any power,
right or remedy shall, under any circumstances, constitute or be
deemed to be a waiver, express or implied, of the same and no course
of dealing between the parties hereto shall constitute a waiver of
Banks' powers, rights or remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
10.6 Modification;Waiver.
Except as otherwise provided in this Agreement, no modification
or amendment hereof, or waiver or consent hereunder, shall be
effective unless made in a writing signed by appropriate officers of
the parties hereto.
10.7 Headings.
The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
10.8 Notices.
Any notice, request or consent required hereunder or in
connection herewith shall be deemed satisfactorily given if in writing
and delivered by hand, mailed (registered or certified mail) or sent
by facsimile transmission to Agent or Borrower at their respective
addresses or telecopier number set forth below, or to Banks at their
respective addresses or telecopier numbers set forth on Schedule 1
attached hereto, or to any party at such other addresses or telecopier
numbers as may be given by any party to the others in writing:
if to Borrower:
Xxxxxxx Research Corporation
0000 Xxxxxxxx Xxxxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
Telecopier: (000) 000-0000
if to Agent:
CoreStates Bank, N.A.
0000 Xxxxxxxx Xxxxxx
FC 1-8-3-12
Philadelphia, PA 19107
Attention: Xxxxx Leaf
Telecopier: (000) 000-0000
with a copy to:
Pepper, Xxxxxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esquire
Telecopier: (000) 000-0000
10.9 Payment on Non-Business Days.
Whenever any payment to be made hereunder shall be stated to be
due on a day other than a Business Day, such payment may be made on
the next succeeding Business Day, provided however that such extension
of time shall be included in the computation of interest due in
conjunction with such payment or other fees due hereunder, as the case
may be.
10.10 Time of Day.
All time of day restrictions imposed herein shall be calculated
using Agent's local time.
10.11 Severability.
If any provision of this Agreement or the application thereof to
any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
10.12 Counterparts.
This Agreement may be executed in any number of counterparts with
the same effect as if all the signatures on such counterparts appeared
on one document, and each such counterpart shall be deemed to be an
original.
10.13 Consent to Jurisdiction and Service of Process.
Each Company irrevocably appoints each officer of Borrower as its
attorney upon whom may be served any notice, process or pleading in
any action or proceeding against it arising out of or in connection
with this Agreement, the Notes, the Loan Documents or any collateral;
each Company hereby consents that any action or proceeding against it
be commenced and maintained in any court within the Commonwealth of
Pennsylvania or in the United States District Court for the Eastern
District of Pennsylvania by service of process on any officer of
Borrower; and each Company agrees that the courts of the Commonwealth
of Pennsylvania and the United States District Court for the Eastern
District of Pennsylvania shall have jurisdiction with respect to the
subject matter hereof and the person of each Company and any
collateral. Notwithstanding the foregoing, Agent, in its absolute
discretion may also initiate proceedings in the courts of any other
jurisdiction in which any Company may be found or in which any of its
properties or collateral may be located.
10.14 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE NOTES OR OTHER LOAN DOCUMENTS OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF AGENT OR BANKS. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR BANKS' ENTERING INTO THIS AGREEMENT.
10.15 ACKNOWLEDGMENTS.
BORROWER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF COUNSEL
IN THE REVIEW AND EXECUTION OF THIS AGREEMENT AND, SPECIFICALLY,
PARAGRAPH 10.14 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND
EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED
TO BORROWER BY SUCH COUNSEL.
IN WITNESS WHEREOF, the undersigned, by their duly authorized
officers, as applicable, have executed this Agreement the day and year first
above written.
Attest: XXXXXXX RESEARCH CORPORATION
By: Xxxxx X. Xxxxxx By: Xxxxx X. Xxxxxxx
--------------- ----------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: Secretary Title:VP
CORESTATES BANK, N.A., for
itself and as Agent
By: Xxxxx Leaf
----------
Name:Xxxxx Leaf
Title:Vice President
SOUTHTRUST BANK, N.A.
By: Meloe X. Xxxxxxxx
-----------------
Name: Meloe K. Barkfield
Title:Vice President
AMSOUTH BANK
By: Xxxxx X. Xxxxxxx
----------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
[EXECUTIONS CONTINUED]
SUNTRUST BANK, NASHVILLE, N.A.
By:Xxxxxx X. Xxxxxx
----------------
Name: Xxxxxx X. Xxxxxx
Title:First Vice President
FIRST UNION COMMERCIAL
CORPORATION
By: Xxxxx Xxxxxxxx
---------------
Name: Xxxxx Xxxxxxxx
Title:Vice President
NOTE: Schedules available upon request.
